2016 Sustainability Report

Forward-looking statements

This report contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about earnings guidance and business outlook. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date of this report. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors not anticipated by management, including, without limitation, global or regional economic conditions and supply and demand dynamics in market segments into which the Company sells; significant fluctuations in interest rates and foreign currencies from that currently anticipated; future financial and operating performance of major customers; unanticipated contract terminations or customer cancellations or postponement of projects and sales; asset impairments due to economic conditions or specific events; the impact of competitive products and pricing; challenges of implementing new technologies; ability to protect and enforce the Company’s intellectual property rights; unexpected changes in raw material supply and markets; the impact of price fluctuations in natural gas and disruptions in markets and the economy due to oil price volatility; the ability to recover increased energy and raw material costs from customers; costs and outcomes of litigation or regulatory investigations; the impact of management and organizational changes; the success of productivity and cost reduction programs; the timing, impact, and other uncertainties of future acquisitions or divestitures; political risks, including the risks of unanticipated government actions; acts of war or terrorism; the impact of changes in environmental, tax or other legislation and regulatory activities in jurisdictions in which the Company and its affiliates operate; and other risk factors described in the Company’s Form 10-K for its fiscal year ended September 30, 2016. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this report to reflect any change in the Company’s assumptions, beliefs or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based.

Message from Seifi Ghasemi . . . . . . . . . . . . . . . . . . . . .2

Our Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Operations at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . 5

Grow responsibly through sustainability-driven opportunities that benefit our customers . . . . . . . . . . . . .6

Conserve resources and reduce environmental footprints through cost-effective improvements . . . . . . . . .8

Care for our employees, customers and communities— protecting our license to operate and grow . . . . . . . . . . . 12

Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Appendix: Detailed Reporting . . . . . . . . . . . . . . . . . . . . 75

1

Grow responsibly through sustainability-driven opportunities that benefit our customers and our world . We help customers improve their sustainability performance through higher productivity, better quality products, reduced energy use, and lower emissions .

Conserve resources and reduce environmental footprints through cost-effective improvements .We set aggressive environmental performance goals for greenhouse gases, energy, water, and emissions, and we measure progress to continually improve our own operations .

Care for our employees, customers and communities—protecting our license to operate and grow .We are building a culture of safety, simplicity, speed, and self-confidence .

Our goal is zero accidents and zero incidents . We are committed to developing our people, supporting our communities, engaging suppliers and upholding our integrity .

G r o w • C o n s e r v e • C a r e

S U STA I N A B I L I T Y

2Air Products | 2016 Sustainability Report

I am very pleased to report that Air Products exceeded nearly all of its environmental Sustainability goals in 2015. This noteworthy achievement is a credit to our employees, to our company, and is a true display of our commitment to Sustainability, as this was attained during a time of the most significant company changes in Air Products’ 75-year history.

Adding Sustainable Value

I am also very happy to report that over the time period in which the 2015 Sustainability goals were achieved, that there were $700 million in cumulative energy and water costs avoided.

Sustainability contributes to our economic soundness, which in turn enables us to support our sustainability objectives, including improving our operational efficiencies while helping our customers do the same.

Helping Customers Improve Sustainability

In fact, that’s what Air Products does best—enable customers to become more efficient, reduce emissions, and increase their productivity through our diverse product offerings, many of which are also sustainable in nature. We make a positive impact on large projects around the world driven by market demand for more energy, environmental improvements, and emerging market growth.

Safety Leads the Way

We strive to assist customers and grow our business in the most sustainable manner, and there is one core value at Air Products that is in practice 24/7 every day, and that is our focus on safety. I firmly believe the only acceptable goal is zero accidents. We have the responsibility to our employees and their families, and the communities around the world where we operate, to ensure that everybody goes home every day with no injuries or incidents. At Air Products, safety is the responsibility of everyone.

Chairman, President and CEO Message

3

Air Products is committed to improving our Sustainability, which is also an important expectation of many of our customers, employees and other key stakeholders. While we are proud of our achievements, we recognize that the Sustainability bar continues to rise, and we need to continue improving the way we do business to remain among the leaders in our industry sector.

New 2020 Sustainability Goals

With that improvement focus, we have established new 2020 Sustainability goals that are detailed in this Sustainability Report. Our new goals include attention to many sustainable endeavors under the focus of Air Products’ Grow, Conserve and Care Sustainability strategy. Some of the highlights of the new 2020 goals are:

• Under grow – lead the Industrial Gas industry in profitability and contribute greater than 50 percent of revenues from offerings that improve energy efficiency, lower emissions, and meet societal needs.

• Under conserve – save energy, reduce greenhouse gas emissions, conserve water, and effectively manage hazardous waste.

• Under care – lead the Industrial Gas industry in safety, build a diverse and inclusive workforce, ensure ethical behaviors and compliance, and measure the positive impacts of our employee and community engagement efforts.

I am pleased these goals all fit well with Air Products’ core values of accountability, customer focus and innovation, integrity, ethics and respect, and sustainability. And in adhering to these principles and striving to do even better, a win-win scenario takes place in that we improve our customers’ operations, we work to improve our own operations, we take care of the environment and our neighbors in the communities where we operate, and we increase shareholder value.

Goals Only Achievable With Dedicated Workforce

Lastly, I would be remiss if I did not specifically point out a very important key to what our company has already achieved from a Sustainability standpoint and how we will achieve our new goals for 2020. Air Products has outstanding employees who work hard every day and are dedicated to strive to meet our new Sustainability goals with safety, speed, simplicity and self-confidence. Because of our employees, we will be successful.

I hope you enjoy reading more about Air Products approach to Sustainability. We very much appreciate your continued interest in our company.

Seifi Ghasemi

Chairman, President and Chief Executive Officer of Air Products

4Air Products | 2016 Sustainability Report

Businesses

Air Products operated across seven business segments in fiscal year 2015 (FY15):

Industrial Gases ‒ Americas

Industrial Gases ‒ EMEA

Industrial Gases ‒ Asia

The Industrial Gases business produces atmospheric gases (oxygen, nitrogen, argon, and rare gases), process gases (hydrogen, helium, carbon dioxide, carbon monoxide, syngas and specialty gases) and equipment for producing and processing gases. The business is organized and operated regionally to serve customers in a variety of markets, including refining and petrochemical, metals, electronics, and food and beverage. The regional Industrial Gases segments also include our share of the results of several joint ventures accounted for by the equity method, the largest of which operate in Mexico, Italy, South Africa, India, Saudi Arabia, and Thailand. Overall, regional industrial gases sales constituted approximately 76% of consolidated sales in FY15.

Industrial Gases ‒ Global

The Industrial Gases – Global segment includes cryogenic and non-cryogenic equipment for air separation sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing. Other activities, which are managed globally instead of regionally, are also part of this segment, such as technology development for air separation.

Materials Technologies

In September 2015, Air Products announced plans to separate from its Materials Technologies business, which includes the Performance Materials Division (PMD) and Electronic Materials Division (EMD) and focus on its core Industrial Gases business.

PMD supplies a portfolio of products that provide high value properties at low cost to the construction, composites, adhesives, coatings and other industries. In May 2016, Air Products announced a definitive agreement to sell PMD to Evonik Industries AG for $3.8 billion in cash. The sale is expected to close before the end of 2016, and is subject to regulatory approvals and customary closing conditions.

EMD supplies critical materials and equipment to the semiconductor industry. Air Products also announced a spin-off of EMD to shareholders as a separate public company, called Versum Materials. The separation was completed at the end of September 2016.

Energy-from-Waste (EfW)

The EfW business included two projects in Tees Valley, United Kingdom designed to process waste materials and generate renewable power. On March 29, 2016, the Board of Directors approved the Company’s exit of the EfW business and discontinued efforts to start-up and operate the two EfW projects.

Corporate and other The Corporate and other segment includes two global equipment businesses: liquefied natural gas (LNG) sale of equipment and the liquid helium and liquid hydrogen transport and storage containers business.

5

On-site/Pipeline

Liquid Bulk

Packaged Gas

Equipment & Services

Materials Technologies (includes 3% Equipment)

Sales of

$9 .9 billion

30+ billionmarket capitalization

19,700employees

750+production facilities

30+industries served

operations in

50 countries

1,800miles of industrial

gas pipeline

75 yearsin business

>190,000 customers

Latin America

Europe

AsiaU.S./Canada

Global Presence*

2015 Sales: $9.9 billion

Consolidated sales by business segmentConsolidated sales by destination

n Industrial Gases–Americasn Industrial Gases–EMEAn Industrial Gases–Asian Industrial Gases–Globaln Materials Technologiesn Corporate and other

FY ’15 Operations at a Glance

Supply Modes

38%

22%

13%

6%

21%

37%3%

3%

19%17%

21%42%

24%

16%

12%6% n U .S ./Canada

n Europen Asia (excluding China)n Chinan Latin America

42% 24% 28%

6%

* Revenue basis with headquarters in Trexlertown, Pennsylvania; Hersham, England; and Santiago, Chile

6

responsibly through sustainability-driven opportunities that benefit our customers and the world

Grow

55% of revenues from

sustainable offerings

Approximately

300 patent families

$139 millionin R&D spending

$1 .8 billionin operating income

19 .3% return on shareholder equity

8% increase in EBITDA

$630 million in cumulative energy

costs avoided

11 million metric tonnes of CO2e avoided

by customers*

$2 billionin capital expenditure

Delivering Business Value: FY ’15

G r o w • C o n s e r v e • C a r e

S U STA I N A B I L I T Y

* Based on use of gases excluding hydrogen for ultra-low sulfur fuels

7

Oxygen for energy-intensive industries, such as steel, coal gasification, chemicals, energy, and glass

Gases for Modified Air Packaging (MAP) to preserve and improve the taste of food and reduce waste

Hydrogen for refining heavier, sour crudes into cleaner transportation fuels, increasing yields

Helium for magnetic resonance imaging and medical gases for sustaining life

Nitrogen for cooling, chilling and freezing food, improving quality, yield, and shelf-life

LNG technology and equipment to economically transport stranded energy resources

Oxygen to improve fish health in aquaculture and for water treatment

Hydrogen for fuel cells from which water is the only emission

Applying our gases and applications know-how, our customers can cost-effectively reduce energy use and improve environmental performance.

Enabling our customers’ sustainability

Industrial Gases applications with sustainability benefits

8

resources and reduce environmental footprints through cost-effective improvements

Conserve

G r o w • C o n s e r v e • C a r e

S U STA I N A B I L I T Y

7 million metric tonnes of CO2e avoided*

22 billion gallons of water conserved*

$700 millionin energy and water

costs avoided*

8% improvement in ASU

energy efficiency*

97% reduction in particulates from U.S. trucks*

14% reduction in GHG

emissions intensity*

4 million MWh of energy conserved*

23% improvement in water efficiency*

45,000+ metric tonnes of FY ’15

fleet emissions avoided

Reducing Environmental Impact

* Cumulative over the period of the environmental goal (2007-2015)

9

Environmental Target Area Air Products’ 2015 Goal 2015 Status

Energy

Reduce consumption on an intensity basis by 7% by 2015 from 2007 baseline

ASUs: Goal exceeded with 8% reduction achievedHyCO: Efficiency improved by 5.4%Impacts: Saved 4 million MWh and $630 million*

Greenhouse Gases

Reduce 7% indexed against production by 2015 from 2007 baseline

Goal exceeded: 14% reduction achievedImpact: Avoided over 7 million MT CO2e*

Water

Reduce consumption 10% on an intensity basis in the controllable portion of our usage from 2009 baseline

Goal exceeded: 23% reduction achievedImpacts: Saved 22 million gallons and $30 million*

Toxic Release Inventory

Maintain at current low levelsGoal met: Continued to maintain emissions levels below 1 million pounds

U.S. Fleet

Reduce NOx/particulate matter (PM) by 10% and CO2 by 2% by 2015 from 2009 baseline

Goals exceeded: reduced CO2, NOx and PM emissions by 12%, 83% and 97%, respectivelyImpacts: Avoided 43K tons CO2, 2K tons NOx and 280 tons of PM*

* Cumulative through goal period (2007–2015)

9

Improving our operations We are pleased to report that we met nearly all of our environmental sustainability goals for 2015. Led by the Sustainability Leadership Council, we have set new goals for 2020, available on page 18.

Fuel MWh GJElectricity 20,138,765 72,499,554

NG/refinery off-gas 83,490,306 300,565,102

Bituminous coal 3 11

Pet coke 45 162

Distillate fuel oil #2 756,721 2,724,196

Motor gasoline 14,334 51,602

Jet Kerosene 1,930 6,948

Steam 9,321,606 33,557,782

Energy Savings Energy is the largest variable cost of our production processes, and we carefully track and manage energy purchases. The majority of our energy consumption is from less than 80 very large natural gas and/or electricity consuming facilities. The energy we use is converted into products and services that enable customers to reduce their energy use and improve their environmental performance.

Total energy consumption (primarily natural gas and electric power), was equivalent to 113 million MWh in 2015 .

Our ASUs continued to improve energy efficiency in 2015, exceeding their energy goal and attaining an 8% improvement in energy efficiency (2007-2015) .

Our HyCO facilities achieved a 5 .4% improvement in energy efficiency (2007-2015) .

10Air Products | 2016 Sustainability Report

Water Withdrawals Billions of Gallons 1,000m3

Municipal sources 40 .1 151,748

Surface water 1 .3 4,782

Ground water 1 .5 5,630

Total 42 .8 162,160

Water Consumption by Region (billions of gallons) CY 2015 CY 2014 CY 2013United States 10 .0 10 .1 9 .9

Balance of the Americas 1 .6 1 .3 5 .5

Europe 1 .9 2 .1 2 .0

Asia 2 .4 2 .3 2 .3

Total 15 .9 15 .8 15 .2

42 .8Water Discharges Billions of Gallons 1,000m3

Discharged to a treatment facility 24 .4 92,437

Discharged directly to surface water 1 .4 5,162

Discharged directly to ground water 0 .003 11

Water Usage and Conservation

Total global water consumption for 2015; 15.9 billion gallons;

less than 1% increase.

15 .9

Direct emissions (Scope 1) for CY2015 were 3% lower than the previous year due in large

part to outages at several large facilities.

Indirect emissions (Scope 2) for CY2015 were 28% higher than the previous year due to the start-up of new

facilities and production increases, particularly in Asia.

Scope 3 emissions of 16.57 million MTCO2e for CY2015.

2015 Indirect Emissions: 14.82 million MTCO2e2015 Direct Emissions: 15.39 million MTCO2e

n North American South America n Europe and Middle Eastn Asia

32 .5%

<1%11 .7%

54 .9%

GHG ReductionsThe majority of our GHG emissions result from energy consumption. Through improvements in energy efficiency, as well as specific projects aimed at reducing GHG emissions, we exceeded our goal to reduce GHG emissions, achieving a 14% reduction (2007-2015). This has avoided emissions of over 7 million metric tonnes of CO2e.

In 2015, total water consumption increased slightly due to the start-up of new plants, production increases for plants that started-up in 2014, and improved reporting.

4 .2%<1%

87 .4%

8%

Total global water withdrawal for 2015: 42.8 billion gallons;

decreased 6%.

11

TRI Releases* (millions of pounds)

CY 2015 CY 2014 CY 2013Air 0 .26 0 .39 0 .5

HAPs* 0 .15 0 .21 0 .25

Water 0 .27 0 .22 0 .05

Land 0 .35 0 .32 0 .27

Total 0 .88 0 .93 0 .82* Hazardous Air Pollutants as defined by the EPA; subset of total releases to air

Hazardous Waste Disposal (millions of pounds)

CY 2015 CY 2014 CY 2013Landfill 10 .1 8 .8 4 .4

Incineration 6 .9 6 .4 6 .9

Recycling 8 .2 6 .7 7 .3

Treatment/disposal 2 .3 3 .1 7 .6

Total 28 .1 25 .0 26 .2

Hazardous Waste Hazardous waste generation from our ongoing operations increased slightly in 2015. Waste minimization efforts were offset by an increase in waste generated at a European facility that began purifying an off-gas from a neighboring facility. While this had a positive impact on reducing CO2 emissions, it generated hazardous waste due to the flue gas clean-up. We are re-evaluating the characteristics of this waste.

Toxic Release Inventory (TRI) Toxic releases in the U.S. decreased by 6% in 2015 and remained below our target of less than one million pounds. Air emissions and hazardous air pollutants (HAPs) continued to decrease due to improved leak detection and repair systems put in place in 2014. Methodology changes also contributed to the decline in estimated air emissions, as well as the increase in releases to land. Releases to water increased in 2015 due to operational changes at a water treatment system at one of our facilities.

Plant NOx/SOx NOx emissions were up over 10% in 2015 because of a new, large HyCO facility reporting for the first time and production changes at existing facilities.

Estimated emissions of SOx were down slightly from the prior year due primarily to improved accuracy of emissions estimates.

U .S . Distribution/FleetAir Products operates a fleet of over 700 trucks in the U.S. that consumed over 7.5 million gallons of diesel fuel and traveled over 51 million miles in 2015. Through our efficiency programs, which include replacement of pre-emission engines, increasing the amount of product loaded in each trailer, and improving miles per gallon through driver behavioral programs such as reduced idling, we have significantly reduced our emissions of CO2, NOx per loaded mile since 2009. Actual reductions were 12%, 83% and 97% for CO2, NOx and PM, respectively. This corresponds to cumulative emissions avoided of 43,000 tons CO2e, 2,000 tons NOx and 280 tons of PM (2009-2015).

CY 2015 CY 2014 CY 2013NOx Emissions (MT) 1630 1,470 1,460

SOx Emissions (MT) 76 100 106

Fleet Emissions CY 2015 CY 2014 CY 2013Carbon dioxide (CO2) 0 .883387 0 .924707 0 .93202

Nitrogen oxides (NOx) 0 .169369 0 .222548 0 .29725

Particulate matter 0 .032435 0 .025176 0 .03428

VOC releases in the U.S. decreased by 12% in 2015 due to methodology changes.

CY 2015 CY 2014 CY 2013Total (MM lb) 0 .28 0 .32 0 .35

12

for our employees, customers and communities— protecting our license to operate and grow

Care

Women represent

23% of global workforce

7 employee resource groups

for diversity and inclusion

30hours of training on

average per employee

<16%turnover rate

945grants to charitable

organizations

$6 .5 millioncash contributions to

communities

Supported 140 not-for-profit groups

with an employee board member

G r o w • C o n s e r v e • C a r e

S U STA I N A B I L I T Y

$0 finesfor product noncompliance

Zerohuman rights violations

FY ’15

13

for our employees, customers and communities— protecting our license to operate and grow 0 .49

employee recordable rate*

16%improvement in employee

recordable injury rate*

Zeroemployee fatalities

9%decrease in preventable

vehicle accidents

0 .34contractor lost-time

incident rate *

0 .2employee lost-time

incident rate*

17%decrease in employee

lost-time incidents

7%reduction in Process

Safety incidents

* per 200,000 hours worked

Safety and Health

21%decrease in contractor

lost-time incidents

Air Products’ goal is to be the safest and the most profitable industrial gas company in the world, providing excellent service to our customers. Underlying our safety goal is our Total Safety Philosophy. We integrate safety into everything we do, striving for industry leadership in safety performance.

During 2015, Air Products emphasized safety improvement programs across the organization through three pillars—visible leadership, operational discipline and mastering the basics. Our injury rate for our employees improved by 16%, and our employee lost-time incidents improved 17% over the prior year.

Much of this progress came from the integration of our South American operations into our Industrial Gases Americas business and implementation of our Basic Safety Process. By the end of FY15 we began to see improvement in the safety performance of our South American operations.

FY ’15

Air Products believes the only acceptable goal is

zero accidents and incidents. We take the approach that all

accidents are preventable.

14Air Products | 2015 Sustainability Report

FY 2015 FY 2014 FY 2013The Americas 50% 50% 45%

Europe/ROW 24% 23% 25%

Asia 26% 27% 30%

Total 19,700 21,200 21,600

Men WomenThe Americas 80% 20%

Europe/ROW 73% 27%

Asia 77% 23%

Global 77% 23%

members of collective bargaining units

19%

employee turnover rate

<16%

Talent—FY ’15

Education and Training

Globally in fiscal year 2015, Air Products’ workforce was 77% male and 23% female.

Air Products’ new hires into its Global Career Development Program, which consists largely of engineering graduates, were 67% male and 33% female, helping the company build an increasingly diverse talent pipeline.

• Human Capital Return (Benefit to Cost Ratio): $15.40 returned for every dollar invested

• % of training applied to the job: 76.4%

• Job performance change due to learning and development: 20.46%

• Time to job impact: 77.5% used the skills within one month of training

At the end of fiscal year 2015, Air Products (including majority-owned subsidiaries) had approximately 19,700 employees, of which 98 percent were full-time and of whom approximately 50 percent were located outside the United States.

Air Products has a globally consistent learning and development strategy to enable the talent we need and provide career development for our people. This is deployed through a global learning management system and our Human Resources organization.

We provide a significant amount of web-based course offerings with development tracks to ensure our employees are trained to comply with safety and job requirements, innovate new customer solutions, and grow professionally.

On average, Air Products employees completed at least 30 hours of training in 2015.

15

Governance—FY ’15

Our Corporate Compliance Committee and the Audit Committee of Air Products’ Board of Directors provide oversight for compliance and risk activities. The Corporate Risk Office manages Ethics & Compliance, Information Risk Management, and Asset Protection and Investigations programs, assisted by specialists in Law, Human Resources, and other teams. Air Products’ leadership holds professional integrity and business ethics as a priceless asset, a message that is frequently and firmly communicated.

