Climate Change Data

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Continued expansion of workforce during the growth course. An additional 818 employees were hired in 2017, 652 in Austria. Apprentice training program with 124 apprentices in 9 vocational training programs. All 22 completing training in 2017 were integrated into KTM AG. KTM AG has more vocational training places than any other employer in the region. Initiatives for work and family reconciliation, including a KTM crèche. Focus on occupational safety and employee health with preventative measures. Employment of 46 individuals with disabilities as of December 31, 2017.

Governance Achievements

• Full commitment to the Austrian Code of Corporate Governance. Established an internal control and reporting system. Variable annual compensation components linked to performance indicators of KTM Industries Group companies. Annual review of remuneration policy by the Supervisory Board. D&O insurance covers the Executive and Supervisory Boards, as well as the management of group companies.

Climate Goals & Targets

Environmental Challenges

• Market risks (cyclical risk, competition and pricing pressure, sales risk), sector-specific risks (restrictions relating to motorcycling, changes in the procurement market, product liability risk), IT risks (cyber attacks), financial risks (currency risks, interest rate risks, default risks, liquidity risks), risks due to the legal framework, business and environmental risks, personnel-related risks.

Mitigation Strategies

• Market research and forecasts, long-term supply contracts, continuous auditing of suppliers, IT security and risk management system, derivative financial instruments for hedging, appropriate insurance, efficient personnel management, personnel development programs, comprehensive apprentice training program.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Continuous auditing of existing and potential suppliers; long-term supply contracts; monitoring of material quality.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• KTM FREERIDE E-XC, KTM 790 DUKE, KTM 790 ADVENTURE R, KTM 450 RALLY, Husqvarna Vitpilen 401, Svartpilen 401, Vitpilen 701.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Research & Development
• Business compliance and fairness in dealing with business partners (incl. suppliers)
• Product quality and safety
• Environmental Aspects Along the Product Life Cycle
• Occupational Safety and Employee Health
• (Further) Training of employees

Environmental Achievements

• Reduced electricity consumption from 34,269,172 kWh in 2017 to 30,847,769 kWh in 2018 (including Pankl Group for the first half of the year).
• Reduced gas consumption from 24,509,314 kWh in 2017 to 20,750,274 kWh in 2018 (including Pankl Group for the first half of the year).
• Reduced water consumption from 8,470 m³ in 2017 to 7,333 m³ in 2018 (including Pankl Group for the first half of the year).
• Recycled 19.6 tonnes of aluminum and 20.2 tonnes of scrap steel in 2018.

Social Achievements

• Improved onboarding process with welcome days for new employees.
• Invested approximately 43,000 further training hours in Austrian KTM companies in 2018.
• Implemented measures to boost mental health based on a 2017 employee survey.
• Opened a new toddler group in Mattighofen for children of KTM employees.

Governance Achievements

• Rolled out a code of conduct in 2017 applying to all board members, managers, and employees.
• Provided training on anti-corruption to 85 employees (79% of relevant employee groups) in 2018.
• Provided extensive training on the General Data Protection Regulation.

Climate Goals & Targets

Environmental Challenges

• Finding and retaining qualified employees in rural locations.
• Potential risks of unfair competition and corruption in collaboration with international business partners.
• Potential shortage of skilled staff.
• Environmental impacts associated with production and use of products.

Mitigation Strategies

• Comprehensive apprentice training program.
• Code of conduct addressing compliance risks.
• Anti-corruption training and measures.
• Continuous improvement in occupational safety and health.
• Resource-conserving and energy-efficient operations.
• Development of new technologies for reducing emissions.

Supply Chain Management

Supplier Audits: Ongoing basis for existing and potential suppliers

Responsible Procurement

• Code of conduct referred to in purchase conditions.
• Monitoring of supplier creditworthiness, operating facilities, and production processes.
• Milk-run systems for efficient cargo capacity utilization.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 8
• SDG 13

KTM Industries contributes to these goals through its operating activities and aims to ensure that its activities do not have detrimental effects on the related issues and objectives.

