Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resources Recycling
• Environmental Pollution and Biodiversity
• Human Rights
• Occupational Health and Safety
• Diversity & Inclusion
• Supply Chain Management
• Corporate Governance
• Information Security
• Community Investment

Environmental Achievements

• Reduced CO2 emissions in Japan by 28.0% compared to 2005.
• Reduced waste intensity in Japan by 24.7% compared to 2005.
• Achieved 0% landfill rate since 2006.
• Reduced global water usage by 7.2% compared to 2017 (though intensity increased by 3.1%).
• Contagem plant reduced waste to landfill by 47% and hazardous waste by 43% compared to 2016.
• Bielsko Biala plant achieved zero waste to landfill.

Social Achievements

• LTIFR (Lost Time Injury Frequency Rate) fell from 1.42 in 2017 to 0.94 in 2018.
• 100% return-to-work rate after maternity leave in 2018.
• Increased CSR e-learning participation rate in Japan to 96.2%.
• Implemented various diversity promotion measures.
• Conducted supplier surveys on conflict minerals, surveying 208 companies in 2018.
• Invested €0.875 million in community projects in 2018.
• 5,829 volunteer hours in 2018.

Governance Achievements

• Established a corporate governance structure with a Board of Directors and auditors.
• No legal violations regarding labor, bribery, information security, product safety, or exports in 2018.
• Implemented global whistleblowing systems.
• Strengthened information security measures and employee awareness.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events.
• Stricter environmental regulations.
• Need to reduce the use of rare metals and rare earth minerals.
• Lack of unified global directions for mobility solutions and regulations.
• Risks associated with cybersecurity threats.
• Maintaining high customer satisfaction.

Mitigation Strategies

• Reviewing environmental strategies and setting progressive targets.
• Implementing initiatives to reduce process defects and conserve resources.
• Recycling resources and reusing materials.
• Thoroughly managing chemicals and adopting alternative technologies.
• Establishing a Policy for Approaches to Conflict Minerals.
• Conducting supplier surveys and due diligence.
• Strengthening cyber security measures.
• Implementing measures to improve response times, meet deadlines, and strengthen cooperation with customers.

Supply Chain Management

Supplier Audits: 208 companies surveyed in 2018 regarding conflict minerals.

Responsible Procurement

• CSR Guidelines for Suppliers
• Due diligence surveys
• Local procurement initiatives.

Climate-Related Risks & Opportunities

Physical Risks

• Disruption of parts procurement and supply.
• Suspension of plant operations due to extreme weather.

Transition Risks

• Stricter environmental regulations.

Opportunities

• Leveraging technological strengths in thermal and electric energy management to develop products that contribute to CO2 emission reduction.

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards

Certifications: ISO/TS 16949 (transitioned to IATF 16949 in 2018), ISO 14001

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 17: Partnerships for the Goals

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Autostereoscopic 3D instrument cluster
• Electric compressors for climate systems

Awards & Recognition

• Various quality awards from automotive companies.
• Health and Safety Leadership Award (EHSLA) 2018

Environmental Metrics

ESG Focus Areas

• Climate Change
• Occupational Health and Safety
• Environmental Awareness and Impacts Reduction
• Pollution and Biodiversity
• Excellence in Monozukuri
• Responsible Business Management
• Employer of Choice
• Supply Chain
• Community Contribution
• Diversity and Inclusion
• Information Security and Data Privacy
• Risk Management
• Sustainable Supply Chain

Environmental Achievements

• All environmental performance targets set for 2019 were met.
• Approximately 98% of our facilities have a management system certified in accordance with ISO 14001 (environmental management).
• 46% of our energy consumption is covered by a certified energy management system in accordance with ISO 50001.
• 50% reduction of total site energy consumption at the Corbetta plant due to LED lighting system revamp.
• Approximately 4 Megaliters of water saved each year at one plant due to water valve installation.
• 90-95% of treated wastewater recycled and reused at Argentan site.
• Cost reduction of ￥3.5 billion (€29 million) from 2018 to 2019 due to material usage optimization.

Social Achievements

• LTI rate of 1.38 achieved.
• 130,343 hours of training provided.
• 82% of employees participated in a medical check-up.
• Nine sites in Japan awarded Certified Health and Productivity Management Organization Recognition.
• 82% employee retention rate.
• 2,096 employees took parental leave.
• 5,593 employees took nursing care leave.

Governance Achievements

• Marelli's Code of Conduct formulated and available in 19 languages.
• Integrity Hotline established.
• Third-party Due Diligence surveys conducted.
• Common information security and data policy implemented.
• New information security function formed.

Climate Goals & Targets

Environmental Challenges

• Potential risks related to changes in the regulatory framework and physical risks posed by intense climatic phenomena.
• Potential negative impacts in ethics and compliance, human rights, health and safety, and environment and energy from suppliers.