Our Code of Conduct for officers and employees is housed on our public internet site for ease of access by all stakeholders. The document is supported by policies, standards and guidelines on our intranet, education and communication, and additional processes and tools.

The “Commit to Integrity” ethics and compliance program includes mandatory Code of Conduct training for all employees and additional training and conflict of interest certification for select employees. Employees are automatically enrolled in role-based learning modules required for their employment positions as new courses are added to the program. Methods for both

96% employees completed

Code of Conduct training

333reported allegations of

Code of Conduct violations

Zerohuman rights violations

98%employees completed anti-bribery training

Zero

fines for product noncompliance

30,000+suppliers

employees and external parties to report Code of Conduct violations or express concerns include a global contact list of key subject matter experts, toll-free phone lines for multiple countries, and web reporting in the languages most commonly spoken by our employees. The phone and web reporting tools are managed by a third-party vendor, and anonymous reporting is available as allowed by local law.

A strong non-retaliation policy is upheld for good faith reporting.

Human rights and equalityOur global Human Rights Policy is aligned with the UN Global Compact’s 10 universally accepted principles in the areas of human rights, labor, environment and anti-corruption.

As a core component of our Code of Conduct and available to employees in 17 languages, the Human Rights Policy clearly states our commitment to fostering an environment where human rights are respected and people are treated with decency and dignity in our operations and practices. It articulates our position relative to diversity, equal opportunity,

harassment, child labor, forced labor, freedom of engagement, employee relations, compensation, employee security, health and safety.

In addition to our Human Rights Policy, our commitment to the fair and equitable treatment of people is reflected in our global Equal Employment Policy and Diversity and Inclusion Policies. These state that all activities related to recruiting, hiring, training, compensation, benefits, promotions, transfers, layoffs, company-sponsored programs and all treatment at work shall be free of unlawful or unjust discriminatory practices. Each of our employees has a responsibility to understand company policies and standards, which are communicated through training, routine communications, and our web sites.

Code of Conduct

16Air Products | 2016 Sustainability Report

• Assisting with health and human service organizations as they work with clients/families in need in our communities

• Providing support and meals to needy children and military families during the holidays

• Renovating facilities and schools

• Planting and harvesting food for local food banks

• Collecting school supplies for underprivileged students

• Cleaning waterways and parks

• Supporting programs for people with disabilities

• Providing clothing to needy people and work appropriate clothing for women entering the workforce

• Participating in awareness and fundraising events for local and national organizations

Community Giving and Philanthropy

Contributions of $6.5 million n Charitable contributionsn Community investments n Commercial initiatives

62%

19%

19%

Charitable contributions priority is given to:• Strategic community and economic development

• Promoting education and technical workforce through improving educational outcomes

• Ensuring healthy, stable and safe communities

We work closely with not-for-profit organizations, emergency responders, elected officials, and business and community leaders in our operating communities around the world to identify opportunities to make a positive impact. In 2015 we provided 945 charitable grants to these organizations totaling $6.5 million.

Significant community projects in 2015 included:

• Partnering in career technical education classrooms and shops

• Judging local, state, and national SkillsUSA competitions

• Mentoring elementary students through Breakfast Buddies program

• Creating paid internship opportunities at not-for-profit organizations for college students

• Delivering meals to elderly and home-bound people

• Assisting with strategic planning for not-for-profits in need of restructuring

• Supporting urban schools by collecting sneakers and other needed clothing

• Highlighting our commitment to STEM by sponsoring camps and classes for elementary age girls

• Presenting science-based liquid nitrogen demonstrations to community groups and schools

• Collecting books and reading to children demonstrating commitment to fight literacy

• Highlighting our commitment to workforce development by taking part in “What’s So Cool About Manufacturing” competition

In 2015, Air Products employees were engaged with over 140 not-for-profit organizations, including the United Way, which has recognized the Company as one of only 126 Global Corporate Leaders for the United Way Worldwide. Air Products’ 2015 United Way campaign realized an outstanding level of 48% employee involvement while the national average remained at 22% according to United Way Worldwide.

17

Suppliers

Air Products spends more than $6 billion in materials, equipment, power and services annually with over 30,000 suppliers and service providers worldwide. Suppliers are integral members of our team, and the Company wants to work with those who share in our commitment to ethical business practices and who can help Air Products deliver value to our customers.

Suppliers are required to abide by and conform to the global Code of Conduct in their business dealings with us and to support sustainability through the principles outlined in Air Products’ Expectations of Suppliers. To ensure that these standards are met, we:

• Prequalify suppliers using commercial and technical evaluations

• Evaluate supplier proposals considering energy efficiency and other life cycle cost factors

• Conduct formal reviews for critical suppliers

• Employ a formal rating system to encourage continuous improvement and recognize achievement

• Monitor ongoing performance and product quality via formal assessments

• Follow defined procedures for noncompliance and remediation

• Develop joint company-supplier corrective action plans

• Organize joint company-supplier continuous improvement events

In addition to volunteer hours in our

communities, Air Products has also

become a national leader in “Skills-based

Volunteering,” whereby employees go

into the community to share professional

competencies to support workforce

development activities and career

awareness (e .g ., strategic planning, IT,

human resources) and help not-for-profits

be more business-savvy and competitive .

Continued leadership and commitment in

the area of workforce development has also

increased employee engagement at sites

around the country .

18Air Products | 2016 Sustainability Report

2020 Sustainability GoalsAir Products met nearly all of its 2015 environmental sustainability goals, resulting in significant energy and water savings and reduced emissions. In 2015, the Sustainability Leadership Council began a process to identify new sustainability goals across all aspects of our Grow-Conserve-Care sustainability framework. This process was aligned with the identification of our sustainability priorities and engagement with key stakeholders.

Grow

Conserve

Care

By 2020 from 2015 baseline year

SAVE ENERGY

Continue to

EFFECTIVELY MANAGEhazardous waste

LEAD the industrial gas industry in

PROFITABILTY as measured by EBITDA margin, operating margin and ROCE

by reducing use intensity by

LEAD the industrial gas industry in

SAFETY measured by recordable and lost-time incident rates

REDUCE GHG emissions intensity by 2%IMPROVE distribution efficiency and reduce CO2 emissions intensity by 10%

CONTRIBUTE>50% OF REVENUES

from offerings that improve energy efficiency lower emissions and meet societal needs

2.5% ASU 1.5% HyCOs

CONSERVE WATERand lower use intensity by 5%

BUILD the most DIVERSE AND INCLUSIVE worforce in the industrial gas industry as measured

by the representation of women and minorities in our workforce and leadership pipeline

ENABLE customers to AVOID CO2 EMISSIONS through energy efficiency and innovative offerings

CONTINUOUSLY IMPROVE COMPLIANCE systems and performance

ENSURE 100% of new supplier agreements include

HUMAN RIGHTS AND CONFLICT MINERALS clauses

ENHANCE our ability to measure the positive impacts of our

EMPLOYEE AND COMMUNITY ENGAGEMENT

REQUIRE 100% of employees to be trained in,

and certified to, Air Products’ Employee

CODE OF CONDUCT and ensure all allegations of misconduct are reviewed and closed

19

G r o w • C o n s e r v e • C a r e

S U STA I N A B I L I T Y

20Air Products | 2016 Sustainability Report

2015 2014 2013

GrowEconomic Performance

Sales (millions of dollars) $9,895 $10,439 $10,180

Operating income(A) (millions of dollars) $1,884 $1,657 $1,566

Net income attributable to Air Products(A) (millions of dollars) $1,427 $1,243 $1,169

Adjusted EBITDA $2,975 $2,765 $2,641

Capital expenditures(A) (millions of dollars) $2,028 $1,885 $1,997

Return on average shareholders’ equity(A) (B) (millions of dollars) 19% 16 .9% 17 .9%

Operating margin(A) (millions of dollars) 19% 15 .9% 15 .4%

Per share dollars

Diluted earnings(A) $6 .57 $5 .78 $5 .50

Dividends $3 .20 $3 .02 $2 .77

Book value $33 .66 $33 .49 $33 .35

Shareholders’ equity (millions of dollars) $7,249 $7,366 $7,042

Shares outstanding (in millions) 215 214 211

Shareholders 6,400 6,600 7,000

R&D spending (millions of dollars) $138 .8 $141 .4 $133 .7

Patent families granted 294 250 229

ConserveEnergy Consumption (MWh)

Total (MWh) 113,184,182 114,332,765 103,434,980

Natural gas (and refinery off-gas) 83,490,306 89,939,866 81,075,632

Electricity 20,138,765 21,483,659 20,255,373

Other 2,909,241 2,103,975

Energy Intensity

Air separation units 0 .920 0 .921 0 .933

Hydrogen/carbon monoxide units 0 .946 0 .946 0 .953

Greenhouse Gas Emissions

Scope 1 (MT CO2-e emitted) 15,399,419 15,884,722 14,972,268

Scope 2 (MT CO2-e emitted) 14,824,615 11,568,359 10,853,989

Scope 3 (MT CO2-e emitted) 16,575,128 13,661,801 13,749,376

GHG Intensity

Indexed GHG performance 0 .857 0 .856 0 .877

Nitrogen oxides (NOx) (metric tonnes) 1,626 1,470 1,460

Sulfur oxides (SOx) (metric tonnes) 76 100 106

TRI releases (millions of pounds) 0 .93 0 .82

U .S . Fleet Emissions (2009 baseline = 1)

Carbon dioxide 0 .89 0 .72 0 .93

Nitrogen oxides (NOx) 0 .17 0 .20 0 .22

Particulate matter 0 .03 0 .05 0 .06

Performance Data

21

2015 2014 2013Hazardous waste disposal (millions of pounds) 28 .1 25 .0 26 .2

Gross water consumption (billions of gallons) 15 .9 15 .8 15 .2

Water Intensity

Indexed water consumption 0 .77 0 .78(C) 0 .76

Water withdrawal (billions of gallons) 43 46 44

Environmental fines $31,500 $150,510 $48,560

CareTotal employees at year end 19,700 21,200 21,600

Female share of total workforce 23% 23% 23%

Global employee turnover rate 15 .9% 11 .1% 9 .5%

Average formal training hours per employee per year 30 30 31

Employees in collective bargaining units 19% 19% 19%

Cash and product donations (millions of dollars) $6 .5 $6 .4 $5 .1

United Way contributions (millions of dollars) $1 .5 $1 .5 $1 .8

Volunteer rate at corporate headquarters 48% 49% 51%

Safety performance(D)

Employee recordables 113 140 107

Employee recordable injury rate (per 200,000 hours worked) 0 .49 0 .58 0 .52

Employee lost-time incidents 45 60 40

Employee lost-time incident rate (per 200,000 hours worked) 0 .20 0 .25 0 .19

Employee fatalities 0 1 0

Contractor recordables 89 79 56

Contractor recordable injury rate (per 200,000 hours worked) 0 .64 0 .57 0 .50

Contractor lost-time incidents 47 55 21

Contractor lost-time incident rate (per 200,000 hours worked) 0 .34 0 .44 0 .19

Contractor fatalities 1 0 0

Vehicle accident frequency rate (preventable accidents per one million kilometers) 0 .80 0 .81 0 .92

Board of Directors

Executive directors 1 1 1

Independent directors 7 10 11

Total board size 8 11 12

Board diversity (percent women or minority) 25% 18% 17%

Average board meeting attendance 97% 96% 98%

Allegations of Code of Conduct violations 333 344 372

Percent employees trained in Code of Conduct 96% 96% 96%

Notes(A) Amounts are non-GAAP . See 2015 Annual Report on Form 10-K for reconciliation .(B) Calculated using income and five-quarter average Air Products shareholders’ equity from continuing operations .(C) Restated for 2014 .(D) Reported on fiscal year basis . Safety performance for our South American acquisition are included in employee and contractor

reporting beginning in FY14 .

22Air Products | 2016 Sustainability Report

About Air ProductsG4-3-4, 6, 8-9Air Products is a world-leading industrial gases company operating for more than 75 years. Our core Industrial Gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refin-ing and petrochemical, metals, electronics, and food and beverage. Air Products is also the world’s leading supplier of liquefied natural gas process technology and equipment. The Materials Technologies segment serves the semiconductor, polyurethanes, cleaning and coatings, and adhesives industries.

The Company had fiscal 2015 sales of $9.9 billion. Over 19,000 employees in 50 countries are focused on making Air Products the world’s safest and best per-forming industrial gases company, providing excellent service to its customers.

Air Products operated across seven business segments in fiscal year 2015:

Industrial Gases ‒ Americas

Industrial Gases ‒ EMEA

Industrial Gases ‒ Asia

The Industrial Gases business produces atmospheric gases (oxygen, nitrogen, argon, and rare gases), process gases (hydrogen, helium, carbon dioxide, carbon monoxide, syngas and specialty gases) and equipment for producing and processing gases . The business is organized and operated regionally to serve customers in a variety of markets, including refining and petrochemical, metals, electronics, and food and beverage . The regional Industrial Gases segments also include our share of the results of several joint ventures accounted for by the equity method, the largest of which operate in Mexico, Italy, South Africa, India, Saudi Arabia, and Thailand . Overall, regional Industrial Gases sales constituted approximately 76% of consolidated sales in FY15 .

Industrial Gases ‒ Global The Industrial Gases – Global segment includes cryogenic and non-cryogenic equipment for air separation sold worldwide to customers in a variety of industries, including chemical and petrochemical manufacturing, oil and gas recovery and processing, and steel and primary metals processing . Other activities, which are managed globally instead of regionally, are also part of this segment, such as technology development for air separation .

Materials Technologies In September 2015, Air Products announced plans to separate from its Materials Technologies business, which includes the Performance Materials Division (PMD) and Electronic Materials Division (EMD) and focus on its core Industrial Gases business .

PMD supplies a portfolio of products that provide high value properties at low cost to the construction, composites, adhesives, coatings and other industries . In May 2016, Air Products announced a definitive agreement to sell PMD to Evonik Industries AG for $3 .8 billion in cash . The sale is expected to close before the end of 2016, and is subject to regulatory approvals and customary closing conditions .

EMD supplies critical materials and equipment to the semiconductor industry . Air Products also announced a spin-off of EMD to shareholders as a separate public company, called Versum Materials . The separation was completed at the end of September 2016 .

Energy-from-Waste (EfW) The EfW business included two projects in Tees Valley, United Kingdom designed to process waste materials and generate renewable power . On March 29, 2016, the Board of Directors approved the Company’s exit of the EfW business and discontinued efforts to start up and operate the two EfW projects .

Corporate and other The Corporate and other segment includes two global equipment businesses: liquefied natural gas (LNG) sale of equipment and the liquid helium and liquid hydrogen transport and storage containers business .

Appendix: Detailed Reporting

23

Global OperationsG4-5, 17Air Products, through subsidiaries, affiliates, and less-than-controlling interests, conducts business in 50 countries outside the United States. The Company owns its principal administrative offices, which include headquarters located in Trexlertown, Pennsylvania, as well as Hersham, England and Santiago, Chile. With over 750 production facilities, approximately 58 percent of Air Products’ consolidated sales in fiscal year 2015 (FY15) were outside of the U.S.

We have majority or wholly-owned foreign subsidiaries that operate in Canada, 17 European countries (including the United Kingdom, the Netherlands, and Spain), 11 Asian countries (including China, Korea, and Taiwan), seven Latin American countries (including Chile and Brazil), two African countries, and one Middle Eastern country. The Company also owns less-than-control-ling interests in entities operating in Europe, Asia, Africa, the Middle East, and Latin America (including Italy, Germany, China, India, Saudi Arabia, Singapore, Thailand, United Arab Emirates, South Africa, and Mexico).

OwnershipG4-7Founded in 1940 by Leonard Parker Pool who pioneered the “on-site” concept of producing and selling industrial gases, Air Products is a Delaware corporation and is traded publicly on the New York Stock Exchange (NYSE:APD). Over 90% of Air Products’ common shares are held by institutional investors. At the close of business on December 31, 2015, there were 215 million shares of Air Products common stock outstanding.

Supply ChainsG4-12Operating in over 50 countries, Air Products has a diverse supply chain that ranges from small, local suppliers to large multinational providers of products and ser-vices. The supply chains vary by business and depend on the product or equipment being manufactured. We also employ many contractors to help build our plants and deliver our products.

In our Industrial Gases businesses, the primary raw materials used to manufac-ture oxygen, nitrogen and argon are air and electricity. In fact, electric power is the largest cost component in the production of atmospheric gases, and Air Products purchased 20 million MWh of electricity during 2015. Another energy source, natu-ral gas, is used to produce energy at a number of our facilities and is a principal raw material for hydrogen production.

From an equipment perspective, steel, aluminum and capital equipment subcom-ponents are the primary materials.

In Materials Technologies, we use a variety of raw materials, including alcohols, ammonia, amines, acrylonitriles, hydrogen fluoride and glycols.

Significant Changes in 2015G4-13During 2015, Air Products continued with its reorganization that included geographic alignment of its gases businesses, as well as greater focus on its core business with the announced sale and intended spin-off of entities within Materials Technologies. In March 2016, the company announced the intention to exit the Energy-from-Waste business.

The Materials Technologies segment is comprised of two business divisions. The Performance Materials Division (PMD) supplies a portfolio of additives products that provide high value properties at low cost to the construction, composites, adhesives, coat-ings and other industries. The Electronics Materials Division (EMD) supplies critical materials and equipment to the semicon-ductor industry.

24Air Products | 2016 Sustainability Report

In September 2015, Air Products announced plans to separate Materials Technologies and focus on its core Industrial Gases busi-ness. In May 2016, Air Products announced a definitive agreement to sell PMD to Evonik Industries AG for $3.8 billion in cash. The sale is expected to close before the end of 2016, and is subject to regulatory approvals and customary closing conditions. Air Products also announced a spin-off of EMD to shareholders as a separate public company, called Versum Materials. The sepa-ration was completed at the end of September 2016.

The Energy-from-Waste (EfW) business included two projects in Tees Valley, United Kingdom designed to process waste materi-als and generate renewable power. On March 29, 2016, the Board of Directors approved the exit of the EfW business and efforts to start-up and operate the two EfW projects.

For additional details, please refer to the 2015 Annual Report Chairman’s Letter and to Note 25, Business Segment and Geograph-ic Information, to the consolidated financial statements on Form 10-K.

About Our ReportG4-22, 28-33We have reported our sustainability performance each year for the past 12 years, building on a previous decade of environmental, health and safety disclosures and reporting. As with our most recent reports, we have followed formal Global Reporting Initiative (GRI) guidelines to provide stakeholders with the data and perspective to understand and evaluate our performance, impacts and opportunities.

Our 2016 report is in accordance with GRI G4 guidelines and the “core” option. The report also contains supplemental informa-tion that is not specified by GRI and shows additional aspects of our sustainability efforts.

The report covers the period of January 1, 2015 to December 31, 2015, except where noted that fiscal year (October 1, 2014 to Sep-tember 30, 2015) data is provided. Our prior report for 2014 was issued in the fall of 2015. Please see the end of the report for the complete GRI index.

The scope of this 2016 report is global, including assets over which financial control is exercised, as reported in our consolidated audited financial statements. We exclude less-than-controlling interests in joint ventures or equity affiliates.

We have guided readers to additional information, including our Sustainability site on airproducts.com as well as other reports, such as our annual financial reports on Form 10-K.

We are committed to transparency in our reporting and continuous improvement in our sustainability management and per-formance. The Corporate Sustainability Director was accountable for overseeing the preparation of this report, with significant data contributions provided by our Greenhouse Gases Center of Excellence, Environmental Measures and other sustainability-related teams, as well as other business and functional groups throughout the company. No GRI sector standard exists for our industry (industrial gases/materials); however, we have attempted to provide best possible disclosures based on the nature of our global business and the related risks and opportunities.

Restatements for 2015 include updates to historical GHG emissions and water consumption data due to improved methodolo-gies. Details are provided in the Conserve section of this report.

Select financial and greenhouse gas data has been externally assured by KPMG and WSP, respectively. Additional details are provided in the Grow and Conserve sections of this report.

Questions about this report can be directed to Julie O’Brien, Air Products’ Corporate Sustainability Director, at obrienjk@airproducts.com.

25

Strategy and AnalysisG4-1Air Products’ strategy and analysis is described in our CEO letter in the front of this report. In summary, we approach sustain-ability across three areas: Grow, Conserve and Care.

We aim to:

• Grow responsibly through sustainability-driven opportunities that benefit customers and the world

• Conserve resources and reduce environmental footprints through cost-effective improvements

• Care for employees, customers and our communities, protecting our license to operate and grow

Business Impacts, Risks and OpportunitiesG4-2Sustainability is one of our core values at Air Products and is directly tied to our business strategy and our growth in serving energy and environmental market applications.

We use an issue assessment process to gauge sustainability risks and opportunities and prioritize our efforts and initiatives. See the “Sustainability Priorities and Stakeholder Engagement” section for details. This assessment is updated annually based on feedback from stakeholders and subject matter experts.

Sustainability priorities in 2015 included:

Grow Economic Performance Product Offerings with Sustainability Benefits

ConserveEnergy SavingsDistribution EfficiencyGHG Reductions

Water ConservationWaste Management

CareSafety FirstTalent ManagementCustomer Sustainability Ethics & Integrity

Regulatory ComplianceCommunity Relations and SupportSupplier Sustainability

In response to the top priorities:

• More than half of our research and development dollars are directed at environmental and energy offerings.

• Energy is a significant end market for our products and technologies, and we continue to develop clean energy solutions, including hydrogen for refining and petro-chemical processes, and as a fuel; LNG technology for natural gas as an alternative fuel; bioenergy processes; and gases and materials for alternative power, among others.