Sustainable Products & Innovation

• KTM FREERIDE E electric motorcycle

Environmental Metrics

ESG Focus Areas

• Business compliance and fairness in dealing with business partners (incl. suppliers)
• Product quality and safety
• Environmental aspects along the product life cycle
• Occupational safety and employee health
• Training of employees
• Research & Development

Environmental Achievements

• Reduced water consumption from production (3,618 m³ in 2019 vs 3,993 m³ in 2018)
• Commissioned a photovoltaic system on the new office building in Munderfing, designed to cover the building's own consumption.
• Rented out roof space for another photovoltaic system (40,000 m²) to feed electricity into the public grid (operational in 2020)
• Modernized heating units in existing buildings, resulting in significantly more efficient temperature control.
• Reduced component weight of a road model frame by 1.9 kg (approx. 20% reduction)
• Reduced weight of a 450cc offroad engine by 1.6 kg compared to competitors.
• Recycled 20.5 tonnes of aluminum and 20.8 tonnes of steel scrap.

Social Achievements

• Launched a 360° virtual reality company tour to attract potential employees, winning a gold award at the “Employer Branding Award 2019”.
• Introduced a new applicant management tool for more efficient recruitment.
• Implemented flexible working hours (Monday-Thursday) and a new flexitime agreement at KTM Technologies GmbH.
• Updated policy on business trips to encourage public transport and reduce CO2 emissions.
• Opened a new toddler group in Mattighofen for employees' children (total 23 childcare places).
• Implemented measures to support women in STEM professions (Girl’s Day, technical apprenticeships).
• Employee turnover below 10%.

Governance Achievements

• Revised the code of conduct to include corruption involving public officials, child labor, and terrorism financing.
• Provided anti-corruption training to 104 managers (31% of managers trained).

Climate Goals & Targets

Environmental Challenges

• Finding and retaining qualified employees, especially in rural locations.
• Shortage of skilled staff.
• Increased accidents at work (attributed to organizational changes, relocation of production areas, and insufficient safety training).

Mitigation Strategies

• Internal and external measures to increase company attractiveness (e.g., VR tour, digitalization).
• Comprehensive apprentice training program.
• Optimized onboarding process.
• Implemented ergonomic workstation development, lifting platform, and process adaptations to reduce accidents.
• Provided training on industrial truck use and optimized traffic routes.
• Implemented ongoing improvements for continuous safety briefings.

Supply Chain Management

Supplier Audits: Product and process audits conducted in cooperation with the Quality department.

Responsible Procurement

• Focus on quality, reliability, competitive prices, and sustainability.
• Long-term relationships with suppliers.
• Centralized procurement management.
• Early collaboration with suppliers on new developments.
• Supplier selection based on ISO certification, technical capabilities, reliability, quality, competitiveness, and communication.
• Monitoring of supplier performance (quality and delivery).
• Evaluation of supplier financial situation.
• Supply chain finance program.
• On-site visits to suppliers and subcontractors to assess working conditions, safety, environmental protection, and resource use.
• Local procurement strategies.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and electric vehicles.

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 9001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 4 (Quality Education)
• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 13 (Climate Action)

Initiatives related to occupational safety, employee training, economic growth, innovation, and emission reduction.

Sustainable Products & Innovation

• Electric motorcycles (KTM FREERIDE E, KTM SX-E 5, HUSQVARNA EE-5)
• E-bikes (HUSQVARNA E-Bicycles)

Awards & Recognition

• Gold award at the “Employer Branding Award 2019”

Environmental Metrics

ESG Focus Areas

• Environmental interests
• Social and employee concerns
• Business compliance

Environmental Achievements

• Reduced average CO2 emissions of the reported vehicle fleet by 0.65 g/km to 78.44 g/km.
• Reduced average fuel consumption to 3.4 l/100km.
• Created one of Austria's largest photovoltaic installations on the roof of its logistics center in Munderfing.

