MTS Systems Danmark ApS, Tuborg Boulevard 1, 2900 Hellerup, CVR No. 40950540

Corporate social responsibility statement cf. section 99 a of the Danish Financial Statements Act and statement of the gender composition of the management cf. section 99 b of the Danish Financial Statements Act for the MTS Systems Danmark group[1] for the fiscal year 2020/21, covering the 15-month period October 1st 2020 – December 31st 2021.

The statements are integral parts of Annual Report 2020/21.

 

Our group’s business model

We have a passion for engineering, and we supply knowledge and turnkey large-scale dynamic test systems for various industries.

MTS’s main capabilities include Test systems, Technology & Solutions and Service.

Our ambition is to develop individualised and innovatory solutions which add substantial value to our customers. We have specialized in customer segments within the wind industry and the aerospace industry.

To create world-class engineering, we approach our customers' challenges from numerous angles to always develop the right solution for the given challenge.

The MTS team of highly specialised engineers possess a broad industry knowledge, and we provide our customers with the right expertise to execute their projects - from heavy-duty test systems and lifting solutions for the wind industry to product development and automation for the industry.

Our values are condensed into the brand tagline: “World class engineering – Heavy-duty & Sustainable Solution” and the values include:

  • Staff: We have an open environment for professional and personal development
  • Customers: We understand the customers' needs and ensure their competitiveness
  • Products: We use knowledge to create the best solutions
  • Culture: Going to work has to be fun

Our test solutions for the renewable energy industry and the aviation industry make it possible to test equipment under realistic conditions, giving customers the possibility to foresee life span and plan maintenance, which contribute to increase the level of sustainability with our customers.

Operating from a quality mindset throughout our value chain we establish a common goal that strengthens cooperation, reduces errors, and increases the overall solutions' cost-effectiveness. We follow international standards for quality and safety, and we are certified according to several certifications.

Customer satisfaction is important to us, and we measure the satisfaction rates systematically, and the results are used for implementing developments and improvements. Especially customers mention delivering high quality on time and within budget as characteristics for their cooperation with us.

In-house specialists deliver complete life-cycle test systems for the aviation industry. The importance of the modern aviation industry is increasing, and the globalised nature of the industry, help connect continents and cultures. Our in-house specialists address customer needs as a whole, as well as to contribute to deliver sustainable test systems.

Renewable energy is an extensive focus area to us, and we have many different development projects and solutions within this this area. Individualised and sustainable solutions are on-goingly delivered to our clients within the wind energy segment. Our renewable energy solutions help our customers reduce their carbon footprints and meet their sustainability strategies and objectives. We develop and optimize e.g. test benches that contribute to ensure reliable and efficient future wind turbines and elements of high quality.

 

Our sustainability governance

Sustainability governance at MTS is anchored with the management team, who as an integrated part of on-going decision and management procedures, assess risks within relevant sustainability areas and where relevant define objectives and needed development initiatives.

Our managers and specialists with the right qualifications implement development initiatives and we encourage all MTS people to take part in and contribute to plans and development.

Sustainability governance at MTS is aligned and coordinated with the sustainability governance, codes and values of our ultimate parent company Illinois Tool Works Inc., Illinois, USA (hereinafter “ITW”).

ITW’s sustainability strategy and associated policies and guidelines[2] are built around four key elements: ”Our Governance & Ethics”, ”Our People”, ”Our Communities”, and ”Our Environment”. It is the ITW group’s vision to be one of the world’s best performing, highest quality and most-respected industrial companies. An integrated part of this vision is to continue to support communities and employees to make a difference in the world around the group.

As a fully owned company within the ITW group MTS is covered by ITW policies and procedures.

 

Focus area: Environment and climate

Our policies and principles

Our “Environmental & Sustainability Policy” states that we are committed to operating our businesses in a way that demonstrates our dedication to global environmental and climate change sustainability.

This commitment is reflected in the following three priorities: 1. Improving our environmental performance on an ongoing basis; 2. Working with suppliers who operate with similar dedication to global environmental sustainability; and 3. Partnering with our customers in innovating solutions that address their needs for environmentally responsible products.

We are responsible for establishing, monitoring, and adjusting sustainability initiatives that are aligned with ITW’s global environmental sustainability priorities in a manner best suited for our business.