• We achieved most of our 2015 environmental sustain-ability goals and have established new goals for 2020 to drive our performance.

26Air Products | 2016 Sustainability Report

Grow: Air Products’ is making the world more productive, energy efficient and sustainable through the offerings we provide. Sustainability impacts our top and bottom lines through these offerings and the cost savings associated with our environmen-tal sustainability goals. Specifically, over 50% of our revenues are derived from products or applications that help customers and others down the value chain improve energy efficiency, reduce environmental impact and address social needs. Meanwhile, reaching our environmental sustainability targets—particularly our seven percent reduction in energy consumption— contributed millions annually to our bottom line.

From a Grow perspective, our most significant challenges and opportunities include:

• The need to continuously monitor and adapt to changes in the regulatory and permitting environment in different countries of operation

• Ensuring the availability of key resources, including raw materials, utilities and water

• Timing for deployment and market readiness for technologies that take clean energy to the next level

Conserve: We generate an environmental footprint and consume energy and water. In addition to enabling customers to operate more efficiently and sustainably through the use of our gases, materials and technologies, we work to responsibly manage and improve our own environmental performance. We design our plants and manage our operations against environ-mental sustainability goals set to reduce greenhouse gases, energy and water use. Progress against these goals is tracked and reported annually.

We met or exceeded nearly all of our 2015 goals.

Environmental Target Area Air Products’ 2015 Goal 2015 Status

Energy Reduce consumption on an intensity basis by 7% by 2015 from 2007 baseline

ASUs: Goal exceeded with 8% reduction achievedHyCO: Efficiency improved by 5 .4%Impacts: Saved 4 million MWh and $630 million*

Greenhouse Gases Reduce 7% indexed against production by 2015 from 2007 baseline

Goal exceeded: 14% reduction achievedImpact: Avoided over 7 million MT CO2e*

Water Reduce consumption 10% on an intensity basis in the controllable portion of our usage from 2009 baseline

Goal exceeded: 23% reduction achievedImpacts: Saved 22 million gallons and $30 million*

Toxic Release Inventory Maintain at current low levels Goal met: Continued to maintain emissions levels below 1 million pounds

U .S . Fleet Reduce NOx/particulate matter (PM) by 10% and CO2 by 2% by 2015 (from 2009 baseline)

Goals exceeded: reduced CO2, NOx and PM emissions by 12%, 83% and 97%, respectivelyImpacts: Avoided 43K tons CO2, 2K tons NOx and 280 tons of PM*

* Cumulative through goal period (2007–2015)

27

Our most significant challenges and opportunities for conservation going forward include:

• Continued reduction of the impact of our operations, particularly as customers demand more product.

• Driving improvements in greenhouse gas emissions intensity as production increases.

• Continuing to drive improvements in our operating energy efficiency, which is core to our business and profitability.

• With a 40% shortfall on water predicted by 2030, we continue to conserve and take steps to mitigate risk to our operations, which rely heavily on water for cooling processes. We are evaluating alternative methods like air cooling, which must be balanced with increased energy use, and continue to use more gray water in our operations.

Care: Good employment practices and a strong commitment to our communities and to sustainable operations remain important elements in our sustainability approach. We pay employees competitive wages, and offer competitive benefits, and provide training and developmental opportunities to improve their capabilities and advance their careers. All employees are required to abide by and certify their understanding of employment continuation responsibilities via training of Commit to In-tegrity: Code of Conduct for Air Products and Its Companies. Likewise the Board of Directors has adopted Governance Guidelines and a Director Code of Conduct to focus on areas of potential ethical risk and conflicts of interest; provide guidance to directors to help them recognize and deal with ethical issues; and establish reporting mechanisms. Outreach is a critical element of our role as a neighbor in the communities where we operate and in our drive to be a responsible global corporate citizen. We regu-larly seek feedback from not-for-profits, emergency responders and community leaders in areas where we have major facilities. This ongoing interaction helps us identify, learn about and address needs. We also engage with our suppliers using our Supplier Expectations for Sustainability that include environmental and safety considerations beyond compliance. Likewise we have verified that our electronics suppliers and sub-suppliers use conflict-free materials.

From a Care perspective, we view our most significant challenges and opportunities in these areas:

• In the competition for talent for our business, our commitment to and management of sustainability has become an increasingly important element of talent attraction and retention.

• The changing world of governance means new risks and ethical challenges that require employee understanding, training and certification. Our Commit to Integrity: Code of Conduct for Air Products and Its Companies reflects the most common business ethics challenges and risks that may be faced. We require every individual to certify their understanding and complete mandatory training as a condition of employment.

• We want to ensure that our investments of time, contributions and resources in the communities where we live and operate create value for our stakeholders.

• We see a significant opportunity to work with our suppliers to optimize our value chain. Collaborating to improve the overall sustainability of our offerings is a challenge due to the number and breadth of suppliers we use.

28Air Products | 2016 Sustainability Report

For each of these areas – Grow, Conserve and Care – we have established metrics, and in many cases, goals to measure our progress. We are pleased to announce our new goals for 2020:

Grow

Economic Performance Lead the industrial gas industry in profitability as measured by EBITDA margin, operating margin and ROCE

Product Offerings with Sustainability Benefits

Contribute more than 50% of revenues from offerings that improve energy efficiency, lower emissions and meet societal needs

Conserve

Energy Savings Save energy by reducing use intensity by 2 .5% for ASUs, and 1 .5% for HyCOs by 2020 from 2015 baseline year

Distribution Efficiency Improve distribution efficiency and reduce CO2 emissions intensity by 10% by 2020 from 2015 baseline year

GHG Reductions Reduce GHG emissions intensity by 2% by 2020 from 2015 baseline year

Water Conservation Conserve water and lower use intensity by 5% by 2020 from 2015 baseline year

Waste Management Continue to effectively manage hazardous waste

Care

Safety First Lead the industrial gas industry in safety as measured by recordable and lost-time incident rates

Talent Management Build the most diverse and inclusive workforce in the industrial gas industry as measured by the representation of women and minorities in our workforce and leadership pipeline

Customer Sustainability Enable customers to avoid CO2 emissions through energy efficiency and innovative offerings

Ethics & Integrity Require 100% of employees to be trained in, and certified to, Air Products’ Employee Code of Conduct and ensure all allegations of misconduct are reviewed and closed

Regulatory Compliance Continuously improve compliance systems and performance

Community Relations and Support

Enhance our ability to measure the positive impacts of our employee and community engagement

Supplier Sustainability Ensure 100% of new supplier agreements include Human Rights and Conflict Minerals clauses

Risk Management & Precautionary PrincipleG4-14, 45-46Risk management is an integral part of our operations—from design and construction, through start-up and production, to distribution and delivery of our products. The Corporate Risk Office leads the Enterprise Risk Management (ERM) process in identifying, analyzing, mitigating, communicating and updating risks. These risks are reviewed with the Board through the appropriate committees. All Board members have financial, engineering, operational, and reputational risk management experience and are competent to make judgments about the risks facing the company. In 2015 the company increased its re-view cycle of elements of its Enterprise Risk Portfolio from annually to quarterly. This increases the visibility and discussion of ERM, creating opportunities for our directors to learn from each other’s views of risk management, as well as ensuring that the company’s risk profile is current and actively managed. Responsibility for risk oversight rests with the full Board, which formally reviews the Company’s risk management processes and policies periodically. Risk focus is on financial and accounting matters, compliance with legal and regulatory matters, financial reporting and controls, corporate governance, succession planning, training and retention of talent, EH&S and public policy and reputation.

29

We support the intent of the Precautionary Principle with respect to risk management and use a formal program to identify potential impacts and develop action plans to mitigate those impacts. For example, subject matter experts conduct risk reviews to identify and address potential safety, health and environmental impacts during new product, process and applications development. Research and Development projects must pass through risk assessment gates before projects may continue. We have conducted Life Cycle Assessments (LCAs) to quantify the environmental “footprint” of select products and technologies for comparison to new and competitive offerings. We provide extensive information on the safe use and handling of our products through targeted customer training and broad access to Safety Data Sheets (SDS), product stewardship summaries and other materials on our website.

GovernanceG4-34, 36, 38-42, 49, 51, LA12The Board of Directors – consisting of seven independent Directors (including an independent Lead Director) and Chair-man, President and Chief Executive Officer, Seifi Ghasemi – is responsible for, and regularly reviews, the organization’s corporate business plan, purpose, vision and values, strategies, policies, and approach and alignment with Sustainability issues including economic, environmental and social impacts.

To that end, in 2015 the Company announced and began implementation of a strategic Five-Point Plan to:

1. Focus on the core – Air Products is focused on its core business and core competency – that is, industrial gases.

2. Restructure the company – The largest organiza-tional restructuring in the history of the company now has Air Products running its Industrial Gas business on a geographically focused basis.

3. Company culture – We strive to have of the company execute our strategy and understand that only each person’s commitment and motivation will guarantee success. We operate under the key principles of safety, simplicity, speed and self-confidence.

4. Controlling capital costs – The responsible use of cash and controlling costs are fundamental.

5. Align rewards – Each business unit is assigned an EBITDA-based target, and rewards are based on annual achievement.

The Board also holds the highest level of authority for corporate governance at Air Products. It has adopted Corporate Governance Guidelines to assure that it has the necessary practices in place to govern the Company in accordance with the best interests of its shareholders. The Guidelines include Board governance practices with respect to: director independence and qualifications, director responsibilities, access to management and independent advisors, director compensation, director orientation and education, chief executive officer performance assessment, management suc-cession, and assessment of Board and committee performance.

The Board has three standing committees that operate under written charters approved by the full Board: Audit; Corpo-rate Governance and Nominating; and Management Development and Compensation. During 2015, the Board stream-lined its Committee structure to demonstrate its leadership in simplification and cost reduction. As a first step in the process, the Board eliminated the Environmental, Safety and Public Policy Committee – the full board assumed account-ability for oversight of the company’s environmental and safety performance, which it reviews every meeting. Other responsibilities of the Committee were assumed by the Audit and Corporate Governance and Nominating Committees.

30Air Products | 2016 Sustainability Report

Board Committee Summary of Responsibilities

Audit Committee Assists the Board of Directors in oversight responsibilities relating to the integrity of the Company’s financial statements, financial reporting process, and systems of internal accounting and financial controls .

Corporate Governance and Nominating Committee

Assists the Board of Directors in assuring the Board is operating effectively and the Company is governed in a manner consistent with the interests of its shareowners .

Management Development and Compensation Committee

Assists the Board of Directors in selection, evaluation, development and compensation of executive officers .

During fiscal 2015, the Board met nine times, with committee attendance averaging 97% for the Board as a whole.

Seifi Ghasemi is Air Products’ Chairman, President and Chief Executive Officer. The Board does not have a policy on whether the roles of Chairman of the Board and Chief Executive Officer should be separate or whether the Chairman of the Board should be independent; the Board determines which structure is in the best interests of the Company at any given time. For more information, see “Board Leadership Structure” in Air Products’ Proxy Statement.

All of the Company’s non-executive directors, including the Lead Director, qualify as independent under the New York Stock Exchange (NYSE) corporate governance listing standards. In addition, the Board has adopted guidelines to assist in determining each director’s independence, which meet or exceed the NYSE independence requirements. For more information, see “Director Independence” in Air Products’ Proxy Statement.

The Proxy Statement details the process for determining qualifications and expertise of Directors. The Corporate Gover-nance and Nominating Committee has primary responsibility for identifying, recommending, and recruiting nominees for election and recommending candidates for election as Lead Director. The Board follows practices outlined in the Corporate Governance Guidelines with respect to these matters. Women and minorities comprise 25% of the Board.

The Board has a formal process for reviewing related party transactions, which is articulated in the Proxy Statement. In addition, the Board has adopted its own Code of Conduct, which specifically focuses on areas of potential ethical risk and conflicts of interest, especially relevant to directors.

The majority of our Named Executive Officers’ direct compensation in 2015 was variable, based on company and stock perfor-mance. Executive incentive compensation (annual and long-term incentive awards) is structured to reward performance that will increase the value of our shareholders’ long-term investment through disciplined capital investment, sustainable growth and superior returns. The compensation program balances financial results with other company values such as sustainabil-ity, continuous improvement, safety, diversity and ethical conduct. Accordingly, some components of the program provide flexibility to recognize non-financial achievements or to reduce or recoup compensation where insufficient attention is paid to non-financial company objectives.

Detailed information about director and Executive Officer compensation is available in our most recent Proxy Statement.

The Board has a written procedure for collecting, organizing, and forwarding direct communications from shareholders and other interested parties to the independent Directors. This procedure is available through the Corporate Secretary’s Office.

Leading Sustainability EffortsG4-48Air Products’ Sustainability Leadership Council steers the Company’s sustainability strategy—working with the busi-nesses to operationalize it—and oversees the processes for measuring Air Products’ environmental footprints as well as setting and achieving reduction targets. These efforts are routinely reported to the Board of Directors.

31

The Council is led by Joseph Pietrantonio, Vice President, Environment, Health, Safety & Quality and Corporate Chief Engineer, who also has direct operating responsibility for climate change policy and GHG inventory programs. Council members included: Corning Painter, Executive Vice President of Industrial Gases; John Stanley, Senior Vice President, General Counsel and Chief Administrative Officer; Scott Crocco, Senior Vice President and Chief Financial Officer; Jenni-fer Grant, Vice President and Chief Human Resources Officer; Julie O’Brien, Sustainability Director; Catherine McDonald, Communications Director; and Art George, External Communications Manager.

The Council was an integral part to the assessment of sustainability priorities described in the following section, and was the highest committee that reviewed the 2016 Sustainability Report.

Charters subscribed toG4-15Air Products has aligned a number of its policies and practices with charters and standards. For example, ISO14001 and OHSAS 18001 have been considered in the development of the Company’s Global Environmental, Health and Safety Management System.

Because improving product quality, service, and overall value to customers is at the heart of our strategy, we have ad-opted ISO 9000 as our model for quality assurance and obtained ISO 9001 certifications for 70% of our plants.

In a similar way, our Human Rights policy has been aligned with the fundamentals of the United Nations Global Com-pact (UNGC), covering all elements of the UNGC.

Organizations subscribed toG4-16

Driven to innovate, share knowledge and embrace good ideas, Air Products was active in a number of industry and advocacy associations in 2015:

• American Institute of Chemical Engineers (AIChE)

• AICHe Center for Chemical Process Safety (CCPS)

• Alternative Fuels Renewable Energies Council

• Association of International Chemical Manufacturers (China)

• CDP (formerly Carbon Disclosure Project)

• The Chlorine Institute, Inc. (U.S.)

• Compressed Gas Association (CGA)

• European Industrial Gases Association (EIGA)

• Fuel Cell and Hydrogen Energy Association

• Lehigh Valley Sustainability Network

• Manufacturers Alliance for Productivity and Innovation (MAPI) Sustainability Council

• Semiconductor Equipment and Materials International

Our management believes that our business, and thus our shareholders, benefit from our participation in organizations that represents our industry. Our GHG Center of Excellence identifies climate change risks and opportunities, policy developments, regulations, legislation, and regularly updating management and the Board. Our Government Relations staff works with government agencies and Non-Governmental Organizations (NGOs) in regions of the world where we have significant business interests to develop strategy, understand changing business environments, and protect and position our businesses to respond to climate change risks and opportunities. These efforts are augmented through membership in these trade associations, and reduce the likelihood and magnitude of risks.

32Air Products | 2016 Sustainability Report

Sustainability Priorities and Stakeholder EngagementG4-18-21, 23-27Stakeholder concerns are important to our company. For this reason, Air Products engaged with representatives of its key stakeholders to understand what is important to them, and what may have a significant impact on the company.

Our Key Stakeholder Groups

Customers Customers come to Air Products for innovative thinking and solutions to their most pressing operational challenges . It’s our commitment to quality, safety, fairness, mutual respect and integrity that keep them coming back . Key sustainability concerns of our customers vary by business, but typically focus on how our products can help them improve energy efficiency and reduce environmental impact . Several of these offerings are noted in this report under section G4-EC1 and on our website .

Employees Air Products is committed to providing a work environment where our employees can grow and thrive, bringing their greatest talents to bear on some of the world’s most pressing business and environmental challenges . We provide career development opportunities in which new employees have the opportunity to rotate through different assignments to gain on-the-job experience in various areas of our organization . We engage in regular, two-way communications with our employees through leadership dialogue sessions, executive town hall meetings, feedback surveys, “Ask Leadership” channels on our company intranet, and our CorpNEWS online newsletter .

Investors The only way to serve our customers with excellence, develop and reward our employees, and support our communities is to have a profitable company with satisfied shareholders .

We hold quarterly investor calls . We also participate in numerous sell-side conferences and one-on-one meetings to ensure the investment community’s perspectives are fully understood as an input to our strategy . Air Products is publicly traded as APD on the New York Stock Exchange, where over 90 percent of common shares are held by institutional investors . As of September 30, 2015, 215 million shares of Air Products common stock were outstanding .

Communities The stronger the local community, the stronger and more stable platform from which we can run our business . We continue to act as a good neighbor, demonstrating our commitment to the health and vitality of the local communities in which we work and live . Our plant management and other personnel communicate with stakeholders on a regular basis and solicit feedback on our processes and procedures, the safe use of our products, and the key issues in the community .

As an employer, we look to partner with local commerce boards to support economic development and jobs creation . Air Products also gives back to local communities through philanthropic endeavors totaling $6 .5 million in cash, volunteer, and in-kind donations in 2015, as well as through our ongoing involvement in workforce development through our investments in science, technology, engineering and mathematics (STEM) education .

Suppliers Every year, we purchase approximately $6 billion in materials, equipment, power and services from more than 30,000 suppliers worldwide . As an extension of our company, Air Products’ suppliers play a crucial role in delivering to our customers each and every day . We look for suppliers who share our values and commitment to sustainability, and hold them to the same high standards that you would expect from Air Products . Our “Expectations for Suppliers” is published on our company website and incorporates the elements of our sustainability program, including economic, environmental and social factors . We engage with suppliers on sustainability matters as part of our supplier relationship management program; for example, each step of an Engineering project is assessed and reviewed with input from key suppliers .

Governments and Regulators

Public policy decisions and regulations have a direct impact on our license to operate . Air Products supports fair, balanced and realistic policy decisions that will help us achieve our sustainability goals and serve the interests of the many stakeholders to whom we’re accountable . We maintain open channels of dialogue with the local, regional and national government entities where we operate . In many cases, our employees provide expertise and input to proposed legislation . We recognize that through cooperation and coordination with governments and regulators, we can more productively address global sustainability challenges .

33

Air Products has been conducting stakeholder assessments since it began reporting in accordance with Global Reporting Initiative guidelines in 2010. For this report, we had more extensive engagement with our stakeholders to improve our understanding of current issues. The process included:

• Evaluating sustainability issues identified in various frameworks, standards, questionnaires, customer reports and stakeholder questions

• Interviewing key stakeholders on sustainability issues, including members of our Board of Directors, customers, investors and suppliers

• Reaching out to community members in person and via surveys to identify and understand concerns

• Engaging our Sustainability Leadership Council in discussions through which they identified specific concerns

• Surveying sustainability subject matter experts who support company efforts

We started with 30 sustainability issues, expanded the list based on stakeholder feedback, and ultimately prioritized 14 issues that were important to our stakeholders and for our company’s success. All of our stakeholders expressed support for sustainability, and as expected, were concerned about varying issues depending on their relationship to sustainability and/or with us. For example, sustainability – and related areas – such as governance and safety–is an expectation of our investors, and they are less likely to invest in companies with poor performance in these areas.

The Sustainability Priorities included:

Issues across our businesses and our value chain that were considered:

ProductDevelopment Sourcing Production Sales &

Marketing Distribution Use/End of Life

high

med

ium

low

low medium high

Impact on Business Success

Stak

ehol

der C

once

rn Priorities

Grow Economic PerformanceProduct Offerings with Sustainability Benefits

Conserve Energy SavingsDistribution EfficiencyGHG ReductionsWater ConservationWaste Management

Care Safety FirstTalent ManagementCustomer SustainabilityEthics & IntegrityRegulatory ComplianceCommunity Relations and SupportSupplier Sustainability

34Air Products | 2016 Sustainability Report

This scope was consistent with prior-year reporting. Impending changes to the Company, specifically the proposed sale of the Performance Materials Division and the spin-off of the Electronic Materials Division, were not considered for this assessment.

These Sustainability Priorities, aspect boundaries, and their content within this report are provided below:

Sustainability Priority

GRI Reference Aspect within Air Products

Aspect outside Air Products

Report Pages

Economic Performance

Economic Performance; Economic Impacts

Production; Sales & Marketing

Communities Where We Operate

20, 40-41

Product Offerings with Sustainability Benefits

Products and Services Product Development Use/End of Life 46

Energy Savings Energy; Emissions Production Not Material 9, 20, 48-49

Distribution Efficiency

Energy; Transport Production; Distribution Not Material 11, 50, 58

GHG emissions Emissions Production Not Material 10, 20, 52

Water Conservation

Water Production Communities Where We Operate

10, 21, 54-55

Waste Management

Effluents and Waste Production Not Material 11, 21, 56

Safety First Occupational Health and Safety Product Development; Production; Distribution; Use/End of Life

Communities Where We Operate

13, 21, 37-39

Talent Management

Employment; Labor/Management Relations; Training and Education; Diversity and Equal Opportunity

Product Development; Production; Sales & Marketing; Distribution

Not Material 14, 21, 61-66

Customer Sustainability

Economic Performance; Customer Health and Safety

Sales and Marketing Use/End of Life 42-43, 58-59

Ethics & Integrity Anti-corruption; Anti-competitive Behavior; Compliance (Society)

Product Development; Sourcing; Production; Distribution

Not Material 15, 21, 67-69

Regulatory Compliance

Compliance (Environmental, Society) Production; Distribution Communities Where We Operate

12, 15, 38, 47, 67, 70

Community Relations and Support

Local Communities; Indirect Economic Impacts

Production; Distribution Communities Where We Operate

21, 71-72

Supplier Sustainability

Procurement Practices; Supplier Assessment for Labor Practices

Procurement Supply Chain 72-74

Air Products used GRI’s Principles for Defining Report Content to develop the 2016 Sustainability Report . These principles included: stakeholder inclusiveness, sustainability context, and coverage of aspects that reflect our significant economic, environmental and social impacts .

