suainability repost rt mercedes-benz do brasil · corporate communication, involving ......

SuStainability RepoRt

Mercedes-Benz do Brasil 2014/2015

Summary 2

Summary

about the RepoRt 3Materiality 4Relevant topics 5

MeSSage fRoM the Ceo 5

MeRCedeS-benz do bRaSil 7Global vision 8daimler group 9global brands 10Vision, Mission and Values 11Presence in Brazil 12Pioneering history 132014/2015 highlights 14Governance 15Ethics and conduct 17Awards and recognition 18Products and services 20trucks 21buses 22light Commercial Vehicles 23automobiles 24parts and customer service 25

StRategy and ManageMent 27Risk control 29Target Management 29

Managing foR SuStainability 30Operational and financial performance 31production and sales 32investments 33Environmental performance 34environmental principles 35Waste 36atmospheric emissions 38eco-efficiency 39Social performance 40initiatives in 2014 and 2015 41employees 44Safety, health and quality of life 47Customers 48Suppliers 49

SuMMaRy of gRi Content 50CReditS 55

Mercedes-Benz do Brasil SuStainability report

about the report

the 2014/2015 Mercedes-benz do brasil ltda. Sustainability Report was prepared based on global Reporting initiative (gRi) methodology and is for the first time aligned with the gRi-g4 Core option guidelines. Gri G4-32

presenting information about economic, social and environmental performance during the period from January 1, 2014 to december 31 2015, the publication provides an overview of Mercedes-benz and its achievements in these two years, encompassing operations at the four units in brazil: São bernardo do Campo

(Sp), Campinas (Sp), Juiz de fora (Mg) and the newly inaugurated factory at iracemápolis (Sp). Gri G4-28, G4-30

the content was defined by means of a materiality matrix. the information and indicators were gathered internally under the coordination of the environmental Management area in partnership with Corporate Communication, involving representatives of diverse company areas and support from the consultancy Report Sustentabilidade.

the publication is available at the address www.mercedes-benz.com.br/institucional/sustentabilidade/relatorio-de-sustentabilidade, in portuguese and english. any questions or suggestions about the report content may be addressed to [email protected]. Gri G4-31

For the first time Mercedes-Benz is publishing a report based on the G4 version of the GRI guidelines

Mercedes-Benz do Brasil SuStainability RepoRt about the RepoRt SummaRy 3

Materiality Gri G4-18

aimed at enhancing company management and strategy, in 2015 Mercedes-benz do brasil worked on developing its materiality and sustainability reporting processes. this involved representatives of diverse company areas.

the starting point for the construction of the new matrix was the identification of the organization's stakeholders and impacts by means of industry studies, references in the field of sustainability and relevant internal materials such as the integrated Management System (iMS). Gri G4-25

Strategic stakeholder groups were consulted in order to prioritize the topics identified. this involved interviews with company vice presidents and directors. the stakeholders consulted in face to face or telephone interviews included customers, suppliers, dealers and specialists. furthermore, an online survey was completed by 778 people, including employees, dealers, suppliers and customers. Gri G4-24, G4-26

Mercedes-Benz MaterialityanalySiS / 2016 topicS

Stak

eho

lder

per

Spec

tive

company perSpective

teChnologiCal deVelopMent and eCo-effiCient VehiCleS

MaCRoeConoMiC influenCeS on the publiC and pRiVate SeCtoR

ManpoWeR planning and talent attRaCtion

SuStainable Supply Chain

opeRational eCo-effiCienCy

CuStoMeR SatiSfaCtion

uRban Mobility

The research and consultation resulted in the validation of seven material topics:

1. TEchnOlOGicAl dEVElOPMEnT And EcO-EfficiEnT VEhiclES technologies focused on performance, technical quality and innovation; vehicles offering low fuel consumption and high performance, as well as technologies for hybrid and electric vehicles and low greenhouse gas and pollutant emissions

2. MAcROEcOnOMic influEncES On ThE PuBlic And PRiVATE SEcTOR access to credit, interest rates and unemployment; growth potential, including tax incentives, tax relief and influence on political decisions

3. MAnPOwER PlAnninG And TAlEnT ATTRAcTiOn Managing work allocation and the development of human capital

4. SuSTAinABlE SuPPly chAin Social and environmental criteria in the acquisition of raw materials and certified inputs; support and incentives for sustainable practices in the supply chain

5. OPERATiOnAl EcO-EfficiEncy efficient use of resources in operations, including energy efficiency, water use and waste optimization

6. cuSTOMER SATiSfAcTiOn Mechanisms for assessing customer satisfaction and responding to customers

7. uRBAn MOBiliTy intelligence and support for logistics in large centres

Mercedes-Benz do Brasil SuStainability RepoRt about the RepoRt SummaRy 4Summary 4

Material topic Gri G4-19stakeholder Groups raisinG the topic Gri G4-27

Boundaries inside and outside the orGanization Gri G4-20, G4-21 related Gri contents

technologies for eco-efficient vehicles all stakeholdersinside: production and development unitsOutside: vehicle users

g4-en7

Macroeconomic influences on the industry executives, suppliers and specialistsinside: production unit planningOutside: financial market and consumers

g4-eC1, g4-eC4

government relations executives and specialists Outside: government, society and industry associations g4-So6

technological development Customers and employeesinside: research and development units; employeesOutside: society, industry associations and suppliers

–

Manpower planning and talent attraction executives and employeesinside: employeesOutside: communities and local governments

g4-la9

Sustainable supply chain executives and suppliers Outside: suppliers of production inputs and dealersg4-la14, g4-la15, g4-hR10, g4-hR11, g4-So9, g4--So10

operational eco-efficiency executives and specialistsinside: all the operational units Outside: local communities

g4-en8, g4-en3, g4-en4, g4-en22, g4-en23, g4-la6

greenhouse gas and pollutant emissions Suppliers, employees and dealers inside: all operational unitsOutside: vehicle users, society (especially in large centres)

g4-eC2, g4-en15, g4-en16, g4-en17

Customer satisfaction Customers, dealers and suppliersinside: research and development unitsOutside: dealers and customers

g4-pR5

urban mobility industry specialists and customers Outside: governments, customers and society –

Mercedes-Benz do Brasil SuStainability RepoRt about the RepoRt SummaRy 5

Relevant Topics

dear readers,

i feel honoured to share our third sustainability report based on gRi – global Reporting initiative - guidelines, the most widely accepted international standard for reporting social and environmental performance.

this document, relative to 2014 and 2015, demonstrates Mercedes-benz's commitment to the future of its activities in brazil after 60 years operating in the country. this encompasses questions related to environmental preservation, one of the focuses of our investments in research and development.

in addition to developing more environmentally responsible vehicles with innovative technologies, - such as the new actros, now more economical, robust and efficient than ever -, we are concerned about how they are produced and about how to minimize production impacts.

an example of this is the 12% reduction in energy consumption at our truck, bus chassis and aggregates plant in São bernardo do Campo (Sp) between 2012 and 2015. in the same unit, water consumption was reduced by 20% between 2005 and 2015. Savings totalled around 84 million litres of water annually, enough to supply approximately 350 families during one year.

in Juiz de fora (Mg), a unit that is being modified to concentrate truck cabin production, we reduced electricity consumption by 21.5% and water consumption by 15.3% between 2013 and 2015. We recently inaugurated our automobile factory in iracemápolis in the state of São paulo, employing the most up-to-date concepts of environmental preservation and flexibility. on the same production line we manufacture two best selling automobiles that employ flexible fuel technology: the Class C sedan and the gla SuV.

We also contribute to driving the future of brazil by acting as agents of social transformation through our social responsibility projects. We have partnered

with Senai (national industrial learning Service) in promoting the professional development of thousands of people for almost sixty years. Since 1957, when this partnership began, we have trained more than 6 thousand apprentices in São bernardo do Campo, Campinas and Juiz de fora. additionally, Mercedes-benz maintains a series of other partnerships with diverse social institutions.

2014 and 2015, the years covered in this report, were not easy given the serious economic crisis in the brazilian market, which had a negative impact on commercial vehicle sales in the country. even so, Mercedes-benz do brasil made a point of maintaining all its planned investments.

between 2010 and 2015 alone, the company invested R$ 2.5 billion on modernizing its plants and boosting competitiveness. for the period 2015 to 2018, Mercedes-benz has investments in excess of R$ 730 million scheduled for its plants in São bernardo do Campo and Juiz de fora, which, added to the R$ 600 million spent on constructing the iracemápolis plant, totals more

Message from the CEO Gri G4-1, G4-2

than R$ 1.3 billion. this is one of the largest investment plans underway in the automotive industry and is a source of pride for all of us at Mercedes-benz do brasil.

i appreciate the help of the company's employees in tackling the challenges we face and for continuing to believe in the future of the country, as well as our partners for their ongoing confidence in the Mercedes-benz brand. i thank you all very much, and i hope you enjoy reading this report!

philipp schiemer CEO, Mercedes-Benz do Brasil & Head Latin America

We help drive Brazil's future by acting as transformers of society

Message froM the Ceo suMMary 6Mercedes-Benz do Brasil SuStainability RepoRt

mercedeS-benz do braSil

Mercedes-Benz do Brasil

1> Global vision

> vision, mission and values

> presence in brazil

> pioneering history

> Governance

> ethics and conduct

> awards and recognition

> products and services

in this chapter

Summary 7Mercedes-Benz do Brasil SuStainability report

Mercedes-Benz do Brasil SuStainability RepoRt

operating in the country for 60 years, mercedes-benz do brasil is the largest truck and bus chassis manufacturer in latin america. in 1956, the company pioneered truck production in brazil with the inauguration of its São bernardo do campo unit in São paulo, now the organization's national headquarters.

the largest daimler group plant outside Germany, employing some 10,000 people, the unit located in São paulo's abc region is the only one in the group to concentrate the production of trucks, bus chassis and aggregates, such as engines, gearboxes and axles, in the same location.

With an additional three plants in the country - including the unit in campinas (Sp), where the parts and customer services operations are concentrated, the truck cabin plant in Juiz de Fora (mG) and the automobile plant in iracemápolis (Sp), mercedes-benz supplies the brazilian market with a complete line of vehicles and services for cargo and passenger transportation.

exports to more than

50 countries

R$ 4.8 billion in overseas sales

R$ 25.4billion in sales in the domestic market

R$ 30.2 billion in revenues

119,800units licensed in 2014/2015

Global vision

hiGhliGhTS in ThE 2014/2015 PERiOd

Gri G4-3, G4-4, G4-5, Gri G4-6, G4-7, G4-8, G4-9

11,395employees in Brazil (on december 31, 2015)

mercedeS-benz do braSil Summary 8Mercedes-Benz do Brasil SuStainability report

Daimler Group

one of the largest premium automobiles makers and the largest global manufacturer of commercial vehicles, daimler aG is headquartered in Stuttgart, Germany, and has manufacturing units on the five continents. the group commercializes its vehicles and services worldwide through the divisions mercedes-benz cars, daimler trucks, mercedes-benz vans, daimler buses and daimler Financial Services, which provides financial, leasing, fleet management, insurance and innovative mobility services. the group also manufactures engines and aggregates.

in addition to mercedes-benz, the portfolio includes the brands amG, maybach, Smart, mercedes me, Freightliner, Fuso, Western Star, thomas built buses, bharatbenz, Setra, daimler truck Financial, mercedes-benz bank e mercedes-benz Financial Services, moovel, car2Go and mytaxi.

daiMler worldwide Gri G4-6

nORTh AMERicACanadaMexicounited States

SOuTh AMERicAargentinabrazilVenezuela

AfRicASouth africa

EuROPE And ASiARussiaturkey

ASiAChinaindiaJapanMalaysiaSingaporethailand

ASiA And OcEAniAindonesia

OcEAniAaustralia

EuROPEaustriabelgiumCzech Republicdenmarkfrancegermanygreat britain

greecehollandhungaryitaly portugalSpainSwedenSwitzerlandthe company is listed on the Frankfurt

and Stuttgart stock markets (ticker symbol dai).

the company's founders, Gottlieb daimler and carl benz, made history by inventing the automobile in 1886. the precursor of automotive engineering, daimler continues to shape the future of mobility: it is focused on innovative green technologies and on safe, high quality vehicles capable of attracting and fascinating customers. daimler invests continuously in developing alternative driving systems aimed at enabling emission free vehicles in the long term.

mercedes-benz do brasil summary 9Mercedes-Benz do Brasil SuStainability RepoRt


Mercedes-Benz Cars

Mercedes-Benz Vans

Daimler Trucks

Daimler Buses

Daimler Financial Services

Global brands Gri G4-4


Visãonosso objetivo é ser referência como empresa produtora e fornecedora brasileira dos melhores veículos comerciais, agregados, automóveis, componentes e serviços. buscamos atender às necessidades e expectativas dos nossos clientes e criar valor para nossos acionistas e demais públicos com os quais nos relacionamos.