Mitigation Strategies

• Development of a Risk Management System.
• Implementation of a business continuity plan.
• Supplier Sustainability Self–Assessment Questionnaire to identify potential negative impacts.
• Improvement action plans with regular monitoring for suppliers with potential negative impacts.

Supply Chain Management

Supplier Audits: 1,250 active direct material suppliers assessed

Responsible Procurement

• Internal sustainability related guidelines for all new suppliers.
• Sustainability improvement plan for existing suppliers.
• Conflict Minerals Policy.

Climate-Related Risks & Opportunities

Physical Risks

• Torrential rain and flooding

Transition Risks

• Changes in the regulatory framework

Opportunities

• Investments in the electrification of vehicles

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, ISO 50001, OHSAS 18001/ISO 45001

Sustainable Products & Innovation

• High efficiency rotary compressor (CR8)
• Thermo Electric Generator (TEG)
• Burner-type Active Catalyst Heating System
• Water Injection System
• Lightweight Solutions
• e-Powertrain Systems
• New Urethane with Low Odor and Low VOC

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 15% reduction in total GHG emissions (location based) vs 2019
• 113% reduction in total GHG emissions (market based) vs 2019
• 99% of Marelli sites are certified ISO 14001:2015
• 91% of waste recovered out of waste generated
• 19% decrease in total energy usage at Gunma Plant in Japan through energy-saving solutions

Social Achievements

• Introduced Safe & Healthy Restart policy in May 2020
• Production of more than 1 million masks by teams in Italy
• Production of 3,000 face shields at Yoshimi Plant, Japan
• Production of 1,000 emergency ventilators and 10,000 patient kits at Kodama Plant, Japan
• 29% decrease in the rate of total lost time injuries for employees vs 2019
• Launched a global employee training on the Code of Conduct
• Established an Integrity Hotline

Governance Achievements

• Stipulated and rolled out the “Marelli Code of Conduct,” “Compliance Charter,” and other rules worldwide
• Established a dedicated team to build a new supplier sustainability program

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly impacted people and businesses globally, including Marelli's operations and supply chain.
• Supply chain disruptions due to the pandemic and lockdowns.
• Climate change risks related to regulatory changes and physical events (torrential rain, flooding).

Mitigation Strategies

• Secured additional capital from shareholders and banks to withstand market downturn.
• Implemented multiple measures to protect financial position and ensure business continuity.
• Introduced smart working, increased communications, sanitization, and travel restrictions.
• Implemented seven new global health and safety COVID-19 procedures.
• Developed a new supplier sustainability program (to be rolled out in 2021).
• Implemented loss prevention and business impact analysis for fire and natural hazards.

Supply Chain Management

Supplier Audits: 827 suppliers assessed for social and environmental impacts

Responsible Procurement

• Supplier sustainability program (to be rolled out in 2021)
• Supplier risk evaluation methodology with a new monitoring platform

Climate-Related Risks & Opportunities

Physical Risks

• Intense climatic phenomena such as torrential rain and flooding

Transition Risks

• Changes in the regulatory framework

Opportunities

• Reducing global carbon footprint, investments in electrification of vehicles

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 50001:2018

Sustainable Products & Innovation

• Full Digital Cluster (easy disassembly and higher recyclability)
• Heat Energy Recovery System (HERS) (3–11% CO2 reduction)
• Electric powertrain technologies (inverter, e-Axles, iTMS)
• h-Digi digital light (improved safety)

Awards & Recognition

• 15 customer quality awards

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy
• Social impact
• Supply chain resilience
• Diversity & Inclusion

Environmental Achievements

• Increased renewable electricity use to 26.5% from 13.9% in 2021
• Reduced water withdrawal intensity by 11% compared to 2021
• Reduced absolute Scope 1 and Scope 2 (market-based) CO2e emissions by 5.5% compared to 2021 restated
• 84.5% waste recycled in 2022
• Reduced waste generated by 2.7% compared to 2021

Social Achievements

• 54% of sites certified ISO 45001 compliant for Operational Health & Safety in 2022
• Created the Women @Marelli network
• Set a target of 25% women in leadership roles by 2025
• Established Gen M – a group of high potential Marelli team members working with the Group Executive Committee
• 63% of employees received regular performance and career development reviews

Governance Achievements

• ESG topics included as part of the agenda for every Board meeting since 2022
• Became a signatory of the United Nations Global Compact in early 2023
• All direct material suppliers are monitored on their resiliency and ESG performance

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to semiconductor shortage
• Global inflation and rising costs of essential components, raw materials, and energy
• Data collection challenges from suppliers for accurate ESG reporting
• Engaging suppliers to improve sustainability performance and mitigate increased costs

Mitigation Strategies

• Supplier localization initiatives (e.g., Brazil pilot program)
• AI-powered contract scanning for social risk detection
• Investment in energy efficiency projects and renewable energy
• Training sessions and risk management for suppliers
• Revised sustainability questionnaire for material suppliers
• Internal restructuring to improve efficiency and reduce costs