35

Demonstrated commitment to sustainability

Air Products was named to the Dow Jones Sustainability North America Index (DJSI) 2015/2016, ranking among the top 20 percent of companies in its industry for corporate sustainability performance . For several years, the company has completed the DJSI Corporate Sustainability Assessment, which is used to evaluate our economic, environmental, social and governance practices . ‘Grow − Conserve – Care approach to managing sustainability is rooted in our fundamental belief that good sustainability practices lead to long-term shareholder value and competitive advantage .

In 2015, Air Products received a disclosure score of 100% and earned a place on the CDP S&P 500 Climate Disclosure Leadership Index (CDLI) . The CDLI includes the top 10 percent of reporting companies scored for transparent and quality disclosure of climate-related information . Air Products believes in openly sharing data and using that data to drive improvements for our customers and for our company . We have responded to the CDP for 14 consecutive years .

For the fifth consecutive year, Air Products was named to Corporate Responsibility Magazine’s (CR Magazine) 100 Best Corporate Citizens List (2015) . The index selects the top 100 corporate responsibility leaders selected from the large-cap Russell 1000® based on performance and citizenship . Sustainability is a fundamental principle at Air Products and the cornerstone of our relationships with customers, shareholders, and our neighbors in the communities where we operate .

Also during 2015, Air Products met the environmental, social and governance criteria to meet the inclusion requirements for the FTSE4Good index . This index is a tool used by a wide variety of market participants when creating or assessing responsible investment products, and is used in four main ways: Financial products, Research, Reference and Benchmarking .

Air Products was reconfirmed for inclusion in the Ethibel PIONEER and Ethibel EXCELLENCE Investment Registers in March 2015 . This selection by Forum ETHIBEL (www .forumethibel .org) indicates that Air Products qualified as a sector leader in Corporate Social Responsibility (CSR) .

Additional Issues Raised by StakeholdersA number of stakeholders raised concerns in addition to the Sustainability priorities stated above, including:

• Job growth and high quality jobs

• Education and skill development

• Affordable and accessible transportation

• Quality of life issues related to urban development, the environment, food and housing

• Noise control

These items are addressed through ongoing company programs, such as our Community Outreach priorities.

36Air Products | 2016 Sustainability Report

Alignment with the UN Sustainable Development GoalsAs part of our assessment, we looked at our Sustainability Priorities and our new sustainability goals relative to the United Nations (U.N.) Sustainable Development Goals (SDGs), which were announced in September 2015. The 17 SDGs were developed by U.N. member states in collaboration with a number of organizations, including corporations, scien-tists, officials, business and labor representatives and NGOs. Air Products applauds the SDGs which are aimed at making the planet more sustainable. We have programs or products that align with nearly all of the SDGs, as shown below and shared within this report.

SDGs Related Air Products Efforts

1 No poverty Economic impact of goods/services, employment and support of education

2 Zero hunger Food technologies and products that enable preservation (food freezing and modified atmosphere packaging [MAP]) and food production (oxygen for aquaculture)

3 Good health and well-being Medical gases and helium for magnetic resonance imaging (MRI), philanthropy that supports local health initiatives, products that enable customers to avoid emissions

4 Quality education Support of education and STEM (Science, Technology, Engineering and Math)

5 Gender equality Diversity and Inclusion programs and goals

6 Clean water and sanitation Oxygen for water treatment and our goal to reduce water consumption on an intensity basis

7 Affordable and clean energy Hydrogen for cleaner burning fuels including ultra uow sulfur diesel that reduces emissions, hydrogen for fuel cells, and our goal to reduce energy intensity

8 Decent work and economic growth Employment and our Human Rights policy and programs

9 Industry, innovation and infrastructure

Development of new and sustainable offerings, products that improve customer productivity and efficiency, and offerings that enable the cleaner production of cement and steel for infrastructure

10 Reduced inequalities Employment and our Human Rights policy and programs

11 Sustainable cities and communities Oxyfuel burners that enable the cleaner production of cement and steel for cities

12 Responsible consumption and production

Goals for reducing energy, water and fleet consumption, gases that enable the reduction of food losses

13 Climate Action Products that improve customer productivity and efficiency, goals for reducing greenhouse gas emissions from operations and product distribution, and business continuity planning to prepare for potential disruptions due to climate change

16 Peace, justice and strong institutions Code of Conduct requirements for employees and other stakeholders, employee engagement in various organizations and Boards of Directors

17 Partnering for the goals Philanthropy and engagement in trade associations

37

Safety: Our Top Priority Disclosure on Management ApproachAt Air Products, safety is our top priority. It is a moral obligation, a condition of employment, and is fundamental to our goal of being the safest and most profitable industrial gas company.

Safety is part of our culture. We all care about safety and are driving towards our goal of zero accidents. Year-on-year, we strive to incrementally improve safety at all our sites to benefit our colleagues and the communities in which we operate. Our new 2020 goal to lead the industrial gas industry in safety as measured by recordable and lost-time inci-dent (LTI) rates will help us continue to drive our performance.

Our progress and performance in safety is built on years of experience and global policies and systems that require accountability and leadership. Our approach to environmental protection and sustainability has been built upon our strong safety foundation.

Global EH&S PolicyEvery employee is required to understand and adhere to our global EH&S policy as both a responsibility and a condition of employment. The highest level of accountability for environmental, health, safety and sustainability rests with our Board of Directors.

Environment, Health and Safety Policy We will be an industry leader in environmental, health, and safety performance and are committed to the following basic principles in managing our businesses worldwide:

• Compliance with all applicable environmental, health, and safety laws and regulations

• Continual improvement in health, safety, and security performance with the goal of zero injuries

• Continual reduction of the environmental impact of our operations

• Design and operation of our plants and facilities in a manner that protects the environment and the health, safety, and security of our employees, contractors, and the public

• Development and production of products that can be manufactured, distributed, used, and recycled or disposed of in a safe, secure, and sustainable manner

• Existing and new EH&S risks are understood and managed through our Risk Management Processes

• Transparent discussion of our environmental, health, and safety practices and performance

EH&S Management SystemApplying to 100% of our locations worldwide, our EH&S Management System includes controls driven by our own corporate policies and government regulations, and supports the principles promoted by international standards such as ISO 14001 and OHSAS 18001.

Elements of our EH&S Management SystemSafe Systems of Work

Occupational Health Protection

Emergency Preparedness

Process Safety Management

Product Stewardship

EH&S Assurance

EH&S Training

Incident Reporting and Investigation

Product Distribution

Procurement and Contractor Control

There are over 250 standards in the EH&S Management System, and nearly a third of these are specifically related to worker safety and health.

38Air Products | 2016 Sustainability Report

Managing Compliance and IncidentsAir Products uses Compliance Management, an SAP-compatible database, to help manage EH&S compliance with regu-lations, standards and permit requirements at facilities globally. The system enables Air Products to manage and track regulatory and permit-driven tasks, identify and track regulatory and permit exceptions, provides access to regulatory and permit requirements, and includes compliance tasks and limits. Tasks are automatically pushed through Compli-ance Management to employees with responsibility for the tasks.

If an incident occurs, it is reported in Event Management (EM), another SAP-compatible computer database which includes the ability to document, share, and learn from critical information regarding EH&S incidents and near misses. Sites must enter data into EM whenever an incident occurs, including injuries and lost-time incidents (LTIs), health and safety regulatory events, environmental events and regulatory key performance indicators (KPIs), motor vehicle ac-cidents, and process safety events. Also reported in EM are near-miss events related to worker safety, design, transporta-tion and product safety. EM is also used to document root cause analyses and track corrective actions.

In addition, our Corporate Assurance Group audits more than 30 plants annually for compliance with governmental requirements and internal standards, using our EH&S functional and operational expertise in production plants.

EH&S TrainingEmployees around the world are enrolled in our online Training Management and Delivery Tool, which enables us to manage EH&S training by assigning courses that are custom-tailored to the employee’s job assignment in addition to those required for regulatory compliance. Compliance is monitored within the system.

Our 2015 Worker Safety PerformanceG4-LA6Air Products’ goal is to be the safest and the most profitable industrial gas company in the world, providing excellent service to our customers. We are aiming for zero accident and incidents, and measure our success against our peers as indicated by our new 2020 goal to lead the Industrial Gas industry in safety. We also set internal, continuous improvement targets for safety that are monitored and communicated through the company on a monthly basis.

In 2015, our worker safety performance improved in all categories except the contractor recordable rate. Safety performance included:

• Zero employee fatalities • 15.5% decrease in employee recordable injuries • 16.7% decrease in employee LTIs

The decrease in our injury rates can be attributed to our systematic approach to safety, including our Basic Safety Process (BSP) that promotes one primary goal - incident prevention through continuous management of our safety effort. BSP has been designed to integrate our safety efforts into all levels of our organization and actively engage employees.

BSP Elements • Demonstrate safety leadership through highly

visible activities

• Clearly defined and measured safety responsibilities that promote accountability

• Planned activities designed to help us achieve, and then maintain safe work conditions and safe work behaviors

• Requirements for contractors to participate in BSP activities

• Emergency preparedness activities that help us practice and test responses

• Performance measures that focus on key process indicators so we know that we are applying the right amount of effort at the right place, before incidents occur

39

BSP complements our EH&S Management system and standards that address the areas of worker and process safety and occupational health, as well as operational and regulatory compliance.

During FY15 we continued to integrate BSP into our South America operations and began to see an improvement in em-ployee LTIs in that region, as well as globally as a company.

We continue to focus on more serious incidents by measuring and tracking Serious Injuries & Fatalities (SIFs) and Near Fatal Accidents (NFAs). These serious incidents help us quantify the severity of our work-related injury performance and can be a more meaningful measure of severity compared solely to the lost-time characterization. By actively monitoring SIFs and NFAs, we can engage the appropriate levels of expertise, target the most impactful improvement opportunities, and leverage the right resources to address issues.

SIFs and NFAs are tracked on a monthly or quarterly basis and reviewed throughout the organization. Employee SIFs are measured as a percentage of total recordable injuries. The current trend shows that 6-7% of our injuries are considered SIFs. Industry benchmarks indicate that this is a significantly better rate than typical industry, which performs at about 20% of recordable injuries being serious injuries. By reviewing SIFs monthly, we can use this data real time to respond to trends in accidents causing serious injuries and emphasize specific areas for focus and improvement.

The Company’s Serious Incident Review Board (SIRB) routinely reviews SIFs, NFAs and significant Process Safety Events that had, or could have had, a serious impact. Comprised of the Chief Executive Officer, Senior Vice Presidents, Directors and Managers from Operations and EH&S, the SIRB ensures that safety accountabilities are reinforced through line management, and safety events are reported and investigated in a consistent and thorough manner, with sustainable corrective actions identified and implemented.

Contractor safety has been an area of focus since 2011. Initial efforts included increased review of contractor safety performance and engagement in day-to-day activities using elements of BSP. This resulted in improved contractor safety performance through 2012 and 2013. In 2013 we acquired a large operation in South America that used a signifi-cant number of contractors for product delivery, resulting in a large spike in contractor LTIs. In FY15 the South American operation was integrated with our Industrial Gases Americas business, and improvement initiatives were integrated, including full implementation of BSP. By the end of FY15, improvement was seen in the South American business and a reversal of upward trend.

Regrettably, we experienced a sub-contractor fatality related to a fall from height during a construction project in the United States. In response to the accident, steps were taken to ensure that the risks associated with this activity were reduced and broadly communicated to all of our employees.

Fiscal Year Safety Performance 2015 2014 2013

Employee recordables 113 140 107

Employee recordable injury rate (per 200,000 hours worked) 0 .49 0 .58 0 .52

Employee lost-time incidents 45 59 40

Employee lost-time incident rate (per 200,000 hours worked) 0 .2 0 .24 0 .19

Employee fatalities 0 1 0

Contractor recordables 89 84 56

Contractor recordable injury rate (per 200,000 hours worked) 0 .64 0 .6 0 .5

Contractor lost-time incidents 47 60 21

Contractor lost-time incident rate (per 200,000 hours worked) 0 .34 0 .43 0 .19

Contractor fatalities 1 0 0

Information about other aspects of safety, including Process Safety, Transportation Safety and Product Safety, are provided in the Care section of this report.

40Air Products | 2016 Sustainability Report

GROW

Economic PerformanceDisclosure on Management ApproachOur goal at Air Products is to be the safest and most profitable industrial gases company in the world, providing excel-lent service to our customers. Our strategic Five-Point Plan is our roadmap to that goal.

The best way to serve our customers with excellence, develop and reward our people, and support our communities is by being a best-in-class, profitable enterprise.

The primary measures used to assess our performance and progress are:

• EBITDA margin as a percent of sales

• Return on capital

• Operating margin as a percent of sales

For 2020 we have established a new goal to lead the Industrial Gas industry in profitability based on these measures.

Management Principles We believe cash generation drives long term value, and that what counts is the increase in per-share value of our stock, not the size of our company or growth rates. Air Products generates a significant amount of cash, and the effective deployment of that cash is critical. In fact, the CEO and CFO review every capital investment of more than $3 million, and there is a minimum hurdle rate of 10% internal rate of return for all new projects. Cash we generate belongs to our shareholders, and we will only spend that cash if we have enough high return projects or good acquisitions.

Priorities for the use of cash are:

• First, to ensure our debt level supports and maintains an “A” credit rating.

• Second, to invest in good projects and accretive acquisitions.

• Third, to continue to increase our dividend, and

• Fourth, if and only if there is excess cash available, to return it to our shareholders in the form of share buybacks.

With the structural transformation of our company which began in September 2015, Air Products has moved to decen-tralized, regional industrial gases businesses and reduced overhead costs by $300 million, with a plan to achieve an additional $300 million of operational cost savings over the next four years. Improving productivity and efficiency is a necessary and never-ending process that we are committed to continue as we move forward so that we can stay at the leading edge of our industry.

Air Products has also aligned its incentive reward program, with over 40 profit and loss centers. Performance is based on EBITDA results, and people are rewarded for what they achieve annually in their specific business unit.

41

FY15 PerformanceG4-EC1Following is a summary of our performance in FY15. Additional details are available in our 2015 Form 10-K.

Millions of dollars, except per share 2015 2014 Change

For the Year

Sales $9,895 $10,439 (5%)

Operating income(A) 1,884 1,657 14%

Net income from continuing operations attributable to Air Products (A)

1,427 1,243 15%

Adjusted EBITDA(A) 2,975 2,765 8%

Capital expenditures(A) 2,028 1,885 8%

Return on capital employed (ROCE)(B) 11.3% 9 .8 150 bp

Return on average Air Products shareholders’ equity(B)

19.3% 16 .9 240 bp

Operating margin(A) 19.0% 15 .9 310 bp

Adjusted EBITDA margin(A) 30.1% 26 .5 360 bp

Per Share 14%

Diluted earnings(A) $6.57 $5 .78 6%

Dividends 3.20 3 .02 (2%)

Book value 33.66 34 .49

At Year End

Air Products shareholders’ equity $7,249 $7,366

Shares outstanding (in millions) 215 214

Shareholders 6,400 6,600

Employees(C) 19,700 21,200 (A) Amounts are non-GAAP measures. See reconciliation to GAAP results within Item 7, Management’s Discussion and Analysis of Financial

Condition and Results of Operations, of the accompanying Form 10-K.(B) Amounts are non-GAAP measures. See pages III and IV for reconciliation to GAAP results.(C) Includes full- and part-time employees from continuing and discontinued operations.

KPMG LLP, an independent registered public accounting firm, has issued their opinion on the Company’s internal control over financial reporting as of September 30, 2015 and is provided in Air Products’ 2015 Form 10-K.

The Value We GenerateAir Products generates direct and indirect economic value throughout its value chain. Fiscal 2015 revenues totaled $9.9 bil-lion, and adjusted EBITDA was nearly $3 billion. Additional information is available in our 2015 Form 10-K.

The company spends $6 billion each year with over 30,000 suppliers globally. In FY2015 approximately 19,000 employees at 750+ locations in 50 countries. Through their individual spending, investments and volunteering, our employees are very supportive of the communities where they live.

In 2015, Air Products donated $6.5 million to non-profit agencies in need in communities we serve. Sixty-two percent was in the form of charitable donations, 19 percent community investments to help prepare for potential emergencies or disas-ters, and 19 percent for commercial initiatives aimed at supporting local economies.

42Air Products | 2016 Sustainability Report

Growth OpportunitiesOur gases, equipment and applications expertise enable customers in dozens of industries to improve sustainability performance by improving productivity, producing better quality products, reducing energy use and lowering emissions.

Merchant business growth is driven by the underlying manufacturing economy, while larger onsite plant investments are being driven by secular trends: energy, environment and resource constraints (i.e., materials use, water use). Ex-amples for Air Products’ industrial gases to serve these needs include petrochemical investments in the U.S. Gulf Coast, coal gasification in China, refinery hydrogen globally, and outsourced gases for the oil and chemical industry (driven by lower oil prices), among others.

Today, a majority of our revenues are from improving customers’ energy efficiency, emissions and societal needs. We will strive to maintain this high level of use of these sustainable offerings through our new 2020 goal to derive more than 50% of revenues from offerings that improve energy efficiency, lower emissions and meet societal needs.

Here are just a few ways we have enabled our customers to be more sustainable and grow their operations:

• Lowering CO2 emissions – Our oxyfuel burner technology enables alternative fuel substitution, helping metals, glass, pulp and paper, and cement makers use less energy and fuel, and significantly lower process emissions.

• Fueling the future – Refineries around the world rely on us as the leading hydrogen supplier to produce cleaner burning fuels. We are also paving a new road with hydrogen fueling stations to power cars, trucks, vans, buses, scooters, and forklifts.

• Improving water quality – Our Halia® water and wastewater solutions improve the quality of water and wastewater streams for reuse or discharge, increase treatment capacity, and reduce the cost and footprint of treatment processes.

• Boosting world energy – Most of the world’s remote natural gas reserves are processed into liquefied natural gas (LNG) with our proprietary LNG heat exchangers, while oxygen from our large scale ASUs enables energy production via gasification in growing economies.

• Advancing digital – Device manufacturers advance to the next generation of semiconductors and displays for tablets, computers and smart devices using our electronic materials and materials science expertise.

• Expanding performance – Our epoxy curing agents, polyurethane additives and specialty additives enable better coatings, adhesives, inks and industrial cleaning product performance with less environmental impact.

As previously indicated, several of these offerings are aligned with the U.N. Sustainable Development Goals (SDG), particularly:

2 6 7 9 Zero hunger

Clean water and sanitation

Affordable and clean energy

Industry, innovation and infrastructure

Sustainable cities and communities

Responsible consumption and production

Climate action

11 12 13

We have estimated that the use of our industrial gases, excluding hydrogen for ultra-low sulfur fuels, enabled our customers to avoid 11 million metric tonnes of CO2e in 2015.

43

Cleaner Air through HydrogenHydrogen is critical to produce today's necessary cleaner transportation fuels . These clean fuels help eliminate smog so people can breathe easier .

Hydrogen is used in refineries to remove sulfur from crude oil and reduce the amount of aromatic compounds in fuels, thus enabling refiners and engine manufacturers to meet government standards for emissions . The ultra-low-sulfur-diesel (ULSD) produced in these refineries greatly reduces the amount of sulfur oxides (SOx) emitted from engines, which reduces acid rain . ULSD also enables the use of Diesel Particulate Filters (DPFs) that remove particulate matter (PM), including Black Carbon . Likewise, ULSD enables the use of catalytic converters that remove nitrous oxides (NOx) and volatile organic compounds (VOCs) . Lowering these emissions has health benefits, including reducing respiratory problems and cancer risk . A 2015 study released by the California Air Resources Board noted that the use of ULSD fuels had decreased the risk of cancer from diesel PM emissions by 47% (2006-2012) .

In addition to being used for cleaner fuels, hydrogen helps conserve precious resources by enabling refiners to increase the amount of fuel that can be produced from every barrel of crude oil, and to process more sour crudes .

As the world’s need for fuel grows, so will the need for hydrogen . The trend for crude oil to be heavier in its consistency and contain more sulfur will continue . At the same time, the world demands cleaner air, and with it comes the increased need for cleaner burning fuels, meaning hydrogen's role will remain critically important .

Air Products is the world’s largest supplier of hydrogen . Our facilities feature the latest technology advancements to maximize energy efficiency, and our efficiencies are typically higher than can be achieved by refiners making their own hydrogen . We also have pipelines that provide a safe, robust and reliable supply of hydrogen to the petrochemical industry around the world .

We have the experience, technology and resources to meet the hydrogen and clean fuel demands of today and tomorrow .

Efficient Design of New PlantsAir Products is continually looking for ways to improve the efficiency of facilities it designs for its own use, as well as for sale to customers.