Visão, Missão e Valores Gri G4-56

Missãonossa missão é ser reconhecida como a maior fabricante e fornecedora mundial de veículos comerciais, automóveis, agregados, componentes e serviços. trabalhamos para nos manter como a fornecedora número 1 de uma linha completa de veículos comerciais de alta qualidade e de serviços relacionados que excedam as expectativas do cliente. buscamos continuamente aperfeiçoar nosso negócio de automóveis, fornecendo veículos de alta performance e confiabilidade.

Valores_PAixãO

_diSciPlinA

_RESPEiTO

_inTEGRidAdE

Visionour objective is to be a reference as the producer and supplier of the best commercial vehicles, aggregates, automobiles, components and services in brazil. We seek to meet the needs and expectations of our customers and to generate value for our shareholders and other stakeholders.

Vision, mission and values Gri G4-56

Missionour mission is to be recognized as the largest global manufacturer and provider of commercial vehicles, automobiles, aggregates, components and services. We strive to maintain our position as the leading supplier of a comprehensive line of high quality commercial vehicles and related services that surpass customer expectations. We seek to continually enhance our automobile business, supplying reliable, high performance vehicles.

Values_PASSiOn

_diSciPlinE

_RESPEcT

_inTEGRiTy

Mercedes-Benz SuStainability report mercedeS-benz do braSil Summary 11


Presence in Brazil Gri G4-6, G4-13, G4-17, G4-23

Dealer networkMore than

200 dealerships strategically located nationwide

São Bernardo do Campo Unit (SP)inaugurated in

1956total area of

1 million m2

administrative headquarters, truck, bus chassis, engine, axle and gearbox manufacturing plants, technology development Centre, professional development Centre and Quality technology Centre.

Campinas Unit (SP)inaugurated in

1979total area of

250,000 m2

parts and Customer Service, technical Support, Spare part Sales, parts logistics Centre, training, Remanufactured parts production and Customer Relationship Centre.

Juiz de Fora Unit (MG)inaugurated in

1999total area of

2.8 million m2

production of truck cabins, manufacture of actros and accelo trucks, Supplier industrial park, luiz adelar Scheuer integrated Worker development Centre

Iracemápolis Unit (SP) inaugurated in

2016total area of

93,000 m2

automobile production (Class C sedan and gla SuV)


The history of Mercedes-Benz and the automobile is marked by the initiatives of Gottlieb Daimler and Karl Benz, pioneers in the manufacture of motor vehicles

Pioneering history

Brandsthe Mercedes brand was

born in 1902, a tribute to Mercedes Jellinek,

daughter of businessman emil Jellinek, an automobile

racing aficionado who had commissioned vehicles

from gottlieb daimler. the Mercedes-benz brand was

the result of the merger of the daimler and Karl benz companies in 1926.

1902Brazil

Mercedes-benz do brasil was officially founded on

october 7, 1953. the first truck produced in brazil,

the l-312, known as the torpedo, was launched

three years later, on September 28, 1956, the

date of the inauguration of the São bernardo do Campo plant (Sp).

1953Exports

exports to the latin american market were initiated in 1965. in 1984, the company produced its

millionth engine. in 2011, Mercedes- benz do brasil

beat its production record, manufacturing more than 78,000 trucks and buses

and commercializing over 100,000 vehicles.

1965Present

With three units in full operation, in São bernardo

do Campo and Campinas (Sp) and Juiz de fora (Mg), in

March 2016 Mercedes-benz inaugurated its fourth plant in

the municipality of iracemápolis in São paulo state. With

investments in excess of R$ 600 million, the plant is now

manufacturing the C Class sedan (180 flex, 200, 250 and

300) and the gla SuV (200 flex and 250).

20161886Foundation

Mercedes-benz's global trajectory began over a century ago in germany with the simultaneous creation of the first motor vehicles in the world by gottlieb daimler and Karl benz.

Pioneering spirit gottlieb daimler's

and Karl benz's other accomplishments included

the creation of the first bus, the first gasoline-powered

truck and the first diesel truck in the world.

1896

1956launch of the torpedo, the first truck produced in Brazil

1 million heavy duty bus and truck engines produced between 1990 and 2014

3 units in the state of são paulo: são Bernardo do campo, campinas and iracemápolis, and one in Juiz de Fora, Minas Gerais

August exportation of the 125,000th

CKd (Completely Knocked down) vehicle for assembly

in argentina. this business model – in which the vehicle

is exported in parts for assembly at its destination

– represents around 30% of the company's regular

exports, the result of 40 years of tradition and

experience.

November 1 million heavy duty engines produced between 1990 and 2014. this number was recorded by the heavy duty engine assembly area, responsible for manufacturing

engines for heavy and extra heavy duty commercial vehicles and marine generators. the millionth engine equipped an o-500RSd

2436/30 euro 5 intercity passenger bus.

December Mercedes-benz beats an

unprecedented record for the company: the zetros

1833a truck became the first vehicle known to

operate normally at an altitude of 6,704 meters.

this major milestone took place on the argentinean

border in the andes Range.

2014 2015

Highlights in 2014/2015


the Mercedes-benz do brasil board reports to the daimler group, in which the highest governance body is the board of Management. there is also a fiscal Council which oversees best practices and assesses conflicts of interest.

the board of Management consists of eight shareholders, led by the chairman. at the end of 2015, this comprised seven men and one women, aged between 46 and 62 years.

in brazil, the company's executive board consists of a Ceo, who is also head of the company in latin america, and five vice presidents, two of whom - finance and human Resources - also oversee their functions throughout latin america. the current Ceo is the german philipp Schiemer, 48, a graduate in economics from the university of Cooperative education in Stuttgart, germany, who assumed the position in June 2013.

the board has two committees that provide support in strategic questions for latin america, the operational Committee, which meets weekly, and the products and Materials Committee, which meets monthly. Consisting of the full board, the operational Committee has two directors as permanent guest members. the products and Materials Committee comprises the Ceo of the company, three vice presidents and four directors, with three other directors and four managers as permanent guest members.

the Mercedes-benz do brasil organizational chart includes a further 24 positions. the organizational structure encompasses functions that monitor, assess and guide discussion of economic, environmental and social questions, overseen by senior management. Gri G4-36

an initiative created in September 2013 to forge closer relations between employees and senior managers, the Chat with the board is held in the head office in São bernardo do Campo and in the other units on a random basis. in the encounters, executives, including Ceo philipp Schiemer, talk about the company's situation and outlook and answer employees' questions. Gri G4-49

Chat with the Board

Governance Gri G4-34

REMunERATiOn Remuneration policy for executive directors, board members and other senior managers is determined centrally and communicated in a specific annual report made available by daimler ag on its global website (under governance). the model adopted considers the complexity of the function and its impact on business, environmental and social results, with short and long-term incentives based on the company's global targets. Gri G4-51

employee remuneration is defined based on market surveys undertaken by specialized companies that compare the diverse positions in the organization. these are independent consultants who are contracted rather than employed by Mercedes-benz. after the survey, guidelines on salary practice are discussed and approved by the board members. Gri G4-52, G4-53


p MeRCedeS-benz do bRaSil ltda.philipp Schiemer

V Marketing & Salestrucks and buses brazilRoberto leoncini

o operationsMercedes-benz do brasil (Coo)Carlos Santiago

d d dev. trucks &aggreg. Mercedes-benz do brasilChristof Weber (tp/e)

C finance & Controllinghetal laligi (fte)

h human Resourcesfernando garcia (hRt)

te/bg Marketing & Sales trucks and buses argentina and Ceo Mercedes-benz argentinaJoachim Robert Maier

pdldaimler latinaMatthias Walter barth

paMarketing & Sales Mercedes-benz Cars latin americaholger Marquardt (MS/o)

pSltS project Mercedes-benz trucks ehrhard thiel

Vo Marketing & Sales buses brazilWalter barbosa

oe truck Manufacturing engineering Mercedes-benz do brasilSérgio Magalhães (tg/M)

bl buses latin americaRicardo Silva(buS)

oC truck operationsMercedes-benz do brasiln.n.

C/C Controlling Results/Coordination Mercedes-benz do brasilKathrin pfeffer

h/a hR & personnel Services Mercedes-benz do brasilana paula desiderio

d/a aggregates developmentMercedes-benz do brasilChristian gropp(tp/p)

VCMarketing & Salestrucks brazilari gomes Carvalho

oMprocurementtrucks & buses laerodes berbets

blpplanning & industrial engineering bus Chassis Mercedes-benz do brasilMiguel de Souza

olCentral logistics, CKd & infrastructure Mercedes-benz do brasilMarcos alves

Caaccounting latin america RegionJochen löhlein(fat)

Vpparts and Customer Service brazilSilvio Renan Souza

oaaggregates operations Mercedes-benz do brasilCelso Salles

bdbus development Mercedes-benz do brasilMartin teigeler(buS/p)

C/ftreasury latin americaleonardo luiz piccinini(fR/al)

itlRioMb brasil, it & telecom governanceWagner Coppede(itC/t)

C/ttaxes Mercedes-benz do brasilSimone Kruger frizzo (ff/i)

p/RCorporate Relations Mercedes-benz do brasilp/CCorporate Communication Mercedes-benz do brasilluiz Carlos Moraes (CoM/VC) (d.r.)

p/Jlegal latin americaMarcelo Quio (l)


Ethics and conduct

See the Integrity Code: www.mercedesbenz.com.br/institucional/empresa/codigo-de-integridade

cOMPliAncEfor the daimler group, compliance means obeying all laws applicable to the business, as well as company directives and procedures. allied with its values of passion, Respect, integrity and discipline, Mercedes-benz develops initiatives to ensure transparency and to mitigate the risk of potential conflicts of interest, fraud, money laundering, antitrust activity, economic sanctions, terrorism and corruption. Worthy of note among these are the Supplier due diligence and integrity Check (verifying the integrity of business partners); the MCp (Mandatory Consultation process) process, related to the assessment of high value transactions or concerns (Red flags) involving government and private customers; internal controls; communications and training sessions and the company's integrity dialogues.

antitrust coMpliance proGraMMe the daimler group antitrust Compliance programme is aligned with national and international standards, establishing mandatory, globally applicable internal parameters that orientate company analysis of competition legislation-related questions. our standards are as rigorous as those applied in the european union, ensuring a consistent level of antitrust compliance in all the countries in which we operate. our executives and employees receive basic online training and specific face to face courses on competition legislation. internal monitoring drives continuous improvement in the effectiveness of our antitrust Compliance programme and its adaptation to global developments and new legal requirements.

the document sets forth the fundamental principles for doing business, protecting human rights, complying with legislation and internal standards, promoting social responsibility, as well as preventing corruption and conflicts of interest. the Code requires the highest ethical standards from all company employees. it also incorporates the “Social Responsibility principles”, a joint initiative by company management and the global employee Committee, based on the united nations' global Compact.

Known as the Integrity Code, Mercedes-Benz uses the Daimler guide of principles of conduct and operating guidelines, which is applicable to all its employees.


19 th Ponto Extra Trophy – the Sprinter won the São paulo Supermarket association (apaS) award in the transportation category.

2015 Best cars – the Mercedes-benz C Class and gla models received the award from the magazine Carro.

The consumidor Moderno customer Service Excellence Award – “Company of the year” in 2010, 2012, 2013, 2014 and 2015. the brand was also considered to have the best Relationship Centre: 15 times in the “luxury automobile” and 7 times in the “truck” category.