Supply Chain Management

Supplier Audits: 147 suppliers assessed for social and environmental impacts in 2022; 100% of active suppliers monitored using Resilinc platform

Responsible Procurement

• Marelli Purchase Agreement mandating compliance with UN Principles for International Human Rights Protection and Environmental Stewardship
• Supplier Code of Conduct
• Sustainability questionnaire for material suppliers
• Training on sustainable procurement for purchasing department
• Conflict minerals reporting requirements
• Due diligence program (planned for 2023)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Supply chain disruptions
• Component price volatility
• Electrification impact

Opportunities

• Development of new products and services for electric vehicles and low-carbon technologies

Reporting Standards

Frameworks Used: GRI Standards, GHG Protocol, TCFD recommendations, UN Global Compact, SDGs (for internal and public policies), CSRD (double materiality concept), SASB (auto-parts)

Certifications: ISO 45001, ISO 50001, ISO 14001, TISAX

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Long flow exhaust system
• Lightweight suspensions
• Magnet-free electrical motors
• Vehicle domain control units

Awards & Recognition

• 33 customer awards in 2022
• 3Rs Waste Management Award and Zero Landfill Award
• Viracopos Excellence Logistics Award
• Platinum Kurumin Certification
• CES Innovation Award Honoree

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Social Impact
• Supply Chain Sustainability
• Human Rights
• Data Responsibility and Cybersecurity
• Employee Well-being

Environmental Achievements

• 12% reduction in Scope 1 and Scope 2 emissions compared to 2021 baseline; 8% reduction compared to 2022 baseline
• Exceeded water intensity targets, upgrading targets to 25% reduction by 2025 and 30% by 2030
• 39% renewable electricity in operations
• Reduced waste sent to landfills at Slovakian site from 1.25% to 0%
• Opened new photovoltaic installation in Malaysia generating 4.4 GWh of clean energy annually

Social Achievements

• 91% of Marelli production sites certified according to ISO 45001
• 96% of targeted employees trained on Code of Conduct principles
• Launched Celebrate @ Marelli program with 7,346 instances of employee recognition
• Launched three new Employee Resource Groups (ERGs): Rainbow, Brains & Hearts, and All Cultures
• 90% participation rate in Great Place to Work survey

Governance Achievements

• Formalized sustainability oversight as a standard item on the board agenda
• Established a sustainability structure at a business unit level
• Integrated ESG targets into performance and evaluation objectives of all teams
• Began preliminary integration of ESG risks into Enterprise Risk Management (ERM) framework
• Launched Supplier Code of Conduct

Climate Goals & Targets

Environmental Challenges

• Measuring Scope 3 emissions due to spend-based methodology not accurately reflecting efforts to reduce high-emission materials
• Data availability and consistency challenges from suppliers for Scope 3 emissions
• Comparability and reliability of emissions data collected from suppliers
• Tracking CAPEX investment required for net-zero transition
• Addressing gaps in SA8000 certification across all sites

Mitigation Strategies

• Moved from spend-based to hybrid volume-based methodology for Scope 3 emissions
• Reset baseline for measuring emissions to 2022 from 2021
• Refined calculations of Scope 3 emissions and extended scope to include additional data
• Developed a new process for tracking and capturing detailed information about waste at the plant level
• Implemented SA8000 self-assessments at all active manufacturing sites

Supply Chain Management

Supplier Audits: 66% of new nominated suppliers covered by ESG assessment in 2023; 71% of direct materials suppliers’ plants nominated with ISO 14001; 50 planned for 2024

Responsible Procurement

• Supplier Code of Conduct
• ESG self-assessment for new suppliers
• ISO 14001 certification for supplier plants
• Monitoring of critical resiliency risk via Resilinc

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting operations

Transition Risks

• Increased operational costs related to greener electricity and raw materials
• Increased customer demand for lower-carbon products

Opportunities

• Revenue growth from electrification

Reporting Standards

Frameworks Used: GRI Standards (300 and 400 series), GHG Protocol Corporate Accounting and Reporting Standard, TCFD, UNGC, CDP, EcoVadis, SA8000, ISO 45001, ISO 14001, ISO 21434, ISO 27001, TISAX

Certifications: EcoVadis Gold Medal, ISO 45001 (91% of production sites), ISO 14001 (94% of manufacturing sites), ISO 21434 (Automotive Lighting and Sensing business), TISAX (24 out of 26 active security certifications)

Third-party Assurance: Ernst & Young Associates LLP (Limited Assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Lightweight Urethane foam for interior products
• LeanLight headlamp and rear lamp concepts
• Oil-free suspension damping system
• Built-in Oil Cooler

Awards & Recognition

• EcoVadis Gold Medal
• CLEPA Innovation Awards (Top Innovator)
• Geely Auto’s Best Value Contribution Award
• Digital Engineering Awards (Commendable honor)