In designing any facility, there are tradeoffs between initial capital investment and efficiency. Air Products works closely with its customers to promote the most energy efficient and cost effective facility design.

Some of the areas where we focus include:

• Matching the design of equipment, such as compressors and distillation columns, for each ASU to manage energy usage and costs

• Optimizing heat exchanger energy efficiency and integration with process cycles

• Developing process controls systems that enable plants to operate at optimal efficiencies

We have built over 2,000 air separation plants and currently own and operate over 300. We learn from retrofits of our own facilities how to optimize efficiencies and costs and apply what we learn to designing and troubleshooting our customers’ facilities.

44Air Products | 2016 Sustainability Report

ConserveEnvironmental StewardshipDisclosure on Management ApproachEnvironmental stewardship at Air Products means reducing our environmental impacts while helping our customers do the same. As noted in our EH&S policy, we are committed to comply with all applicable environmental laws and regulations to continually reduce the environmental impact of our operations and to develop and make products that can be managed in a sustainable manner. Implementing this policy, as well as managing the systems and tracking per-formance enables Air Products to drive environmental stewardship in the organization.

Our environmental values support Air Products’ EH&S Policy. We recognize that conducting our business in an environ-mentally responsible manner is critical to our success.

Our Environmental Values

We believe that:

• Environmental policies, programs and practices must be integrated into each business function and made a priority in the design of new processes and facilities and in the evaluation of new business opportunities

• Pollution of air, water and land can be prevented, and waste can be eliminated

• Where our past practices have created environmental conditions that require correction, we should responsibly correct them

• We can supply products, or those of predcessor facility operators where we now have responsibility, and processes that can be manufactured, distributed, used, and recycled or disposed of in an environmentally

responsible manner, helping our customers to protect the environment

• We must be an environmentally responsible neighbor for the benefit of our host communities and to retain our license to operate

• We have a responsibility to protect the environment and conserve resources for future generations through sustainable development

• Each employee must be given the training and tools needed to understand and support these environmental principles in his or her daily responsibilities

We also believe that protecting the environment is a key element of sustainability. To that end, we work to minimize the environmental impacts of our operations and products and enable customers to do the same. As described in the following sections of this report, we set and track environmental sustainability goals aimed at reducing resource con-sumption and emissions. The Vice President, Environment, Health, Safety & Quality and Corporate Chief Engineer has responsibility for these goals and performance. Progress against these goals is routinely reviewed by our Sustainability Leadership Council and Board of Directors.

For commercial products, potential environmental impacts have been assessed through a product risk review process, which establishes risk management measures for products based on their intrinsic environmental hazards. Depending on the potential environmental impact, we can also conduct life cycle assessments of products and processes to identify areas for improvement.

We also evaluate environmental protection during plant design and operation. Capital expenditure authorizations, which are required to finance new projects, include environmental considerations. From an operations perspective, we have set specific goals to reduce emissions, water consumption, and energy use. We also established GHG reduction targets based on our verified GHG inventory.

Importantly, the majority of our products and services enable our customers to reduce their environmental impacts. Some examples include use of hydrogen by refiners to remove sulfur dioxide from crude oil, thus producing cleaner fu-els that enable vehicles to operate more efficiently and reduce emissions of SOx, NOx and particulates; water treatment technologies that improve water quality and reduce wastewater sludge; and performance materials such as water-based products that eliminate solvents and reduce VOCs, low- or no-emission catalysts, and replacement products for nonylphenol and nonylphenol ethoxylate-containing surfactants.

45

Environmental Sustainability GoalsWith a commitment to design and operate our facilities in a manner that reduces impact on the environment, we set a series of environmental sustainability targets to assure continued focus and progress in reducing greenhouse gas emis-sions, energy use, water consumption, other emissions and transportation impacts. We achieved the majority of these goals and avoided nearly $700,000 in energy and water-related costs, four million Mwh of energy, 22 billion gallons of water and seven million metric tonnes of carbon dioxide equivalent (CO2e) emissions.

2015 Environmental Sustainability Goals

Goal Progress through 2015

Greenhouse Gases

Reduce 7% indexed against production by 2015 for ASUs and HyCO, representing approximately 80% of our total global energy requirements from 2007 baseline

Exceeded this goal, attaining a 14% reduction in GHG emissions on an intensity basis in 2015 from the 2007 baseline .

Energy

Reduce consumption on an intensity basis by 7% by 2015 for ASUs and HyCO plants from 2007 baseline

ASUs exceeded their energy efficiency goal, realizing an 8% reduction in energy intensity in 2015 since 2007 . HyCO units improved energy efficiency by 5 .4%, which was slightly below the goal and due to physical plant limitations and low energy pricing . Savings correspond to nearly 4 million MWh and $630 million, cumulatively .

Water

Reduce consumption 10% on an intensity basis in the controllable portion of our usage (from 2009 baseline)

We exceeded this goal, realizing a 23% reduction in indexed water consumption in 2015 . This correlates to cumulative avoided water costs of nearly $70 million and over 22 billion gallons of water conserved .

Toxic Release Inventory

Maintain at current low levels We continued to maintain TRI emissions below 1 million pounds per year, even though emissions increased 13% due to operational changes at a wastewater treatment facility .

U.S. Fleet

Reduce NOx/particulate matter (PM) by 10% and CO2 by 2% by 2015 (from 2009 baseline)

We exceeded these goals, reducing CO2 (12%), NOx (83%), and PM emissions 97% . Cumulative emissions avoided have been estimated at 43K tons CO2, 2 tons NOx and 280 tons of PM .

Air Products met its hazardous waste goal prior to 2015. A new hazardous waste goal was not set due to the impending separation of our Performance Materials Division and Electronics Materials Division, which were the primary drivers of hazardous waste generation.

We have established new goals for our Industrial Gases operations:

2020 Environmental Sustainability Goals

Energy Reduce consumption on an intensity basis by 2 .5% for ASUs and 1 .5% for HyCO plants by 2020 from 2015 baseline .

Greenhouse Gases Reduce 2% indexed against production by 2020 from 2015 baseline .

Water Reduce consumption 5% on an intensity basis in the controllable portion of our usage by 2020 from 2015 baseline .

Global Fleet Improve fleet efficiency on an intensity basis by 10% by 2020 from 2015 baseline .

46Air Products | 2016 Sustainability Report

Environmental Product and Process InnovationsG4-EN7We work to minimize the environmental impacts of our operations and products and enable our customers to do the same. Many of these offerings are described in the “Growth Opportunities” section of this report and on our website.

In 2015 we undertook many projects that will help Air Products and our customers reduce their environmental impact, including:

• Development of a hydrogen reactions lab to evaluate and optimize hydrogenation and hydrotreatment reactions, enabling ultra-low sulfur diesel fuels that reduce fleet emissions.

• Investing in smaller scale LNG projects in North America to enable clean energy production.

• Commissioning a new helium facility in Doe Canyon, Colorado that produces helium from a naturally occurring underground CO2 gas source. The facility will replace 15% of the current U.S. Bureau of Land Management reserve helium supply as that system declines. The CO2 is used for enhanced oil recovery.

• Receiving Pressure Equipment Certification for our biogas membrane separators that enable the production of enriched streams of biomethane and carbon dioxide.

• Commissioning a new CO2 plant in the Canary Islands that purifies CO2 from nearby industries to supply CO2 to the market rather than having to burn fuel on purpose.

• Commissioning several SmartFuel® Technology hydrogen fueling projects around the world.

We are also continuing to look for methods to produce hydrogen from renewable and low carbon sources, such as biomass. This builds on the many energy benefits of hydrogen, from removing sulfur from sour crude oil that enables refiners to meet fuel emissions standards, to increasing the amount of fuel that can be produced from every barrel of crude, to hydrogen’s use as an emission-free transportation fuel.

For our customers we provide a number of products and applications that help improve productivity and efficiency, thereby reducing costs and wastes. Examples of these offerings include:

• Oxygen for oxyfuel combustion that reduces fuel consumption and GHG emissions; for de-bottlenecking catalytic cracking units and sulfur recovery units; for facilitating CO2 capture and sequestration; and for use in biomass combustion/gasification for renewable power and biofuels.

• Hydrogen for use as an emission-free transportation fuel; in the production of biofuels from renewable feedstocks; and to enable refiners to meet fuels emissions standards while increasing the amount of fuel that can be produced from oil.

• Nitrogen for unconventional natural gas production and increased demand for energy-integrated Liquefied Natural Gas (LNG).

• High purity process gases and cleaning agents and services that support the drive for renewable energy sources.

• Gases for high efficiency lighting and insulation of windows to reduce energy losses from buildings.

• Catalysts and surfactants for polyurethane foam that provides superior insulation.

• Curing agents for epoxy resins used in high strength-to-weight composites that enable weight reduction in transportation vehicles and wind turbines.

47

Helping oil recyclers improve their processesHydrotreatment is a growing trend in the used oil re-refining and transmix processing markets . With Group II base oil becoming the norm for re-refiners and limits on sulfur for transmix-derived diesel fuel, both areas are seeing an immediate need for polishing and sulfur reduction techniques . Air Products’ new Hydrogen Reactions Lab can be used to help customers optimize their existing hydrogenation and hydrotreatment processes by testing the impact of feed quality, catalysts, and additional operating parameters on product quality, throughput, and process economics .

Compliance MattersG4-EN29, G4-EN31Air Products strives to comply with all applicable regulatory requirements. However, issues can arise at our plants, such as emergency shutdowns due to loss of power, which cause compliance issues.

We track and internally report environmental compliance on a monthly basis. Incident reports, which are tracked in Event Management, are required on anything that can cause harm to the environment or anything that does not main-tain compliance with government regulations.

Environmental measures reported include:

• Notices of Violation (NOVs) – a deviation from a regulation or permit requirement that is formally cited by a government agency

• Key Performance Indicators (KPIs) – any emission or discharge that exceeds a regulatory or permit limit, the discovery of missing or expired permits, and NOVs

NOVs and KPIs declined in fiscal 2015 by 65% and 49%, respectively:

Fiscal Year NOVs KPIs

2015 13 33

2014 20 67

2013 22 64

In 2015, Air Products had seven reportable spills that involved the following materials: ammonia, bleach, diesel fuel and a refrigerant. All spills were promptly addressed and reported to governmental authorities.

Environmental fines declined in 2015, with fines in fiscal 2015 totaling $31,500:

Fiscal Year Environmental Fines

2015 $31,500

2014 $150,510

2013 $48,560

During fiscal 2015, Air Products spent $28.3 million for operating expenses directly attributable to environmental protec-tion activities. We spent another $4 million in 2015 for capital improvements in our facilities to control emissions and reduce waste.

48Air Products | 2016 Sustainability Report

Remediation We accrue environmental investigatory and remediation costs for identified sites when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The potential exposure for such costs is estimated to range from $80 million to a reasonably possible upper exposure of $93 million as of September 30, 2015. The consoli-dated balance sheets at September 30, 2015 and 2014 included an accrual of $80.6 and $86.2 million, respectively. The accrual for the environmental obligations includes amounts for Pace, Florida; Piedmont, South Carolina; and Pasadena, Texas locations which were a part of previously divested chemicals businesses.

Energy and Climate ChangeWe share society’s concerns about the impacts of climate change on our environment. And we’re focusing our develop-ment efforts on real solutions, bringing the breadth of our innovation, problem solving abilities, and proven gases and technology capabilities to bear.

After all, air and gases is “what we do.” We have a unique history and depth of experience as a leading gases, materials and technology solutions company, developing environmental and energy solutions for customers that have contrib-uted to cleaner air and energy efficiency improvements for decades.

We believe the global challenge of greenhouse gases (GHG) should be addressed through a diverse mix of solutions. With the increasing use of fossil fuels and the world’s continuing need for competitively-priced power, we believe that the gases and technologies we supply will continue to improve efficiency and reduce GHG emissions in a variety of our end-use markets. Our most significant contributions to address the global challenge of climate change will be in developing clean energy technologies with the potential to reduce emissions across the energy supply chain through a variety of emission reduction options.

From our leading position supplying hydrogen to refineries to make low-sulfur, cleaner burning fuels; to large-scale oxy-gen systems for solid fuel combustion and oil or clean coal gasification; to delivery systems to support a future hydro-gen economy, we continue to invest in research and development (R&D) to develop products and processes that contrib-ute to cleaner air and GHG mitigation. In 2015, half of our total R&D budget of $138.8 million was spent on products and processes that reduce GHGs and address other sustainability issues.

Meanwhile, as we grow our operations and help our customers do the same, we are committed to continually improving our own efficiency, acting on emission reduction opportunities, and improving our overall environmental performance.

Powering our PlantsG4-EN3, EN5-6Due to the nature of our operations, Air Products uses a significant amount of energy. Ultimately our energy consump-tion is driven by fulfilling our customers’ demands for our products.

In our ASUs, energy is used to compress air before it can be separated into nitrogen, oxygen and argon. Historically, electricity has been used for this purpose, however since 2014 we have seen an increase in the use of steam to drive the air compressors.

Another energy source, natural gas, is the primary raw material for hydrogen production via steam methane reforming (SMR). Natural gas is reacted with water in two “shift” reactions to form hydrogen, with carbon dioxide as a significant by-product. Hydrogen production via SMR is the most economic and efficient method for hydrogen production, and the main driver for Air Products’ Scope 1 GHG emissions.

49

Our direct energy consumption for 2015 was as follows:

Fuels MWh

Natural Gas and Refinery Off-gas combined 83,490,306

Electricity 20,473,475

Steam 9,321,606

Distillate fuel oil No 2 756,721

Motor gasoline 14,334

Jet kerosene 1,930

Petroleum coke 45

Bituminous coal 3

Against a calendar 2007 baseline, our 2015 intensity-based energy efficiency goals represented approximately 80 percent of our total global energy requirements. They include a seven percent reduction in energy consumption at our large ASUs per quantity of gas produced, and a seven percent reduction in fuel and feedstock consumption per quantity of HyCO plants.

In 2015, our ASUs exceeded their energy efficiency goal, realizing an 8% reduction in energy intensity in 2015 since 2007. Our HyCO units improved energy efficiency by 5.4%, which was slightly below the goal and due to physical plant limita-tions and low energy pricing.

1 .02

1 .00

0 .98

0 .96

0 .94

0 .92

0 .90

0 .882007 2008 2009 2010 2011 2012 2013 2014 2015

n ASU n HyCO

This success was realized through hundreds of projects aimed at improving energy efficiency and reducing emissions. These projects included the redesign, replacement and/or upgrade of equipment, changes to manufacturing processes, and facility improvements. Cumulative energy purchases avoided during the goal period totaled four million MWh, which corresponds to $630 million in energy cost avoided.

We have set new energy efficiency goals for our Industrial Gases business for 2020, including:

• Reduce ASU energy intensity by 2.5% by 2020 from 2015 baseline year

• Reduce HyCO energy intensity by 1.5% by 2020 from 2015 baseline year

The new targets may appear low relative to other companies in the chemicals sector. This is due in large part to the decades that Air Products has spent improving the energy efficiencies of its plants. The goals are in line with the targets of our Industrial Gas peers.

50Air Products | 2016 Sustainability Report

Driving ReductionsG4-EN30Air Products is focused on delivering productivity, energy efficiency, and helping our customers be more sustainable. Air Products operates a fleet of over 700 trucks in the U.S. that consumed over 7.5 million gallons of diesel fuel and traveled over 51 million miles in 2015. Through our efficiency programs, which include replacement of pre-emission engines, increasing the amount of product loaded in each trailer, and improving miles per gallon through driver behavioral programs such as reduced idling, we have significantly reduced our emissions of CO2, NOx and particulate matter (PM) per loaded mile since 2009.

These reductions enabled us to meet our fleet emissions goals, which in-cluded reducing NOx/particulate matter (PM) by 10% and CO2 by 2% by 2015 from a 2009 baseline. Actual reductions were 12% for CO2, 83% for NOx, and 97% for PM. This corresponds to cumulative emissions avoided of 43,000 tons CO2e, 2,000 tons NOx and 280 tons of PM.

To continue driving efficiency improvements, we have established a new distribution efficiency goal that will apply globally:

• Distribution Efficiency – Improve distribution efficiency and reduce CO2 emissions intensity by 10% by 2020 from 2015 baseline year

Driving Efficiency is in our DNA Using data and analytics, our Industrial Gases North America Fleet, Procurement and Business Improvement Teams worked with the IT Data and Analytics (DNA) Team to identify opportunities to improve fleet efficiency . Rigorous use of data and analytics allowed the team to quantify these opportunities, which included a new model to help determine the right size for our tractor and trailer fleet, reducing out-of-route miles, and better utilizing our large trailers . The results were $1 .2 million in reduced costs and $5 .5 million in avoided costs as of early 2016 .

Managing our GHG RisksG4-EC2Our Greenhouse Gas strategy is focused on managing the potential commercial risks of climate change and pursu-ing business growth opportunities. To that end, we are identifying opportunities to use our core technology and product strengths to bring cost-effective solutions to our customers to reduce their environmental impact while improving our ef-ficiencies to reduce emissions and other potential costs. This approach is reflected in our Climate Change Policy Statement.

51

Driving ReductionsG4-EN30Air Products is focused on delivering productivity, energy efficiency, and helping our customers be more sustainable. Air Products operates a fleet of over 700 trucks in the U.S. that consumed over 7.5 million gallons of diesel fuel and traveled over 51 million miles in 2015. Through our efficiency programs, which include replacement of pre-emission engines, increasing the amount of product loaded in each trailer, and improving miles per gallon through driver behavioral programs such as reduced idling, we have significantly reduced our emissions of CO2, NOx and particulate matter (PM) per loaded mile since 2009.

These reductions enabled us to meet our fleet emissions goals, which in-cluded reducing NOx/particulate matter (PM) by 10% and CO2 by 2% by 2015 from a 2009 baseline. Actual reductions were 12% for CO2, 83% for NOx, and 97% for PM. This corresponds to cumulative emissions avoided of 43,000 tons CO2e, 2,000 tons NOx and 280 tons of PM.

To continue driving efficiency improvements, we have established a new distribution efficiency goal that will apply globally:

• Distribution Efficiency – Improve distribution efficiency and reduce CO2 emissions intensity by 10% by 2020 from 2015 baseline year

Driving Efficiency is in our DNA Using data and analytics, our Industrial Gases North America Fleet, Procurement and Business Improvement Teams worked with the IT Data and Analytics (DNA) Team to identify opportunities to improve fleet efficiency . Rigorous use of data and analytics allowed the team to quantify these opportunities, which included a new model to help determine the right size for our tractor and trailer fleet, reducing out-of-route miles, and better utilizing our large trailers . The results were $1 .2 million in reduced costs and $5 .5 million in avoided costs as of early 2016 .

Managing our GHG RisksG4-EC2Our Greenhouse Gas strategy is focused on managing the potential commercial risks of climate change and pursu-ing business growth opportunities. To that end, we are identifying opportunities to use our core technology and product strengths to bring cost-effective solutions to our customers to reduce their environmental impact while improving our ef-ficiencies to reduce emissions and other potential costs. This approach is reflected in our Climate Change Policy Statement.

Climate Change Policy Statement Climate change, energy consumption and water use are inextricably linked . Looking ahead, the world’s population is expected to grow to over nine billion people by 2050, while their needs for energy, water and food will increase even faster . For these reasons, maximizing the efficient use of the earth’s resources while minimizing environmental impacts is vital .

Air Products’ long-standing strategy for responding to these challenges is straight forward . We enable our customers to reduce their environmental impact by providing cost-effective technologies and products that improve their energy and water efficiency and reduce emissions to the environment . At the same time, we strive to reduce energy and water consumption, as well as emissions, in our own operations through efficiency improvements and technological innovations . We are making real progress in these areas, as demonstrated by our environmental sustainability targets and related cost savings .

Air Products has evaluated the potential risks and opportunities of climate change and GHG legislation.

Our GHG Center of Excellence (COE) identifies and prioritizes climate change risks and opportunities based on potential financial and operating impacts, supports internal policy development, tracks regulations and legislation, and regularly updates management and the Board.

Risks are also prioritized through the global Enterprise Risk Management process. The most significant risks are identi-fied during the process, and mitigation measures are reviewed and modified as needed. Results of the assessments are shared with the Corporate Compliance and Risk Committee, and the Board.

We also conduct detailed country risk assessments that consider GHG/Climate Change (among other) risks for new ge-ographies for expansion. Once risks are identified, the business unit or function must create plans to mitigate the risks.

Through Business Continuity Plans (BCPs), we assess and plan for risk of business interruption due to natural disaster, supply chain disruptions, pandemics, etc. Each business must complete a Business Impact Analysis (BIA) and a Business Recovery Plan (BRP) on a regular basis.

Risks identified generally include those driven by changes in regulation, such as carbon taxes and Cap & Trade pro-grams, changes in physical climate parameters, such as increased weather events, and changes in other climate related developments. Any binding agreement that limits or taxes GHG emissions from Air Products’ facilities could impact our value chain and growth by increasing operating costs, both directly and through suppliers. We believe we will be able to mitigate some of these potential costs through contractual terms. Additional details can be found in our annual CDP Climate Change submission.

Air Products and the Paris Agreement In December 2015, representatives of 195 countries met in Paris and negotiated an international agreement to address climate change . The Paris Agreement requires emissions reduction commitments from developed and developing countries, and contains provisions to hold countries accountable to these commitments . In fact, all major economies committed to reduce greenhouse gas emissions by at least 25 percent by 2030 from a 2005 baseline .

At the same time, businesses, investors, states and others committed to emissions reductions and related actions that supported governmental plans and the Paris Agreement .

