Our supplier code of conduct and compliance program are the primary tools we use to instill improved social, environmental, and ethical governance practices in our supply chain, as warranted.
Xerox joined the Responsible Business Alliance (RBA) formerly known as the Electronic Industry Citizenship Coalition (EICC) in 2008 to strengthen our approach for managing corporate social responsibility across the supply chain. All RBA members are accountable to a common code of conduct for social,
environmental, and governance of its operations and suppliers. Xerox has adopted the RBA Code of Conduct as our Supplier Code of Conduct.

The United States requires public companies that are listed on a U.S. Stock Exchange to undertake due diligence in an effort to determine the source and chain of custody of “conflict minerals” that are necessary to the functionality or production of their products. Companies must then publicly report on an annual basis whether any such “conflict minerals” originate from the Democratic Republic of the Congo (DRC) or adjoining countries, and whether trading in those minerals benefited armed groups. The “conflict minerals” are tin, tantalum, tungsten and gold. Although Xerox does not directly purchase conflict minerals from our suppliers, Xerox purchases component parts and materials that contain metals, some of which contain conflict minerals. Rules similar to the SEC Rule are under consideration by the European Union and in other countries, and will require due diligence practices similar to those of the SEC Rule.

The Xerox EHS&S Standards provide consistency and guidance for meeting the policies. Our product standards encompass the following: energy efficiency, chemical management, packaging, parts reuse and recycling, electrical and mechanical safety, ergonomics, electromagnetic emissions, noise, fire resistance, and materials safety. Xerox business teams and our EHS&S organization review our products at each stage of the development process for conformance with environmental, health, and safety standards, which is a requirement for the introduction of any product. All Xerox standards ensure our products have the appropriate labels and information needed to meet all safety and environmental label requirements to keep our clients appropriately informed. All products meet required industry labeling standards for each market.

Xerox Corporation's (Xerox or the Company) stated Corporate philosophy is to comply with the highest standards of ethical behavior and the letter and spirit of all applicable laws. Additionally, Xerox is committed to full and accurate financial disclosure in compliance with applicable laws, rules, and regulations and to maintaining its books and records in accordance with applicable accounting policies, laws, rules, and regulations. This policy sets forth the unique stewardship responsibilities of Xerox Senior Financial Management, as defined, Financial Management and Finance staff. The responsibilities in this policy fall within the guidelines established in the Company's business ethics, conflicts of interest and related policies. Compliance with these policies is also implied in the requirements of the Sarbanes-Oxley Act of 2002 and regulatory bodies such as the Securities and Exchange Commission (SEC).

Globally, we create policies that support our business goals and reflect the culture of the countries where we do business. Xerox does not discriminate on the basis of race, color, religious belief, sex, age, national origin, citizenship status, marital status, union status, sexual orientation or gender identity.
By focusing on diversity, Xerox hires, promotes, and retains the best people who are well-suited for our business. We’ve designed our hiring and promotion efforts to ensure a deep, diverse reserve of strong players who are ready to assume leadership roles. Our Senior Executives recruit at universities and career fairs as an outreach for diverse candidates.

Xerox has a long-standing tradition of civic engagement. Our involvement in the political process and global public policy debates are a natural extension of our core values. We work with governments, others in our industry, and the broader business community to advocate for public policies that are consistent with our business objectives.

Xerox’s Office of Global Government Affairs coordinates and oversees all policy-based interactions with governments and governmental organizations across the nation and around the world. We engage on issues that range from corporate governance, trade, employee benefits, and tax policy to regulatory compliance, intellectual property, and government procurement.

In the print industry, Xerox was the first in many ways to design products that are accessible and easy to operate by all users, including people with disabilities. Our dedicated team of design professionals upholds that commitment for the products and services we provide.
To make our systems accessible for people with disabilities, Xerox has developed several accessories, such as angled consoles, Braille console labels, magnifying lenses for visually impaired users, and “start print” foot switches. We design software for embedded web servers and print drivers to be compatible with screen readers to enable people with visual impairments to operate them. On an ongoing basis, we strive to improve our performance around accessibility and adapt products so that ease of use is not compromised.

Xerox stepped forward in 1998 when Congress amended Section 508 of the U.S. Rehabilitation Act of 1973. We developed solutions to adapt our technology for use by government workers who are disabled. We also established a rigorous process to evaluate our products’ compliance to meet Section 508 accessibility requirements. In the near future, Section 508 rules will change, and new input is expected to come from the European Union and the Far East. Learn more about our efforts pertaining to Section 508 accessibility requirements at Xerox.com.

Our focus on increased mobility has expanded with the anywhere, always-on enterprise. We’re enabling enterprises to manage a complex infrastructure, as employees are bringing their own devices to work and demanding the same seamless, secure ability to find, use, and print business documents. Xerox technology, such as mobile print solutions, is enhancing easy access to information.

Xerox has an adaptive, leased product business model through which we can guarantee nearly 100 percent of the equipment is returned for optimized end-of-life processing. This model also ensures that our design process prioritizes equipment longevity and reuse and allows for ultimate recycling.

Nearly 100 percent of leased Xerox equipment is returned for optimized
end-of-life processing.

The priority nonconformances are the most serious type of
findings during our CSR audit. Xerox takes such audit findings very
seriously; the supplier will be required to take immediate action to
rectify the situation and provide a corrective action plan within
thirty days from the original audit.

In 2018, there were sixteen Priority nonconformances
identified during the audit for deficiencies related to Labor,
Health & Safety and the Environmental sections of the RBA
Code. Suppliers were required to provide their corrective action
plan within the thirty-day time frame. After review and
acceptance by Xerox, all suppliers agreed to the corrective
action plans.

Distribution of Major Nonconformances by RBA Code of Conduct—2018
34% Management System
23% Labor
20% Health & Safety
16% Environmental
7% Ethics

Most of our air emissions originate from production of imaging supplies, such as toner, photoreceptor drums and belts, and fuser rolls. Approximately thirteen metric tons of volatile organic compound (VOC) process air emissions (VOC and non-VOC) were released into the atmosphere from these activities in 2018. Emission reductions over time have come primarily from process modifications, lower production volumes of legacy products, and production declines attributable to longer-life components. VOC air emission decreases in 2018 are primarily due to the closure of the XNOR facility in Brazil, the relocation of products to Venray, Netherlands, and 2017 actions in Venray to increase VOC removal efficiency.

Xerox has significantly reduced manufacturing air emissions over the past twenty years. We continue to pursue efforts to do even more.

A subset of these VOC emissions is defined by the U.S. Environmental Protection Agency (EPA) as hazardous air pollutants (HAP). In 2018, Xerox reported worldwide air emissions of approximately 5.0 metric tons of HAP under national toxic chemical release regulations, including the U.S. Toxic Release Inventory (TRI) program. Methylene chloride, methyl isobutyl ketone (MIBK), 1,3-butadiene, and styrene represent virtually all these HAP emissions.

It is the policy of Xerox Corporation and its subsidiaries (Xerox) to comply fully with all applicable antibribery and anticorruption (ABAC) laws and regulations, including the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA). Xerox is similarly committed to full compliance with applicable export controls and sanctions restrictions.
Xerox operates an active and comprehensive ABAC compliance program that is supported by policy and annual training that is overseen by the Compliance Office in the Office of General Counsel. Xerox prohibits the giving or offering of a bribe of any amount or value; this includes small “facilitation” or “grease” payments for routine government approvals and actions unless employee security and health are at risk and even then, only with prior approval.

Xerox screens potential clients for applicable export control requirements and sanctions restrictions, drawing on an internal network of export control coordinators and subject matter experts. Xerox also conducts risk assessments of third-party intermediaries and includes a contractual obligation in its contracts requiring third-party intermediaries to adhere to the same standards for compliance with ABAC, export controls, and sanctions. Xerox sends an annual reminder letter to its major distributors and resellers outside the United States requiring them to acknowledge and confirm awareness of the FCPA, UKBA, and all locally applicable ABAC laws and regulations, as well as any applicable export controls and sanctions, and to certify that, to the best of its knowledge, the third party has complied fully with these requirements.

The Xerox Asset Protection and Fire Safety Program provides fire-safe workplaces and limits the potential for losses to Xerox equipment and property from fire, explosion and natural hazards, such as windstorms, snow-loading collapse and floods. The program includes periodic inspections, management reviews of findings, and mitigation planning. Our philosophy is to maintain our higher-valued locations to a “Highly Protected Risk” standard. In addition, locations are reviewed for conformance to Xerox standards and recognized fire, property and life safety standards.

We continue to demonstrate excellent loss control performance and benefit from favorable insurance rates and premiums.

A well-established internal audit program measures our success in implementing corporate standards, allows us to share best practices and helps us validate regulatory compliance. Audits at major operations are conducted once every three to five years (or sooner, based on performance). The frequency and the focus of the audits are based on the type of operations and the inherent risks associated with the operations.

Xerox audit teams evaluate operations against our internal standards, external regulations and industry guidelines. The teams also evaluate management system performance. With the assistance of the local managers and support staff, action plans are developed and deficiencies corrected. Senior management pays particular attention to situations with the potential to pose a significant risk of environmental damage, serious injury to employees or regulatory non-compliance. Xerox’s audit program is an important mechanism for identifying and correcting performance gaps.

Year after year, Xerox is recognized for embracing diversity in the workplace.

The following is a list of some of our acknowledgments from 2018 through April 2019:
•Military Friendly Employer & Best Workplace
•India Best Company for Women
•DMBA—Diversity MBA Top 50 Places to work
•Black Enterprise Best Companies for Diversity
•Spain—INTRAMA Top 30 companies
•CEI—Global LGBT Human Rights Campaign
•ATT Supplier Diversity Crystal Award
•Chief Information Officer (CIO) 100 Awards
•Greater Toronto’s Top Employers 2019 by MediaCorp Canada
•Canada Best Diversity Employer & Place to Work—Category: Technology
•Canada’s Top 100 Employers for 2019 by MediaCorpCanada
•Canada’s Top Employers for Young People

Each Xerox employee and those working on behalf of Xerox have an important role to play not only in helping Xerox succeed but also in how we achieve that success. Doing business in accordance with the highest ethical standards and in accordance with the Xerox Code of Business Conduct, Company policies, and applicable laws and regulations is at the heart of who Xerox is as a Company.

Since the Company’s inception, Xerox has recognized that the best possible results to our clients, shareholders, and communities can only be delivered when conducting ourselves ethically and with integrity. It’s a part of who we are and how we do things.

Xerox has established the Xerox Business Ethics Office to oversee Xerox’s efforts to reinforce and enhance Xerox’s culture of ethics and compliance on behalf of operating unit management, corporate management, and the Audit Committee of the Board of Directors. Xerox’s Chief Ethics Officer reports to the Executive Vice President and General Counsel with a dotted-line reporting relationship to the Audit Committee.
The Xerox Business Ethics Office maintains metrics to help detect misconduct and to inform continuous improvement of the ethics program. The Chief Ethics Officer attends Audit Committee meetings and prepares reports on the status of the ethics program, including metrics, program strategy and operations updates. The Business Ethics Office also prepares quarterly reports to Xerox’s external auditors.

The Office of Compliance oversees and coordinates the work of the company’s subject matter experts to ensure that the organization is in full statutory compliance with global rules and regulations related to all applicable laws in our industry as well as internal policies. The Office of Compliance also collaborates with other departments such as internal audit, corporate security, legal, human resources, government affairs and ethics to ensure sustainable corporate compliance.
The Office of Compliance is managed by the Compliance Leader who reports to the Vice President, Global Government Affairs, Sustainability, Citizenship and Compliance and the Executive Vice President and General Counsel. The Compliance Leader acts as a liaison between the company and external, independent audit and compliance companies/contractors and advises and makes recommendations to the Office of General Counsel and management team regarding the state of statutory compliance at the company.