Most prestigious company – More than 13,000 internet users nationwide elected Mercedes-benz do brasil the most prestigious company in the truck segment in a survey conducted by the magazine Época.

Awards and recognition

2014 Automotive Press Award – the Mercedes-benz gla was elected the best sports utility vehicle of the year by the brazilian automotive press association abiauto.

ipsos institute – placed among the top 4 in leadership in april 2015 in the ranking prepared by the ipsos institute, specialized in surveys in diverse market segments. Mercedes-benz was the only automaker that won in the category.

2015 highest Resale Value – one of the winners in the 1st edition of the award promoted by the agency agência autoinforme in partnership with the publisher editora frota, the brand gained recognition in two categories: “light trucks”, with the accelo model, and “Minibus”, with the Sprinter van.

2015 Best Resale Value – a new award granted as a result of an unprecedented partnership between three media organizations (agência autoinforme; editora frota, publisher of Revista frota e Cia; and texto final de Comunicação integrada) which identifies the truck and utility vehicle brands and models providing the best return on purchase price after three years' depreciation. Winners: in the Minibus category, the Sprinter 415, and in the light truck category, the accelo 815.

Most Admired in Brazil in 2015 – promoted by Carta Capital magazine, Mercedes came first in the truck Manufacturer and importer category. the brand received the award based on the result of a survey conducted among executives to evaluate the biggest and most important companies in the country.

Brazil Brand 2014 – the best semi-heavy truck (15 to 40 metric tons) in the heavy goods vehicle industry, in a survey conducted among readers of the magazine O Carreteiro.

nTc Transportation Suppliers – Winner in the 18th and 19th awards coordinated by the instituto datafolha, based on a survey of the main brazilian transportation companies. both in 2014 and 2015, the company won in the categories “Semi-light and light Vehicle Manufacturer” and “Medium and Semi-heavy truck Manufacturer”.

mercedeS-benz do braSil Summary 18Mercedes-Benz do Brasil SuStainability report

16th ABT Award – –“the Customer's Voice” programme won in the product and process innovation category. the award, promoted by the instituto brasileiro de Marketing de Relacionamento (ibMR) in partnership with garrido Marketing, is for best practices in consumer relations.

2014 and 2015 Autodata Award – the company won four trophies in 2014, when Ceo philipp Schiemer was elected “personality of the automotive Sector”; the articulated o 500 was the winner in the “bus” category, the Mercedes-benz Cla in the “imported Vehicle” category, and the Sprinter 9+1 in the “light Commercial Vehicle" category. in 2015, the brand came first in the categories Commercial Vehicle Manufacturer and Marketing Strategy, with fleetboard (an exclusive Mercedes-benz technology).

hospital Best Award – the Sprinter was the winner as the preferred vehicle brand in the ambulance category in 2014.

2014 and 2015 lotus Award – the company was considered the “brand of the year” in six bus chassis categories in 2014 : urban chassis, highway chassis, light trucks, semi-light (Sprinter) and "Semi-light truck of the year" (Sprinter 415 Cdi). in 2015 it was brand of the year” in five categories: bus chassis, urban bus chassis, intercity coach chassis and semi-light truck (Sprinter) and “Semi-light truck of the year” (Sprinter 415 Cdi model).

5th REi Award 2015 – the company won in the four categories it competed in. the actros truck received two trophies, the heavy Commercial Vehicle for the actros 2646 6x4 and the Marketing and advertising trophy for the "Ritmos do brasil" campaign. the Ceo of Mercedes-benz do brasil & head of latin america, philipp Schiemer, was elected "Vehicle Manufacturer professional", and the flexible truck cabin welding line at the Juiz de fora plant won in the "Manufacturing and logistics" category.

Top car TV –two trophies in 2014 for the Cla coupé and the gla sports utility vehicle.

Top Truck TV 2014 and 2015 – tV and electronic media journalists elected the most outstanding vehicles and industry executives of the year in 32 categories. in 2014, three products received the award: the accelo 1016 6x2 as the "best light truck"; the atego 1419 as the "best Medium truck"; and the extra heavy duty actros as the best "Retail trade Commercial Vehicle". in 2015, Mercedes-benz was the winner in four categories: "best business performance" (best Vehicle Manufacturer); "best Vehicle Manufacturer executive": philipp Schiemer, Ceo of Mercedes-benz do brasil & head of latin america; "best Medium truck": Mercedes-benz accelo 1316; "best Semi-heavy truck": Mercedes-benz atego 2430.

2015 cic Brasil Award – the "Customer's Voice" programme also won in the "Strategic thinking" category of the 2015 CiC brasil award, organized by the magazine Revista Cliente Sa. the award acknowledges the best initiatives aimed at customer satisfaction.

Summary 19mercedeS-benz do braSilMercedes-Benz do Brasil SuStainability report Summary 19

Products and services

in 2016, Mercedes-benz do brasil celebrates its 60th anniversary, further consolidating its presence among customers and with its sights set firmly on the future. the company is a reference in brazil and in latin america as a pioneer and leader in technological development and in commercial vehicle sales. the brand is also known for the other high quality, high technology products it commercializes in brazil, such as its light commercial vehicles, the Sprinter and the Vito, and its premium automobiles.

The Mercedes-Benz lines of trucks, buses, light commercial vehicles and automobiles meet all customer needs in the Brazilian market

Quality: focus on reliability, availability, increased working life and improved performance.

effiCienCy: pursuit of reduction in pollution emissions, noise and fuel consumption. ease of repair.

Safety: technologies that preserve life and minimize the risk of accidents

The company's investments are based on three directives:

Mercedes-benz do brasil is the largest truck and bus manufacturer in latin america. it is also the only company that produces trucks, bus chassis and aggregates, such as engines, gearboxes and axles, in a single location.

as a result, the company offers the most complete line of vehicles, meeting all customer needs in the brazilian market. the truck portfolio comprises 207 versions, complemented by 90 in the bus family, 65 models of light commercial vehicle and 50 models in the premium automobile category.

R$1.3 bione of the largest investment plans in the brazilian automobile industry.


the Mercedes-benz portfolio comprehends trucks for every type of transportation, ranging from heavy trucks that connect companies' warehouses and distribution networks and semi-heavy, medium and light models that complete the logistics cycle, ranging from highway through intercity to urban transportation.

in 2014, the atego, axor and actros truck lines offered more than 40 new features based on the eConfoRt (economy + Comfort + power/performance) concept. in May 2014, the company organized a series of test drives with customers and the press. this was the eConfoRt experience, the first of which was held in the Velopark autodrome in porto alegre. during the three-day event, more than 80 journalists and 500 customers had the opportunity to try out the three truck lines. Similar events were held in Cascavel, paraná, and Rondonópolis, Mato grosso, significant markets for trucks.

Worthy of note in 2014 was the launch of the atego 2430, with an automated 12-speed Mercedes powerShift transmission; the biggest cabin and cargo bed in the category, ensuring greater productivity; and a robust engine, with the highest torque in the segment. in March 2015, the line was expanded with the offer of a new rear axle ratio (i=3.30), boosting the vehicle's versatility. the change in ratio directly influences engine rotations, reducing internal noise levels and increasing engine durability.

in the axor line, the most important new features were the automated Mercedes powerShift transmission with no clutch pedal and with smart functions on the axor 4x2, 6x2 and 6x4 highway models; rear axles without hub reduction for the versions 6x2 and 6x4, resulting in lower fuel consumption and lower operating costs; air suspension in the chassis, fully remodelled cabin interior with bed, providing a high level of onboard comfort and well-being.

in the actros line models, the fully automated Mercedes powerShift transmission, which has no clutch pedal or synchronizing rings, is standard on both highway and off-road models, offering diverse advantages both for the driver and the customer. other novelties include rear axles with no hub reduction; pneumatic rear suspension as standard and the exclusive Megaspace cabin with air suspension and high levels of ergonomics and functionality, as well as an exclusive totally flat floor.

in 2015, the launch of the new best-in-class extra heavyweight actros highway trucks was one of the brand's main attractions. With a bold new, modern design, they are equipped with a number of high technology features, offering customers even higher levels of quality, performance, comfort and safety. particularly worthy of note was the introduction of the 510 hp 13-litre oM

Trucks

207 versions of trucks in the Mercedes-benz portfolio

460 la engine in the newest member of the family, the actros 2651 6x4, making it the most powerful vehicle produced by Mercedes-benz in brazil. the 460 hp version of this 13-litre engine was also used in the actros 2646 6x4 and actros 2546 6x2.

in addition to the three new actros models, in 2015 the Mercedes-benz truck line was complemented by four new models: the semi-heavy atego 3030 and 3026 8x2, the first vehicles to leave the factory in a 8x2 4-axle configuration; the atego 2730 6x4 for civil construction and off-road operations, and the new midsize accelo 1316 6x2, with a third axle as standard and a total gross weight of 13 tons. With this range, Mercedes-benz fully meets market demands, offering greater transportation efficiency, productivity and profitability, with superior comfort for the driver. Mercedes-benz trucks are known for their power and performance and their elevated levels of robustness, resilience and productivity. they are also differentiated by their versatility and large cargo capacity, allied with reduced fuel consumption and operating costs.


Busesthe leader in bus sales since it was founded, Mercedes-benz do brasil houses the daimler World Competence Centre for the development and production of bus chassis at its São bernardo do Campo unit in São paulo.

With the most comprehensive line of bus chassis, the brand portfolio comprises vehicles designed to meet the requirements of all major urban public transport systems, such as bus corridors, exclusive lanes and bRt (bus Rapid transit) systems, as well feeder and distribution routes.

ThE SuPER-ARTiculATEd O 500 hAS A nEw hiGhER cAPAciTy REAR AxlEWith a growing presence in São paulo and diverse other metropolitan regions in brazil, the super-articulated o 500 ensures greater robustness to meet the demands of mass transport. its new 13-ton ho-7 rear axle increases cargo capacity by 6%, boosting resistance and durability, as well as passenger load.

ThE Of 1519 OPTiMizES AiR cOndiTiOninG inSTAllATiOnan important new feature was introduced in the of 1519 in 2015. the repositioning of the air filter on the left-hand side of the chassis facilitates the assembly of the air conditioning system compressor. this alteration meets the growing demand for

air conditioning in the São paulo public transportation system.

the repositioning of the air filter boosts onboard comfort and convenience since it enables the bus to be fitted with a wider front door, optimizing passenger access and speeding up operations.

developed for urban and charter applications, the of 1519 chassis can take bus bodies of up to 11.3 metres in length. the new stamped R 390 10.5 tonne rear axle guarantees a reduction in weight, while maintaining the same robustness. it also facilitates assembly and maintenance with low noise levels and high durability.

MERcEdES-BEnz chASSiS dRiVE EnViROnMEnTAl SuSTAinABiliTyMercedes-benz buses can be powered by non-fossil fuels, such as sugarcane-based diesel and biodiesel, solutions in use in cities such as São paulo and Rio de Janeiro. the environmental gains enabled by the use of these alternative fuels are further incremented by engines using bluetec 5 technology. this way, the company makes an important contribution to sustainable urban mobility. furthermore, it gives customers, operators and transportation managers the possibility of choosing between different fuels. all of this is done without any alterations in the engines. in other words, Mercedes-benz engines are multi-fuel.

Mercedes-benz has developed a six-cylinder generator engine for the 23-meter super-articulated 500 uda chassis, with a 4th steer

axle fitted especially for an innovative hybrid electric bus in brazil. Known as the dual bus and powered by eletra technology, the vehicle is considered to be hybrid. When it uses only the batteries it is powered purely by electricity. however, it may also be used as a trolleybus in areas where there is an overhead wire network. the hybrid model significantly reduces pollutant emissions, which may be as low as zero when the generator engine is off.

the company also provides solutions for sustainable mobility. Mercedes-benz buses are currently used extensively in the main bRt (bus Rapid transit) systems in place in brazil. these include the expresso tiradentes in São paulo; the MoVe in belo horizonte; the transoeste and transcarioca systems in Rio de Janeiro; and the expresso df in brasilia. the bRt systems in these metropolitan regions boost quality of life for the public, offering faster, more comfortable and safer transportation and driving significant gains in urban mobility. this is complemented by environmental benefits, given that the new fleets of Mercedes-benz buses consume less fuel, emit fewer pollutants and help improve air quality due to the company's exclusive bluetec 5 technology.