Our GHG COE is monitoring the adoption of the Paris Agreement and determining the potential impact of the commitments on our operations and products . On the heels

of achieving our 2015 environmental sustainability goals, we established new goals for improving energy

efficiency and reducing greenhouse gases for our Industrial Gases business through 2020 . Likewise we will continue to look for opportunities that enable our customers to reduce their environmental impacts by providing cost-effective technologies and products that improve their energy efficiency and reduce emissions to the environment . We will also work collaboratively with our customers to evaluate alternative products that meet their quality and performance needs while considering environmental impact .

52Air Products | 2016 Sustainability Report

GHG Emissions MethodologyWe use the WRI/WBCSD Greenhouse Gas Protocol standard to define organizational boundaries, operational bound-aries, emission calculation methodologies (general and specific), sector-specific calculation protocols, and inventory quality aspects to ensure an accurate and representative inventory. Scope 2 emissions are calculated using the location-based method. An Inventory Management Plan, developed under the U.S. EPA Climate Leaders program, defines the work processes employed in managing our data, documents refinements to the emission estimation methodology, and guides any restatements of historical values based on objective criteria. The Inventory Management Plan and support-ing work process reference documents cover our Scope 1, Scope 2 and Scope 3 reporting activities.

The calculations and data are subjected to several levels of quality assurance to ensure completeness and accuracy of the resulting emissions inventory. The entire inventory process is documented and subsequently summarized in the “Annual GHG Inventory Summary and Goal Tracking Form,” originally developed by the U.S. EPA Climate Leaders Pro-gram. The Inventory Management Plan, the Annual GHG Inventory Summary and Goal Tracking Form emissions report, and all the underlying calculations and data compilations are then reviewed by an independent, third-party assurance firm, providing a further level of quality assurance.

WSP Environment & Energy (WSP) conducted a limited assurance review of our 2015 Scope 1, Scope 2 and Scope 3 green-house gas inventory in accordance with ISO 14064-3. WSP issued an Assurance Statement, attesting to Air Products’ adher-ence to the Greenhouse Gas Protocol and the absence of any material inaccuracy in the representation of the inventory data.

Understanding Our GHG Footprint G4-EN15-19For calendar 2015:Direct emissions (Scope 1) of 15.4 million metric tonnes were down 3% vs. prior year. This was due in large part to out-ages at several facilities.

Indirect emissions (Scope 2) of 14.8 million metric tonnes were up 28% vs. prior year. The significant increase was due to the start-up of new facilities as well as production increases at facilities that opened in 2014. Several of these new facili-ties use customer-supplied steam in lieu of electricity for air compression prior to cryogenic distillation. In addition, the facilities are primarily located in Asia, where coal is the predominant source of energy for making steam. As a result, indirect greenhouse gas emissions for these plants are a significant portion of the company's indirect emissions. Air Products has limited ability to control these emissions as the energy source is selected and provided by its customers.

We have met our 2015 goal to reduce greenhouse gas emissions by 7% indexed to production from a 2007 baseline through significant reductions in emissions from our Electronic Specialty Materials facilities and plant efficiency im-provements, particularly at our HyCO facilities.

2007 2008 2009 2010 2011 2012 2013 2014 2015

Indexed Performance 1 .0 0 .983 0 .930 0 .944 0 .894 0 .861 0 .877 0 .856 0 .860

The performance index increased slightly in 2015 due in large part to the steam-driven ASUs in Asia. Excluding the emissions and production from these facilities, Air Products' indirect greenhouse gas emissions intensity declined.

We have set a new goal for Industrial Gases that is tied to our energy efficiency goals:

• Reduce GHG emissions intensity by 2% by 2020 from 2015 baseline year

In 2015 we continued reporting Scope 3 emissions, covering 11 of the 15 Scope 3 categories. Most emissions were based on analyses completed with the life cycle assessment tool, SimaPro. Details about our Scope 3 emissions are available in our 2016 CDP Climate Change response.

53

More product, lower emissions In 2015, an Air Products facility was recognized as a Chairman's EHS award winner for reducing CO2 emissions . Through a number of operational changes the facility was able to reduce emissions by 58% . This not only provided more product for our customers, it also reduced greenhouse gas emissions by over 200,000 metric tonnes .

Ozone Depleting SubstancesG4-EN20Air Products does not manufacture or sell pure chlorofluorocarbons (CFCs) or methyl bromide. We also do not manufac-ture hydrochlorofluorocarbons (HCFCs). We do sell different gas mixtures that contain small quantities of HCFCs and CFCs in cylinders for calibration of detection instruments, as allowed under the Montreal Protocol. In eight European countries, we are a refrigerant distributor but also recover, recycle and reclaim for destruction. We have phased out the use of CFCs in plant refrigeration systems at our facilities, while eliminating the use of HCFCs completely in Europe and at other plants when refrigerant systems are replaced.

NOx and SOxG4-EN21NOx emissions were up over 10% in 2015 because of a new, large HyCO facility reporting for the first time and produc-tion changes at existing facilities.

Estimated emissions of SOx were down slightly from the prior year, due primarily to improved accuracy of emissions estimates.

2015 2014 2013

NOx Emissions (MT) 1,630 1,470 1,460

SOx Emissions (MT) 76 100 106

Toxic Release Inventory (TRI) and VOCsG4-EN21Toxic releases in the U.S. decreased by 6% in 2015 and remained below our target of less than one million pounds. Air emissions and hazardous air pollutants (HAPs) continued to decrease due to improved leak detection and repair systems put in place in 2014. Methodology changes also contributed to the decline in estimated air emissions, as well as the increase in releases to land. Releases to water increased in 2015 due to operational changes at a water treatment system at one of our facilities.

TRI Releases* (millions of pounds)

2015 2014 2013Air 0 .26 0 .39 0 .5

HAPs* 0 .15 0 .21 0 .25

Water 0 .27 0 .22 0 .05

Land 0 .35 0 .32 0 .27

Total 0 .88 0 .93 0 .82*Hazardous Air Pollutants as defined by the EPA; subset of total releases to air

VOC releases in the U.S. decreased by 12% in 2015 due to methodology changes.

2015 2014 2013Total (millions of pounds) 0 .28 0 .32 0 .35

54Air Products | 2016 Sustainability Report

Water StewardshipG4-EN8For our Industrial Gases businesses, the majority of our water consumption results from two uses – cooling the air compressors that are used in ASUs and completing the water shift reactions for production of hydrogen via SMRs. In our materials businesses, water is used for many purposes, including cleaning, cooling and product formulation.

For 2015, our global water withdrawal was 42.8 billion gallons, which was slightly lower than the amount withdrawn in 2014.

Water Withdrawal by Source Million Gallons 1,000 m3

Surface 1,300 4,900

Groundwater 1,500 5,600

Municipal Supply 40,100 152,000

Over the same period, water consumption—including water pumped, piped or otherwise brought on-site for use in manufacturing and related activities but not including the netting-out of water discharges returned to their sources—was 15.9 billion gallons.

Gross Water Consumption (billions of gallons)

CY2015 CY2014 CY2013

U .S . Only 10 .0 10 .1 9 .9

Balance of the Americas (Canada, South America)

1 .6 1 .3 1 .0

Europe 1 .9 2 .1 2 .0

Asia 2 .4 2 .3 2 .3

Global 15 .9 15 .8 15 .2

In 2015, total water consumption increased slightly due primarily to the start-up of new plants, production increases for plants that started-up in 2014, and improved reporting at several facilities that reported for the first time. On an inten-sity basis, water consumption decreased by 1%.

We have exceeded our goal of reducing water consumption 10% on an intensity basis in the controllable portion of our usage off our 2009 baseline, realizing a 23% reduction from 2009 to 2015. These efforts correspond to nearly $70 million in cumulative costs avoided and over 22 billion gallons of water conserved.

We have set a new goal for water consumption for our Industrial Gases business that is tied to our energy efficiency goals:

• Reduce water consumption intensity by 5% by 2020 from 2015 baseline year

55

Recycled/Reclaimed WaterG4-EN10One of the ways we strive to reduce potable water consumption is through the use of “gray” water. This is water that has been used for another purpose and treated by Air Products prior to use in our facilities.

During calendar 2015, Air Products used over 160 million gallons of gray water at facilities in the U.S., helping make more potable water available to cities in drought-stricken California.

Saving Water in California Large quantities of purified water are a critical component of the hydrogen manufacturing process . In an effort to reduce Air Products’ water requirements in the drought stricken state of California, our Wilmington team identified ways to conserve . Through consultation with our third-party water provider, an opportunity was presented to purify and recycle an existing waste stream . The recovered water is returned to the inlet of the existing water treatment skid, significantly reducing our potable water and sewer requirements . The overall project resulted in 215,000 gallons per day less total wastewater being sent to sewer and a reduction of the incoming potable water by an equivalent amount, equating to more than 75 million gallons of water saved per year .

Water DischargeG4-EN22Globally, Air Products discharged approximately 25.8 billion gallons of water in 2015, primarily to treatment facilities and the original water sources. As in prior years, the direct water discharges from the majority of our industrial gases operations were predominantly cooling tower blowdown streams with low chemical oxygen demand (COD) impact.

Water Discharges Million gallons 1000m3

Discharged to treatment facilities 24,400 92,437

Discharged directly to surface water 1,400 5,162

Discharged directly to groundwater 3 11

COD releases totaled four tons for 2015. Our chemical facilities and HyCO operations typically generate higher COD wastewater streams; however, these are transferred to nearby regulated facilities where COD is effectively treated prior to the water being discharged to the environment. COD transferred off-site for treatment totaled 674 tons in 2015.

Water Sources Significantly AffectedG4-EN9Water we use at our operating sites does not significantly affect any ecosystems, habitats or water sources. We continue to evaluate our water sources using the World Business Council on Sustainable Development’s water tool and as part of our participation in CDP’s annual water survey. Air Products has no known water discharges from operations with significant impacts on water bodies.

56Air Products | 2016 Sustainability Report

Managing WasteG4-EN23-24Based on internal record keeping, external reporting to agencies, and verification documents from approved waste disposal vendors, the weight of hazardous waste from operations globally was 28.1 million pounds during calendar 2015. This increase was due primarily to an increase in waste at our Telde, Spain facility. At this facility, a project was initiated to take off-gas from a neighboring facility, purify it and produce CO2. This had a positive impact on reducing CO2 emissions. At the same time, it resulted in the generation of hazardous waste due to the flue gas clean-up. We are re-evaluating the characteristics of this waste.

Hazardous Waste Disposal (million pounds) CY 2015 CY 2014 CY 2013

Landfill 10 .1 8 .8 4 .4

Incineration 6 .9 6 .4 6 .9

Recycling 8 .2 6 .7 7 .3

Treatment/Disposal 2 .3 3 .1 7 .6

Total 28.1 25.0 26.2

With respect to non-hazardous waste, Air Products has a relatively complete dataset for North America that is sup-ported by our national waste vendors. Air Products is continuing to analyze and assess information that is available for non-hazardous waste on a global scale.

North America Non-Hazardous Waste Disposal (million pounds)

2015 2014 2013 2012

9 .3 10 .2 13 .2 11 .5

At our corporate headquarters, we reached a recycling rate of 59% during 2015 that included:

• Recycling 20 tons of cans, bottles and glass

• Recycling 113 tons of cardboard

• Recycling 28 tons of paper

• Composting three tons of food waste

Saving steel and plastic In 2015, we continued our container recycling program at our U .S . Performance Materials facilities using EarthMinded® Life Cycle Services, a network of industrial drum and IBC reconditioners . We collected over 14,000 containers for recycling and reuse, including over 8,000 steel drums, 2,800 plastic containers and 3,400 IBCs . Eighty-two percent of the containers were reusable, enabling the reuse and recycle of over 540,000 pounds of steel and 286,000 pounds of plastic .

57

Care

Our Management Approach to SocietySafely and responsibly caring for each other, our communities and the global environment is a core value at Air Prod-ucts. We have a strong history of serving in the hundreds of communities where we operate throughout the world.

We believe healthy and vibrant communities are key to building a successful and growing business, and to our ability to attract, retain and develop talented employees. This belief shapes our community engagement and development efforts. The most senior position with responsibility for Society aspects is the Senior Vice President, General Counsel and Chief Administrative Officer.

We are committed to:

• Operate by the highest standards of integrity and ethi-cal behavior as the environment in which we do busi-ness continues to change

• Be a leader in the areas of the environment, health and safety and comply with or exceed laws and regulations

• Design and operate our plants and facilities to protect the environment and the health and safety of our work-force and the public

• Develop and produce products that can be manufactured, distributed, used, and recycled or disposed of in a safe, secure and sustainable manner

• Be an employer of choice, known as much for the way we value our employees, as for the quality of our prod-ucts, or our earnings

• Be a part of our communities through time, talent, resource and financial contributions

Safety FirstOf the Sustainability priorities identified under “Care,” safety rises to the top. We take a comprehensive approach to safety as described in “Safety: Our Top Priority,” which includes a detailed review of worker safety policies, pro-grams, goals and performance. Additional focus areas for safety include Process Safety, Transportation Safety and Product Safety.

Process SafetyProcess safety has been a key component of our Environmental, Health & Safety (EH&S) Program since the 1970s, and we have evolved into an industry leader in this area.

We believe we have a commitment to ensure:

• Our processes and products are designed to minimize risks from potential process safety incidents

• Our operating facilities and delivery of our products to customers are conducted in a safe and responsible manner

58Air Products | 2016 Sustainability Report

Transportation SafetyWith a global fleet that travels millions of miles each year, we’re focused on making sure our drivers get to their destina-tions – and back home – safely. A key measure of our transportation safety is preventable Vehicle Accident Frequency Rate (VAFR). Accidents are reported and tracked in Event Management, and communicated across the organization.

VAFR for the past three years are provided below:

Fiscal Year VAFR

2015 0 .80

2014 0 .87

2013 0 .92

VAFR has improved for a number of reasons, including new programs to encourage driver performance and behavior through in-cab monitoring.

When it’s time for some of our higher-hazard materials to leave a manufacturing facility, we use our Transportation Risk Assessment (TRA) process to evaluate potential transit risks. This analysis includes a Process Safety review, evaluating package specifications and sizes, shipment frequency, route, carriers, emergency response capability, and elements of safety in the supply chain.

Product SafetyDisclosure on Management Approach, G4-PR1, 3, 4We are committed to the safe use of our products and ensuring they can be appropriately handled by our customers. The key to product safety is identifying and managing potential risks, which we do through our Product Risk Review process. We then communicate through Safety Data Sheets, labels, Safetygrams and other means. In addition, we have established a list of chemicals of concern that enable our product security commitments, which include customer verification and transportation tracking.

We aim for a cradle-to-grave life cycle management approach, incorporating EH&S protection into every step of the life cycle of our products. We have conducted life cycle assessments of our products and processes to identify the environmen-tal benefits of our offerings, as well as areas for possible improvement. And before a product can go to market, we put it through an Offering Development and Introduction (ODI) process, which looks at EH&S considerations at each stage of product development, from concept through commercialization.

We provide clear and easy to understand directions on the safe use and handling of our products, all of which comply with our own requirements and governmental regulations for hazard communication information, specifically data sheets and labels. We have completed the implementation of the Globally Harmonized System (GHS) to define, classify and consistent-ly communicate chemical hazards and safety information. We have converted many of our products to the GHS scheme in China, the EU, Singapore, Brazil, Korea, Japan and Taiwan, and the U.S.

Labels are not enough; education is key to product safety performance. For many years, we have offered product and equip-ment training to our customers and published Safetygrams on the safe use and handling of our products, related equip-ment and services.

In 2015, we paid two fines totaling $1,500 related to the transportation of our products. We are not aware of any fines in fis-cal 2015 resulting from the use of our products.

REACH (Registration, Evaluation and Authorization of Chemicals), the EU chemicals legislation in force since 2007, requires the registration of substances manufactured or imported in the EU above a certain volume. Since 2010, Air Products has reg-istered more than 70 substances under REACH. For many of the most recent registrations, we acted as the lead registrant, developing the registration dossiers and managing the overall registration process for those substances.

59

We worked with a number of external stakeholders – regulatory authorities, customers, suppliers and co-registrants – to complete these registrations. Led by Product Safety, compliance required the assistance of employees from many internal functions, including Supply Chain, Operations, Controllership, Accounts Payable, Purchasing, Customer Service, Commu-nications, and Legal. Work is in progress to meet the next and final registration deadline (May 2018). We also put measure-ments and processes in place to maintain compliance beyond the 2018 deadline.

Improving Acetylene Handling Many industrial incidents have been reported regarding the safe use of acetylene cylinders and equipment . Unfortunately some of them have caused very serious injuries .

For many years, Air Products has run an applications specialists team of welding and cutting experts who provide knowledge and training to users of acetylene (and other gases) . The expert team recognized the need to bring acetylene users on a journey to improved safety, explaining how to make best use of the equipment and skills of the users . To reach a wider audience quickly, they developed a micro-website, including a video, which is dedicated to acetylene safety . The site has nearly 9,000 users and the video has had over 1,500 'hits' on YouTube .

SecurityG4-PR8The security and safety of our employees and the communities in which we operate have always been a priority. In support of these efforts, and as part of Air Products’ Security Plan, we regularly communicate about the importance of security and expectations for employees when it comes to security matters.

Our formal security policies and standards address employee and facility security, product security, pipeline and land transportation security, Security Vulnerability Assessments (SVAs), workplace violence, and security services for which we contract, among other areas.

Our Security Approach includes: Security Personnel: Air Products employs security personnel globally, including a cyber investigation team, with much of our security staff having prior security, audit and law enforcement backgrounds . All third-party contracted security personnel are properly vetted to ensure professional services are provided around the globe .

Security Vulnerability Assessments (SVAs): Air Products has a regimented, global SVA program in place supported by trained personnel and global policies and standards . The SVA process systematically assesses the risks at each facility and determines security measures needed to ensure risks are properly mitigated .

Chemical Facility Anti-terrorism Standard (CFATS): Our security and process safety teams are actively engaged in the CFATS effort . We have completed the “Top Screens,” SVAs and Site Security Plans (SSPs) per the regulation and have implemented changes as necessary .

U.S. Customs Trade Partnership Against Terrorism (C-TPAT) Programs: Air Products is a certified and validated C-TPAT member, and we remain committed to the program . We consistently look to maintain the highest level of security and integrity across our supply chains .

Global Security Incident Reporting System: We have implemented a global incident reporting system to respond to suspicious behavior and other security-related activity . All incidents are recorded and investigated by appropriate internal resources, and when appropriate, are reported and investigated by external law enforcement agencies, including the regional Joint Terrorism Task Forces in the U .S .

Employee Travel Security Program: We use a web-based tracking tool to identify, locate and communicate with employees traveling anywhere in the world .

60Air Products | 2016 Sustainability Report

At Air Products we believe it is our responsibility to safeguard the personal information of our employees and all other individuals with whom we deal, including customers. We have established a Global Data Privacy policy to ensure that personal information is handled and stored in a secure manner. We also adhere to any additional data protection re-quirements in the countries in which we operate.

We have had no substantiated complaints regarding breaches of customer privacy and losses of customer data.

Global Health and WellnessWe provide a variety of educational, training, counseling and prevention resources to maintain and improve the mental and physical health of our global workforce.

Global Health and Wellness:

• Works closely with our EH&S organization to ensure global standards comply with governmental regulations on topics including handling of blood-borne pathogens, medical records management, emergency response, fire brigade and confined space entry rescue, among others.

• Provides wellness assessments and health coaching for employees in the U.S. and Canada, including a program for more than 800 professional Air Products drivers.

• Provides a program of travel medicine—including formal standards and policies for medical evaluations, training, administration of medications and/or immu-nizations, country-specific information and educational materials and more—to help employees and family members traveling internationally or working abroad.

• Collaborates with our Global Security and Corporate Travel organizations to ensure employees have the most current information they need to travel safely, including a dedicated Intranet portal for relevant information.

• Coordinates the Global Corporate Challenge (GCC) wellness program which evaluates the change and impact on both employees, and ultimately business performance metrics. The program provides increased awareness through education and motivation, while teaching employees to master long-term, sustainable habits that allow them to arrive at work feeling more engaged, productive and equipped for peak performance.

• Conducts global Influenza Awareness campaigns, pro-viding flu vaccines at employee work sites to promote seasonal influenza vaccinations. This has resulted in vaccination rates higher than national averages at many Air Products’ locations for the past several years.

• Collaborates with the Crisis Management Team in dealing with a health crisis event, such as a pandemic. Provides the Health Crisis Event Procedure at inception of a health crisis event, and engages in the decision to activate the Crisis Management System.

• Works collaboratively with employees, Human Resourc-es and management to determine reasonable accom-modations for employees living with a disability so that they can work safely and productively.

61

Labor Practices and Talent Management Disclosure on Management ApproachBeyond Policies: Programs to Turn our Commitments into Actions

Career and personal development of employees is a vital part of our business strategy. Air Products has a glob-ally consistent learning and development strategy to develop the talent we need and provide long-term career development for our people. This is deployed through a global learning management system and our Human Resources organization. We go beyond traditional train-ing to capture informal learning, best practices and the exchange of knowledge and experience with a variety of programs, including:

• On-the-job Development: We believe the very best development happens on-the-job, when employees are given meaningful, challenging work and provided with constructive feedback and coaching. In 2015, we designed a new global approach to Performance Development based on leading market trends that provides a simple framework to help raise the performance bar for individuals and company.