The Compliance Leader prepares quarterly compliance updates for executive management and the Board of Directors. The Executive Vice President and General Counsel reports directly to Xerox Vice Chairman and Chief Executive Officer.
Since the Office of Compliance was created in 2017, it has focused on reviewing all corporate policies, performing high-level assessment of corporate compliance processes, and mapping key corporate compliance risks to available corporate training.

See www.xerox.com/ethics for additional information regarding Xerox’s Business Ethics and Compliance
Program.

The Office of Compliance oversees and coordinates the work of the company’s subject matter experts to ensure that the organization is in full statutory compliance with global rules and regulations related to all applicable laws in our industry as well as internal policies. The Office of Compliance also collaborates with other departments such as internal audit, corporate security, legal, human resources, government affairs and ethics to ensure sustainable corporate compliance.

The Office of Compliance is managed by the Compliance Leader who reports to the Vice President, Global Government Affairs, Sustainability, Citizenship and Compliance and the Executive Vice President and General Counsel. The Compliance Leader acts as a liaison between the company and external, independent audit and compliance companies/contractors and advises and makes recommendations to the Office of General Counsel and management team regarding the state of statutory compliance at the company. The Compliance Leader prepares quarterly compliance updates for executive management and the Board of Directors. The Executive Vice President and General Counsel reports directly to Xerox Vice Chairman and Chief Executive Officer.
Since the Office of Compliance was created in 2017, it has focused on reviewing all corporate policies, performing high-level assessment of corporate compliance processes, and mapping key corporate compliance risks to available corporate training.

We review suppliers’ performance against expectations and contractual requirements, prioritizing based on business risk and revenue impact. Suppliers with the highest business risk and potential revenue impact are considered “critical” and are required to maintain an acceptable business resumption plan. We inspect these plans on a regular basis.

Revenue risk criteria include:
•Materiality risk to business revenues;
•Annual supplier spends and total contracted value of the full relationship;
•Impact to product life cycle management; and
•Extent of the impact to related subsystems and productportfolio.

Business risk criteria include:
•If a supplier is a single source;
•Length of time to resume business after an adverse event;
•Percent of revenue that Xerox represents to the supplier;
•Financial stability of the industry and the supplier; and
•Probability and severity regarding natural disasters, climate change impacts, and/or political turmoil.

In 2018, Xerox conducted six initial audits and closed seventeen audits that were initiated before 2018 in various Asian countries. As compared to the initial audit findings, the average level of supplier conformance observed during the closure audits increased 12 percent to 82.64 percent.

One of the key elements in Xerox’s risk assessment framework is to identify potential sustainability risk in our supply chain. Xerox focuses its supplier audit program on those suppliers that comprise the greatest percentage of annual spend. Suppliers in the Asia-Pacific region comprise approximately 80 percent of Xerox annual direct spend.
The audits conducted by Xerox Global Procurement Organization are based on the Responsible Business Alliance (RBA) Code of Conduct and relevant local laws and regulations. For audits conducted in 2018, Xerox used the latest ratified RBA Code of Conduct (version 6.0) that included additional requirements pertaining to social and environmental dimensions. With the addition of requirements pertaining to pregnant workers and water resource management, Xerox suppliers are required to provide additional evidence of ongoing continual improvement practices.

Xerox global procurement operations are platinum certified to the Chartered Institute of Procurement and Supply (CIPS) in the area of procurement excellence through processes and procedures. In 2012, Xerox was the first organization globally to achieve CIP gold certification. The Platinum Certification signifies world-class levels in all aspects of ethical, sustainable, and strategic procurement when measured against CIPS globally respected standards structured around leadership and organization, strategy, people, processes and systems, and performance measurement and management.

In 2018, CIPS completed a complete recertification of Xerox’s strategic procurement program against the standards set forth in the Platinum Certification and concurred that Xerox continues to display world-class procurement practices required to maintain this advanced CIPS certification.
Through the certification process, Xerox global procurement identified and validated best practices, areas for improvement, and gained an unbiased measure of organizational performance against benchmark industry criteria.

We have developed learning paths and certification programs specifically designed for employees in particular business areas. These programs use standard criteria for tracking learning progress and provide recognition for skills development and application. Along with development within a particular role, career opportunities are available to move internally at Xerox, whether into a new department, a different business unit, or supporting a new client.

We want employees to have rewarding careers at all levels, so our learning and development strategy is essential for success. As part of the performance management process, managers and employees work together to build development plans. We are also continually focused on our next generation of leaders. When managers recognize an emerging leader on their team, they work with that individual to plan developmental assignments to stretch and test their capabilities. We identify and accelerate high potentials as well as provide growth opportunities for our people. Senior leaders review performance and career steps with those who are poised to assume key roles. More broadly, Human Resources provides a forum for management to review the future needs of the organization, noting strengths, gaps, and strategies to build strong teams for the next chapter at Xerox.

When you join Xerox, you become part of a team of ambitious and motivated professionals who seek to create tomorrow’s technologies, business processes, and service solutions for our clients. We are always eager to learn new things, collaborate with new people, and explore new possibilities. That is why we have developed robust learning and upskilling opportunities.
To manage their professional learning, our employees use a comprehensive global learning platform that provides access to hundreds of targeted online courses, virtual classroom events, simulations, job aids, and other learning and development resources. Topics range from technical upskilling to management development and professional effectiveness and includes productivity tools for project management, client service, negotiations, and technology solutions.

We assess and manage our carbon risk by maintaining both a comprehensive GHG emissions inventory and a mature regulatory tracking function that provides the necessary information to stay abreast of developing regulations. We do not consider our company to be subject to unique risks due to changing weather patterns, rising temperatures, or sea level rise, but we recognize that our business and clients could be affected by more frequent disruptions because of severe weather in locations where we operate. We may need to invoke our business continuity and resumption plans to aid clients and employees who are affected by business disruptions because of severe weather. We have experience working to ensure continuity of critical applications by prioritizing business needs and developing client-specific preparedness plans where appropriate.

These plans include communication with employees and clients, management of employee health and safety issues, business continuity and resumption processes, as well as interaction with government organizations.

Xerox has examined the regulatory, physical, and commercial risks and opportunities associated with climate change across our value chain.

We recognize that the costs of energy and concerns around energy security are issues that affect both our operations and our clients. To meet our commitment for “Reducing Energy Use and Protecting the Climate,” our long-term strategy is to continue to invest in technologies that reduce the carbon footprint of our operations and develop technology solutions that help our clients reduce the energy and environmental effects of their businesses.

Our Code of Business Conduct serves as the foundation of our Business Ethics and Compliance Program and our means to implement the Xerox Human Rights Policy. It embodies and reinforces our commitment to integrity and helps our people resolve ethics and compliance concerns consistent with our core values and legal and policy controls. Our Code of Business Conduct is available in 19 languages and accessible on our internal and external websites. The Code is aligned to our core values and covers policies and guidance on key topics, including sales and marketing activities, controllership, insider trading, bribery, non-discriminatory employment practices, privacy rights, human rights and environmental stewardship. It also specifies employees’ obligations to report suspected ethical violations and reinforces our strong “non-retaliation policy,” which is also memorialized in a separate, stand-alone corporate non-retaliation policy.

Xerox has a comprehensive framework of policies which incorporate a culture of compliance into day-to-day operations. Corporate policies are published on Xerox’s Ethics & Policies intranet. Additionally, key policy references are included in the Code of Business Conduct to help ensure accessibility. Xerox’s Business Ethics Policy is publicly available and translated into 19 languages. It describes the ethical business conduct required when conducting business on Xerox’s behalf or representing Xerox in any capacity. Country specific and regional policies exist to provide additional clarity.

In addition to our global Code of Business Conduct and policy framework, we have a supplemental Finance Code of Conduct for finance employees and a Code of Business Conduct and Ethics for Members of the Board of Directors. As a member of the Responsible Business Alliance (RBA), Xerox uses the RBA Code of Conduct as our supplier code of conduct.

At the start of every year, our CEO distributes a message on business ethics to employees. All employees, and those working on behalf of Xerox, must complete ethics training annually and acknowledge that they have read the Code of Business Conduct. Xerox’s Senior Leadership Team is also required to complete a conflict of interest disclosure and ethics certification confirming that each is in compliance with our Code of Business Conduct, have processes in place to support the Company’s Business Ethics and Compliance Program, are committed to protecting those who make good faith reports of an actual or suspected violation from retaliation, and that they will work to safeguard the confidentiality of investigations.

We promote awareness of our Business Ethics and Compliance Program on our Ethics and Policies intranet site and Ethics and Compliance Program website. We publish video vignettes on Xerox’s intranet site to provide real world examples of ethics and compliance dilemmas to keep ethics and compliance front and center for employees and those working on behalf of Xerox. We periodically implement a global ethics survey process across the organization to measure the state of the Company’s ethical culture and help us focus on areas for improvement.

See www.xerox.com/ethics for additional information regarding Xerox’s Business Ethics and Compliance Program.

OPERATIONAL CHANGES TO COLLECTIVE AGREEMENTS

In the U.S., the notification periods required for operational changes are specified in collective bargaining agreements and vary depending on the location and type of change. As a default, each agreement contains a “duration clause,” which provides that if either party desires to make changes to the agreement before its termination, written notice must be given sixty days before the expiration date.

GRIEVANCE PROCESSES

Each collective bargaining agreement in the U.S. includes a provision allowing for unions to file grievances. The number of steps in the grievance process, however, depends on each collective bargaining agreement, with the final step being
binding arbitration.

Our workplaces continue to have exemplary Safety and Health compliance performance. In 2018, there were zero OSHA citations and no penalties issued.

We are committed to improving mining conditions associated with sourcing goods and materials containing conflict minerals, e.g., tin, tantalum, tungsten, gold.
* Xerox has an extensive Conflict Minerals Policy.
* We publish our Due Diligence activities in our yearly Conflict Minerals Report.

* Our internal processes incorporate the Organisation for Economic Co-operation and Development (OECD) frameworkfor Responsible Supply Chains of Minerals from Conflict- Affected and High-Risk Areas.
* We are an active member of the RBA and the Responsible Minerals Initiative (RMI), formerly known as the Conflict-Free Sourcing Initiative (CFSI).
* We use the RMI Conflict Mineral Reporting Template (CMRT) to survey our supplier base regarding conflict-free mineral usage.
* We support the Responsible Mineral Audit Program (RMAP), which independently audits smelters and refiners to determineif they have a system in place to ensure compliant sourcing of conflict-free minerals.
* Our supplier contract template includes a specific reference to conflict-free minerals to ensure responsible sourcing in our supply chain.
* We filed Form SD with the SEC for 2018 on May 15, 2019. 60

We are committed to improving mining conditions associated with sourcing goods and materials containing conflict minerals, e.g., tin, tantalum, tungsten, gold.

We publish our Due Diligence activities in our yearly Conflict Minerals Report.

Returned products are sorted, and items suitable for remanufacturing are cleaned, inspected. and then remanufactured. Remanufactured consumables, containing an average of 90 percent reused/recycled parts, are built and tested to the same performance specifications as new products. Items that are not suitable for remanufacturing are recycled or recovered through energy from waste. Recycled waste toner and toner reclaimed from manufacturing that qualifies for reuse may account for 25 percent of the weight of new toner without compromising toner functionality. Reusing waste/reclaimed toner saves several million dollars in raw material costs each year. Of the toner that cannot be reclaimed 75 percent is recycled by our consumables recycling partner, while the remaining volume is utilized at energy from waste facilities to generate steam and electricity.

Our GWA initiative, as noted, is a collection and reuse/recycling program for customers for their used imaging supplies. GWA is central to our commitment to waste-free products.