The commitment includes considering as appropriate long-term sustainability implications for the business and its operations and managing the business’s supply chain efficiently and responsibly.

The commitment also includes examining ways that the business can lessen any negative impacts on the environment, reduce waste and preserve natural resources.

In our commitment to the environment we monitor environmental data relevant to the business, including emissions, energy usage, water usage, waste and other applicable data.

Our actions during 2020/21

As stated in our policy, climate change is an important issue for us to address. During the year we have continued to install automatic light switches and replaced conventional light sources with LED lightning.

Our supplier contract on carbon-neutral electricity for our site in Denmark is still in force, which means that our own electricity consumption in Denmark is emission-free.

During the year we have ordered and purchased further one fully electric car and three plug-in hybrid cars, and in support for these two charging stations have been installed, which means that customers and employees visiting our Danish head quarters now have four charging stations at their disposal.

As in previous years disposal of waste from our customer projects are done via the customers’ normal disposal channels, and disposals from our own operation sites are done by recognized vendors from whom we receive declarations for responsible handling for most parts of the waste volumes. Starting this year cardboard is sorted at the source.

When it comes to hazardous waste we have appointed one of our engineers to be overall responsible for this area. Hazardous waste includes e.g. oil for hydraulics, batteries, chemicals etc. Establishing communication with colleagues on integrating hazardous waste management into project planning and execution, is part of this task.

It is still an integrated part of the project manager’s systematic work processes to have focus on optimizing both material consumptions and the amounts of waste when we organize projects for our customers. It is our experience that this focus reduces both material consumption and overall costs.

Where possible and relevant we involve in end-of-life handling of our customers’ wind turbine test benches. During 2020/21 we have assisted a customer in disassembling an 80 tons test bench and identifying a customer who will reuse the equipment. To our knowledge we are the only supplier handling test bench end-of-life in this way.

We still cooperate with a professional service company specialized in refurbishing IT equipment. Obsolete laptops, servers, screens, cables, accessories etc. is sold to the vendor. This ensures an extended overall use-period for the equipment, which contributes to lowering resource consumptions. During 2020/21 we have extended this arrangement to also cover mobile phones.

In contribution to minimize energy consumption, it is still our policy that laptops are replaced at least once every three years.

Our overarching design rule, “that we rather spend more hours designing the solution, if this will save construction materials – than the other way round”, is still in force, and we believe that this is a sound environmental principle

When designing wind turbine test benches for our customers, it is still a mandatory rule to us always to ensure that the electricity produced during test runs is fully consumed by the test equipment or subsequently utilized in the grid.

During the year we have established a virtual meeting room at our site in Denmark and similar facilities are planned for our offices in Berlin, Germany and Prague, the Czech Republic. We encourage our employees to use virtual meetings when possible, as this can save time and costs for travel, energy consumption and carbon emissions.

In continuation from previous years, we still use and extend our usage of virtual reality technology – both as part of service tasks and as part of product development and learning. We have implemented the use holographic glasses, which allows remote dialogue, learning, service etc. Benefits include faster service, reduced travel time and costs, reduced energy consumption and CO2 emissions from travelling and improved customer satisfaction. The technology is used several times every day around the year.

It is our vision to work towards being able to perform parts of the test procedures as digital simulations, and thereby partly replace the need for physical tests. Also during 2020/21 we have made progresses within this area. Digital pilot test simulations have been performed and we have established further project objectives including applications for financing the development costs. Benefits from replacing physical tests with digital simulations include reduced development time, reduced energy consumption, reduced CO2 emissions and less material consumption.

Our rain erosion test equipment has been equipped with water collection and tank facilities, which means that our water consumption has been reduced.

At our Danish offices potable water for our employees has been converted from bottled water to water from water dispensers, and majority of fruit and vegetables used in our Danish canteen is now ecological and sourced from nearby producers.

Our results

Our efforts and plans during the year have contributed to reducing resource and material consumptions, to increasing recycling of materials and to reducing the amounts of waste, as well as the waste’s potential negative impacts have been reduced.

Energy consumption, CO2 emissions, water consumption associated to our business activities have been limited and reduced as results from the actions we have taken during the year.

Our risks and management procedures

Risk within this area include e.g. unintentional development in or handling of resource/material consumption, energy consumption, carbon emissions and waste amounts.