• Training and Development: While we believe in the power of on-the-job development, we also believe that more formal training and development also plays an important role in preparing our employees to do their best work. On average, employees completed about 30 hours of training per year in 2015. Our Training and Development offerings are wide-ranging and include:

– Air Products University: Learning programs through the Air Products University which has colleges in each of the major business and/or functional areas. By way of example, in the People College there are many learning offer-ings such as Influencer, Situational Leadership, etc. In the Environment Health and Safety College, safety training is delivered to all employees, and in the Engineering College, technical training is provided. Our University today hosts over 5,000 courses.

– Career Development Program: The Career Development Program (CDP) is a strategic investment in the future of Air Products. CDP participants develop their skills and interests through a rotation of three different assignments during the first two to three years of employment. As a CDP, employees along with their mentor, explore oppor-tunities while in the program and ultimately determine a career path. For over 50 years, the CDP has provided Air Products top college graduates capable of becoming tomorrow's leaders.

– Leadership Development: We offer two comprehensive programs to enable leaders to grow their ability to devel-op, lead and inspire people:

> Management Fundamentals: a comprehensive, global learning solution for new managers and supervisors to provide tools and knowledge they need to make a successful transition to a management role.

> Experienced Managers: Prepares our leaders to work across cultural boundaries and manage multiple opera-tions in different countries.

– Soft-Skills Development: Employees have the opportunity to participate in workshops and training programs designed to enhance their professional effectiveness, including courses in effective communications and conflict resolution, influencing others, and managing change.

– Tuition Reimbursement: We support continuing education through providing support for our employees to com-plete or continue their education at an accredited college or university. In 2015, in the U.S., over 100 employees were actively pursuing associate’s, bachelor’s and master’s degrees through the program. Over half were pursuing MBAs.

– Employee Career Portal (CareerWorks): To support career development and planning, our CareerWorks portal provides employees and managers with a robust, self-service platform of career development guidance and re-sources available in six languages.

62Air Products | 2016 Sustainability Report

The Foundation: Supporting Respectful, Fair and Equitable TreatmentOur commitment to a respectful workplace is embodied in our Employee Code of Conduct, Human Rights, Equal Employment, and Diversity and Inclusion Policies.

• Our Code of Conduct for Air Products and its compa-nies reflects the most common business ethics chal-lenges and risks employees may face. Every individual is required to certify their understanding and complete mandatory training as a condition of employment.

• Our global Human Rights Policy, which was developed in alignment with the United Nations Global Compact, clearly states our commitment to fostering an environ-ment where human rights are respected and people are treated with decency and dignity in our operations and practices worldwide. The policy articulates our position relative to diversity, equal opportunity, harassment,

child labor, forced labor, freedom of engagement, em-ployee relations, compensation, employee security, and health and safety. We abide by all local laws, and often our internal standards are more stringent than govern-mental requirement

• Our commitment to the fair and equitable treatment of people is reflected in our global Equal Employment Policy, and Diversity and Inclusion Policies. These state that all activities related to recruiting, hiring, training, compensation, benefits, promotions, transfers, layoffs, company-sponsored programs and all treatment at work shall be free of unlawful or unjust discriminatory practices.

Promoting Diversity and Inclusion With a global workforce located in 50 countries, diversity and inclusion is a valued and essential part of the culture of Air Products. The unique perspectives and experiences our employees bring to their work are essential to meeting our customers’ needs and bringing innovation to the wide range of markets we serve. That is why we value diversity and foster a collaborative and respectful work environment where everyone can achieve their true potential. Air Products is committed to enhancing the diversity of its workforce and the inclusiveness of its culture. With this in mind, the com-pany‘s global Diversity & Inclusion strategy is based on the following foundational pillars:

Diversifying our talent pipeline

• Increasing female representation in leadership roles

• Increasing minority representation in the U.S. talent pipeline

• Accelerating the development of local leaders in emerging geographies

• Tapping underutilized talent pools (i.e., U.S. veterans and people with disabilities)

• Embedding Inclusive Leadership Practices

• Increasing Employee Engagement through Inclusive-ness everyone can achieve their true potential

In 2015, initiatives championed by the company to enhance diversity included: Diversity and Inclusion training; wom-en’s leadership events including a global Women’s Leadership Development program; enhanced peer-based recognition programs; mentoring and networking initiatives; and building/enhancing relationships with external diversity organi-zations to increase access to diverse talent.

In 2015, following significant company reorganization, we emphasized the use of inclusion to help engage employees and build high performance teams. Managers and Human Resources were provided with four Inclusive Leadership tool-kits to engage their teams in discussions and action planning around four topics: Respect; Feedback and Engagement; Managing Assumptions; and Avoiding Bias in Decision Making.

63

Most recently, the strategic focus has been on addressing unconscious bias through leadership training. Our approach has been to embed this training directly into our Talent Management processes related to high potential identification, recruiting and leadership development.

The company sponsors seven Employee Resource Groups (ERGs) that offer programs to support professional and person-al development, and foster an inclusive environment. Our ERGs plan and deliver educational and development focused events. The ERGs are Women, Hispanics, Black/African Americans, LGBT, Asians, Ethnically Diverse Gulf Coast Employ-ees, and Employees with Disabilities.

Learn more abut our Di&I commitment on our Web site.

Women’s Development Program At Air Products, we are committed to enhancing the diversity of our workforce and inclusiveness of its culture . In 2015, the company piloted a global Women’s Development Program, providing 70 high performing women in our organization the opportunity to develop their leadership skills and increase their exposure to senior management . Led by senior male and female leaders, the program leveraged materials from the Lean In organization and was held in Asia, Europe and the Americas . Nearly 90% of participants said they learned a new skill or behavior during the program, and a large number of participants have had a significant development opportunity since the conclusion of the program .

Workforce DemographicsG4-10-11, 13, LA1, LA4In 2015, Air Products undertook the largest organizational restructuring in company history, creating more than 40 profit centers with individual incentive plans, and the empowered, decentralized structure that we have today. While these changes were necessary to create the financial strength required for future growth, it resulted in the elimination of a significant number of jobs, particularly as layers of management and the global structure on top of the local structure were eliminated to increase speed and simplicity. This was one of the driving factors in the increase in employee attrition from 11% in 2014 to 15.9% in 2015.

As part of the restructuring, the Company consulted with Works Councils, Unions, employee groups and where necessary, employees directly in compliance with local labor laws. Separated employees were provided with severance and benefits in accordance with company policies and applicable laws. Many employees received outplacement support.

At the end of 2015, Air Products had a global workforce of approximately 19,700 employees, of whom approximately 19,400 were full-time employees and 12,500 were located outside of the United States.

Fiscal 2015 Fiscal 2014 Fiscal 2013

The Americas 50% 50% 45%

Europe/ROW 24% 23% 25%

Asia 26% 27% 30%

Total 19,700 21,200 21,600

64Air Products | 2016 Sustainability Report

Approximately 19% of Air Products’ workforce is represented by officially designated third-parties or designated/elected employee representatives. Underscored in our Code of Conduct and Human Rights Policy, Air Products respects employ-ees' voluntary freedom of association and right to collective bargaining.

Globally in 2015, Air Products’ total workforce was 77% male and 23% female. To better understand the impact of our focus on enhancing our gender diversity, it is important to break this number down further. Our emphasis on closing gaps in female representation in leadership has resulted in greater female diversity in our professional and leadership pipelines:

Diversity of our Career Development Program (new college hires)

• Air Products’ new hires into its Global Career Development Program, which consists largely of engineering graduates, were 67% male and 33% female, helping the company build an increasingly diverse talent pipeline.

Diversity of our Professional Talent Pipeline (excl. roles such as production, maintenance & drivers)

• 30% of our professional talent pipeline is female.

Diversity of our Management and Mid-Level Professional Pipeline

• 23% of our management and mid-level professional pipeline is female, representing an 18% increase over the past 10 years.

Diversity of our Senior Leadership

• 18% of our senior leadership pipeline is female, representing a 4% increase over the past 10 years.

Because of the importance of diversity, we have established a new goal for 2020 to build the mot diverse and inclusive workforce in the Industrial Gas industry.

Veterans Enhance Our Talent PoolHiring veterans is part of Air Products commitment to equal employment and diversity & inclusion and something we’ve acted on for more than 40 years . Skills obtained during military service—leadership, focus on procedure, unwavering dedication to safety—can be directly transferred to many of our career opportunities and help us serve our customers and meet our profitability and safety goals .

In 2015, the company joined Veteran Jobs Mission so we could contribute to the coalition’s goal by reporting our veteran hires and gain access to best practice regarding transitioning, training, and retaining veterans . Internally, we also measure our total veteran employee population . CivilianJobs .com awarded Air Products with Most Valuable Employer for Military® in 2014 and 2015 . We are also proud to be among more than 80 companies to partner with Hirepurpose, a veteran-developed company committed to addressing gaps that exist in the transition from military service to civilian career success . We take additional, proactive steps to be viewed as a military-friendly employer . For example, we indicate applicable military experience in the qualifications and requirements section of our job postings to help veterans determine if an open position is amenable . We also engage in direct outreach to bases in proximity to our plant locations, attending job fairs and transition meetings . Veteran hires during calendar year 2015 represent 14 percent of total hires for the year . These men and women represent all five U .S . armed service branches with ranks at discharge ranging from seaman apprentice to captain .

65

Providing Employee Benefits G4-LA2We want to attract talented employees. And once they’re here, we want to keep them motivated and engaged.

Our total rewards approach includes:

• Market-based pay and merit-based incentives

• Stock options and purchase plans

• Savings plan match and profit sharing plans

• Medical and dental insurance

• Flexible spending accounts for healthcare and childcare

• Healthcare insurance for same-sex domestic partners

• Paid vacation, holidays and sick days

• Life, accident, short-term and long-term disability insurance for eligible employees

• Retirement healthcare benefits and plans

Education and Training G4-LA9, LA10Air Products has a globally consistent learning and development strategy to develop the talent we need and provide long-term career development for our people. This is deployed through a global learning management system and our Human Resources organization. We provide a significant amount of Web-based course offerings with development tracks to ensure our employees are trained to comply with safety, job requirements, innovate new customer solutions, and grow professionally. Employee roles and responsibilities, as well as current and future business needs, determine training and learning requirements and opportunities. All training, education, and knowledge sharing throughout Air Products are provided in a nondiscriminatory fashion. In addition to formal training and education, we also measure the time invested in learning through other events, such as hands-on training, teaching communities, action teams and knowledge transfer processes, which are available to all employees. On average, Air Products employees completed 30 hours of training in 2015.

When it’s time for our colleagues to retire, we not only honor their knowledge and contributions, we give back by providing a number of services that help them transition to and remain active in their retirement. Our Knowledge Retention and Transfer process uses a variety of tools to help retiring employees impart their knowledge. As colleagues approach retirement, we offer services and planning seminars on topics such as “financial readiness” and “the transition to non-working life.” Our Credit Union, in the U.S., also provides contracted services for retirement financial planning.

Some of our retirees return to work on a part-time basis through our Supplemental Employment Program, enabling them to work up to 1,000 hours within a fiscal year and collect a salary comparable to what they earned prior to retire-ment (assuming the work is comparable).

Air Products’ network of more than 1,500 retirees across the U.S. is an active part of our extended community. Mem-bers of Air Products’ Retirees Association, AIRPro, stay connected through a variety of means and have the opportunity to continue working in local communities through the Air Products (Retiree) Volunteers (APV) organization, which matches retiree volunteers with specific needs in their local communities.

Performance and Remuneration G4-LA11Performance Development and Competencies

Our ability to be an industry leader requires everyone performing at their best everyday. During 2015, we introduced a new, contemporary approach to maximize individual performance and help our employees reach our full potential.

Performance Development reflects our focus on development and on making feedback and coaching a regular and rou-tine part of how we work. Research shows that 70 percent of employee development happens on-the-job, as we learn from our experience.

66Air Products | 2016 Sustainability Report

Through the process, employees and managers capture priority objectives, development goals and annual results. With the intentional focus on regular feedback, recognition and coaching, managers and employees have several conversa-tions throughout the year (quarterly at a minimum) ranging from quick in-the-moment feedback conversations to one-on-one meetings to review progress on key priorities and receive coaching.

We have also introduced a new competency model, which defines how we accomplish our strategy and strive for a cul-ture of safety, speed, simplicity, and self-confidence.

The competency model consists of:

• Nine core competencies, which everyone shares, regardless of their role

• Three leadership competencies apply to those who contribute through others, either leading people, projects, or organizations

To support development, each competency has a simple set of performance indicators that describe what fully master-ing the competencies looks like.

Remuneration

Air Products has competitive pay practices and programs to attract, retain and develop our world-class workforce. Our human resources processes ensure external competitiveness and internal equity, with a pay for performance approach that is aligned with our vision, values and business strategies. Air Products has established competitive pay levels that are based on job descriptions and independent of gender, age, ethnicity, or other characteristics, so there is consistency in the pay range for employees performing the same job function.

Customer Sustainability G4-PR5Customers come to Air Products for innovative thinking and solutions to their most pressing business challenges. It’s our commitment to quality, safety, fairness, mutual respect and integrity that keep them coming back.

Key sustainability concerns of our customers vary by business, but typically focus on how our products can help them improve energy efficiency and reduce environmental impact. Several of these offerings are noted in this report under section G4-EC1 and on our website.

In 2015, customers avoided 11 million metric tonnes of CO2e emissions due to the use of our Sustainable Offerings. And one of our 2020 sustainability goals is to continue enabling our customers to reduce their CO2 emissions.

The people closest to our customers manage the relationships. Each of our divisions solicits regular feedback (at least annually) and manages customer satisfaction independently.

These efforts and our products keep customers coming back – in 2015, over 97% of our sales revenue was from recurring customers.

Our marketing organizations and regional marketing managers promote, protect and enhance the value of our brand. We regularly benchmark respected external organizations for best practices and follow consistent guidelines for global promotional materials to ensure clarity and consistency of our message and identity standards.

We had no instances of noncompliance, sanctions, warnings or fines regarding regulations for marketing communica-tions during 2015.

67

For example, during 2015:

• Our merchant gases areas employed customer satisfaction programs based on surveys, feedback, and tracking/analysis of customer complaints.

• Our large on-site businesses employed contracts that result in long-term relations and high levels of customer retention.

• Electronic Materials used customer report cards, which included quality, service, innovation/technology, and assurance of supply. Electronic Materials also measured customer justified complaints with a goal of reducing complaints by 10% year-on-year while having all complaints resolved in 30 days or less.

• Performance Materials tracked customer complaints as a percent of sales orders. Data is tracked and reported by region and business unit on a monthly basis.

Estimating Avoided EmissionsFor several years, Air Products has quantified potential emissions avoided by its customers through its Sustainable Offerings, and reported many of these offsets through the CDP (formerly Carbon Disclosure Project) Climate Change questionnaires .

Most recently, Air Products has estimated the potential CO2 emissions avoided for 19 industrial gas products and applications . This process included:

• Identifying the Sustainable Offering

• Determining the base case against which the offering would be compared, for example, the energy leakage from windows using argon and krypton for insulation was compared to energy leakage of windows with air insulation

• Developing product- and application-specific calculations, based on standard protocols and emissions factors (where available), to estimate potential emissions avoided

• Applying sales data to these calculations to estimate the potential emissions avoided on a product/application basis

Air Products estimates that the potential emissions avoided by industrial gas customers for these products and applications, excluding hydrogen for cleaner burning fuels, totaled 11 million metric tonnes of CO2e in 2015 .

The largest contributor to these savings was the use of oxygen in combustion . With respect to hydrogen, the Company has thoroughly examined methods in the public domain for estimating CO2 avoided due to ultra-low sulfur fuels and diesel particulate filters and has concluded that further analysis is needed to estimate the avoided emissions .

Ethics and Integrity Disclosure on Management Approach, G4-56-57Air Products’ values – accountability, customer focus, innovation, integrity, respect and sustainability – underpin our policies and practices companywide.

Our Values Accountability - Being responsible for our actions and delivering results for the enterprise

Customer Focus - Creating value for our customers

Innovation - Cultivating ideas to deliver improvement and growth

Integrity - Behaving ethically and being true to our words

Respect - Treating all people with dignity and valuing the collective power of team work

Sustainability - Safely and responsibly caring for each other, our communities and the global environment

68Air Products | 2016 Sustainability Report

Our integrity is a priceless asset. It is something that has been held in the highest esteem, and we must continue to up-hold it. As stated in our Employee Code of Conduct, we will not sacrifice our integrity for any reason, not profit, and not ease of doing business. There are no exceptions.

Our “Commit to Integrity” program provides practical guidance for managing company risks and compliance. The pro-gram consists of our Code of Conduct document, related policies, standards, and guidelines and ongoing learning oppor-tunities and communications. It’s the responsibility of each employee to understand the Company’s expectations and take the training that applies to his or her work. It’s also the employee’s responsibility to uphold the ethical business standards on which individual and the company’s reputations depend. That means reporting wrongdoing or expressing concerns when someone becomes aware. Our IntegrityLine reporting numbers, IntegrityOnline web site, and our orga-nization contact list are tools to use to take such steps when approaching a leader is not comfortable or practical.

Air Products’ Employee Code of Conduct and related policies and training apply to employees of all entities that are controlled by the Company (>50% ownership). The Code is available in 21 different languages, which enables internal and external stakeholders to have access to the Code in their local language. We have also published additional support-ing documentation entitled "Reporting Instructions and Contacts" to help stakeholders who want to report a violation of our Code.

All employees must comply with the Code of Conduct; it is a condition of employment. Code of Conduct training is required of all employees and is delivered in local languages. In addition, local senior managers make periodic presenta-tions to reinforce the message as part of normal leadership and team communications.

Compliance with Code of Conduct training requirements is reviewed regularly with the Chief Compliance Officer and quarterly with senior business and functional leaders who are responsible for addressing delinquencies. Code of Con-duct training and compliance certifications are done in alternating years biennially.

During 2015, the Company completed its biennial "Code of Conduct & Conflict of Interest Certification," which rein-forces key elements of the Code of Conduct training and requires a targeted group of employees to self-disclose known personal or colleague infractions of the Code of Conduct or Conflicts of Interest. Air Products' appraisal process includes consideration of integrity and ethical conduct, as well as compliance with training requirements. We have a standing committee dedicated to monitoring compliance with key legal and ethical training requirements.

Because of the importance of ethics and integrity, we have established new goals for 2020 that require 100% of employ-ees to be trained in, and certified to, Air Products’ Employee Code of Conduct and ensure all allegations of misconduct are reviewed and closed.

Anti-Corruption ProgramsG4-SO3, SO4, SO7We significantly expanded Anti-Bribery and Corruption initiatives in 2015. Our risk-based approach requires all users of third-party partners to evaluate the risk associated with the relationship, and then have an independent third-party conduct relevant due diligence. A team of three compliance specialists review and approve the findings and recommen-dations, followed by multiple levels of reviews by business and corporate executives, depending upon the level of risk.

We have implemented a formal, vendor-supported process for reviewing third-party engagements and conducting risk-based, tiered due diligence. The process was in place in high-risk geographies previously and has now been implement-ed globally for all new third-parties, enabled by an online work flow system developed by Navigant Consulting. Work continues to input prior third-parties at the time of renewal of contracts. New policies and standard practices have been finalized and are in use.

We have augmented the work done by Navigant with resources available from TRACE International as part of a fee-based annual membership package. This package entitles Air Products to on-line resources, including a learning platform to train highest risk third-parties. In addition, the membership provides access to a TRACE Offering known as TRAC® for baseline supply chain due diligence. This product complements the features of the Navigant system.

Employees are identified as candidates for Foreign Corrupt Practices Act (FCPA)/Anti-bribery training based upon the

69

position they hold and where they are located. Of the required employees targeted globally for FCPA training, we have achieved a 98% completion rate. We have broadened this training to include global anti-bribery and anti- corruption (ABAC) awareness, and 94% of employees with this requirement have completed the ABAC training. Both of these training sessions are available in 16 languages to facilitate understanding of these important topics. We also require all employees to complete multi-unit courses on our Code of Conduct and Competition Law.

In accordance with our Policy on Political Contributions and Expenditures for Lobbying, Gifts and Travel for Govern-ment Officials, we will not use corporate funds to make political disbursements to candidates in any country or region, even where allowed by law. However, we do use our resources to advance matters of public policy by educating public officials about our business. We also use our resources to facilitate employee contributions.

Air Products uses a Political Action Committee (PAC), whose membership comprises certain eligible employees who donate to it on a purely voluntary basis. The PAC makes contributions—reported to the Federal Election Commission and applicable state agencies—to U.S. candidates who support the Company’s business interests. In 2015, Air Products’ PAC disbursements totaled $113,000. The Corporate Governance and Nominating Committee of the Board of Directors monitors the Company’s political activities through annual reports from members of management responsible for the activities.

We take a strong position on all violations of our Code of Conduct. We maintain telephone and web-based allegation systems designed to be compliant with local regulations and rulings. Stakeholders who wish to make allegations of vio-lations in accordance with the Sarbanes-Oxley Act or our Code of Conduct can report their allegations, consistent with local regulations, to their local management, functional specialist or to our allegation system. All reported incidents and the related investigations are reviewed quarterly with our Corporate Investigation Council and annually with the Compliance and Risk Committee, which is comprised of senior executives. Similarly the Audit Committee of our Board of Directors reviews all material incidents. Air Products has had no confirmed incidents of corrupt behavior as defined under FCPA, and as a result, no employees were terminated or disciplined for incidents of corruption in the reporting period.

Legal actions for anti-competitive behavior, antitrust and monopoly practices which are deemed to be material are re-ported as required in our Form 10-K (page 16-17), Item 3, Legal Proceedings, for our fiscal year ending September 30, 2015.