More than thirty-five countries currently participate in the Xerox GWA. Worldwide, our clients returned more than 6.1 million cartridges, toner containers, and other used supply items in 2018, equating to four thousand metric tons, down roughly six hundred metric tons from 2017. The decrease is based on a decline in volume of client returns in the U.S. market. In 2018, Xerox received the Non-Product Award from the US EPA’s Sustainable Materials Management Program for its Green World Alliance program’s significant positive sustainability impact.

The goal of the Contractor Safety Program is to ensure contracted work conforms to all applicable regulations and Xerox Environment, Health, and Safety requirements. Contractors are qualified to the safety and health requirements before beginning work at a Xerox location. Contractors are required to submit a job safety plan, and workers on U.S. Xerox sites must attend a safety orientation session and complete the OSHA 10-Hour Safety course when appropriate to the job function. Incidents and injuries are tracked both as feedback to the contractor and to measure program effectiveness. First established in our Webster, New York, operations, this model has been applied successfully in many of our larger locations.

Xerox also functions as a contractor for many Xerox client accounts. At these sites, we follow our internal safety standards, establish worker protection plans, deliver specific employee training, and maintain management oversight to ensure our operations meet both Xerox and client requirements.

Completed an initial high-level assessment of corporate compliance processes. The assessment document is based on a format used by the Institute of Internal Audits and uses seventy criteria provided in the U.S. Department of Justice guidelines and U.S. Federal Acquisition Regulations. Compliance Assessment is intended to:
• Assess the design and operation of Xerox’s corporate compliance programs, considering governmental expectations, existing/changing legal requirements, and leading practices;
• Provide observations, risks, and recommendations, including:
• Identifying existing elements and gaps in the compliance infrastructure;
• Identifying and prioritizing opportunities to enhance Xerox’s compliance program;
• Establishing a baseline for compliance monitoring and continuous improvement; and
• Ensure sustainable corporate compliance processes by implementing corrective actions that meet statutory requirements and balance ideal performance factors and resources.

We assessed several topics, including General Corporate Compliance, Sexual Harassment, Data Protection, Foreign Corrupt Practice, Third Party Risk Management, and Fraud. Based on the assessment, areas of improvement were identified, and action items were prepared to present to senior management. Next steps included:
• Prioritizing compliance processes and working with subject matter experts to complete an assessment of prioritized compliance processes;
• Identifying compliance leaders/managers in business units; and;
• Developing compliance training and awareness.

The Xerox Business Ethics and Compliance Governance Board (Governance Board) works closely with the Ethics Office to imbed business ethics into Xerox’s worldwide business operations. The Ethics Office coordinates the Governance Board’s activities to ensure consistency and provide an executive-level forum for discussing emerging trends, issues and concerns. The Governance Board represents business and corporate organizations within Xerox and its subsidiaries and participates in quarterly meetings chaired by our Business Ethics Office. Governance Board Members are responsible to establish regional and/or local networks within their respective organization to assist in helping ensure that a culture of ethics and compliance exists globally at Xerox.

Xerox requires suppliers to provide a comprehensive corrective
action plan for all nonconformances within a designated time
frame that varies according to the severity of the
nonconformance. The time frame can range from immediate up
to 180 days from the original audit. Our team then reviews these
plans and schedules a closure audit to ensure all corrective actions
plan put into place are effective. If such remedies are found to be
inadequate, we intervene to help the supplier develop a more
robust and effective solution.

Upon request from the suppliers, Xerox will provide a briefing
session to the suppliers on their specific areas of concern in
responding to Xerox RBA audit findings.

For example, one wire harnesses assembly supplier in Singapore has requested a briefing session regarding their area of concern in targets and objectives of pollution control, waste management, storm
water management after the RBA audit in 2016 in which Xerox
conducted a training session explaining the actual requirements
and expectations with them on December 1, 2016.

The CSR audit nonconformances vary according to geographical
location, the respective country culture, and governmental
policing. All twenty-three suppliers were found to have
nonconformances in one or more segments of the RBA Code
(refer to the following chart).

In 2018, the nonconformances reported for the Labor, Health &
Safety and Management System accounted for more than twothirds
of the total nonconformances.

Distribution of Major Nonconformances by RBA Code of Conduct—2018:
34% Management System
23% Labor
20% Health & Safety
16% Environmental
7% Ethics

Xerox manages these impacts through implementation of a global privacy program that includes representation from all aspects of the enterprise, including legal, information technology, information management, corporate security, human resources, marketing, ethics, risk management, product development, and internal audit. The purpose of this cross-functional team is to build on Xerox’s existing robust privacy practices and create consistency across the enterprise to implement binding procedures that instill confidence in our products and services. These Xerox groups are responsible for maintaining and overseeing various policies concerning privacy compliance and secure handling of personal data, such as Xerox’s Privacy Statement, and different internal corporate privacy and security policies regarding personal data, marketing preferences, and human resources obligations.

Our client privacy responsibilities are considered throughout all aspects of the Xerox enterprise. Client privacy can be affected in Xerox’s marketing activities, from Xerox’s processing of personal data through services Xerox provides to our clients and through events involving Xerox systems maintaining client information.

The Xerox global privacy program reviews and updates these policies annually, most recently to address the EU General Data Protection Regulation and Xerox’s certification to the Privacy Shield Framework. Xerox has implemented new privacy management tools and practices, such as privacy impact assessments to document and map data flows within Xerox and updates to our vendor management to ensure appropriate contractual obligations are agreed to and followed by vendors processing personal data on our behalf. Xerox continuously monitors and researches privacy laws throughout the world to ensure we comply with all applicable requirements.

To protect our clients’ most sensitive data, we take a holistic approach to managing security throughout the product life cycle, from design to development, manufacturing, deployment and, ultimately, disposal.
Security functionality is integrated at the individual device level and extends seamlessly to the fleet. State-of-the-art encryption is used extensively to protect client information, both while at rest in the device and in motion to and from the device. The authentication and authorization features are unmatched in their ability to control usage; yet, they also are easy to use. We put special emphasis on the care and handling of machines that are returned to us after lease expiration or otherwise. Disks in these devices are destroyed or completely remastered to remove any residual client information before they are reused.

In the unlikely event that data and network defenses are bypassed, Xerox® ConnectKey® Technology will run a comprehensive Firmware Verification test either at start-up or when activated by authorized users. This alerts users if any harmful changes to their printer have been detected. Our most advanced built-in solutions use McAfee® Whitelisting technology, which constantly monitors for and automatically prevents any malicious malware from running. Integration with Cisco® Identity Services Engine (ISE) auto-detects Xerox® devices on the network and classifies them as printers for security policy implementation and compliance.

To further support information security, we have policies and controls in place to provide privacy protection for personally identifiable information maintained by Xerox. Our policies follow industry best practices, including the use of encryption technology and data loss protection software.
Our approach has earned us top levels of compliance and certifications, such as the Common Criteria (ISO/ IEC 15408) and FIPS 140-2, and in 2018 Xerox became the first document technology company to achieve an Authority to Operate (P-ATO) from the U.S. Federal Risk and Authorization Management Program (FedRAMP), a government-wide initiative that provides a standardized approach to security. FedRAMP authorization was granted for Xerox’s cloud-based Managed Print Services.

We invest in the American Red Cross for its efforts to respond quickly and effectively to U.S.-based natural disasters. In 2018, Xerox partnered with The American Red Cross in response to the California wildfires and Hurricanes Florence and Michael. We also invest in Save the Children and Concern Worldwide, which bolsters our ability to help satisfy urgent humanitarian needs around the world.

Xerox champions a variety of organizations that respond to natural disasters around the world.

A Fortune 100 company tapped Xerox to manage its worldwide print infrastructure to support its “paperless” initiative. With our Intelligent Workplace Services, a new offering that transcends Managed Print Services, we are pairing digital alternatives, print authentication, and analytics along with gamification techniques to help them change their company’s print behaviors to ultimately reduce their reliance on paper as well as helping them reduce their impact on the environment.

While Xerox has long been committed to responsible end-of-life management of equipment, the proliferation of
e-waste regulations has created a need for many separate programs in different countries and even states. We carefully manage suppliers that provide recycling and waste disposal services to ensure that our clients’ returned equipment is protected from data breaches and improper disposal. Xerox does not allow its vendors to send electronic scrap to developing nations for processing. In addition, we strive to work only with electronic waste recyclers that have implemented voluntary programs certified by accredited organizations, including Sustainable Electronics Recycling International’s (SERI) Responsible Recycling (R2) standard or the Basal Action Network’s e-Stewards standard. This past year marks the third year in a row that Xerox has received the U.S. EPA Sustainable Materials Management GOLD Award for its responsible
end-of-life processes.

The ENERGY STAR program introduces progressively more stringent requirements over time. Xerox and other industry members worked together in conjunction with the EPA to develop the latest set of criteria.

The most recent revision of the ENERGY STAR Imaging Equipment 3.0 criteria went into effect October 11, 2019. While the standard is challenging to meet, our goal remains to have 100 percent of our newly eligible products achieve this label. In addition, many existing products were reengineered to be more energy efficient, meeting 3.0 criteria. These energy requirements serve as the foundation for other eco-labels, such as EPEAT and Blue Angel, and show our ongoing commitment to reduce product energy consumption. Learn more about the ENERGY STAR program and view current Xerox eco-label registered products at www.energystar.gov.

In 2018, 100 percent of all our new eligible product introductions achieved ENERGY STAR. This continued success in cutting the power consumption of our laser-based printing products has been achieved by adjustments in the fuser design, changes to the properties of the toner, and more efficient electronic controls and performance of the xerographic system.

EPEAT is composed of criteria spanning corporate and product requirements (50+ requirements for imaging equipment). EPEAT registration is a rigorous process, entailing both a third-party desk review for initial certification and random product verification audits once certified.

EPEAT® product criteria combine comprehensive requirements for design, production, energy use, and recycling with ongoing independent verification of manufacturer claims. EPEAT criteria reflect several categories of environmental attributes that span the life cycle of electronic products: material selection, design for end-of-life, product longevity/life extension, energy conservation, end-of-life management, corporate performance, packaging, consumables, and indoor air quality. Xerox continues to support EPEAT initiatives, aids in the future success of the program, and supports the program’s global expansion.

EPEAT: A FUNDAMENTAL PART OF OUR “DESIGN FOR SUSTAINABILITY” APPROACH

In 2018, we expanded our registration of products to Canada, the UK, France, Germany, Netherlands, Belgium, Luxembourg, Switzerland, Norway, Sweden, Finland, and Denmark, making Xerox the first imaging equipment manufacturer to register EPEAT products in Europe. Since 2014, Xerox has committed to launching all new eligible office products with EPEAT Silver or Gold certification. For example, all new VersaLink and AltaLink products are EPEAT Silver or Gold, as we continue to design our products with the environment in mind. Xerox is the only company to claim all eight EPEAT corporate optional criteria in the U.S. Learn more about the EPEAT program and view current Xerox eco-label registered products.

To prepare for emergencies, Xerox facilities worldwide have implemented site-specific Emergency Preparedness Plans to assist with the development and execution of appropriate actions in response to local emergencies. Our plans account for common emergencies, such as responding to fires, for weather related emergencies such as tornadoes and hurricanes, and for more location-specific emergencies, such as responding to earthquakes and radiological emergencies. We also include resources and procedures for first aid medical response in the event of an injury or illness to an employee in our facilities. In our more complex and higher hazard operations, we have Medical Emergency Response Teams (MERTs). These MERT employees are provided with the training and equipment necessary to render quick response to stabilize the medical emergency until more advanced medical support arrives.

In addition to emergency action plans that are established at the local operation level, there are preparedness plans at the corporate level including major incident response, crisis management and pandemic preparedness. These plans have been designed with a central corporate strategy that utilizes an incident command structure. Incident Response Managers are responsible for local/regional tactical and emergency response, coordinating efforts at their respective locations with the Corporate Crisis Management Team and addressing local business operations issues. Response coordination and integration are part of the planning process.