Our policies and procedures, our organisational setup and management principles provide a good basis for monitoring and managing the risk within this area.

 

Focus area: Human rights, ethics, and anti-corruption

Our policies and principles

Our “Human Rights Policy” states that ITW is committed to human rights in the workplace. This commitment includes respecting all individuals and encouraging and supporting all of our colleagues in their efforts to contribute to their full potential. In addition to being embodied in our core values, this commitment is reflected in ITW’s Principles of Conduct and our Supplier Code of Conduct. Among those principles are those relating to providing a workplace that protects employee well-being and safety, equal employment opportunity and fair treatment of all employees. Our commitment also includes compliance with applicable laws regarding slavery, human trafficking, child labour and data protection/privacy.

Our “Global Anti-Corruption Policy” prohibits bribery in all its forms. This ban applies to attempts to secure improper advantage in any area, permits or other favorable treatment; offers of any form of undue reward, all means of channeling undue payments or other benefits, ITW employees receiving something of value in return for giving an improper advantage to a third party. The policy further addresses Gifts and Entertainment, Facilitation Payments, and Lobbying.

Our “Supplier Code of Conduct” states that we expect Suppliers to operate using the highest ethical and legal principles. Suppliers are responsible for ensuring that any employees, affiliates, distributors, subcontractors, agents or other representatives of Supplier providing products or services to us or to our customers on behalf of us read and comply with this Supplier Code of Conduct. Areas such as inhumane treatment, child labour, forced labour, safety, well-being in the workplace, labour rights, discrimination, fair competition, trade secrets and responsible sourcing are included in the Supplier Code of Conduct.

Our “Code of Conduct” states that we operate our own business with a demonstrated commitment to the highest level of ethical conduct. This commitment is reinforced by strong policies and practices related to fair, ethical and honest business dealings, robust governance, and compliance with applicable laws, while demonstrating respect for human rights at our own business and throughout our supply chain. Our core values of Integrity, Respect, Trust, Simplicity and Shared Risk are the foundation for our Code of Conduct. The Code of Conduct also includes different means of speaking up, including a whistle blower function.

Our actions during 2020/21

Continued from previous years all employees in our group have confirmed that they are aware of and focused on complying with our Code of Conduct. Going forward this confirmation will be renewed on an annual basis.

As in previous years our management team together with other relevant risk position employees have signed the principles of our Global Anti-Corruption Policy. Due to shifts in our ownership during 2021, no trainings have been held in 2021. Trainings will be resumed in 2022. We enforce strict control procedures on all payments, which is an important part of lowering  our risk within the corruption area.

During previous financial year a whistle blower scheme has been established covering our entire group, and this possibility still exist under our new ownership. The scheme can be used by both internal and external stakeholders. No inquiries have been received during the year.

Establishing the foundation for the highest level of customers’ safe use of our delivered products and solutions is important to us. From our side this is addressed through e.g. that we train customer employees, and that we draft high-quality user manuals as part of the deliverables we transfer to our customers. In addition, our service deliverables for customers on most of our delivered test equipment includes elements of training and education of customers’ employees.

In 2021 we have still aimed at prioritizing suppliers that are ISO-certified and thoroughly validated by independent external parties, as this contributes to lower potential CSR issues in the supply chain. The large majority of our procured products and services are contracted with suppliers that origin within the EU, which also contributes to lowering the risk profiles.

During the year our parent company has performed a high-level and broad supplier sustainability audit aimed at a specific customer project. Sustainability is furthermore partly addressed as a minor part of audits performed in connection to our quality assurance procedures. Going forward it is planned to further address sustainability issues.

Implementing our commitments within human rights is done as an integrated part of our trainings, our procurement procedures, and our follow up processes.

Our results

The above described sourcing principles, the performed trainings, our employees signing policies, our drafted product manuals, and our training of customers’ employees have contributed to lowering the potential risk levels within this area.

Our risks and management procedures

Risk within this area include e.g. involvement in corruption or cartel cases, collaboration with dubious business partners, human rights breaches, lack of sufficient customer trainings or instructions, and low ethical standards.

Our described policies, organisational setup and management principles provide a sound and efficient basis for monitoring and managing this area.