Reporting MechanismsG4-58Air Products has multiple mechanisms for reporting potential violations of integrity and other corporate policies, thefts, workplace violence and regulatory inquiries. Reporting allegations of misconduct is completed primarily through our IntegrityLine via phone or online. Directions for reporting misconduct and the IntegrityOnline website are available in the languages most commonly spoken by our employees.

The Integrity Line was upgraded in 2015 to the EthicsPoint platform which was expanded to include certain human re-sources allegations to enable better online case management of allegations received. Effectiveness of the Code is evalu-ated using allegations of code violations filed through the IntegrityLine and other direct reporting methods (HR, EH&S, Security incident management) and are reviewed by the executive level Corporate Risk and Compliance Committee and the Investigation Council.

All allegations are appropriately reviewed and closed.

70Air Products | 2016 Sustainability Report

Regulatory ComplianceAir Products strives to comply with all applicable regulations and laws. We have systems and personnel to identify what regulations apply to the company, and to ensure the systems and requirements are in place for compliance. We also have processes to audit our compliance systems and performance.

Occasionally an inspector will find an issue with an aspect of our business or operations. These findings are reviewed, addressed as required, and closed. Environmental, transporta-tion and other fines are noted elsewhere in this report.

Because the number and complexity of regulations and laws according to which we must operate are continually increas-ing, we have added a new goal for 2020 to continuously improve our compliance systems and performance, and will report on our progress in future reports.

Community Relations and SupportDisclosure on Management ApproachEngaging our communities and contributing to their economic health and social infrastructure is an important element of our investment strategy and our responsibility to operate our facilities safely and efficiently around the world.

Through open dialogue, and by measuring our activities and performance, we strive to understand the needs of our lo-cal communities, continually improve our performance, and deepen our relationships with our community stakeholders.

We work with nonprofit organizations, emergency responders, elected officials, business and community leaders in geographies where we have major facilities, including our headquarters community. This ongoing, two-way interaction helps us identify, measure and address key issues in each community.

Decisions about community relations activities and support are made after careful consideration against two main criteria:

• Addressing Community Needs – This includes demon-strating leadership, innovation and vision through sup-port of major projects and community “quality of life” issues; supporting activities and projects that share our commitment to diversity; providing support when com-munities are impacted by major disasters; supporting communities with a great need in the area of education and career technical education; and gathering feedback and insight from leaders in our headquarters commu-nity to truly understand what the community needs are, and what issues face the community.

• Celebrating Employees – This includes augmenting employee volunteer interests and efforts with charitable contributions and other resources; providing opportunities to refresh employee morale to build loyalty and a positive

view of the company; and leveraging activities that may also support the company’s recruitment and retention ef-forts. We also take note of opportunities where community leaders and customers are aligned so that we can leverage our charitable giving and engagement.

71

Community Relations, Training and Engagement PlansG4-SO1Air Products’ plant management and other personnel communicate with stakeholders on a regular basis and solicit feedback on our processes and procedures, the safe use of our products, and the key issues and needs in the community. Outreach training sessions are held periodically for site managers and other corporate staff involved in implementing community relations/stakeholder outreach plans. This training focuses on skills for engaging the public and the role that building trust and credibility plays in our stakeholder relationships.

Air Products has specific stakeholder outreach plans for priority sites. The sites are selected in consultation with Air Products’ business areas, EH&S, and Corporate Relations based on potential risks and the strategic nature of the sites. Plans include personal outreach, building relationships with public/government and community leaders, facility tours, annual meetings, support for education, and philanthropy. Our focus is on supporting the community’s needs and build-ing stronger relationships with local leaders.

Where we have pipelines supplying gaseous products to customers, Pipeline Awareness Coordinators oversee compli-ance with federal and state regulations regarding public awareness of our hydrogen, carbon monoxide and syngas pipelines. This includes soliciting regular feedback from and communicating with a number of external stakeholders, including excavators, local leaders, emergency responders and public safety officials.

Community Philanthropy Using an established process, criteria and needs analysis, we provide monetary support for Not-for-Profits (NFPs) in communities where our people live and work. Decisions regarding community relations activities are made after being carefully reviewed and measured against three main criteria:

• Strategic community and economic development through community outreach plans that include spe-cific philanthropic goals tied to employee engagement opportunities and actions to create value and positive results for the community and for Air Products. These activities also support our license to operate and grow our facilities in our host communities.

• Promoting education and technical workforce through improving educational outcomes. Today’s advanced manufacturing requires a technical workforce with advanced skills. Closing the gap between educa-tion and today’s employment opportunities is critical to the future success of our sector and our company.

• Ensuring healthy, stable and safe communities that fit with our business strategies and celebrate employees through augmenting volunteer interests/ef-forts with charitable contributions and other resources; providing opportunities to refresh employee morale to build loyalty and a positive view of the company; and le-veraging activities that may also support the company’s recruitment and retention efforts. We also take note of opportunities where community leaders and customers are aligned and so that we can focus our charitable giv-ing and engagement.

We are active members in our communities, and are striving to have a real impact. To that end we have established a new 2020 sustainability goal to enhance our ability to measure the positive impacts of our employee and community engagement.

72Air Products | 2016 Sustainability Report

Furthering Education across the Country Air Products is a leader in the area of technical and vocational education through our involvement and leadership with SkillsUSA, through which over 300,000 students in grades 9 through 12 and in community/technical colleges have an opportunity to learn technical skills along with the employment and personal skills that they need to excel in the workplace . Recognizing the career decisions by students are often made in the middle school years, Air Products was instrumental in developing the first-ever Middle School SkillsUSA program by piloting it in key states including Wisconsin, Pennsylvania, Texas and Louisiana . In 2015 the Company initiated a national SkillsUSA STEM scholarship program, and 25 students from across the country who were entering STEM careers each received a $1,000 scholarship to further their training or education .

Supplier Sustainability Disclosure on Management Approach, G4-12, LA14, LA15, HR1, SO9Air Products’ supply chain varies by business, and as a result, suppliers are managed independently by the business.

For our Industrial Gases businesses, energy – as electricity, natural gas or steam – is the primary raw material we use. In many cases these utilities are provided by our customers, and we include this supply as part of our energy and environ-mental reporting. We work closely with our energy suppliers to ensure that the energy we need is reliably available. We also use a significant amount of steel, aluminum and capital equipment to build the facilities we own and operate, or sell.

In our Electronic Materials and Performance Materials businesses, we use a variety of raw materials, including alcohols, ammonia, amines, acrylonitriles, hydrogen fluoride and glycols. These products are obtained through contracts with leading chemical suppliers throughout the world.

We purchase more than $6 billion in materials, equipment, power and services annually from over 30,000 suppliers and service providers worldwide. We use local suppliers where appropriate and economically fiesible. We want to work with vendors who share in our commitment to ethical business practices and who can help us deliver value to our customers.

Suppliers are required to abide by and conform to our global Code of Conduct in their business dealings with us and to support sustainability through the principles outlined in Air Products’ Expectations of Suppliers.

To ensure that our standards are met, we:

• Prequalify suppliers using commercial and technical evaluations

• Evaluate supplier proposals considering energy efficiency and other life cycle cost factors

• Conduct formal reviews for critical suppliers

• Employ a formal rating system to encourage continuous improvement and recognize achievement

• Monitor ongoing performance and product quality via formal assessments

• Follow defined procedures for noncompliance and remediation

• Develop joint company-supplier corrective action plans

• Organize joint company-supplier continuous improvement events

73

Our Supplier Relationship Management (SRM) program focuses on identifying and managing critical suppliers within our supply chain. Our sourcing specialists use a Segmentation Model Tool to identify key suppliers, taking into consider-ation factors such as supplier annual spend, financial strength, potential for innovation, ease of finding substitutes and switching, and overall business impact on Air Products. We conducted 77 supplier site audits in 2015.

Various processes are in place to identify supplier sustainability risks, including safety requirements for all contractors, review of environmental risks, business continuity planning, a conflict minerals program, and supplier risk assessments. Supplier qualification includes the use of a scorecard system, which includes metrics by category and key performance indicators. Sustainability is included under the supplier risk category, and specifically references supplier environmental and social programs and measures. Numeric data with respect to screening of suppliers and contractors is not tracked. All suppliers and contractors are expected to comply with the Human Rights principles of our Global Code of Conduct.

Air Products has completed initial human rights assessments for its Industrial Gases operations and supply chains, representing nearly 80% of 2015 business activities. From a supply chain perspective, we have examined human rights risks relative to procurement spend and supplier location using country-specific risk information from Verisk Maplec-roft. For the highest risk countries, the specific human rights risks have been reviewed for potential impact, and are not considered significant. However we are reviewing our supplier due diligence process as a result of this assessment to determine if and what improvements are needed.

We are not aware of any significant actual and potential negative impacts or fines for labor practices in our supply chains in 2015.

That being said, we have created a new 2020 sustainability goal to ensure that 100% of new supplier agreements include Human Rights and Conflict Minerals clauses.

Supporting Diverse Suppliers Our Supplier Diversity Program in the U .S . is tied to our commercial activities that support U .S . Federal Government purchase requirements . Annually, we develop a Commercial Subcontracting Plan with specific performance targets and other actions—including attendance at trade fairs and involvement in local business groups and councils—which our procurement organization undertakes to encourage small and small disadvantaged businesses . Our Supplier Diversity Program provides us with a competitive advantage as a result of gaining different perspectives on new ideas and the introduction of innovative products and processes . More information about our procurement policies and practices is available on our Web site .

Conflict Minerals

G4-LA15Air Products has invested significant effort to understand the potential for Conflict Minerals in our supply chain. These four minerals – tungsten, tantalum, tin and gold (also called 3TG) – are used in a variety of applications, from hearing aids and pacemakers, to laptop computers and GPS devices. About 10% of the world’s 3TG comes from “conflict regions,” countries in and around the African Congo, where the mining industry has been used to fund armed conflict and hu-man rights abuses. The remaining 90% is sourced from conflict-free regions, such as Peru and China. In other words, the term “conflict” can be misleading – not all Conflict Minerals come from conflict regions.

In 2015, Air Products revised its Conflict Minerals Policy, adding the expectation that our suppliers provide conflict-free sourcing. Also in 2015, we implemented provisions for our supply contracts for new and renewed contracts that require suppliers and their sub-contractors to provide supply chain transparency about the source of any Conflict Minerals.

74Air Products | 2016 Sustainability Report

Each year we report on our progress in identifying Conflict Minerals in the supply chain. Our 2015 Conflict Minerals report is available on our website. Following are highlights of our progress in 2015:

Materials Technologies – Air Products’ Materials Technologies segment has two types of products that potentially con-tain Conflict Minerals – Consumable Products and Delivery Systems. All 2015 suppliers or manufacturers of components for Consumable Products and Delivery Systems equipment were contacted and requested to provide information on Conflict Minerals used in their products. The response rate to our Reasonable Country of Origin Inquiry (RCOI) from sup-pliers of materials for our Consumable Products was 100%. Many of the Delivery Systems suppliers do not have a legal requirement to report Conflict Minerals information and may not have systems in place to obtain the requested supply chain information. We achieved a response rate of 54% to our RCOI from suppliers who provided Delivery Systems com-ponents to us in 2015. Suppliers whose responses were considered to be high risk or contain inadequate information were subsequently contacted again, either by email, phone calls, or both.

• Materials Technologies determined that the necessary Conflict Minerals in its Consumable Products were smelted at a smelter deemed by the Conflict Free Sourcing Initiative to have systems in place to assure sourcing of only conflict-free materials with one exception, and that exception was on a path to compliance.

• The results of the equipment Delivery Systems RCOI and due diligence were inconclusive; however we did not find that any of the necessary Conflict Minerals in our Delivery Systems directly or indirectly financed or benefited armed groups in the Democratic Republic of the Congo or adjoining countries.

Industrial Gases – equipment products containing Conflict Minerals are typically assembled from a large number of generic components. For 2015, we identified over 5,000 different equipment product components which potentially con-tained necessary Conflict Minerals, and 422 suppliers or manufacturers of these components to be contacted to deter-mine the presence and origin of any Conflict Minerals.

Air Products contacted all 422 suppliers, and 221 suppliers, or 52%, responded to the request, as compared to 38.1% for 2014. Suppliers who did not respond or whose responses were incomplete were repeatedly contacted, at least four times, to obtain more information. Of the responses received, 102, or 48% reported that their products did not contain Conflict Minerals originated in the Covered Countries; and 118, or 53%, reported that the source of the Conflict Minerals was undetermined.

75

GRI Content Index G4-LA15

General Standard Disclosures Page Description

External Assurance

Strategy and Analysis

G4-1 2-3, 25 Vision and strategy No

G4-2 6, 25-28 Business impacts, risks and opportunities No

G4-3 4, 22 Organizational profile, name No

G4-4 4, 22 Brands, products and services No

G4-5 5, 23 Headquarters location No

G4-6 5, 23 Countries of operation No

G4-7 23 Ownership No

G4-8 22 Markets served No

G4-9 5, 22-23 Organizational scale No

G4-10 12, 14, 63 Employee demographics No

G4-11 14, 64 Collective bargaining No

G4-12 23, 72 Supply Chains No

G4-13 23, 63 Significant changes No

G4-14 29 Precautionary principle No

G4-15 31 Charters subscribed to No

G4-16 31 Organizations subscribed to No

Identified Material Aspects and Boundaries

G4-17 23 Entity description No

G4-18 32-35 Defining report content No

G4-19 33 Material aspects No

G4-20 34 Aspect boundaries within the organization No

G4-21 34 Aspect boundaries outside the organization No

G4-22 24 Restatements No

G4-23 34 Significant changes in scope and boundaries No

G4-24 32-35 Stakeholder engagement No

G4-25 32 Stakeholder groups No

G4-26 33 Approach to engagement No

G4-27 33-35 Key topics and concerns No

76Air Products | 2016 Sustainability Report

General Standard Disclosures Page Description

External Assurance

Report Profile

G4-28 24 Report profile No

G4-29 24 Reporting period No

G4-30 24 Date of most recent report No

G4-31 24 Contact point No

G4-32 24 In accordance option No

G4-33 24, 41, 52 Assurance No

Governance

G4-34 29-30 Board Structure No

G4-36 29-30 Executive responsibility No

G4-38 29 Governance body composition No

G4-39 29 Executive officer No

G4-40 30 Board nomination process No

G4-41 30 Board conflicts of interest No

G4-42 29 Governance on organization purpose No

G4-45 28 Board involvement in risks No

G4-46 28 Board review of risk management No

G4-48 30-31 Committee reviewing report No

G4-49 30 Communicating concerns to board No

G4-51 30 Remuneration for Board No

Ethics and Integrity

G4-56 15, 21, 67-68 Values, principles and norms No

G4-57 67-69 Advice mechanisms No

G4-58 69 Reporting mechanisms No

77

Standard Specific Disclosures Page Description Omissions

External Assurance

Category: Economic Performance (GROW)

Material Aspect: Economic Performance

G4-DMA 40 Disclosure on Management Approach No

G4-EC1 20, 41 Direct economic value generated and distributed Yes

G4-EC2 42-43, 50-52 Climate change risks and opportunities Employee compensation data is not publicly disclosed .

No

Category: Environmental (CONSERVE)

Material Aspect: Energy

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN3 9, 20, 48-49 Energy consumption within the organization No

G4-EN5 20, 49 Energy intensity No

G4-EN6 9, 49 Reduction of energy consumption No

G4-EN7 46 Reductions in energy requirements of products and services No

Material Aspect: Water

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN8 10, 21, 54 Total water withdrawal by source No

G4-EN9 55 Water sources significantly affected by withdrawal of water No

G4-EN10 55 Percentage and total volume of water recycled and reused No

Material Aspect: Emissions

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN15 10, 20, 52 Direct GHG emissions (Scope 1) Yes

G4-EN16 10, 20, 52 Indirect GHG emissions (Scope 2) Yes

G4-EN17 10, 20, 52 Other indirect GHG emissions (Scope 3) Yes

G4-EN18 20, 52 GHG emissions intensity No

G4-EN19 52 Reduction of GHG emissions No

G4-EN20 53 Emissions of ozone-depleting substances No

G4-EN21 11, 20, 53 NOX, SOX, and other significant air emissions No

Material Aspect: Effluents and Waste

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN22 10, 55 Water discharge No

G4-EN23 11, 21, 56 Total weight of waste by type and disposal method Air Products currently tracks hazardous waste on a global basis .

No

G4-EN24 47 Total number and volume of significant spills No

78Air Products | 2016 Sustainability Report

Standard Specific Disclosures Page Description Omissions

External Assurance

Material Aspect: Compliance

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN29 21, 47 Environmental fines No

Material Aspect: Transport

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN30 11, 50 Significant impacts of transporting products No

Material Aspect: Overall

G4-DMA 44-45 Disclosure on Management Approach No

G4-EN31 47-48 Environmental protection expenditures and investments No

Category: Social (CARE)

Sub-category: Labor Practices and Decent Work

Material Aspect: Employment

G4-DMA 61 Disclosure on Management Approach No

G4-LA1 14, 21, 64 Number and rates of new hires and employee turnover All requested data is not tracked in HR system .

No

G4-LA2 65 Employee benefits No

Material Aspect: Labor and Management Relations

G4-DMA 61 Disclosure on Management Approach No

G4-LA4 63 Minimum notice periods regarding operational changes No

Material Aspect: Occupational Health and Safety

G4-DMA 37-38 Disclosure on Management Approach No

G4-LA6 13, 21, 38-39 Safety performance No

Material Aspect: Training and Education

G4-DMA 61 Disclosure on Management Approach No

G4-LA9 21, 65 Average hours of training Training requirements are based on job function . Training hours by gender is not tracked .

No

G4-LA10 65 Programs for skills management and learning No

G4-LA11 65-66 Employees receiving regular reviews No

Standard Specific Disclosures Page Description Omissions

External Assurance

Material Aspect: Diversity and Equal Opportunity

G4-DMA 61 Disclosure on Management Approach No

G4-LA12 14, 21, 30, 63 Composition of governance bodies and employee demographics

No

Material Aspect: Supplier Assessment for Labor Practices

G4-DMA 72 Disclosure on Management Approach No

G4-LA14 73 Suppliers screened for labor No

G4-LA15 73-74 Significant negative impacts for labor practices No

Sub-category: Human Rights

Material Aspect: Investment

G4-DMA 72 Disclosure on Management Approach No

G4-HR1 73 Human rights clauses or screenings Percentage/ number of agreements with human rights clauses not tracked in 2015 .

No

Sub-category: Society

Material Aspect: Local Communities

G4-DMA 70 Disclosure on Management Approach No

G4-SO1 21, 71-72 Operations with local community engagement No

Material Aspect: Anti-corruption

G4-DMA 67-68 Disclosure on Management Approach No

G4-SO3 68 Operations assessed for risks No

G4-SO4 68 Communication and training on anti-corruption No

Material Aspect: Anti-competitive behavior

G4-DMA 67-68 Disclosure on Management Approach No

G4-SO7 69 Cases of anti-competitive and anti-trust behavior No

Material Aspect: Supplier Assessment for Impacts on Society

G4-DMA 72 Disclosure on Management Approach No

G4-SO9 72-73 New suppliers screened with society criteria No

80

Standard Specific Disclosures Page Description Omissions

External Assurance

Sub-category: Product Responsibility

Material Aspect: Customer Health and Safety

G4-DMA 58-59 Disclosure on Management Approach No

G4-PR1 58-59 Product health and safety No

Material Aspect: Product and Service Labeling

G4-DMA 58-59 Disclosure on Management Approach No

G4-PR3 58-59 Product and service information No

G4-PR4 58 Product incidents No

G4-PR5 66-67 Customer satisfaction No

Material Aspect: Customer Privacy

G4-DMA 58-59 Disclosure on Management Approach No

G4-PR8 60 Customer privacy breaches and complaints No

Material Aspect: Compliance

G4-DMA 58-59 Disclosure on Management Approach No

G4-PR9 58 Fines for non-compliance No

tell me moreairproducts.com

© Air Products and Chemicals, Inc ., 2016 (39988) 900-16-015-US

The information contained herein is offered without charge for use by technically qualified personnel at their discretion and risk. All statements, technical information and recommendations contained herein are based on tests and data which we believe to be reliable, but the accuracy or completeness thereof is not guaranteed and no warranty of any kind is made with respect thereto.

For more information , please contact us at:

Corporate Headquarters Air Products and Chemicals, Inc . 7201 Hamilton Boulevard Allentown, PA 18195-1501 T 610-481-4911 (Outside the U .S . and Canada +1-610-481-6799) F 610-481-5900

Regional Head Offices Air Products PLC Hersham Place Technology Park Molesey Road Walton-on-Thames Surrey KT12 4RZ UK T +44-1932-249200 F +44-1932-249565

Air Products Chemicals Europe B .V . Kanaalweg 15, P .O . Box 3193 3502 GD Utrecht Netherlands T +31-30-2857100 F +31-30-2857111

Air Products Asia, Inc . 2503-5, 25/F 148 Electric Road, North Point Hong Kong T +852-2527-1922 F +852-2527-1827

Air Products Asia, Inc . 2 International Business Park #03-32 The Strategy Singapore 609930 T +65-6494-2240 F +65-6334-1005

Air Products and Chemicals (China) Investment Co . Ltd . East Wing, Floor 1 Building #88, Lane 887 Zu Chongzhi Road Zhangjiang Hi-Tech Park Shanghai, 201203 P .R . China T +86-21-38962000 F +86-21-50805555

Indura S .A . Av . Las Americas 585 Cerrilos Santiago, Chile ZC-9230117