All preparedness plans are regularly tested for effectiveness through management reviews, corporate audits and annual drills. Any discrepancies are noted and corrective actions are implemented. Following an emergency, Business Resumption Plans are put into action to ensure the business operations are quickly restored after the incident.

Xerox is committed to fostering open communication between employees and management—from one-on-one conversations to company-wide engagement activities. Engagement requires open two-way communication, clearly articulated goals, and unambiguous expectations. It demands shared values and well-understood reward systems. Engagement is an ongoing journey, not a final destination.

Open dialogue has always been a priority, and for the past forty-eight years Xerox has been at the forefront of actively surveying our employees. Leveraging employee feedback, including the Employee Engagement Surveys, the Voice of the Employee Survey, and the prior year’s Culture Survey, as well as the one launched in July 2019, strengthens the communication channel between the company and employees, ensures a better experience with our clients and clients, and helps create an effective and motivating work environment where we all can thrive.

Our employee engagement goal is to tap into the knowledge, creativity, and enthusiasm of our people—at all levels—who care so deeply about this great company. Together, we are rallying the organization around the right plan for our future, with clear direction, straight talk, and the required tools to get the job done for our clients.

We encourage our employees to participate in any community and political activities they find to be consistent with their values. We do not discriminate in favor of or against employees based on the organizations they choose to support. Employees are not reimbursed directly or through increases in compensation for their personal political contributions and expenses.

Many Xerox employees are represented by labor unions, trade unions, or work councils throughout our global operations. Relationships with these groups are based on applicable laws in each country.

• In Europe, we recognize a variety of work councils and trade unions as established under European labor laws to meet requirements for information and consultation for the protection of employee rights. Union representation ranges from 43 to 100 percent in the following countries: Ireland, France, Austria, Switzerland, Spain, Italy, Netherlands, Germany, Belgium, Norway, Sweden, Denmark, Finland, and Luxembourg.
• Union representation in Latin American countries includes Argentina, Brazil, Chile, and Mexico and ranges from 50 to 100 percent.
• In the U.S. and Canada, we maintain a cooperative and effective relationship with three unions that represent nearly
3 percent of employees in five locations: Workers United, Unifor, and the Service Employees International Union (SEIU) through a Cooperative Agreement with Workers United.

We have in place a robust, worldwide incident reporting process. This, in combination with workplace safety, inspections, and hazard analysis focus our safety improvement efforts where we can have the greatest effect on preventing incidents and where populations are most at risk. Employee safety communications take a variety of forms, given the great diversity in our operations and workplaces. A number of methods are used to keep employee safety awareness high, including site-specific hazard management, off-the-job safety information, and communications regarding unique safety concerns that may be endemic to the geography.

Xerox is committed to maintaining a safe work environment for our people. We strive toward a goal of zero workplace injuries, continually decreasing the frequency and severity of injuries every year. In 2018, our U.S. total recordable injury (TRI) rate decreased by 11 percent, and our day away from work case (DAFW) rate decreased by 6 percent from 2017 levels. Overall, this improvement trend has continued since 2012 and is the result of increased safety awareness and communication to our employees and focused safety management processes within our management teams. Globally, our day away from work case (DAFW) rate decreased by 2 percent, but our total recordable injury (TRI) rate increased by 2 percent.

In 2018, our Dundalk, Ireland, and Cincinnati, Ohio, operations achieved ISO 45001 certification. Additional manufacturing operations are currently pursuing certification. We believe this safety management system certification will continue to improve our safety processes, functions, and performance.

We believe a combination of financial and human resources can bring about greater change than either on its own. This philosophy is perhaps best represented by the Xerox Community Involvement Program (XCIP).

Outside of the Xerox Community Involvement Program, many Xerox people give their time and talent to a wide variety of causes. Here are a few examples:
•The Xerox Science Consultant Program places Xerox people in elementary school classrooms to teach hands-on sciencelessons and ignite an interest in science.
•Our partnership with For Inspiration and Recognition of Science and Technology, or FIRST, enables hundreds of Xerox engineersto mentor middle and high school students within FIRSTprograms. The programs vary in difficulty and teach valuabletechnical and business skills.
•Xerox lawyers provide pro bono work to a wide range of nonprofit organizations.

•Xerox Canada’s Day of Sharing (DOS) is exclusively a volunteeropportunity for employees to give back to their communities.Employees are encouraged to find opportunities matchingtheir interests and dedicate the time to volunteer during business hours. In total, Xerox Canada invested $120,838 in their communities in 2018.
•The Xerox (U.K.) Trust invested £11,120, or USD $14,700, incharitable U.K. organizations undertaking projects with the help and at the request of Xerox people. The U.K. trust is a registered charity, number 284698. For more information,please visit Xerox.com.
•People across Xerox—from the C-suite to the factory floor— volunteer to help make our world a better place, whether by giving their time to a corporate board or rolling up their sleeves and packing boxes for a holiday food and gift drive.

The Xerox Community Involvement Program (XCIP). This long-running, grassroots initiative backs the volunteer spirit of our employees with funding support from Xerox. In this way, we’re making the biggest difference in the communities where we live and work. Since the program began in 1974, thousands of Xerox people have rolled up their sleeves and participated in projects that make their hometown a better place. In 2018, Xerox invested $403,470 in XCIP, enabling more than 212 projects.

In 2003, we made a public commitment to reduce GHG emissions—our carbon footprint—by joining the U.S. Environmental Protection Agency (EPA) Climate Leaders program and launching our own internal Energy Challenge 2012.

This 10-year initiative set a goal to reduce GHG emissions across all company operations by 10 percent by 2012. We met this target six years ahead of schedule and set increasingly stringent targets as each previous target was met. By 2016, our cumulative GHG reduction totaled 302,000 tons of carbon dioxide equivalents (CO2e).

In 2018, we established a new corporate-wide, science-based energy goal to reduce energy consumption and GHG emissions by 25 percent by 2025 (from a 2016 baseline).

As a U.S. Department of Energy Better Plants® Challenge partner, we pledged to improve energy performance by 25 percent over a 10-year period across all our U.S. manufacturing operations in 2018.

Energy and GHG totals are associated with fuel consumption by company-owned fleet and natural gas/electricity consumption in facilities. Vendor invoices from utility and fuel providers are the preferred source of data; when unavailable, estimates have been used.

In accordance with the Greenhouse Gas Protocol and to make annual data comparable, we adjust the energy data each year as a result of the opening and closing of facilities and use of more appropriate emission factors that are available. Revenue is from continuing operations.

We continually make modifications to facilities, work processes and operations to improve efficiency and effectiveness. To ensure these changes meet applicable Xerox safety standards consensus standards and regulatory requirements, projects are reviewed by occupational safety and health professionals. The scope of the project is defined, potential safety and environmental impacts are characterized, and control requirements are established and communicated before the project is initiated.

The process serves to inform the engineering and management teams on safety requirements and ensures all project designs have controls integrated into work plans. The process ensures environmental, health and safety requirements are understood and implemented at the beginning of the project.

In 1985, we voluntarily assessed our real estate portfolio globally and identified sixty-eight facilities that required corrective actions to address environmental contamination. We worked closely with the appropriate federal, state, and local agencies to implement prompt and appropriate measures to ensure the protection of employees, neighbors, and the environment.

Today, only three of the original sixty-eight sites require active remedial or control measures. Source areas of contamination have effectively been removed or greatly reduced, allowing the remediated properties to be available for reuse or redevelopment. We are conducting post-remediation compliance monitoring at one site that is no longer subject to active remediation, which will enable the regulatory process for managing this site to be completed.

Besides employing conventional techniques for groundwater recovery and treatment and soil excavation, we have a history of developing innovative technologies to enhance our remedial efforts. These include techniques that improve and accelerate the recovery of contaminants, such as high-vacuum 2-Phase Extraction and enhanced bedrock fracturing.

We require our various operations and subsidiaries worldwide to report any written or verbal notices of environmental fines, citations, or formal violations. In 2018, Xerox UK Holdings Limited was issued a regulatory citation due to late filing of a report. Corrective actions were implemented and subsequent reports for Xerox UK Holdings Limited have been provided prior to the regulatory deadline.

All of our major manufacturing sites and some of our administrative offices employ an Environmental Management System (EMS) that conforms to ISO 14001:2015. The system:
•Establishes a framework to ensure compliance with regulationsand Xerox standards;
•Identifies environmental effects considering a life cycleperspective and sets objectives and performance targets;
•Identifies, manages, and addresses risks and opportunitiesrelated to environmental aspects, compliance obligations,other issues or other needs, and expectations of interestedparties;
•Strives for continual improvement by conserving naturalresources, eliminating the use of toxic and hazardousmaterials, preventing pollution, and recovering, reusing, andrecycling materials;
•Ensures integration between day-to-day business activities andenvironmental planning and program management; and
•Encourages innovative engineering solutions, creativepartnerships, and employee involvement.

Our major manufacturing operations have been certified to ISO 14001 since 1997. Our major worldwide technology equipment distribution centers achieved certification in 2010. Quarterly status meetings and use of an environmental performance scorecard provide visibility, best practice sharing, and innovation across our operations.

In the U.S., Xerox complies with Equal Employment Opportunity (EEO) guidelines and all applicable federal, state and local laws that govern the hiring and treatment of its employees. We do not discriminate against veterans, including veterans of the Vietnam era and disabled veterans, individuals with a disability or employees who take protected leave time.

We have developed a comprehensive end-of-life product takeback system, which processes assets through remanufacture, refurbish, parts reuse, recycling, or broker sales, each of which fully supports our waste-free initiatives.
We design our machines with high durability and reuse capability in order to facilitate multiple product lifecycles. During the active phase of a product, all returned equipment and spare parts are evaluated for reuse opportunities throughout the supply chain. Finally, all parts and equipment that are not destined for re-use have specific guidelines, which facilitate easy and consistent recycling. Xerox enables reuse according to the following principles:
- Reuse of complete end item;
- Remanufacturing or conversion into a newer-generation product or part;
- Used Equipment;
- Reuse of major modules, subcomponents and parts for spares or manufacturing;
- Material recycling; and
- Post-consumer recycled plastic content.

Xerox participates in several European Union member state Waste Electrical and Electronic Equipment (WEEE) programs; equipment collected and recycled through these programs is not included in our recycling data. In geographies where Xerox exercises direct control over the end-of-life management of equipment, return rates are high. In 2018, 8,600 metric tons of equipment and parts-related waste were diverted from landfills to recycling at our U.S. Reverse Logistics Center. Globally, that volume rises to 9,400 metric tons.

Our reverse logistics center is certified to R2, demonstrating our commitment to responsible management of end-of-life equipment and consumables.

We consider the ergonomic aspects of our products from both a user and service standpoint to ensure inclusion and operability. Our design teams take into account all points of human interface, including a product’s height, curves, and placement of touchscreens and paper trays. We also place a high value on the end-user experience through human factors, industrial design, and user interface design to promote ease of use, ease of learning, and transfer of learning.

Product design teams work directly with clients in our labs to test and continually improve the usability of new products.

Manufacturing Operations: Workstation evaluations are conducted in Xerox facilities worldwide for ergonomic hazards based upon risk profile and injury experience. Ergonomic enhancements such as tilt tables, lifts and hoists make it easier for employees to maneuver parts and equipment during assembly.

Machine Service: Xerox Customer Service Engineers’ (CSEs) exposure to ergonomic hazards has been studied. The findings have helped us select tools and develop procedures to mitigate risk of musculoskeletal disorders. Throughout the equipment design process, evaluations are done to assess risks for our CSEs. The best time to make a modification is when a product is still in the design or early test phases.

Office Ergonomics: Our largest employee population is office-based. Raising awareness and helping employees make effective workstation changes is critical to minimizing risk for this population. We created computer-based training on ergonomics principles and practices. This method of delivery enables employees to go through needed training programs at a time that minimizes business interruptions.