 

Focus area: Social and employee topics

Our policies and principles

Our “Safety Policy” states that we are committed to strive toward our goal of zero accidents, with the understanding that every accident is preventable. We have an effective and “fit for purpose” safety management system. We are committed to shared ownership for safety, recognizing that both us as an employer and our employees are responsible for safety. We are collectively accountable for conducting our operations in a safe manner for the protection of ourselves and one another. We are committed to proactive accident prevention, and we have established a routine and structured process to identify and eliminate hazards before accidents occur. We are committed to continuously improving our safety performance, and we regularly monitor and assess safety improvement progress, toward our shared goal of zero accidents.

Our ”Code of Conduct” states that we do not discriminate or harass colleagues, applicants, or business partners, and that we are committed to maintaining a healthy workplace for our colleagues, business partners and visitors to our business locations. We never tolerate violence, threats or physical intimidation in our facilities.

Our ITW Culture defines who we are as a company and how we lead. We are focused on ensuring our culture is deeply and consistently applied across the company while giving our colleagues flexibility within the framework to achieve success.

Further our “ITW Culture” states that we invest in our colleagues through professional development, challenging on-the-job experiences and long-term career growth opportunities. We recognize and reward colleagues who perform well, and we want to offer attractive compensations and benefits.

Our actions during 2020/21

As in previous years our work environment committee, composed of 8 representatives from both employer and employee sides, addresses topics within both physical, psychological and health work-related areas, including e.g. harassment, discrimination, lost time injuries and near-misses. The committee meets on a regular basis throughout the year and works based on an annual issue plan. The committee identifies, evaluates, and mitigates on both retrospective and forward-looking concrete topics throughout our group. We have decided to allocate more resources into the committee’s work going forward.

It is important to us, that all employees and managers enjoy going to work, as we believe this makes both better results and happier employees – therefore we regularly conduct mandatory employee satisfaction survey among all employees. Results from the survey are incorporated into our development plans in general and results also form basis for more specific improvement initiatives. Next survey is planned for the fall 2022.

We consider a good physical work environment to be an important issue. Therefore, installing PC screens that meets each employee’s needs for adjustments, adjustable tables and chairs, correct lighting etc. is an ongoing effort.

When workload or other circumstances impacts an employee negatively, we take open dialogues with the employee to identify and agree on the best solution. Solutions can include reduced worktime for a period, replanning etc. It is highly prioritized for us to prevent stress situations for our employees, and we focus on having early dialogue with employees that might be threatened by stress. We offer help from a professional stress coach in relevant cases.

At MTS we consider it important to offer high-quality insurance and pension schemes to our employees. During the year we have made agreement with a new pensions fund, that offers better insurance coverage, broader health coverage, lower costs, and an improved possibility for each employee to choose his or her preferred investment profile; which e.g. means that each employee can choose a sustainable/green investment portfolio. We believe this has improved the overall benefits for our employees.

We offer employees a partly company-financed lunch buffet, and free fruit during the workday at most of our permanent sites. In the cause of the year, we have moved further towards using ecological food that is sourced close to our office.

Ongoing and updated training and education programmes for our employees is important both to the individual employee and to MTS as an employer. We offer programmes that focus on both professional and personal development objectives. Parts of our employees need renewals of certificates and approvals to be able to work on our customer projects, while other employees need cutting edge education within their specific professional engineering area.

Planning of and agreement on which education/training programmes that are relevant to the each employee is done as a systematic part of the annual employee development interview.

Mandatory individual development interviews have been performed with all employees. We use an external IT solution for documenting discussions and agreements, and all interviews are performed based on systematic structures and templates. Interview outcomes form basis for the employee’s professional and personal development.

Educating and training apprentices is an important focus point to us, and currently we have five apprentices among our employees. We also offer students within relevant area such as mechanics, electronics and machinery to spend their practice terms with us, as well as we collaborate with a number of student while they are writing their bachelor or master thesis. A large part of the apprentices and students apply for a job with us after they have finalized their educations, which we are very proud of.

As part of on-boarding new employees as well as training current employees, we are in the process of launching a number of guidance videos. The videos will guide employees on our principles and procedures, and in this way make things easier and more efficient for all.

Participation in and support for events and promotions at relevant education institutions is part of our ongoing activities. An example is our office on the island of Funen/Denmark, that collaborates with the nearby university.