Mercedes-Benz buses offer sustainable urban mobility solutions, with faster, more comfortable and safer options


the light Commercial vehicles that Mercedes-benz commercializes in brazil are the Sprinter and the Vito, produced in the Mercedes-benz plant in gonzález Catán, argentina. More than 60 versions are available on the market. the Sprinter is one of the most successful vehicles in the world. available in the brazilian market since 1997, more than 113,000 of these vans have been sold to date. the Vito, which can be driven with a brazilian “b” category license, was launched at the end of 2015.

emissions: according to the brazilian fuel efficiency labelling programme, Mercedes-benz vans have reduced pollutant (nox, Co², nMhC) emissions in comparison with the main competitors in the same class.

SPRinTERbased on the largest and most complete portfolio of panel vans, chassis and people carriers in the brazilian market, the Mercedes-benz Sprinter is noted for its innovative, customized solutions. Compact, tough and agile, it circulates easily and efficiently in urban traffic and over short distances, performing particularly well in large metropolitan regions with restricted zones.

a new version of the Sprinter 415 Cdi 9+1 (9 seats plus the driver's seat) was launched in June 2014, with exclusive leather seats and an adjustable multifunctional steering wheel. adaptive eSp, airbag and diverse other features guarantee practicality, comfort and safety.

another modification was introduced in May 2015, when the Mercedes-benz Sprinter Street received a new configuration for its proven oM 651 engine, generating a 12% increase in power and 7% higher torque, resulting in greater agility in traffic and faster deliveries.

longer engine oil change intervals for the Sprinter: in december 2015, the service intervals for Sprinter vehicles were unified at 20,000 kilometres regardless of the service category. the main advantages are: a direct reduction in maintenance costs for customers, environmental improvement due to decreased oil disposal and higher service intervals than competing models, resulting in increased vehicle availability. additionally, the reduction produces a positive environmental impact due to the lower volume of engine lubricant disposed of.

With more than 50 models, the Mercedes-Benz light commercial vehicle portfolio means great versatility for entrepreneursLight Commercial Vehicles

ViTOdesigned for versatility, the Vito line is aimed at reinventing the midsize panel van and people carrier segment in brazil. With a gross vehicle weight of 3,050 kg, it combines comfort and safety with features such as Crosswind assist and attention assist. especially indicated for transportation companies, self-employed transportation operators and entrepreneurs, the Vito 111 Cdi turbo diesel van has a load capacity of 1,225 kg or 6 cubic metres, making it suitable for diverse applications. With its compact dimensions and robust capacity it can be used in innumerable situations, such as carrying partial loads, refrigerated loads, pallets and mobile units. it is also ideal for e-commerce deliveries, events and for liberal professionals.

in the Comfort (8+1) and luxo (7+1) versions, the Vito turbo flex tourer 119 meets diverse passenger transportation requirements, such as transfers, executive transport, tourism and limousine services, not to mention private use. in the passenger compartment, the six seats may be easily removed, permitting greater flexibility and the possibility of increasing luggage space.


a reference in the premium automobile segment, Mercedes-benz has been increasingly winning over the brazilian public with a large number of product launches and significant investments in technology and innovation.

Considered to be true objects of desire, Mercedes has a broad portfolio of automobiles, such as the comfortable and luxurious S Class Coupé, which combines the classic proportions and charm of a sports coupé with state-of-the-art technology. it was launched in europe in 2014 and arrived in brazil in 2015. the model has diverse internal features: the interior colour scheme can be customized and the standard ambient lighting has seven different settings to ensure a sensation of well-being. the customer may opt for special headlights, each having 47 Swarovski crystals. in the standard Seat Comfort package, the front seats provide a massage function.

in the compact category, in 2014 Mercedes-benz do brasil started importing the revolutionary a 250 turbo Sport. the 2.0 litre 211 horse power engine ensures dynamic, sporty performance. the efficiency of the engine is optimized by the

transverse dual clutch 7g-dCt automatic transmission. the transmission has seven speeds and two sub-transmissions, each with its own clutch. thanks to this configuration, gear changes are almost immediate with no loss of traction.

equipped with diverse innovations, the new generation C Class was launched in brazil in august 2014. Worthy of note in this best seller are: the completely reformulated and more spacious interior, the new external design with lines that evoke the S Class, improved performance due to the combination of the new 2.0 turbo engine in the C 200 and C 250 versions, the bold aerodynamic design, and the increased use of aluminium in the bodywork, making this generation 50 kg lighter than its predecessor. another new feature is the led headlights, available in seven models – C 180 ff avantgarde, C 180 ff exclusive, C 200 ff avantgarde, C 250 Sport, Mercedes-aMg C43 4M, Mercedes-aMg C63 and Mercedes-aMg C63S.

focused on producing more efficient vehicles that pollute less, Mercedes-benz has incorporated technologies such as start-stop and direct injection engines

Automobiles

the Mercedes-benz do brasil automobile portfolio comprises

50 models

200 avantgarde and C 250 Sport) and four versions of the gla (gla 200 ff Style, gla 200 ff advance, gla 200 ff enduro and gla 250 Sport).

Complementing its portfolio, Mercedes-benz also offers a premium automobile rental service –Mb Rent. luxury sedans, SuVs, Smart cars and even the recently launched Vito van make up this fleet used by people who are passionate about the brand, as well as by hotels, travel agencies, events promoters, air taxi services, among others.

in its entire automobile portfolio for the brazilian market. furthermore, it has developed flexible fuel vehicles that can run on gasoline and ethanol, a non-fossil fuel in common use in the market.

further consolidating the brand's presence in the brazilian market, in March 2016 Mercedes-benz inaugurated a new factory in iracemápolis in the state of São paulo, where it started producing automobiles employing cutting edge industrial processes. the new plant is a milestone in the development of the brand's flexible and efficient production chain. the unit manufactures four versions of the C Class (C 180 ff avantgarde, C 180 ff exclusive, C


the Mercedes-benz product and service portfolio encompasses a wide range of spare parts. Customers have the option of selecting the product that best suits their replacement and maintenance requirements while optimizing operating costs.

SPARE PARTS – Customers always have access to the best options in spare parts. these include genuine parts, made with rigorous quality control and commercialized with a 12-month guarantee, and the RenoV line of remanufactured parts. Consisting of 15 product families with more than 240 items, the RenoV line is the largest portfolio of remanufactured parts for commercial vehicles in the market. Commercialized on a part exchange basis, prices are on average 40% lower than new parts. from 2015 , customers have also had access to alliance truck parts original parts and accessories, offering a new option at an attractive price for customers seeking economy and quality with a warranty. these three spare part options are available from the Mercedes-benz dealer network.

7 million parts available at the more than 200 dealerships in the brazilian market and in more than 50 countries

Parts and customer servicesMAinTEnAncE PlAnS – Mercedes-benz Maintenance plans are essential to ensure that preventive and corrective servicing is carried out with original parts and using specialized, qualified manpower. from 2017 there will be four types of plan to suit diverse customer operations, with coverage ranging from preventive maintenance to repair work, ensuring maximized vehicle availability. these are complemented by a tow truck and mobile mechanic service, offering customers convenience when they most need it. the Mercedes-benz maintenance plans are designed to ensure the predictability of vehicle maintenance costs, providing nationwide service through the dealer network and maximizing customers' return on investment. the company also has a toll-free 0800 service centre which operates 24 hours a day, seven days a week.

dEdicATEd MERcEdES-BEnz wORkShOP – Mercedes-benz has expanded the offer of a new, differentiated service, providing Mercedes dealer services in workshops on large customers' own premises. these workshops carry out corrective and preventive maintenance to the same standards of quality guaranteed at dealerships. this service offers customers many benefits, including increased vehicle availability, fewer unscheduled stoppages, more qualified and faster maintenance, with no wasted time. Moreover, the reduction in trips to the dealer translates into fuel savings and greater productivity for drivers, whose time may be better employed while the service is performed.


27 training units located all over Brazil are certified to qualify dealer network professionals in accordance with international standards

23 ,000 professionals trained in more than 250 areas for the Mercedes-benz lines of commercial vehicles and automobiles

luBRicAnT – through its dealership network, the company commercializes its own genuine oil brand at competitive prices. this line of engine, differential and transmission lubricants is available for Mercedes-benz trucks, buses and the Sprinter. used successfully in more than 20 countries, Mercedes-benz brand oil is consumed by 5 million customers a year. produced with the brand's hallmark quality, the lubricant was developed for all engine specifications.

24-hOuR ASSiSTAncE SERVicE – Completely free of cost during the vehicle warranty period, the Mercedes-benz 24 hour Service offers a wide range of services, such as mechanical assistance, towing, accommodation, taxis, transfers and many other benefits. Customers are entitled to access these services at any time anywhere in brazil via the telephone 0800-970 9090.

dEAlER nETwORk – present in every state in brazil, the network consists of around 200 strategically located service outlets providing broad nationwide coverage.

RElATiOnShiP cEnTRE – With a highly specialized team, the Customer Relationship Centre may be accessed via diverse channels, such as telephone, email, online chat, correspondence, fax and the social networks, providing high quality service with a rapid response.

flEETBOARd – formula 1 technology is now available on brazilian highways, enabling fully comprehensive fleet management for our customers. from self-employed drivers to large fleet owners, fleetboard helps improve performance, reduce operational costs and prolong vehicle working life by means of the most complete telemetrics system on the brazilian market. the platform also ensures

vehicle and cargo security via its tracking and locking functions. our telemetrics system provides a full prognosis for truck maintenance, as well as generating information about the level of wear of diverse components, enabling maximum availability and avoiding unpleasant surprises on the road. all of these benefits come in a single module which is standard equipment on Mercedes-benz vehicles, with customer vehicle data integrity guaranteed.

in august 2015, the MercedesServiceCard for the purchase of fuel, parts and services was launched for commercial truck, bus and light commercial vehicle fleets. in partnership with the ticket company's ticket Car, the new card demonstrates Mercedes-benz's commitment to expanding its broad portfolio of products and services.

Mercedes-benz is the first commercial vehicle fleet manufacturer in the country to offer this type of card, which has enjoyed great success in europe for over ten years. the MercedesServiceCard is also a tool that drives loyalty, providing customers with additional benefits such as discounts on fuel and facilitated payment of vehicle maintenance in the Mercedes-benz dealer network. the card guarantees security by eliminating the need for cash and ensuring practicality and convenience for drivers, as well as improved control over expenses for fleet managers.

Mercedes-Benz launches service card


Strategy and management

2in this chapter > risk control

> managing targets

StrateGy and manaGement Summary 27Mercedes-Benz do Brasil SuStainability report

Corporate Project Management - PMO

Mercedes-benz do brasil has an integrated management system (iMS), which was implanted in 1995 and is submitted to periodic reviews. policy is aligned with international standards that specify the requirements for the quality, occupational health and safety and environmental management system.

the integrated management system encompasses procedures set forth in the iSo 9001, iSo tS 16949, ohSaS 18001 and iSo 14001 standards, as well as other documents to ensure operational effectiveness and process control. it also incorporates the manual of principles and methods used globally in truck and bus production systems. additionally, the daimler group adopts the nine lean principles, a strategy used to enhance customer satisfaction by means of optimized resource utilization. Mercedes-benz employees from around the world met in Mannheim, germany, in november 2014 to study the best practices set forth in the concept. at this encounter, Mercedes-benz do brasil received awards for three management projects, among the 62 submitted:

Category 5 (best process and Service portfolio optimization) 3rd place, São bernardo do Campo: Optimization of commercial vehicle invoicing process.

Category 8 (best overall toS lean Culture) 2nd place, São Bernardo do campo: Pull Principle in ckd - the major challenge.

3rd place, Juiz de fora: Excellence in Quality and Safety.