From manufacturing operations to office work, we continue to study the causes and potential remedies for workplace injuries.

Because musculoskeletal disorders represent a significant portion of our work-related injuries, we work to minimize the risk factors as a job is designed. We study exposure to ergonomic hazards and raise awareness with employees so they can make improvements to their workstations.

In 2018, we conducted detailed ergonomic assessments in some of our U.S. manufacturing plants because of employee concerns and job moves. This enabled additional risk reduction, process changes, and employee training programs.

On-the-job experience improves current capabilities and builds a foundation for the future. These experiences provide hands- on opportunities to expand and enhance skills. Our strategy includes a focus on workforce knowledge sharing across regions.

We recognize that a strong employee induction experience for new hires is important for their success. Targeted learning covers such topics as ethics, diversity and inclusion, and information security, as well as organization and critical job-specific information.

Employees and authorized business partners can access our online global learning and development environment. We provide resources for valuable industry and Xerox proprietary certifications. Besides on-demand virtual learning, we offer face-to-face and virtual instructor-facilitated classes, virtual hands-on labs (vHOLs), online collaboration, user-generated knowledge sharing, curated resources, and performance support to our people and partners worldwide. For global reach, our virtual hands-on labs (vHOLs) are delivered through a hybrid cloud environment for remote access to the controllers from our product portfolio during learning events. Learning history is tracked online and available for employees and partners to include in their professional portfolio.

Our Global Philanthropy Policy was created to formalize our approach for giving back to communities around the world. Along with reinforcing our core focus areas, it put into place a reporting structure to better capture and report global philanthropy activities that matched GRI core standards.

In 2018, we launched three new initiatives to strengthen our commitment to citizenship as well as improve our measurement of corporate philanthropy at Xerox.
• The Global Volunteer Policy launched in November 2018, granting every Xerox employee one workday of paid time off to volunteer at a nonprofit of their choice.
• The Xerox Employee Matching Gift Program, where Xerox will match employee donations to nonprofit organizations up to $500 per employee per calendar year on a one-to-one basis.
The nonprofit institution must meet eligibility requirements. The new approach expands on the matching gift program of years past, where Xerox would match only contributions to higher education. With the expansion of the program, Xerox matches employee donations to both higher ed and nonprofits.
•The Xerox Community Giving Tool. This tool is the backboneof our employee volunteer efforts while facilitating the Xerox Matching Gift Program and tracking CSR activity.

Global independent affinity groups have an important place in our diversity story. These groups are instrumental in advocating openness, opportunity, and inclusion for the entire Xerox community. They work with management to achieve common business objectives and self-advocacy, and to create an environment of inclusion. Our affinity groups currently deal with the concerns of our employees who are millennials and veterans as well as those who are African-American, Asian, Hispanic, women, and/or gay, bisexual, lesbian, and transgender.

Topics that are discussed in partnership with these affinity groups are:
• Workforce representation
• Work environment
• Diverse client markets
• Organizational efforts to meet the needs of a multicultural workforce

In accordance with the international guidelines of the Greenhouse Gas Protocol developed by the World Resources Institute and the World Business Council for Sustainable Development, we track the six major GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6). As noted, we express our carbon footprint in terms of carbon dioxide equivalents (CO2e).

Energy sources account for more than 99 percent of our GHG emissions. Our GHG inventory includes direct emissions from the combustion of fossil fuels, primarily natural gas (Scope 1), and indirect emissions from purchased electricity and steam at our manufacturing sites, offices, and warehouses (Scope 2). The inventory also includes the combustion of gasoline and diesel fuels in our service and sales vehicle fleet (Scope 3).

As a result of the opening and closing of facilities, changes to fleet inventory, and availability of more appropriate emission factors, baseline adjustments are made each year, which are reflected in the Energy Consumption and GHG Emission charts. We continually strive to expand our GHG tracking of indirect, or Scope 3 emissions.

In 2018, Xerox GHG emissions totaled 151,877 metric tons of CO2e, which is a 15 percent reduction from a 2016 baseline. About 60 percent were direct emissions from the combustion of natural gas, gasoline, and diesel fuel. The remaining 40 percent of the GHG emissions total were indirect emissions from purchased electricity and steam. Xerox-owned or leased facilities, such as manufacturing sites, offices, and warehouses, are associated with 58 percent of our direct GHG emissions. The remaining 42 percent are direct emissions from our service and sales vehicle fleet and other mobile sources.

We currently track Scope 3 emissions from end-of-life treatment of sold products, employee business travel, product transport, employee commute, and waste
generated in operations.

Since 1999, Xerox has reduced the quantity of hazardous waste generated by almost 90 percent. These hazardous waste reduction activities have included manufacturing technology changes and reuse/recycling initiatives. Xerox strives to manage these waste streams in a beneficial manner.

Approximately 65 percent of the hazardous waste generated in 2018 was managed at fuels blending and solvent recycling facilities. Only 1.49 tons of hazardous waste was landfilled; all other hazardous waste generated during the year was treated and/or incinerated. Xerox does not export hazardous waste to developing nations.

Our healthcare program focuses on helping employees and family members make informed healthcare decisions and gives them the tools to manage their health and well-being. Employees can also access various health and wellness programs through the healthcare carriers they select. As part of the healthcare program, the company provides free preventive screenings on an annual basis so that employees
can identify key health risks and work with their primary care physician. Xerox has also contracted with various wellness vendors to assist employees in developing action plans to manage these risks. We provide easy access to meaningful, timely, and relevant information through a single portal, simplifying the experience of choosing and using benefits.

Currently, this program is available to employees in the United States.

Xerox is leading the charge against counterfeiting and other
black market activities, both independently and collaboratively with other original equipment manufacturers. Every year the global imaging industry—and the clients who use its products and services—suffer the loss of millions of dollars due to piracy and fraud. We are vigilant in our efforts to thwart both the use of our brand on counterfeit materials as well as “blending,” whereby counterfeit materials are mixed with originals.

The use of counterfeit supplies can result in poor equipment performance, low supply yields, inferior print quality, toner leakage, increased failure rates, and equipment downtime all of which can cost time and money. To avoid this risk, we advise our clients to purchase solely from Xerox Authorized Resellers.

One way for our business and communities to thrive is to provide a means to better the lives of young people. Since the early ’60s, Xerox and our grassroots education programs have helped to inspire young men and women to take an interest in the STEM principles and create a career path to success—one that eliminates poverty.

One place we’re succeeding in this endeavor is Rochester, New York, where Xerox began. The Rochester City School District has one of the state’s and country’s lowest graduation rates and highest poverty levels. To combat this one-two punch dealt to the children of Rochester, Xerox has created a continuum of critical programming that has proven to change lives.

•In 2019, Xerox celebrated fifty years of The Xerox ScienceConsultant Program. It began in 1968 as an effort of our founder, Joe Wilson, and was a direct result of race riots in Rochester. Xerox men and women visit elementary schoolclassrooms to teach hands-on science to children who may never have had the exposure to the material or, most importantly, a role model that looks like them.
• Xerox also celebrated thirty years of FIRST, For Inspiration and Recognition of Science and Technology. Xerox and our people are the driving force behind more than one hundred teams in the U.S. and Canada. FIRST is yet another hands-on approach to learning valuable and technical skills with real-world pressures and deadlines. Students build robots to compete and meet challenges out of a box of LEGOS and parts. As many students have said, “It’s the hardest fun you’ll ever have.” Xerox was a founding partner of FIRST.

Consistent with the world’s most stringent ecolabels, we design products to control emissions of chemicals and noise.

As a result, current products have achieved chemical emission levels that are well below global regulatory requirements — often at or near the detection limit of our measurement equipment — and are considered to have a negligible impact on customers’ work environments. We publish emissions data for all of our products on our PSDS.

Xerox worked with the Bangladesh Bureau of Statistics to transform their Household Census Project. With our Digital Citizen Services, we enabled them to collect, digitize and process data from more than thirty-seven million filled Census Forms in three sub-projects of six months each. By digitizing this once paper-laden process, the government can now easily extract data points, trends, and analysis to target and improve the lives of their citizens.

Xerox integrates life cycle thinking into our product and service development activities as well as our innovation activities. Lifecycle Assessments (LCAs) are a means of technically evaluating the environmental and health impact of a product’s materials, manufacturing, distribution, use, and end-of-life. We conduct full LCAs in accordance with the appropriate ISO standards to determine where in the product life cycle the largest environmental impacts arise and to compare products with a significant difference in technology. Full peer-reviewed LCAs have been performed on our AltaLink and VersaLink devices and many of our other laser technology devices (WorkCentre 5325/30/35, WorkCentre C60/C70, and Phaser 6510).

These LCAs directly contribute to our achieving the Electronic Products Environmental Assessment Tool (EPEAT) Gold certification for these configurations. We encourage our clients to learn more about how their printing behavior affects the overall carbon footprint of their organization from a life cycle perspective.

Our commitment to education is a key enabler to nurture the next generation of innovators and global leaders. We create opportunities for young people to pursue college degrees and, ultimately, careers in science, technology, engineering, and mathematics—the STEM principles.

As part of a larger effort to support education in the U.S., Xerox provides matching gifts to colleges and universities.

In 2018, 110 institutions received 173 matching gifts from Xerox. The top five beneficiaries were:
• University of Rochester
• Rochester Institute of Technology
• Carnegie Mellon University
• University of Missouri
• Tulane University

Xerox was the first and remains the only company in our industry to have concluded two comprehensive investigations that lasted more than three decades on the health risks of inhaling xerographic toner. These studies included assessments of the health of current employees and the causes of death for people who worked for the company between 1960 and 1982. The analysis demonstrated that the health and mortality patterns of Xerox employees were consistent with a healthy working population and, in fact, our employees had a lower rate of disease (e.g., were healthier) than the general population. In October 2010, the mortality study was published in the peer-reviewed Journal of Occupational and Environmental Medicine.

Toxicologists conduct a comprehensive assessment of new materials in our products to ensure conformance with applicable global registration, hazard communication, and waste handling and disposal requirements. In addition, our strict internal standards set firm controls on the types of materials approved for use in our consumable products. As a result of our stringent requirements, Xerox toners and office printing products are noncarcinogenic and nonmutagenic. These products do not: cause adverse developmental or reproductive effects; pose a toxicity hazard to humans or aquatic species; cause a permanent adverse effect to the skin, eyes, or respiratory system; or have the potential to generate federally regulated hazardous waste. Xerox sells imaging supplies through its distribution network that are manufactured by other companies for use in other Original Equipment Manufacturer (OEM) printers.

We review these supplies to ensure compliance with appropriate regulatory requirements and our own stringent standards.

We have made a long-term commitment to eliminate the use of persistent bioaccumulative and toxic materials throughout our supply chain by applying strict internal standards and tightly managing chemicals. Our supplier requirements are periodically updated as regulations change, and new information becomes available. All new product designs refer to these requirements, and suppliers are expected to verify their compliance with them. Learn more at www.xerox.com/ environment.

Matters Reported to Business Ethics and Compliance Office in 2015:
Human resources - 60%; Internal policy violations - 3%; Fraud - 5%; Misappropriation of assets - 3%; External relationships (customers, agents, vendors, etc.) - 5%; Conflict of interest - 3%; Confidential information - 2%; Accounting and financial reporting - 2%; Policy inquiries - 7%; and Others - 10%.

Matters Reported to Business Ethics and Compliance Office in 2016: Human resources - 61%; Internal policy violations - 3%; Fraud - 5%; Misappropriation of assets - 3%; External relationships (customers, agents, vendors, etc.) - 5%; Conflict of interest - 3%; Confidential information - 2%; Accounting and financial reporting - 2%; Policy inquiries - 8%; and Others - 7%.