The MTS employee club initiates a variety of social activities, including football, cycling, swimming, physical training, cultural events etc., and the company provides financial contributions.

As a permanent arrangement we now have established a voluntary possibility for employees to work partly from home. Homework can be performed one day per week, and a large part of our employees use this possibility on a regular basis. Employees are in general very satisfied with the arrangement, as it provides a more flexible way of combining work and free time. Digital equipment for this purpose has been bought and installed in some employees’ private homes. Working from home saves time and energy consumption for commuting.

Following our practice in previous years we have performed a number of courses and trainings for our employees. Where relevant equality and anti-harassment has been an integrated part of these courses and trainings.

Our results

Impacts from the above described efforts and objectives are a high employee satisfaction rate and a good employer image, which are reflected in e.g. low illness absence rates and low employee turnover rates, and further that we have been able to attract and retain talented employees and managers. Our lost time injury rates are low.

Our risks and management procedures

Risk within this area include e.g. unintentional development or handling of accidents, occupational health and safety and employee satisfaction.

Our described policies, organisational setup and management principles provide a good basis for monitoring and managing this area.

 

Focus area: Equality

At MTS we believe that gender equality and diversity help increase our innovation ability, generate better results, make better decisions, and make us an even more attractive employer.

Currently we employ people who origin from several different countries, who have different educations and backgrounds, who have different work experiences, and of all ages. We welcome and respect all current and new employees regardless of age, gender, ethnicity, religion, disabilities, sexual orientation etc. is

Our policies and principles

Board of directors: Our target for the underrepresented gender on the Board of Directors at MTS Systems Danmark ApS is by the end of fiscal year 2024 to have at least one out of a four members of the Board of Directors to be a woman.

The target is considered ambitious and realistic. At the end of fiscal year 2020/21, the Board of Directors consisted of four male members, which according to the definitions in the Section 99b of the Danish Financial Statements Act, is not considered an equal gender distribution. There has been focus on establishing an equal gender distribution, resulting in changing all seats in the Board of Directors in February 2022, which means that the Board of Directors hereinafter consists of three male members and two female members, which is considered an equal gender distribution.

Other management levels: Our principles are formulated in our Gender and diversity policy for other management levels”[3].

It is the vision for the policy, that we want our employees and managers to be diverse, as we believe this promotes the company's development and is one of the basic prerequisites for our business success.

Establishing and upholding equality and diversity on e.g. gender, age and educational background among our managers and employees are objectives for us, and it is important to us that we avoid discrimination and that we create and develop an open-minded culture.

Our actions during 2020/21

In general, our industry is characterized by having only very few females employed – and this is also the situation for our company, despite the fact that we have a constant focus on attracting female employees.

As in previous years we still invite qualified candidates of both genders to interviews for open job positions at all levels, and both internal and external recruiters are instructed to aim at identifying candidates of both genders, when possible.

Personal and professional competences are always the basis for hiring and promotion of employees. Applicants’ age, gender, ethnicity, national origin, religion, disabilities, sexual orientation etc. has not been influencing our recruitment or promotion decisions.

Regardless of gender, age, ethnicity etc. employees with the desire and competences to advance within our company, are ongoingly encouraged to apply for open positions.

Our results

Even though we have only been able to recruit few women during the fiscal year, our recruitments, promotions, and redundancies havebeen based on personal and professional qualifications.

Applicant’s gender, religion, race, ethnic or social background etc. have not influenced our decisions, and our policy has as such been applied.

At yearend we had three female members of our management group which totals 15 members.

Our risks and management procedures

Risk within this area include e.g. unintentional development of equality in the board of directors, recruitments or promotions that does not promote the intended diversity.

We have an ongoing management focus on this area to ensure that our policy is applied throughout the group.

 

Non-financial Key Performance Indicators and upcoming changes to Danish Financial Statements Act

We do not systematically collect data for non-financial KPIs, which is the reason for not including such information in this statement.

The addition Section 99d to the Danish Financial Statements Act regarding Data Ethics is not reported on in this year’s statement, as it applies only to financial years starting January 1st 2021 or later.

[1] Hereinafter ”MTS”

[2] The policies and procedures can be found here: https://investor.itw.com/governance/documents/default.aspx

[3] The policy can be found here: https://www.rd-as.com/corporate-social-responsibility/group-gender-and-diversity-policy/