BuSinESS innOVATiOn (Bi)part of a global innovation network, the business innovation office has worked on new trends , exploring alternatives to strengthen Mercedes-benz do brasil's business and prepare the company for the constant changes in society and in customer expectations.

at the end of 2015 the first event with incubators, universities and venture capitalists was organizing, attracting market attention to the diverse needs of internal departments and focusing mainly on challenges customers have faced.

at the beginning of 2014, seven growth priorities were established, one of which is the circular economy, aimed at transforming sustainability challenges into business opportunities. Within this priority,

two projects are at a more advanced stage of maturity:

a pilot for the renovation of bus fleets which tested a business model that links the sale of the new vehicle to the purchase and reuse or recycling of the used one;

implantation of an e-commerce model for classic parts providing the owners of classic Mercedes models with access to rarer parts.

2014saw the establishment of seven growth priorities, including the circular economy aimed at transforming sustainability challenges into business opportunities

IMSa policy shaping Mercedes-Benz's actions in quality, occupational health and safety and the environment

Sustainabilityincorporated into strategy through the development of clean technologies and the manufacture of environmentally responsible products

the Mb trucks #1 - Mbbras turnaround, fundamental for the resumption of the company's growth, was concluded in 2014 with the identification and implementation of improvements in the engineering, Materials, production, Quality, Sales, post-Sale and fixed Cost areas.

With a view to expanding its field of action, in 2015 the Corporate project Management office (pMo) assumed an important role in the development and management of the projects, providing its knowledge of project support methods and boosting the probability of success, as well as accelerating strategic decision making.

the weekly meetings involving the business area, the pMo and the board, have adopted an innovative format that does not require the preparation of presentations; the meetings are held in what is known as the war room.

Since then, the area has been involved in a number of successful projects.

Strategy and management Summary 28Mercedes-Benz do Brasil SuStainability RepoRt

Risk control Gri G4-2

for Mercedes-benz do brasil, risk management requires the prior identification, assessment, treatment and monitoring of risks. to ensure this, the company has control and monitoring systems which are aligned with the directives and procedures adopted across all daimler group units.

the process of identifying risks and their respective impacts involves all company employees and is revised by the board twice a year. this process encompasses legal and regulatory risks, financial and business risks, as well as reputational risk inside and outside the company. Gri G4-45, G4-46, G4-47

Within this context, regulatory risks have a significant impact on the company's businesses in the country. Regulations related to vehicle emissions and fuel consumption are particularly relevant in the automotive chain and, consequently, for Mercedes-benz do brasil. in view of this, the company develops vehicles that are increasingly economical with lower levels of pollutant emissions. this involves research, development and product innovation.

TARGET MAnAGEMEnTto encourage the engagement of the entire work force and to present the results expected objectively, Mercedes-benz do brasil disseminates its targets at the beginning of each year by means of ScoreCard methodology, which is adopted by all daimler group units worldwide. targets are reviewed annually in accordance with the prevailing economic conjuncture.

the targets proposed take into account, among other factors, the need to avoid rework and to increase process efficiency; ensuring on-time product delivery; avoiding accidents; observing the integrity Code and daimler group Compliance requirements; as well as maintaining the company's social responsibility programmes.

the proposals are standardized via the design of a pyramid in which the base consists of the corporate values: passion, Respect, integrity and discipline. at the top, profitable growth is featured as the company's main target.

to achieve the planned results, work is applied in seven dimensions: profitable growth (top of the pyramid), Superior products and Customer Satisfaction, leadership in innovation and technology, global presence and integration, leading brands, operational excellence and inspired high performers. these seven dimensions are broken down into general targets which permit the integration of each dimension into the organization's day to day routines.

Strategy and management Summary 29Mercedes-Benz do Brasil SuStainability RepoRt

Managing for Sustainability

3in this chapter > operational and financial

performance

> environmental performance

> Social performance

manaGinG For SuStainability Summary 30Mercedes-Benz do Brasil SuStainability report

revenue (r$ Billion)

2014

15.014.3

2013

8.4

2011

inTERnAl

2014

1.92.0

2013

1.5

2011

ExTERnAl

2014

16,916.3

2013

9.9

2011

TOTAl

Responsibility, ethics and respect for society and the planet

Sustainability is aimed at ensuring the long-term success of the business and, at the same time, contributing to the economic and social development of the community and a healthy and stable environment.

in strategic planning, this concept is considered in assessing business performance in the economic, social and environmental dimensions, also seeking to answer the question: how to ensure the longevity of the business without jeopardizing the planet and those who live on it, while offering the best products and services, generating wealth for investors and opportunities for the surrounding community.

in 2014 and 2015, the brazilian automotive market suffered a retraction in sales volume compared with the previous two-year period, influenced mainly by the conjuncture of high inflation combined with high interest rates and low gross domestic product (gdp) growth in the country. in the automotive market as a whole, the worst hit category

was commercial vehicles (trucks and buses), significantly impacting Mercedes-benz do brasil's business, since this category represents the major portion of the company's revenues in brazil.

in the automobile, light commercial, truck and bus segments, the company had revenues of R$30.2 billion in 2014-2015, 15% up on 2012/2013. from this total, R$ 25.4 billion corresponded to sales in the brazilian market and R$ 4.8 billion to exports (latin american and other countries).

Operational and financial performance

MANAGING FOR SUSTAINABILITY SUMMARY 31Mercedes-Benz do Brasil SuStainability RepoRt

PROducTiOn And SAlESMercedes-benz do brasil had the largest commercial vehicle sales volume in the brazilian market in 2015. the company ended the year with the significant number of 33,279 units of trucks, buses and light commercial vehicles (Sprinter and Vito) registered. this represents around one third of the 112,000 units commercialized in the three market segments.

the company ended 2015 having commercialized 18,109 trucks (over 6 tons), 8,254 buses (over 8 tons) and 6,916 Sprinter and Vito line vehicles. this result was due to the efforts of the

Mercedes-Benz commercialized more than 90, 000 trucks, buses and light commercial vehicles in 2014/2015

total truck reGistrations doMestic Market

2015

18.1

2014

34.336.8

2013

33.741.5

20122011

total Bus reGistrations doMestic Market

2015

8.2

2014

13.013.6

2013

12.614.9

20122011

Source: denatran

total autoMoBile reGistrations doMestic Market

2015

17.5

2014

11.99.4

2013

6.210.3

20122011

total liGht coMMercial vehicle reGistrations doMestic Market

2015

7.0

2014

9.59.7

2013

5.86.3

20122011

plant and dealer network to listen to what customers want.

a reference in the premium automobile segment, Mercedes-benz has increasingly won over the brazilian public with its large number of product launches and significant investments in technology and innovation. automobile registrations totalled 17,725 in 2015, compared with 11,912 units in 2014.

Regardless of the number of units registered in the country in the coming years, Mercedes-benz intends to remain top of Mind in trucks, buses and light commercial vehicles. in 2015, the brand won the biggest number of awards for commercial vehicles in the brazilian market, based on surveys of customers and opinions formers in the automotive sector.90%

growth in automobile sales in 2014/2015


Investments from 2010 to 2015, Mercedes-benz do brasil invested R$ 2.2 billion in upgrading its plants in Campinas, São bernardo do Campo and Juiz de fora, underscoring the strategic importance of the brazilian market and the company's confidence in the country.

the constant pursuit of increased productivity means the company will continue to invest in brazil in the coming years: the Mercedes-benz do brasil investment plan includes an additional R$ 730 million by 2018, aimed at boosting synergies between the commercial vehicle plants in São bernardo do Campo and Juiz de fora, while concentrating cabin production in Juiz de fora and the manufacture

of axles, engines, gearboxes and final assembly of trucks and buses in São bernardo. as a result of these investments, the company will have a more up-to-date industrial park, with modern manufacturing and assembly processes, making it even more competitive, not only in brazil but also globally.

to further expand its presence in brazil, in 2015 Mercedes-benz initiated the construction of its automobile plant in iracemápolis in São paulo state. the company will invest R$ 600 million in the factory, which will have an initial production capacity of 20,000 vehicles a year, making Mercedes-benz the only automotive company to produce cars, vans, buses and trucks in latin america.

Mercedes-Benz do Brasil plans to invest R$ 730 million by 2018, aimed at boosting synergies between its commercial vehicle plants


cOMMiTMEnT TO RESPOnSiBlE PRAcTicESMercedes-benz do brasil is aligned with daimler group global environmental management guidelines, which are aimed at standardizing activities to drive commitment and a positive performance in the preservation of natural resources as a means of guaranteeing business continuity and environmental conservation, preserving the planet for future generations.

this commitment to environmental quality is sustained by five pillars: waste; water, air and soil; legal compliance; eco-efficiency, dissemination and awareness.

the company focuses particularly on the ongoing development and application of technologies aimed at economizing water and energy, on strategies to minimize atmospheric emissions and to reutilize and recycle materials, mitigating waste disposal impacts.

in addition to complying with legal requirements, Mercedes-benz is aligned with the iSo 14001 standard, with all its

units certified except iracemápolis. the company periodically audits its processes to identify any deviations and to take the necessary corrective measures.

EnViROnMEnTAl MAnAGEMEnT SySTEM the manner in which the company should address these pillars is determined in the environmental Management System (eMS), which establishes work procedures, mechanisms to ensure compliance with legal requirements, methods to enhance production processes and emergency protocols, in addition to organizing management documentation related to different environmental aspects.

Topics addressed by the EMS

identification of aspects and hazards and assessment of controls

legal and other requirements

internal and external communication

Competency, training and awareness

identification and assessment of emergency situations

auditing the integrated management system

improvement, corrective and preventive actions (pdCa methodology)

environmental and occupational health and safety monitoring plans

administration of hazardous products

Solid waste management

liquid effluent management

atmospheric emissions management

planning and identification of environmental aspects and future occupational hazards

environMental ManaGeMent systeM (eMs)

environMental Quality

Environmental performance

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Environmental Performance Index

to measure its environmental performance and ensure year on year comparability, Mercedes-benz applies its environmental performance index, which monitors energy consumption, water consumption, hazardous solid waste generation and selective waste collection on a monthly basis and is used to implement corrective measures and to drive continuous improvement.

the targets for the index in 2015 were a reduction of 4% in electricity consumption, 2% in water consumption and the maintenance of the same percentage achieved in 2014 for hazardous waste, as well as 97% compliance in selective collection. the format of the index permits the insertion of new indicators and targets in accordance with the company's needs and interests, as well as management and offsetting of the most significant environmental aspects. it also permits measurement of consumption per vehicle produced.

the importance of the index is reflected in the fact that senior executives' bonuses are linked with the achievement of targets, as is the case with the company's other strategic objectives. Currently a new data bank for the index is under development.

in addition to the environmental Management System, Mercedes-benz is also oriented by its environmental principles, a set of drivers that determine how the company should address opportunities to reduce impacts.

1 - We project future environmental challenges, working continuously on improving environmental performance in processes and products.

2 - We develop products that are environmentally responsible in their respective market segments.

3 - We plan all production stages to ensure the rational use of resources and inputs, minimizing waste generation, preventing impacts and pollution and optimizing environmental protection.

Environmental Principles

4 - We promote measures to protect biodiversity, reduce greenhouse gas emissions, and identify opportunities to mitigate climate change impacts.

5 - We monitor process environmental indicators and appraise company executives based on the achievement of environmental targets.

6 - We provide customers with information and services oriented to promoting reverse logistics and environmental protection.

7 - We strive continually to ensure exemplary environmental performance and to develop environmentally responsible suppliers of products, transportation and other services.

8 – We provide transparent information on environmental protection to company employees and to the general public.