Matters Reported to Business Ethics and Compliance Office in 2017: Human resources - 42%; Internal policy violations - 6%; Fraud - 8%; Misappropriation of assets - 3%; External relationships (customers, agents, vendors, etc.) - 10%; Conflict of interest - 3%; Confidential information - 2%; Accounting and financial reporting - 7%; Policy inquiries - 8%; and Others - 8%.

Matters Reported to Business Ethics and Compliance Office in 2018: Human resources - 51%; Internal policy violations - 4%; Fraud - 6%; Misappropriation of assets - 4%; External relationships (customers, agents, vendors, etc.) - 9%; Conflict of interest - 2%; Confidential information - 1%; Accounting and financial reporting - 11%; Policy inquiries - 4%; and Others - 8%.

Through our Heroes@Home program, we hire qualified veterans and military spouses for at-home
employment opportunities. We’re proud partners with all branches of the military, the Military Spouse Employment Partnership (MSEP), the U.S. Chamber of Commerce and “Hiring Our Heroes” Career Fairs.

We value the experience and skills acquired during military service. As part of a commitment to the White House Joining Forces Initiative, we pledged to hire 10,000 veterans by 2018; in 2016, we hired more than 4,000. In 2017: Six percent of our employee population are military veterans.

Motor vehicle safety is a key component of our safety initiatives. We have a company car program that specifies motor vehicle safety requirements for our drivers and accident prevention and reporting processes. Employee driving records are reviewed on a regular basis, and we provide remedial motor vehicle safety training to improve awareness and competency. Motor vehicle accidents are tracked by frequency and type and are reported to the management team.
We also participate on fleet safety benchmark forums to keep up to date on the latest motor vehicle safety practices and technologies and to share Xerox’s best practices with our peers.

The use of cell phones in any company vehicle is restricted. Texting is forbidden while the vehicle is moving. Employees who need to use their phones in the car are instructed to find a safe place to stop.
A comprehensive safety review is conducted on any vehicle model prior to it being accepted as part of the Xerox fleet. We review the safety ratings and crash test results of candidate vehicles and require safety features such as daytime running lights and safety barriers between the driver’s seat and storage areas.

Process waste consists primarily of paper, wood, pallets, waste toner, plastics, and packaging waste, such as corrugated cardboard. Equipment manufacturing waste includes scrap metal, waste batteries and lamps, miscellaneous trash, and unusable, end-of-life equipment and parts that our clients return to Xerox for processing and remanufacturing. This waste made up about 68 percent of the nonhazardous solid waste managed by Xerox operations in 2018. Xerox is able to reuse or recycle nearly 100 percent of the equipment and parts generated from our client and field service returns.
Our goal is to reuse, recycle, or recover energy from 100 percent of waste generated at facilities globally by 2020. In 2018, 95 percent of nonhazardous solid waste generated was reused in equipment repairs or remanufacturing, recycled, or used to produce energy, up from 94 percent in 2017. In 2018, our equipment resellers were able to return a greater number of products to the marketplace for resale.

Xerox has had waste reduction efforts in place for many years. We reuse boxes, pallets, and containers for parts delivery. We capture and reprocess toner that is outside the acceptable size range during manufacturing, recycle returned equipment, and reuse totes for recycling scrap metal and paper. Globally, operations generated thirty-six thousand metric tons of nonhazardous solid waste in 2018, a slight increase from thirty-five thousand metric tons in 2017.

Xerox policy prohibits the use of ozone-depleting substances (ODS) as ingredients in the manufacturing processes for products and finished products, including spare parts, accessories, consumables, and packaging. ODS used as refrigerants in facility and vehicle air conditioning systems and various food/equipment-cooling systems are in compliance with applicable global regulations. Elimination of ODS as refrigerants is managed consistent with government phase-out dates.

Packaging and distribution are integral parts of our product commercialization process. We strive to eliminate, reduce, reuse, and recycle packaging whenever feasible. Product teams actively seek out more environmentally responsible packaging alternatives. We also require packaging suppliers to comply with bans and restrictions for a variety of chemicals. We document our expectations in our Environment, Health and Safety Requirements for Packaging Standard—EHS-710 and our General Packaging Standard—88P311. Our commercial equipment is designed and tested extensively to be shipped with minimal required packaging. Eliminating or reducing packaging wherever feasible conserves natural resources and decreases fuel use for distribution. Doing so represents a sustainability win for business and the environment.

We recognize our obligation to responsibly source paper and enable efficient paper use. Our long-term goal is to support a sustainable paper cycle and minimize environmental effects while meeting our clients’ exacting business needs.
In 2013, Domtar signed an agreement with Xerox for the acquisition of the Xerox paper and media products business in the U.S. and Canada. This deal gives Domtar exclusive rights for the marketing and distribution of Xerox brand paper and print media. The same year Xerox’s paper business in Western Europe was sold to Antalis.

Xerox maintains the paper business in its developing market geographies. We apply stringent paper sourcing guidelines for companies that provide paper to Xerox for resale. The requirements cover all aspects of papermaking, from forest management to production of finished goods. We supply papers that comply with sustainable forest management standards, including Forest Stewardship Council (FSC) and Program for the Endorsement of Forest Certification (PEFC). FSC-certified papers use raw materials from an FSC-certified source, controlled wood sources, or post-consumer reclaimed sources.

Beginning with our first commercial product, the Xerox 914,
we introduced electronics remanufacturing long before the term “circular economy” became popular. Our vision was to transform Xerox manufacturing, operations, offices, and facilities into waste- free workplaces. We had this same vision for our clients’ workplaces: a world where electronics and supplies at the end of their useful life would come full circle to become the raw materials of tomorrow. In this model, quality and performance are not to be compromised, precious natural resources are conserved, and waste becomes an obsolete term. Six decades later, we continue to demonstrate that a circular economy delivers environmental, economic, and societal benefits.

Our aim is to design products, packaging, and supplies that make efficient use of resources, minimize waste, reuse material where feasible, and recycle what cannot be reused. To meet this commitment, we developed several collection and waste reduction programs, as well as design and business models in line with the key elements of a circular economy.

To protect employees from unsafe exposures to chemicals, noise and radiation, Xerox applies exposure limits to worldwide manufacturing, research and technology service operations based upon the Threshold Limit Values (TLV) recommended by the American Conference of Governmental Industrial Hygienists. These reflect the best advice of a widely respected committee of international experts. However, in jurisdictions where government regulations are more stringent, Xerox meets those regulatory requirements. For some materials — including toners and certain solvents and metals — Xerox has established exposure limits that are more stringent than the TLV or existing regulations and standards.

Using the Xerox Exposure Assessment process industrial hygienist and safety professionals monitor, assess and report workplace exposures. Effective process design, engineering controls, safe job procedures and personal protective equipment are utilized to control exposures and protect employee health. Medical surveillance programs are in place to monitor the health of employees working in operations with specific jobs and hazards (e.g., high noise, organic solvents). Results of those medical exams are reviewed by health care professionals to ensure employee wellness.

Of the workplace exposure monitored in 2018, 99 percent was within limits established by the American Conference of Governmental Industrial Hygienists. When necessary, inhalation exposure was controlled through the proper use of respiratory protection equipment where additional engineering controls were not feasible.

Security is a top priority for us, and we know it is for our clients’ business too. That’s why every Xerox® ConnectKey® Technology-enabled devices are armed with our holistic four- point approach to security, ensuring comprehensive, all- encompassing protection for all system components and points of vulnerability. A comprehensive set of capabilities and integrated technologies from security leaders, such as McAfee® and Cisco®, help prevent and detect malicious attacks, proliferation of malware, and misuse of unauthorized access to printers.

We measure our performance against international standards with certifications, such as Common Criteria and FIPS 140-2, to ensure our devices are trusted in even the most secure environments. In 2018, Xerox was also the first to receive security authorization from the Federal Risk and Authorization Management Program (FedRAMP) for cloud-based MPS.

Working along with our seven Employee Diversity Resource groups, we support direct mentorship programs and encourage employee-to-student outreach and seminars. To expand our recruitment efforts further, we partner with contract employers to ensure our opportunities are available to veterans and individuals with disabilities. We have a similar university outreach program for recruiting minority employees from local colleges and universities.

We hold a policy of balanced external recruitment and candidate slates for internal job openings. The Wilson Rule, named after Joe Wilson, a Xerox CEO from the 1960s, provides guidance on building a diverse candidate slate.

With goals to reduce environmental impacts across our value chain, we invest in innovative solutions that can conserve natural resources and lower the energy intensity of our operations. A few examples of our most recent successes include:
•Energy management and equipment upgrades, such as utilizing “free cooling” systems in place of mechanical cooling for chilledwater systems and installing a new air compressor andcompressed air system; and
•Efficiency-promoting initiatives, including optimizing operationof pumping and air handler systems.

Data in this section associated with air emissions, releases, water use, and hazardous and nonhazardous waste represents total quantities for our manufacturing, research, development, warehouses, and equipment recovery/recycle operations. Data in this section associated with energy and greenhouse gas (GHG) emissions represent total quantities for our manufacturing, research, development, warehouses, and equipment recovery/recycle operations, offices, and data centers. Normalized values for 2014 forward have been calculated using Xerox revenue from continuing operations. Unless otherwise noted, all numbers represent worldwide totals (excluding Xerox Business Solutions locations) and are reported in generally accepted international units.
The data presented is based on actual measurements to the extent possible. Where direct measurements are not available, we employ engineering calculations or estimates. We continue to strive to increase the accuracy of the data we report.

For clients leveraging Intelligent Workplace Services, we provide them with an opportunity to opt in to our PrintReleaf partnership, which is akin to a carbon offset program. We leverage paper usage reporting that equates the number of trees needed to reforest that usage on an equivalent basis in geographic areas of need. Xerox helps clients select the managed forestry projects where their trees will be planted in addition to tracking and reporting on their direct reforestation impact.
Since launching this program in 2018, Xerox and our clients have reforested more than one hundred thousand trees across the world, from the Amazon to Madagascar, offsetting more than one billion pages. With one tree absorbing more than one ton of carbon dioxide in its lifetime, this program thus far will offset nearly two hundred million pounds of carbon dioxide.

100K+ trees planted through PrintReleaf

Through relationship surveys, we ask our clients and partners about their experiences working with Xerox. The surveys identify levels of client satisfaction with our products, services, and support. The feedback helps us determine which improvements are most likely to bolster client value and helps differentiate us from the competition. Traditional survey methods have been supplemented with feedback links on our social media platforms, Xerox.com, and Xerox Business Solutions individual company websites, and through client councils and client business reviews. Collection and response to client feedback is addressed at multiple levels with full accountability by the business.

We provide a variety of channels for employees, suppliers and clients to report suspected ethical violations, including phone, web, email and postal mail. Our Ethics Helpline is available globally 24 hours a day, seven days a week, in multiple languages, via toll-free telephone numbers (see www.xerox.com/ethics) and our web reporting tool (www.xeroxethicshelpline.com) which supports multiple languages. We have contracted with an independent third- party that specializes in helpline reporting with immediate electronic transfer of all reports to our Business Ethics and Compliance Office for case management.
For some cases, the Business Ethics Office provides guidance and takes immediate action; for others, including allegations of wrongdoing, an ethics investigation is required. The Office follows a formal, consistent method for assessing alleged violations and complaints and directs them to the appropriate functional areas for investigation, resolution and closure.

Our Business Ethics Office Charter includes a “Worldwide Assignment of Responsibility Matrix for Handling Potential Ethics Violations and Associated Penalty Guidelines.” This tool includes a wide range of possible ethics and compliance violations within each category of our Code of Business Conduct. Ethics allegation matters substantiated, in whole or in part, result in disciplinary action (counseling, training, warning letter, job reassignment, financial penalty or, in some cases, dismissal from the company). In addition to disciplinary action, resolution of many cases may also involve changes in processes or policies to prevent future occurrences.

Our Business Ethics Office tracks all cases from initial reporting to closure, case activity and trends, including the number of matters reported, case categories, outcomes and disciplinary action.
See www.xerox.com/ethics for additional information regarding Xerox’s Business Ethics and Compliance Program.

We also research and monitor the data-protection laws in the countries where we do business to ensure that we comply with applicable requirements. For example, we comply with the following international laws where applicable: Canadian Personal Information Protection and Electronic Documents Act; European Union Directive 95/46/EC on the protection of personal data; EU General Data Protection Regulation (GDPR); and Applicable U.S. federal and state privacy laws.

In order to ensure that all Xerox owned and leased facilities meet our stringent fire and life safety requirements, all real estate transactions are reviewed by the Environment, Health, Safety and Sustainability (EHS&S) organization prior to occupying.

Xerox fire safety and life safety requirements have been established and are implemented worldwide, regardless of location, size of the facility or occupancy classification. The focus of the safety review is Life Safety requirements, including safe egress in an emergency, fire and incident prevention, early detection, suppression, occupant notification and prompt emergency response. These reviews also ensure that building specific emergency plans are implemented and updated, and that emergency drills are completed at least on an annual basis.

Safety has always been a cornerstone of our work in product development. Our comprehensive Product Safety Plan details our health and safety requirements, and all Xerox imaging equipment is assessed for conformance to these standards.

Clients are encouraged to review product safety information and understand the environmental profile of our devices. Users guides contain information regarding safe use and any applicable hazard warnings. Our Product Safety Data Sheets (PSDS) offer environmental, health, and safety information for each Xerox device. Safety Data Sheets (SDS) identify hazards associated with specific materials and describe how they can be safely handled, used, stored, and disposed of. Both our SDS and product labeling have been updated to meet the requirements of the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) as implemented through regulations in our various markets. Clients can access PSDS and SDS in different languages at www.xerox.com/environment.

At Xerox, innovation is our foundation for success. Academic organizations are important in the long-term strategic interests of the company by furthering scientific research and training the next generation of scientists.

Xerox R&D teams partner with many universities worldwide to collaborate, innovate, and ideate—all in an effort to bring to the market more quickly thoughtful, sustainable technology for clients.

A prime example of this kind of investment is our partnership with the Rochester Institute of Technology (RIT) and the Advanced Manufacturing Print Center.

Since 2015, Xerox and RIT have partnered to create The Advanced Manufacturing Print Center, a 2,000-square-foot, state-of-the-art research facility. For more than a decade, Xerox has been in the additive manufacturing market (also known as the 3D printing market) as a developer and supplier of the inkjet print heads used by leading 3D printing companies. We have also used 3D printers to transform some of our own manufacturing processes.

The partnership affords Xerox direct access to a world-class facility and the potential for our technology group to collaborate with leading researchers in this space, all of which may enhance and propel future programs. We also take part in working with and developing talent that may benefit us in the future.

Scope 3 emissions result from activities associated with Xerox activities but take place at a third party and/or arise from sources not owned or controlled by Xerox. Therefore, the collection of indirect, or Scope 3, GHG emissions is challenging. The probability of data inaccuracy with these emission estimates is higher than for Scope 1 or 2 emissions due to the limited availability of data from the supply chain and a lack of transparency in the data collection process. To overcome some of these challenges, we calculate Scope 3 emissions according to the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. This standard provides requirements and guidance to collect, prepare, and publicly report a GHG inventory that includes indirect emissions.

The Scope 3 emissions information is also used to prioritize our GHG emission reduction efforts and to integrate consideration of carbon impact into our sourcing and internal decision-making.

Our goal is to proactively prevent any accidental release of regulated materials to the air, soil, and water. In 2018, no spills or releases occurred at Xerox operations that presented a
significant risk to human health or the environment or caused liabilities significant enough to be included in company financial reports. The few spills and releases that occurred across company operations were reported to local government agencies as required but were not considered significant.

Xerox enforces the Code by including terms and conditions in our supplier purchase agreements and contracts and requiring suppliers to represent and warrant their compliance with all applicable laws and regulations for the sale of goods/materials to Xerox. We perform risk assessments and require suppliers to participate in the Xerox Compliance Program. Annually, we remind our suppliers of their contractual obligations.

An initial risk assessment is conducted to determine suppliers that pose higher corporate social responsibility risks. Suppliers classified as high risk and those considered critical to our supply chain are required to complete a Self-Assessment Questionnaire (SAQ) annually. If significant risks are indicated on the SAQ, then Xerox will schedule an audit of that supplier.

The SAQ also serves to raise suppliers’ awareness about the importance of social responsibility topics, clarify Xerox’s expectations, target areas for review, and document suppliers’ assessment of their performance. Annually and based on the assessments and questionnaires from the previous year, we select suppliers for compliance review or on-site audit.

Xerox global procurement and corporate security organizations screen all production suppliers and significant indirect suppliers to assess compliance with global anti-bribery laws and regulations, including but not limited to, the U.S. Foreign Corrupt Practices Act and U.K. Bribery Act. If a supplier is found to have violated applicable laws or contract terms and conditions, Xerox reviews each situation on a case-by-case basis and determines the necessary course of action, e.g., terminate supplier relationship, instruct supplier to take corrective action.

We proactively identify and seek to work with certified small and diverse businesses, and several independent groups have recognized Xerox as having outstanding supplier diversity. A diverse supplier pool is a competitive advantage and a powerful business tool. We are committed to:
•Actively seeking certified diverse suppliers that can provide competitive, high-quality goods and services and whosebusiness models align with our business strategy;
•Ensuring the inclusion of diverse suppliers as part of our strategic sourcing and procurement process;
•Communicating the value of supplier diversity both internally and externally to all stakeholders; and
•Leveraging our supplier diversity results to meet our clients’supplier diversity requirements.

We take part in several efforts with the goal of increasing diversity and inclusion in different business areas:
•We are an active member of the New York/New Jersey NationalMinority Supplier Development Council (NMSDC) and theWomen’s Business Enterprise National Council. We participate invarious national and regional conferences, matchmaker events,and forums, which promote business with small and diversebusinesses.
•The Inclusion Initiative is committed to identifying andincreasing opportunities for minority, women, and otherdiversely owned law firms. Since joining the Initiative in 2011, we have increased engagements of diverse firms and continuously exceeded our annual goals for spend with them.

Supplier Diversity adds value to the supply chain and increases our competitive position. Xerox is rich in culture from our global workforce, clients, shareholders, and suppliers. We know that these initiatives give us our competitive advantage and help us to maintain our leadership position.
Current and potential vendors can learn more about supplier diversity, supplier quality assurance, and supplier ethics by visiting our Supplier Relations page at Xerox.com. 62

The Xerox brand is known worldwide for delivering industry- leading document technology, services, and solutions. Counterfeit parts and supplies misrepresent the quality of our products and pose a serious threat to our reputation.
•We have rigorous processes to identify and eliminate counterfeit supplies and components from our supply chain.Read our Anti-Counterfeiting Statement. Genuine Xerox supplies are also microchip (CRUM) protected for use with Xerox products.
•We source from a base of trusted and established suppliers (and their authorized distributors) who have been through our comprehensive vetting system.
•We seek warranties guaranteeing authenticity and quality;among other benefits, this practice mitigates obsolescence.
•Suppliers wanting to substitute an item different from what wasoriginally agreed upon are required to seek approval from our Global Procurement and Engineering groups.

We’ve built security controls into our supply chain to help ensure the uninterrupted flow of products from the point of manufacture to the client.
•We continuously monitor 100 percent of our direct and criticalindirect suppliers to ensure compliance with global anti-briberylaws and regulations, including but not limited to, the U.S.Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act.
•We are a certified participant of the U.S. Customs and Border Protection Customs-Trade Partnership Against Terrorism
(C-TPAT) and the E.U. Authorized Economic Operator (AEO) program in the Netherlands and Ireland. As part of these memberships, we’ve adopted specific criteria for both our Supplier Security Requirements and internal security policies andstandards.
•We have an ongoing assessment program to monitorcompliance of high-risk suppliers as well as internal locations.We belong to the Transported Asset Protection Association(TAPA).

For more than a century, Xerox has been an icon and one of the world’s most well-known brands, delivering innovation that is integral to modern life. For the future, we are focused on reinvention and writing the next chapter with some of the best and most diverse minds in the technology industry. We are driving our transformation through innovation across the business and in how we approach the development of our people. Talent management and workforce development are crucial for the future of Xerox and fueling business growth, so we use high-impact practices and technology to drive global workforce capability and integrate learning with work.

Xerox is focused on talent and organization capability. Our organization and talent planning processes include reviews with business leaders to build our talent pipeline. We are committed to attracting and developing the best talent with a focus on diversity and building global capability. Our culture is inclusive, values differences, and encourages collaboration to help our people thrive and reach their full potential.
We are reinventing our culture of learning by integrating learning into day-to-day work rather than simply delivering it. In 2019, we are completing the implementation of our new learning ecosystem to ensure our people have access to critical resources for business success and to align with our corporate vision, values, and business direction.

To thrive in a competitive landscape, we rely on the expertise of our workforce. Key priorities include:
•Fueling leader-led talent management and workforce development, and learning enabled by all managers;
•Fostering ownership of high-performance and career-focused development among employees;
•Integrating learning with work and building a culture of learning and workforce knowledge sharing; and
•Upskilling our people for key business initiatives.

Our 2018 Scope 1, Scope 2, and Scope 3 GHG emissions have been verified by a third-party verification/assurance company in accordance with ISO 14064-3:2006 against internally defined methodology described in our inventory management plan, and the principles of transparency, accuracy, consistency, completeness, and relevance.

Issue: Working hours (>60 hours per week) (Labor); 65% audit with nonconformances; Description:
Excessive work hours have been the single largest challenge in the CSR audit, especially in Malaysia and China during peak production months. Most workers in these countries voluntarily work long hours. Xerox is working closely with suppliers for continual improvement of the working hours.

Issue: Self-assessment and corrective action systems (Management Systems); 61% audit with nonconformances; Description:
Most Xerox Suppliers certified to ISO14001 and/or OHSAS 18001 have not established an effective self-audit and corrective action system for ethics and labor management. Suppliers were advised to adopt a similar approach in their certified ISO management system for labor and ethics management system.

Issue: Implementation of RBA Code of Conduct to next tier suppliers (Management Systems); 61% audit with nonconformances; Description:
To counter this issue, we have shared best practices in implementing the RBA Code of Conduct across the supply chain.

Issue: Improvement in GHG Emissions (Scope 1 and 2) (Environment); 56% audit with nonconformances; Description:
Most suppliers have improvement projects but lack measurable improvement in reducing Scope 1 emissions. Suppliers were advised to establish clear improvement objectives.

Issue: Risk Assessment & Improvement objectives (Management Systems); 56% audit with nonconformances; Description:
Most Xerox Suppliers certified to ISO14001 and/or OHSAS 18001 have not established an effective risk assessment and improvement objectives for ethics and labor management. Suppliers were advised to adopt a similar approach in their certified ISO management system for labor and ethics management system.

Our success depends on attracting and sustaining a healthy and productive global workforce. Globally, we provide our people with a comprehensive Total Rewards package that includes a variety of compensation and benefit offerings.
We believe our programs should achieve the following objectives:
•Drive shareholder value: support our business strategy andculture;
•Align with performance: align our people’s interests with our shareholders thus incenting the right behaviors; and
•Support our talent strategy: attract, retain, and motivate a productive workforce.

We benchmark our programs to understand our competitiveness against the market and our peers. As a result, we review annually and make changes to our compensation and benefits programs to achieve these objectives. As with most global companies, compensation and benefits vary by location according to local regulations, market conditions or practices, and business objectives. Our compensation offerings may include the following, depending on eligibility: base pay, short-term incentive pay, and long-term incentive pay. Our benefit offerings may consist of health insurance and services, life and accident insurance, holiday and leave programs, and retirement programs.