The Environmental Performance Index monitors energy consumption, water consumption and waste generation, optimizing corrective measures and driving continuous improvement

Summary 35Mercedes-Benz do Brasil SuStainability RepoRt manaGinG For SuStainabilityMercedes-Benz do Brasil SuStainability report Summary 35

nOn-hAzARdOuS (in tons) 2012 2013 2014 2015

Composting (foods and tree clippings) 0.15 0.20 83.33 643.59

Reutilization (pallets) 7,150 7,080 4,950 2,400

Recycling (plastics, cardboard, glass, aluminium cans and tires) 5,377 4,654 3,310 2,478

Recovery - includes energy recovery 3,617 6,584 4,003 2,682

industrial landfill (dejects, regular garbage) 2,772 3,011 2,457 1,257

TOTAl 18,916 21,330 14,803 9,460

hAzARdOuS (in tons) 2012 2013 2014 2015

Recycling (solvents, electrical equipment, drums, emulsion and lubricants) 1,200.13 1,336.49 960.12 522.48

Recovery - includes energy recovery, paint sludge, oil and parings, activated coke, sludge, contaminated earth and light bulbs

1,941.70 2,179,37 2,636.60 1,641.53

incineration (hospital waste) 1.40 1.32 1.45 1.25

Sanitary landfill (asbestos roofing) 91.46 201.25 496 227.05

on site storage (paint sludge, oil and parings, activated coke, sludge, contaminated earth, light bulbs, resins, solvents and electrical equipment)

336.00 280.00 592.00 145.00

TOTAl 3,600.69 3,998.43 4,773.17 2,719.31

Total non-hazardous + hazardous 22,516.84 25,328.04 19,576.60 12,179.58

*the numbers for the previous two-year period were restated due to improved controls.

waste Generation and destination Gri G4-en23wASTE Gri G4-en23

Waste management at Mercedes-benz prioritizes the reuse of materials rather than disposing of them, as well as employing recyclable and non-pollutant materials.

the company has an internal collection and transportation system in which the waste generated in the diverse production processes is placed outside the respective buildings. this stage is conducted by employees who have been trained in internal environmental procedures, which include the selective collection programme. the disposal areas are standardized with the waste organized in accordance with its properties: hazardous, regular rubbish, paper and cardboard, plastic, metal, wood and others. upon collection, the material is transported either to the recyclable waste centre (Class ii) or hazardous waste centre (Class i). Regular rubbish is collected by compactor garbage trucks and sent directly to sanitary landfills.

Recyclable waste is submitted to an operational process which encompasses the receipt of diverse packaging from production processes, the disassembly and sorting of its components by type of

material (paper, cardboard, plastic, glass and wood), compacting or storage for shipping to approved customers who use it to manufacture new raw materials.

hazardous waste is identified, sorted, stowed adequately and disposed of by approved service providers who are fully compliant with legislation. the final destination of hazardous waste is undertaken by providers specialized in the neutralization of the material, after which it is disposed of in cement kilns or submitted to other types of treatment. other eco-friendly processes include the reuse of lubricants, solvents and drums; the employment of a paint sludge drying system; ultra-filtration equipment for oil emulsions; the use of washable towels for industrial cleaning instead of disposable ones; and the use of a filter press in the wastewater treatment plant to dry the sludge.


in 2014 and 2015, the volume of waste generated by Mercedes-benz do brasil was around 32% lower than in the 2012-2013 period, in part due to the decrease in production volume. however, the increase in the hazardous waste in 2014 was the result of the displacement of contaminated soil in one area of the plant.

furthermore, there was a drop in the volume of waste disposed of in industrial landfills because in november 2014 the company started to dispose of food leftovers via composting. there was also a reduction in waste sent to sanitary landfills, with the donation or sale of material in alignment with brazilian national solid waste policy.

partnership with iaM (instituição assistencial Meimei): as a social and environmental improvement measure, the company donates some waste materials such as metals, white paper, tetra pack packaging etc on a monthly basis so that the institution may sell these and generate income to help cover its expenses. the environmental team carries out periodic inspections to ensure that these are handled and recycled in accordance with the law. wATER And EffluEnTS

Mercedes-benz constantly monitors water consumption and carries out periodic inspections on equipment and installations to eliminate any wastage. as a result, the volume of water withdrawn has been decreasing over the years, as shown in the table at the side. Moreover, the company adopts measures to reduce consumption, such as the installation of flow reduction valves on taps and showers and the substitution of lavatory bowls and shower units. the company also employs processes to reuse rainwater, water from washing vegetables and greens in the restaurant and the dejects from reverse osmosis (the desalinization process that generates industrial water).

the São bernardo do Campo, Campinas and Juiz de fora units each have a wastewater treatment plant, and a treatment plant for industrial effluent is currently being implanted at iracemápolis, which will enable discharge in compliance with legal

total water discharGe (m3/year) Gri G4-en22

2012 2013 2014 2015

domestic effluent with primary treatment (removal of solids and grease)

1,301,234.46 1,048,808.92 862,846.00 837,391.70

Secondary industrial effluent (chemical flocculation)

259,158.54 325,556.08 213,182.00 177,204.30

TOTAl 1,560,393.00 1,374,365.00 1,076,028.00 1,014,596.00

Periodic inspections of equipment and installations seek to eliminate water wastage, resulting in reduced withdrawal volumes over the years

4%water consumption reduction target for 2015 established in the environmental performance index

total water withdrawn By source (000's of m3/year) Gri G4-en8

utility / external supply

734,428

2012

804,432

2013 2014

729,019

2015

539,027

*the change in scope of the gRi 4.0 protocol compared with gRi 3.1 resulted in different numbers from the previous report.

requirements. the effluent networks are separated in accordance with the liquid generated. at the São bernardo do Campo unit, the domestic and industrial effluents are discharged into the public (SabeSp) sewage network in compliance with state legislation, law 997, decree 8.468, article 19a. there was a reduction in effluent generation in function of the decrease in production and the number of employees. in 2014, improvements in the painting process also led to a reduction in the generation of industrial effluent. Gri G4-en22

to ensure that effluents do not contaminate the soil, the company has an internal environmental audit programme that includes checks on machine leaks, compliance in maintenance and cleaning activities, as well as deviations in the use of containment basins and in the disposal of waste, among other items.


ATMOSPhERic EMiSSiOnS Gri G4-ec2

Mercedes-benz do brasil employs a series of measures to control the atmospheric emissions from its production processes, including emissions monitoring, air quality control, dispersion studies, mapping of stationary and mobile sources and a greenhouse gas (ghg) emissions inventory.

these atmospheric emissions are monitored and controlled by specific equipment such as filter sleeves, post burners and gas scrubbers. noise is monitored both internally and externally and the ghg emissions inventory is conducted in accordance with ghg protocol methodology, which is compliant with iSo 14064-1 and is one of the most widely used tools worldwide.

furthermore, the company is rigorously compliant with brazil's ConaMa Resolution nº 299/2001 which establishes procedures for reporting new vehicle emissions. the results of specific regulated pollutant emissions, obtained by tests defined in accordance with nbR standards, are sent to the p/R Vehicle Regulation, Certification & approval area every six months and then forwarded to the competent government authorities.

during 2015, Mercedes-benz do brasil emitted a total of 73,950.04 tCo2e, comprehending scopes 1, 2 and 3. the base year considered is 2012 – when the company conducted its first inventory – and the gases identified were: Co2, Ch4, n2o and hfC. it should be noted that R-22 (hCfC-22) and hCfC-141b emissions were also identified due to the use of refrigeration and air conditioning equipment; however, these gases are not taken into account in the Kyoto protocol.

Since 2011, Mercedes-benz do brasil has kept an inventory of its ghg emissions. in order to improve environmental performance, the company established

eMissions By scope (tco2e) 2012 2013 2014 2015

Scope 1 Gri G4-en15 43,184.46 58,866.291 57,596.72 43,047.73

Scope 2 Gri G4-en16 12,482.82 21,031.91 26,145.20 20,880.97

Scope 3 Gri G4-en17 12,593.802 12,996.47 10,565.17 10,021.34

Scope 1: direct emissions (stationary sources, mobile sources, industrial processes, fugitive emissions and fertilizers)Scope 2: indirect emissions (electricity)Scope 3: indirect emissions - optional (freight, solid waste treatment and air travel)1, 2 numbers restated in relation to the 2012-2013 Sustainability Report.

Mercedes-Benz do Brasil has kept an inventory of its GHG emissions since 2011 and works on controlling them in its production processes.

23.7%reduction in scope 1 and 2 greenhouse gas emissions in 2015

eMissions x production

emissions per product (tCo2e)

1.09

2012

1.17

2013 2014

1.59

water and electricity consumption reduction targets. the innovations and solutions adopted to promote a low carbon economy include electric vehicles and the truck of the future.

With a view to driving constant improvement in its activities, in addition to its plants in Campinas (Sp), Juiz de fora (Mg) and the company headquarters in São bernardo do Campo (Sp), in 2015 the greenhouse gas inventory included the recently inaugurated factory in iracemápolis (Sp) and the regional offices in Recife (pe), brasília (df), Rio de Janeiro (RJ) and porto alegre (RS).

even with the 23.7% reduction in scope 1 and 2 ghg emissions in 2015, there was a 9% increase in the scope of the indicator. this was due to the continuous refinement Mercedes-benz do brasil has introduced into climate management by incorporating new ghg emission sources into the calculation, such as the iracemápolis plant, the regional offices and the use of lubricants and grease.


EcO-EfficiEncy Gri G4-en3, G4-en4

in 2014 and 2015 Mercedes-benz do brasil consumed respectively 955.7 gj and 788.9 gj of energy. of the total energy consumed in 2014, 194,300 kWh was from renewable hydroelectric sources acquired from the public grid. in 2015, hydroelectric power accounted for 165,600 kWh.

enerGy consuMption (000's of GJ) 2012 2013 2014 2015

electricity 799.7 784.3 699.6 596.3

natural gas 236.3 324.6 256.1 192.6

TOTAl 1,036.0 1,108.9 955.7 788.9

obs: i gJ (gigajoule) is equivalent to the amount of mechanical energy produced with 278 kWh of electricity or 26.137 m3 of natural gas.

iRAcEMáPOliS

Energy Co-generation iracemápolis is the first auto industry factory with a natural gas-based energy co-generation system .

developed in partnership with the utility Comgás, this solution permits the simultaneous production of electrical and thermal (steam, hot water and cold water) energy based on a single energy source,

natural gas. the plant uses two 1.35 MW generator engines (totalling 2.7 MW) that power the entire Mercedes-benz factory. the machines operate in a regime of co-generation, producing electrical

energy, thermal energy in the form of hot water, reutilizing the cooling system of the actual generator and thermal energy in the form of refrigeration - employing absorption chillers that use the heat from

the exhaust gases and from the engine refrigeration system - resulting in energy efficiency of close to 85% for the system as a whole.

diSSEMinATiOn And AwAREnESSto encourage other links in the business chain to adopt environmentally responsible practices, Mercedes-benz do brasil has promoted its environmental Responsibility award for Suppliers and dealers since 2010.

the award aims to provide visibility for solutions which are already in use and to incentivize the adoption of new ones that enable sustainable development. projects that have proved successful in the suppliers and dealers

the rest of the energy consumed consisted of natural gas in the boilers, heaters, post burners and restaurant - 6,741,100 m3 in 2014 and 5,069,000 m3 in 2015. the amounts converted into gigajoules are given in the table below.

The Iracemápolis plant is the first auto industry factory to use a natural gas-based co-generation system

18.66 %% reduction in electricity consumption from 2012/2013 to 2014/2015.

operations may be submitted. from three to eight winners are selected in each category. there are three awards each for suppliers, commercial dealers (trucks, buses and vans) and automobile dealers. the winners are announced at the interaction award for suppliers and at the Star Class Convention for dealers.


Social Responsibility Strategy in brazil, the company's social responsibility strategy is sustained by four pillars, each of which comprises a series of one-off or ongoing initiatives made possible by Mercedes-benz's private investment, incentive laws, partnerships and volunteer work.

in alignment with daimler group principles, Mercedes-benz do brasil believes that social responsibility is key for developing the business and community relations.

as a major business, it is the company's understanding that it can contribute on a broad level. investments are directed at development on a wide front, not only innovating by launching products that help enhance mobility for cargos and people, but also by creating direct and indirect employment, driving the local economy and the growth of the country.

Socia

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Arts

and c

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pillars

Mercedes-Benz do Brasil social responsiBility

Edu

catio

n an

d spo

rts

Env

ironm

ent

Company commitment is concretized by means of diverse actions, such as donations, sponsorship (through private investment and tax incentive laws), the company's own social initiatives and support for institutions. the projects and actions are aimed mainly at the regions close to the company units in São bernardo do Campo (Sp), Campinas (Sp), Juiz de fora (Mg) and iracemápolis (Sp).