Performance, both at the individual and company level, matters. We have an integrated Performance Management and Compensation strategy and process that drives our desired cultural behaviors, business results, and high performance. This key company process touches nearly every one of our people globally, enabling them to achieve their stated objectives and earn appropriate rewards. Ultimately, we believe that when the “company performs well then we all benefit”—in the form of development opportunities as well as greater compensation.

The release of materials used in our worldwide operations is evaluated annually and reported to government agencies under national toxic chemical release reporting regulations, such as the U.S. EPA’s Toxic Release Inventory, the Canadian National Pollution Release Inventory, and the European Pollutant Release and Transfer Register.
Releases for reporting year 2018 decreased significantly compared with 2017 levels and were 79 percent lower than 2007 levels.

In 2018, less than 2 percent of the total toxic chemical releases from Xerox operations were emitted into the air. Approximately 60 percent of all chemical releases were recycled on-site or fueled energy recovery initiatives.

In 2011, operations with reportable toxic chemical releases to the air,
land, or water—in amounts greater than one metric ton—established goals, targets, and objectives related to chemical releases. Progress against these goals as of year-end 2018 is summarized below.

Methylene chloride used in the manufacture of Xerox photoreceptor belts has been reduced by 72 percent from the 2010 baseline. This dramatic decrease was primarily due to volume declines of legacy products and process modifications that cut the amount of methylene chloride used for batch cleaning of production equipment. Methylene chloride usage decreased by 26 percent from 2017 to 2018.

In 2018, per-batch emissions of 1,3-butadiene from U.S. toner resin manufacturing operations increased from 7.03 pounds per batch in 2017 to 7.07 pounds per batch in 2018. Low-emission hose connectors installed in 2016 and incident-free material handling operations have continued to maintain a reduced emission rate as compared with historical values.

Xerox has committed to establishing new goals in 2020 to reduce the release or transfer of toxic chemicals from our manufacturing operations.

Feedback from clients is collected from multiple client touchpoints, including relationship and transactional surveys, social media platforms, company websites, client forums, and client support interactions. Client feedback is directed to the appropriate Xerox organization to drive pervasive improvements with our client experience, including product and services quality and capability, sales relationship and engagement, service and support practices, and progressive collaboration on social and digital platforms. Each organization manages the flow through of client feedback, with accountability to report on critical client satisfaction factors.

Additionally, we offer clients access to the Xerox® Sentinel Client Satisfaction Assurance System, which is a Xerox proprietary closed-loop client experience system. Sentinel includes web-based “send and respond” features for clients to easily raise unresolved issues or share feedback that is immediately routed to the appropriate Xerox staff for closed- loop management. Given the broad adoption of Sentinel by clients across the globe, we are modernizing our communication methods to enable quicker client feedback. Sentinel will soon be available as an app on our devices, further enhancing client experience. Sentinel also generates a Sentinel Net Experience Score that is used to track and manage overall client experience.

We employ transactional surveys to monitor satisfaction with our products and services with clients across our routes to market including direct sales, inside sales, and channel partner sales. These surveys help us to diagnose and address root causes of issues. Transactional surveys also tell us if we have achieved the objectives of our service-level agreements and if our clients are satisfied with our service and interactions.

WASTE AS A RESOURCE
The Xerox Green World Alliance (GWA) provides a collection and reuse/recycling program for spent consumables. The Xerox Product Takeback and Recycling Program efficiently manages equipment at end-of-life, thereby diverting material from landfills and reducing the demand for raw materials. Collected toner from spent cartridges is used for color additives as well as returned to Xerox for reprocessing.

DESIGN FOR THE FUTURE
This approach ensures that our products and packaging placed on the market today can ultimately be reused, fit end-of-life management processes, and meet client needs in the future. Our comprehensive Design for the Sustainability approach engages design teams in all phases to innovate for the circular economy. Our packaging design goes beyond regulatory requirements by prioritizing a “reduce, reuse, recycle” strategy.

As part of our commitment to conserve resources, we monitor water consumption across our manufacturing, distribution and R&D facilities worldwide. Water consumed by Xerox operations is sourced from local municipal suppliers that withdraw water from the ground, lakes, rivers or other surface waters.

In 2018, our worldwide water consumption was approximately
1.13 billion liters, a 45 percent reduction from baseline year 2010, exceeding our 2020 goal of a 35 percent reduction. Reductions were achieved by a combination of conservation initiatives and production declines. We strive to preserve the planet by recycling water. A program initiated in 2016 at our plant in Wilsonville, Oregon, to utilize reverse osmosis reject water in on-site cooling towers continues in operation.

Wastewater discharges at manufacturing sites are monitored to validate compliance with local sanitary sewer discharge limits. Process wastewater is treated, as necessary, before being discharged into local sanitary sewers.

We utilize best practices to prevent unwanted pollutants from entering waterways through surface contamination and runoff. Extensive sampling of wastewater discharged to both sanitary and storm sewers ensures that discharged water meets our strict requirements. Although Xerox has not established a reduction goal for wastewater discharges, discharge volumes roughly correlate with consumption and are down more than 40 percent from a 2010 baseline. These results are attributed to water conservation initiatives, adjustments to metered discharge estimates, and production trends.

Our workplace health programs include processes for emergency medical response, the characterization of employee fitness for duty, and pre-employment drug testing. In addition, programs are in place for conducting medical exams in connection with safety-sensitive work, and drug testing and immunizations based upon specific work operations and client accounts.

The Xerox Corporate Focus Executive Program fosters relationships with our top corporate accounts. A senior Xerox executive is assigned to collaborate with our account team to understand client requirements, establish and implement strategic account plans, marshal resources to eliminate client concerns, and build strong, productive client partnerships that enhance client satisfaction and accelerate revenue growth.

We have a long-standing policy that nothing of value may be given, paid, promised, or offered—directly or indirectly—from corporate treasury funds for any of the following: political party, committee, and/or candidate for any federal, state, or local government office anywhere around the world; independent expenditure or ballot measure committees; electioneering communications; or candidates for judicial office.

We have an established policy that does not permit any in-kind political contributions. The only authorized method to make political contributions on behalf of Xerox is through the Xerox Corporation Political Action Committee (XPAC), which is funded solely with voluntary employee contributions.

The XPAC guidelines used as a basis for supporting candidates and elected officials include:
•The integrity and character of the candidate;
•The candidate’s position on significant policy issues of importance to our company;
•The candidate’s overall support for our company and industry;
•The candidate’s overall support for the free enterprise systemand U.S. competitiveness; and
•A demonstrated willingness on the part of the candidate towork with our company and industry to achieve responsible public policy solutions.
•The candidate’s representation of a state or district in whichour company has a significant number of employees or facilities
•Whether the candidate holds a leadership position within theirpolitical party
•The candidate’s electability permissibility under applicable law

XPAC also focuses on contributions that go directly to candidates for office; special exceptions are required for:
•Out-of-election-cycle contributions
•Contributions to leadership PACs
•Contributions to trade association PACs
•Contributions to ballot measure committees
•Contributions to political parties
XPAC does not permit contributions for:
•Independent expenditure committees
•Electioneering communications
•Candidates for judicial office
•Presidential candidates

XPAC discloses all contributions made and received on reports filed with the Federal Election Commission and the various state and local campaign finance commissions as required by law. In accordance with XPAC’s Articles of Organization, an audit of the accounting books of the XPAC are performed at least once during every two-year election cycle to ensure compliance with the Federal Election Campaign Act of 1971, as amended, and its regulations and all other applicable laws.

We use outside legal experts to provide periodic oversight of the company’s political activities. In 2018, Xerox contributed equal amounts of $10,000 each to the Democratic Governors Association and Republican Governors Association.

Xerox contributions and other spending in 2018 are itemized below:
• Lobbying, interest representation, or similar = $1,429,133
• Local, regional or national political campaigns/organizations/candidates
= $41,000
• Trade Associations or tax-exempt groups = $200,507
• Other (spending related to ballot measures or referendums)
= $0
• Total = $1,670,640

The Xerox Board of Trustees hold the following positions within Xerox:
• Director, Federal Policy
• Manager, Global Trade Compliance
• SVP, U.S. Multi-Brand Dealer Channel
• SVP, America Operations
• VP, Global Government Affairs, Sustainability & Citizenship
• VP, Public Sector and Healthcare Center of Excellence
• VP, Worldwide Taxes 36

Many nonprofit organizations, colleges, and universities received direct financial support in the form of strategic investments, matching gifts, or community involvement activities of Xerox people.

Our philanthropic investment strategy delivers the greatest effect possible for every dollar spent. In 2018, we invested more than $1.9 million in the nonprofit sector. In addition to financial support, we provided more than twenty-five thousand hours of volunteer time.

At its core, Xerox philanthropy efforts are focused on four strategic areas:
• Strong vibrant communities: Xerox supports communities where our people and clients live and work, strengthening ties with our stakeholders, and embedding Xerox into the fabric of communities around the world. We enable our people to give back to the causes they believe in, and the support we provide enhances our corporate reputation and drives the company’s success.
• Education and workforce preparedness: Xerox reveres the role of education in society—colleges, universities, STEM education programs, and workforce development programs that prepare the next generation of leaders, inventors, and scientists.
• Science and technology: Xerox invests in scientific research and partnerships to serve the long-term strategic interests of the company and our world.
• Disaster relief: Xerox provides aid to our employees and their neighbors in crises during natural disasters.

The Xerox global privacy program reviews and updates these policies annually, most recently to address the EU General Data Protection Regulation and Xerox’s certification to the Privacy Shield Framework. Xerox has implemented new privacy management tools and practices, such as privacy impact assessments to document and map data flows within Xerox and updates to our vendor management to ensure appropriate contractual obligations are agreed to and followed by vendors processing personal data on our behalf. Xerox continuously monitors and researches privacy laws throughout the world to ensure we comply with all applicable requirements.

Our publicly facing Privacy Statement provides information to
individuals regarding the corporation’s actions with respect to personal data Xerox may collect and process and provides rights to these data subjects regarding their personal data. Additionally, Xerox cooperates with our clients and negotiates appropriate contractual commitments to allow our clients to comply with relevant data subject rights and applicable privacy laws. Inquiries related to our handling of personal data can be made to privacy@xerox.com or to the appropriate account manager for the client relationship. An ethics hotline and an internal incident response hotline are available for reporting alleged violations for investigation by a dedicated, cross- disciplinary incident response team. During 2018, Xerox did not receive any substantiated complaints from outside parties or regulatory bodies concerning breaches of client privacy.

Adherence to Xerox policies is enforced through a combination of technical and manual safeguards on our systems and facilities, disciplinary actions against employees, and audit rights and other contractual rights against our vendors. We implement the ISO 27000 Information Security Management System and the National Institute of Standards and Technology Cybersecurity Framework within Xerox, and many of our systems and data centers have been ISO 27000 certified by independent auditors. Annual training regarding ethics, privacy, and security is required of all Xerox employees. Additional specialized training is required for certain roles, and numerous training programs are available for employees to take on their own initiative.

Product

Xerox provides products with EPEAT eco-label.

EPEAT is a free and trusted source of environmental product ratings that makes it easy to select high-performance electronics that meet an organization’s IT and sustainability goals. Manufacturers register products based on the devices’ ability to meet various criteria developed and agreed upon by diverse stakeholders to address the full lifecycle of an electronic product.

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Product

Xerox provides products with EPEAT eco-label.

ENERGY STAR is the simple choice for energy efficiency, making it easy for consumers and businesses to purchase products that save them money and protect the environment. EPA ensures that each product that earns the label is independently certified to deliver the quality, performance, and savings that consumers have come to expect.

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• FIRA Assurance statement ESG report File Xerox Statement 20201127.pdf is available in online report.