10principles of the united nations Global compact underpin the daimler Group's social responsibility culture

Mobilitythe company's products are focused on transporting people and cargos, a key driver of the country's ongoing development

Mercedes-Benz's presence drives the economy in the communities in which it operates

Social performance Since 2003, Mercedes-benz do brasil has had a Social Responsibility Committee charged with coordinating measures aimed at developing society. Comprising a cross-functional group of executives, the committee meets on a monthly basis to define projects that are aligned with the company's global business vision and that add value for the Mercedes brand and for the community.


Mobile kids: a traffic education programme for children aged from 6 to 10 years at the São paulo school Colégio humboldt.

na Mão certa: signatory to the business pact against the Sexual exploitation of Children and adolescents in the na Mão Certa - Childhood brazil programme, aimed at mobilizing governments, companies and third sector organizations around more effective combat against the sexual exploitation of children and teenagers on brazil's highways. gRi g4-15

AdcMB: donation to the Mercedes-benz employee association adCMb, which benefits employees and their families, as well as the communities around the units. the association organizes sports, social, cultural and leisure activities, integrating people and improving quality of life.

TuccA: a non-government institution that provides free, high quality multidisciplinary treatment for underprivileged children and adolescents with cancer. it currently assists around two thousand patients in the east of the city of São paulo, guarulhos, Mogi, itaquaquecetuba, poá and Suzano. Mercedes-benz do brasil supports the institution through the purchase of Mchappy day campaign tickets, which it donates to apprentices at all the units in brazil.

Initiatives in 2014 and 2015

Gardening Apprentice project: the charity Saint Vincent de paul offers a gardening qualification programme to prepare adolescents for life, giving them notions of civic awareness, discipline, organization and inclusion in the labour market. this takes place in the Juiz de fora plant. So far more than 400 adolescents have been trained in the programme.

Jequitibá Project – fieMg/Mercedes-benz do brasil: the programme provides children aged between 7 and 14 from the neighbouring community with playful and enjoyable sports and educational activities, as well as transportation, meals and medical assistance. More than 500 children have benefited from this project since its inception.

Social



Summary 42Mercedes-Benz do Brasil SuStainability RepoRt manaGinG For SuStainability

lar Social Girassol: this was founded in 1983 and incorporated into the german charity Sociedade beneficente alemã in 1998. the institution provides shelter and care for some 50 children and adolescents from 0 to 17 years of age who study at local kindergartens or public schools. over 13 years, Mercedes-benz do brasil has contributed to the development of around 5,200 young people and adults between 15 and 35 years of age.

Alfasol: is an institution that offers training opportunities for socially vulnerable young adults and teenagers. Mercedes-benz do brasil has been a partner of alfasol since 2009, supporting its professional education programme for needy youngsters in all regions of the city of São paulo. the company organizes visits to its plants to give the participants experience in a corporate environment. the project has benefited around two thousand young people.

Estrelas do Amanhã (Stars of Tomorrow). this is a project organized by Mercedes-benz do brasil aimed at preparing young apprentices for the labour market at the company's São bernardo do Campo unit. for one year, the 36 apprentices take information technology and professional courses, as well as participating in cultural and work-oriented events. the best performers receive grants to study a language.

inside Mercedes-Benz: a guided visit programme that shows visitors the technology and technical rigour involved in truck production. the programme received approximately 1,000 visitors in 2014 and 2015.

The Mercedes-Benz Run and walk: this event involves three contests (5 km walk, 5 km run and 10 km run). around 6,000 people participated, including employees from the São bernardo do Campo and Juíz de fora units, community members and professional athletes.

Athletes of the future: this programme is aimed at preparing para-athletes to participate in national and international sports competitions and events and to be selected for the brazilian national teams.

Azo: this is a project overseen by specialists for some 150 underprivileged young people in the Capuava region in Santo andré. the aim is to prepare the participants to address challenges in sports and in life. in 2014, Mercedes-benz donated 120 full uniforms for the project, and employees participated in a campaign to donate books to the organization's library.

Education and Sports

Mercedes-Benz do Brasil SuStainability report Summary 42


Prototype: this is a festival of Sustainability in art, an initiative of the goethe-institut and the Ministry of Culture, sponsored by Mercedes-benz do brasil. it encompasses a number of art forms, emphasizing minimizing the use of electricity and prioritizing collective activities and interaction with the public.

Rosas de Ouro: knowing Carnival is a part of brazilian culture, Mercedes-benz do brasil supports the Sociedade Rosas de ouro, a samba school in the city of São paulo which has paraded in the city's special group for more than 30 years. Known for its variety of members, the school contributes to the development of the local community.

you learn samba at school: this projects helps generate work and income for socially vulnerable young and elderly people both in the vicinity of the samba school and all over the city of São paulo. the professional training helps affirm the cultural identity of the participants and the communities in which they live.

Rita lee Mora ao lado: the Musical: the company sponsors this musical about the life of the singer Rita lee, with vignettes featuring other musicians, such as gilberto gil, Cazuza and Raul Seixas.

Buddy Bears: in partnership with the german Consulate general in Rio de Janeiro, from april to July 2014 the company organized an exhibition on Copacabana beach with 140 bears representing the countries recognized by the united nations.

Guri Project: a social and cultural project centred on teaching classical music. around 36,000 children and adolescents participate in the project, which is conducted outside of school hours. the programme is in place in iracemápolis and in the interior of the state of São paulo. in iracemápolis, some 70 students have percussion and guitar classes.

Environment

Arts and Culture


Employees

in pursuit of world class excellence, all Mercedes-benz do brasil human Resources processes are based on global policies, demonstrating the group's differentiated approach to people management. the country's economic situation in 2014 and 2015 was not favourable; however, the company sought to minimize impacts for its employees and society by adopting various tools that enable flexibility.

Consequently the results of the last climate survey were positive. More than 80% of the respondents were satisfied with their overall working conditions. More than 90% would apply to work in the company again and would recommend it to friends and family, showing a high level of identification with Mercedes-benz do brasil. Mercedes-benz employees are proud to belong to the group.

Mercedes-Benz employees identify with the brand and are proud to belong to the Group

80%of employees are satisfied with the work environment according to the latest climate survey

at the end of the two-year period comprehending 2014 and 2015, Mercedes-benz do brasil had 11,395 direct employees, including apprentices. this represents a decrease of 17.3% in headcount compared with 2012/2013, when the company had 13,776 employees. the reduction is due mainly to adverse conditions in the brazilian economy, which had a negative impact on commercial vehicle sales in the country. Gri G4-10

the company values the mixture of generations, diversity and willingness to innovate, resulting in a committed team that is aligned with Mercedes-benz values.


Created in 2014 the Star award is a programme that recognizes ideas or work aimed at driving change, innovation and a high performance culture, as well as rewarding employees who exceed expectations.

every three months, up to ten of the submissions that are the most creative, relevant and beneficial for the company, be it in terms of processes or financial return, receive the award.

eMployee proFile

categories (2014) Total women Men <30 30-50 >50

apprentices 228 68 214 278 4 -

executive level 450 71 379 4 327 119

hourly paid employees (direct and indirect) 8,559 416 8,143 1,473 6,268 818

Salaried employees 2,749 558 2,191 384 1,852 513

TOTAl 12,040 1,113 10,927 2,139 8,451 1,450

categories (2015) Total women Men <30 30<50 >50

apprentices 290 67 223 287 3

executive level 491 81 410 9 139 343

hourly paid employees (direct and indirect) 7,775 366 7,409 1,095 889 5,791

Salaried employees 2,839 591 2,248 404 562 1,873

TOTAl 11,395 1,105 10,290 1,795 1,590 8,010

By unit

S. BERnARdO dO cAMPO Total women Men <30 30<50 >50

2014 10,489 955 9,534 1,861 7,418 1,210

2015 9,666 901 8,765 1,439 1,296 6,931

cAMPinAS Total women Men <30 30<50 >50

2014 693 56 637 106 478 109

2015 705 63 642 102 136 467

Juiz dE fORA Total women Men <30 30<50 >50

2014 848 102 746 168 552 128

2015 767 92 675 134 146 487

iRAcEMáPOliS Total women Men <30 30<50 >50

2014 10 0 10 4 3 3

2015 257 49 208 120 12 125

the winners receive feedback from their manager and a formal letter of acknowledgement signed by their area Vp. they also receive two prizes. the first is the right to use a Mercedes-benz automobile for a weekend, with a full tank of fuel, and the other is a box of experiences, with the winner being entitled to choose one of them.

the initiative has been successful with positive feedback from all those involved. there have been eight editions with more than 350 submissions since the programme began.

the return from the programme is positive both for the company and for employees, since it encourages process improvement, creativity and high performance.

Mercedes-Benz values diversity and committed people aligned with company values in its team


TRAininG

Mercedes-benz takes an active approach to training and developing its employees in general and specific competencies. training is defined by means of a matrix which takes into account performance appraisals and specific conversations with managers, as well as market trends and business needs.

an organizational development team promotes team building workshops, involving constructing the vision and mission of the different areas and the definition of targets and action plans.

in 2014 and 2015, the average number of hours training per individual was 25.5 and 8.3 respectively. for 2012, the average was 32.5 hours, compared with 5.6 in 2013. Gri

G4-la9

the company develops technical training for specific purposes or standards. it also provides behavioural training, enhanced by means of challenges and projects. training sessions are also customized according to

the needs of each unit or area. Worthy of note in the training area in 2014-2015 were:

factory technical training, developed in partnership with Senai and specialized institutions, aimed at achieving specific standards or certifications or at meeting audit requirements.

leadership training in partnership with the daimler Corporate academy, aimed at developing talented and high potential individuals for more senior roles, as well as imparting the leadership skills and competencies required at each level.

Regional programmes for e5 executives (supervisors) such as Conscious leadership and team Coaching, focused on meeting the demands of leadership and managing hourly-paid employees (conflict resolution, feedback).

programme in partnership with the fundação dom Cabral called leading people. aimed at managers and senior

managers, it has two modules, one addressing self-knowledge to prepare individuals to lead themselves and others, and a second focused on leading processes and results, as well as people.

business Schools. these are focused on salaried and hourly-paid employees and meet the specific requirements of the different businesses, taking into account the teams' different levels of knowledge, with the purpose of accelerating learning and sharing knowledge. the areas covered include human Resources, finance and Controlling, Safety, Quality and environment, foreign trade, information technology and Sales & Marketing.

basic and advanced Microsoft® computing courses, training in specific technical software for development engineering.

english, german and Spanish language courses with intercultural training.

the young talents programme for apprentices and interns, which is focused on developing the specific skills and competencies required at the start of the participant's career.Training is defined based on

performance appraisals, market trends and business needs

one hundred percent of the company's salaried and hourly-paid workers are covered by collective conventions and agreements negotiated with representatives of the Metalworkers' union in the regions in which the company has units (São bernardo do Campo, Campinas and iracemápolis - Sp and Juiz de fora - Mg). Gri G4-11

Currently 12 collective agreements are in force between the company and the unions. protocols are prepared systematically to provide an internal record of the decisions negotiated between the parties related to the most varied subjects of interest to employees. Gri G4-49

Mercedes-benz and its executives maintain their neutrality during organizational campaigns run by union groups. the unions and the company must ensure that employees are able decide without interference. Gri G4-53

Freedom of choice is guaranteed for employees

uniOn RElATiOnS


Mercedes-benz do brasil has ohSaS 18001 (occupational health and Safety assessment Series) certification, guaranteeing quality in the execution of its policies aimed at driving robust performance in occupational health and Safety. aligned with these policies, the company's integrated Management System (iMS) provides tools that ensure compliance with all the legislation applicable to the business.

the iMS establishes a set of practices to guarantee the control, management and achievement of targets for senior management, employees and service providers with the objective of reducing incidents that may harm employees or damage assets.

Worthy of note among these practices are:

opCom Meeting: this is held annually. Members report on health and safety indicators at the units and carry out a critical analysis of the iMS.

operational Committee: comprising vice presidents, directors, managers and representatives of the units' safety and occupational medicine areas, it is considered to be the manufacturing unit's main committee.

Senior Management Committee: aimed at the production areas, it consists of the senior manager, managers, the Specialized Services in Safety engineering and occupational Medicine team (SeSMt in the portuguese acronym) and factory representatives.

area Safety Committee: consisting of the production Manager and supervisors, the area safety supervisor and the spokespersons for the factory employees.

the committees meet on a monthly basis to track occupational health and safety indicators, discuss and assess related questions, analyze trends and risks of accidents, to schedule and assess inspections, and to take strategic decisions, among other attributions. the objective is to guarantee the achievement of targets related to compliance with the iMS.

Health, safety and quality of life

proGraMMes to control and prevent health proBleMs

health Promotion and disease Prevention Programme– MBSAÚdE

this provides regular and periodic medical and nutritional accompaniment for employees with chronic diseases such as hypertension, , diabetes, dyslipidemia, obesity, among others. it uses campaigns and health education and guidance measures to prevent these diseases.

Anti-smoking programme

this programme provides individual and group medical supervision for people who want to or need to stop smoking. it includes educational actions related to this habit, illustrating the benefits of stopping smoking. it is estimated that two thirds of programme participants give up smoking.

chemical dependency Prevention and Treatment programme (Teca)

this is focused on prevention and provides support for employees with this type of problem, in particular alcoholism. employees and managers receive guidance aimed at demonstrating the seriousness of the problem and the need for treatment. the programme also underscores the risk of accidents while working under the influence of alcohol.

Back Programme

the programme helps people with chronic back pain caused by degenerative alterations that compromise movement. the objective is to re-establish and maintain well-being through specialized treatment and specific exercises conducted in five stages over a period of one year. it results in a significant improvement in chronic pain, in flexibility and mobility, ensuring improved quality of life.

Mercedes-Benz do Brasil also has the following programmes in place aimed at controlling and preventing health problems:


Customers

Continually improving customer service is key for Mercedes-benz. business success may depend on the attention paid to partners, creating a differential for the company.

the espaço Mercedes, inaugurated in São bernardo do Campo (Sp) in 2010, for example, is a setting appropriate for holding meetings, closing business deals, organizing technical deliveries, product demonstrations, among other activities that enable Mercedes-benz do brasil to build closer links with customers and partners.

another outstanding channel is the Mercedes-benz Customer Relationship Centre, recognized as the best relationship centre by the magazine Consumidor Moderno. available to dispel customers' doubts, provide information on products and manage the Mercedes-benz 24-hour roadside assistance service, the centre may be accessed via telephone, mail, online chat, chat for the disabled, email or through one of the 15 channels the company has on the main social networks such as facebook, youtube, instagram and twitter.

Mercedes-benz has been adapting constantly to the new consumer profile, which includes the development of social

network initiatives designed to forge even closer relations with the brand's customers. the following are worthy of note:

the customer's voice programme – created at the end of 2013, this face-to-face training course in the Mercedes-benz Relationship Centre enables monitoring of the main customer contact channels by company executives in real time. Since it was created, 280 directors and managers from all company areas have participated.

calls with the Board – calls from the Ceo and Vice presidents to customers who have had negative experiences with the brand, conducted on a weekly basis. Since 2014, the Ceo and board members have spoken to more than 100 customers.

customer Forum – an initiative launched in 2015 that brings customers inside the company to participate in a plenary meeting with the Ceo and the board and interact with executives from all areas. during the forum, customers have the opportunity to air their perceptions of Mercedes-benz and suggest improvements. three editions of the event had been held up until March 2016. the next edition is scheduled for august. Gri G4-26

+ than 100customers have already taken part in the initiative calls with the Board since 2014, a direct channel to the company's ceo and vice presidents

Continuous improvement in customer service is key for the success of Mercedes-Benz's business


(passport for example) or a cash deposit to begin work, the number of hours worked (working hours in accordance with legislation), whether employees are able to communicate with management about working conditions, union membership and the provision of information and instructions on corruption, bribery and extortion. 16 suppliers were screened in 2014 and 11 in 2015, and no negative impacts related to these issues were encountered. Gri G4-la15, G4-hr11, G4-so10

2014 and 2015 were tough years for the company due to the complex conjuncture of the brazilian market. in parallel with the dissemination of new projects and investments aimed at leveraging the competitiveness of company products, it was necessary for the company to expand and forge closer links with local suppliers, given that the major devaluation of the brazilian currency made it necessary to produce more components in brazil.

Suppliers Gri G4-12, G4-13

Mercedes-benz's relations with its suppliers are based on mutual expectations and commitments underpinned by trust, transparency and ongoing communication. Within this context, guidelines such as the Code of ethics and fair play for business partners provide the basis for building sustainable partnerships.

Close relations, be it in improvement or new product development projects or in the day to day routine of the industrial operation, constitute an open channel for the exchange of information and/or suggestions which may later be converted into improvements.

Mercedes-benz sets forth the standards it expects from suppliers with respect to human rights, working conditions, environmental standards and business ethics in its Sustainability directive for Suppliers, based on the company's Corporate Social Responsibility principles, which in turn are aligned with international standards such as the un global Compact.

the process of screening supplier labour, human rights and social impacts includes questions such as the use of child labour, the delivery of official documents

the economic crisis the country has faced over recent years has inevitably affected the Mercedes-benz supply chain. the significant drop in demand in the brazilian automotive market has made financial and contractual adjustments and process reviews necessary for all players.

Currently, Mercedes-benz does business with around 1,200 suppliers. from this total, around 400 supply production material directly related to product manufacture. the remainder supply indirect materials and services. Currently more than 70% of spending on production inputs goes to business partners located within brazil.

Suppliers are often frequently assessed with respect to their performance in cost efficiency, quality, logistics, technological innovation, as well as environment management. other factors taken into account in the selection and maintenance of the Mercedes supplier portfolio include geographical location, financial soundness, sustainability and integrity.

Mercedez-Benz does business with around 1,200 suppliers


Summary of GRI content 4

Summary 50Mercedes-Benz do Brasil SuStainability report Summary oF Gri content

General content

ASPEcT dEScRiPTiOn PAGE/RESPOnSEExTERnAl

VERificATiOnOMiS-SiOn

Strategy and analysis g4-1 Message from the organization's highest ranking decision maker 5

g4-2 description of main impacts, risks and opportunities 5, 28

Organizational profile g4-3 name of organization 7

g4-4 primary brands, products and/or services 7, 9

g4-5 location of the organization's headquarters 7

g4-6 Countries in which the operation's main or most relevant units for the sustainability aspects of the report are located 7, 8, 11

g4-7 nature of ownership and legal form 7

g4-8 Markets in which organization operates 7

g4-9 Scale of organization 7

g4-10 employee profile 45

g4-11 percentage of employees covered by collective bargaining agreements 47

g4-12 description of organization’s supply chain 50

g4-13 Significant changes in the organization’s size, structure, ownership, and supplier chain 11, 50

g4-14 description of how the precautionary approach or principle is addressed by the organization

Mercedes-benz sustainability standards, which are extensive to suppliers, require that initiatives

involving environmental questions must be aligned with the precautionary principle and must promote

environmental responsibility and the development and dissemination of environmentally friendly technologies

g4-15 Social charters, principles, or other initiatives developed externally 42

g4-16 participation in associations and organizations- associação nacional dos fabricantes de Veículos

automotores (anfavea)

Summary 51Mercedes-Benz do Brasil SuStainability RepoRt SummaRy of GRi content

Material aspects identified and boundaries

g4-17 entities included in the organization's consolidated financial statements and entities not covered by the report 11

g4-18 process for defining the report content 3

g4-19 list of material topics 4

g4-20 boundary within the organization for each material aspect 4

g4-21 boundary outside the organization for each material aspect 4

g4-22 Restatements of information provided in previous reportsWhenever information is restated an explanatory

note is included.

g4-23 Significant changes in scope and boundaries of material aspects in relation to previous reports 11

Stakeholder engagement g4-24 list of stakeholder groups engaged by the organization 3

g4-25 basis for identification and selection of stakeholders with whom to engage 3

g4-26 approach to stakeholder engagement 3, 49

g4-27 Key topics and concerns that have been raised through stakeholder engagement. 4

Report profile g4-28 Reporting period 2

g4-29 date of most recent previous report february 2015, corresponding to the period 2012-2013.

g4-30 Reporting cycle 2

g4-31 Contact point for questions regarding the report or its contents 2

g4-32 "in accordance" option of application of guidelines 2, 51

g4-33 policy and current practice with regard to seeking external assurance for the report the report was not assured externally.

Governance g4-34 organization's governance structure, including the committees of the highest governance body. 14

g4-36 executive positions and functions responsible for economic, environmental and social topics 14

g4-45 Responsibilities for the implementation of economic, environmental and social policies 28

g4-46 Role of highest governance body in reviewing the effectiveness of the organization's risk management processes for economic, environmental and social topics

28

g4-47 frequency of highest governance body's review of economic, environmental and social impacts, risks and opportunities 28

g4-49 process for communicating critical concerns to the highest governance body 14, 47

g4-51 Relationship between remuneration and organization's performance, including social and environmental aspects 14

g4-52 participation of internal and independent remuneration consultants in determining remuneration 14

g4-53 Consultation of stakeholders regarding remuneration and how this is applied in the organization's policies 14, 47

Ethics and integrity g4-56 Values, principles, standards and norms of behaviour in the organization, such as codes of conduct and ethics 10


speciFic content

econoMic cateGory

ASPEcT dEScRiPTiOn PAGE/RESPOnSE ExTERnAl VERificATiOn OMiSSiOn

Economic performanceg4-dMa Management approach 31

g4-eC2 financial implications and other risks and opportunities for organization’s activities due to climate change 39

environMental cateGory unGc


Energy

g4-dMa Management approach 40

g4-en3 energy consumption within the organization 40

g4-en4 energy consumption outside the organization 40

g4-en7 Reduction in product and service energy requirements 40

waterg4-dMa Management approach 38

g4-en8 total water withdrawn by source 38

Emissions


g4-en15 direct greenhouse gas (ghg) emissions (Scope 1) 39

g4-en16 indirect greenhouse gas (ghg) emissions from the acquisition of energy (Scope 2) 39

g4-en17 other indirect greenhouse gas (ghg) emissions (Scope 3) 39

Effluents and waste


g4-en22 total water discharged, discriminated by quality and destination 38

g4-en23 total weight of waste, discriminated by type and disposal method 37


social cateGory– laBour practices and decent work


Occupational health and safety


g4-la6 types and rates of injuries, occupational diseases and days lost, absenteeism and number of fatalities at work, discriminated by region and gender

the company does not disclose these indicators because of the characteristics of the

market in which it operates.

Training and educationg4-dMa Management approach 47

g4-la9 average number of hours of training, discriminated by gender and functional category 47

Supplier assessment for labour practices


g4-la14 percentage of new suppliers that were screened using labour practice criteria2014: 87.5%

2015: 81.82%

g4-la15 Significant actual and potential negative impacts for labour practices in the supply chain 50

social cateGory– huMan riGhts


Supplier human rights as-sessment


g4-hR10 percentage of new suppliers that were screened using human rights criteria 2014: 87.5%

2015: 81.82%

g4-hR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken 50

social cateGory– society


Public policy g4-So6 policies on financial contributions to political parties and institutions the company does not make this kind of donation.

Supplier assessment for impacts on society


g4-So9 percentage of new suppliers that were screened using criteria for impacts on society2014: 87.5%

2015: 81.82%

g4-So10 Significant actual and potential negative impacts on society in the supply chain and actions taken 50


creditsMERcEdES-BEnz dO BRASilCoordination: environmental Managementteam: Vehicles, Communication, Controlling,development, operations, office of the Ceo, hR,Vans and Sales

MATERiAliTy, GRi cOnSulTinG, EdiTORiAl cOORdinATiOn And dESiGnReport Sustentabilidade

team: ana Souza (project and relationship management), Victor netto (materiality and gRi consulting), fernando badô (editing), Rejane lima (copy), luciana Mafra (layout) and Sérgio almeida (graphic production)

REViSiOnassertiva Mindfulness editora e treinamentos

TRAnSlATiOn TO EnGliShRaymond Maddock

PhOTOGRAPhyMercedes-benz archive

suainability repost rt mercedes-benz do brasil · corporate communication, involving ......

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