Social Achievements

• Launched KTM Riders Academy to improve rider training for test riders.
• Implemented measures to protect employees from COVID-19.
• Maintained staff turnover below 10%.

Governance Achievements

• Revised the Code of Conduct of the PIERER Mobility Group and communicated it to suppliers and dealers.
• No confirmed incidents of corruption.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the coronavirus pandemic.
• Shortage of skilled staff.

Mitigation Strategies

• Revised supplier risk assessment and reassessed risks for each country.
• Implemented a comprehensive apprentice training program.
• Increased the attractiveness of the company as an employer through various measures.

Supply Chain Management

Supplier Audits: At least once a year for the largest suppliers.

Responsible Procurement

• Code of Conduct
• Quality assurance agreements
• ISO 9001 certification
• Local procurement strategies

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 9001, ISO 26262, TISAX

Third-party Assurance: KPMG Austria GmbH

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 8
• SDG 9
• SDG 12
• SDG 13

The report describes how the company's activities contribute to these goals.

Sustainable Products & Innovation

• Electric motorcycles
• E-bikes

Awards & Recognition

• Best Recruiter Awards (gold)

Environmental Metrics

ESG Focus Areas

• Reliable Employer
• Sustainable Mobility
• Environmentally Aware Production
• Fair Business Practices

Environmental Achievements

• ISO 14001 certification implemented in summer 2021.
• Reduced average CO2 emissions of newly sold vehicles by 2.34% between 2016 and 2021.
• Reduced average fuel consumption by 2.49% compared to 2016.
• Achieved 99.5% renewable energy share for electricity and district heating at main sites.
• Recycled 189.83 tons of aluminum chips.

Social Achievements

• Launched "Employees Recruit Employees" initiative, resulting in a 39.7% recruitment rate via employee referrals.
• Increased vaccination rate by more than 20% to 76.2% through a vaccination bonus.
• Substantial workforce expansion by 663 people.
• Staff turnover rate below 10% in Austrian companies.
• Launched KTM Riders Academy for test rider training.

Governance Achievements

• Revised and announced the Code of Conduct in September 2021.
• Established a whistleblower system in December 2021.
• Achieved a low ESG risk rating from Sustainalytics (11.5).

Climate Goals & Targets

Environmental Challenges

• Increasing regulations on combustion engines.
• Resource scarcity and wasteful consumption.
• Rising energy prices.
• Need for alternative drive technologies.
• Supply chain disruptions.
• Occupational safety and employee health risks.
• Shortage of skilled workers.
• Data protection risks.
• Road safety concerns.
• Product quality and customer safety risks.
• Corruption and bribery risks.
• Human rights risks in the supply chain.

Mitigation Strategies

• Consistently reducing CO2 and pollutant emissions.
• Researching and deploying alternative technologies (electric mobility, synthetic fuels).
• Optimizing processes and investing in efficient technologies.
• Implementing material-efficient processes and waste reduction strategies.
• Utilizing renewable energy sources (photovoltaic systems).
• Implementing energy-saving projects.
• Expanding electric mobility (low voltage).
• Focusing on local procurement and short transport distances.
• Implementing a Code of Conduct and other compliance measures.
• Establishing a whistleblower system.
• Implementing a strategic approach to hazard mitigation, precautionary measures, and extensive training.
• Pursuing a strategically focused and holistic approach to personnel development.
• Implementing a data protection management system.
• Offering state-of-the-art rider assistance systems.
• Implementing intensive quality assurance processes.
• Developing a due diligence approach to identify human rights and environmental risks in the supply chain.
• Introducing an ESG platform for supplier evaluation.

Supply Chain Management

Supplier Audits: 67 audits in 2021

Responsible Procurement

• Code of Conduct
• Social and environmental criteria in purchasing conditions
• Focus on local and European procurement
• ESG platform for supplier evaluation (planned for 2022)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Increasing regulations on combustion engines
• Changes in customer behavior

Opportunities

• Development of energy-efficient products and alternative drive technologies

Reporting Standards

Frameworks Used: GRI Standards: Core

Certifications: ISO 14001, ISO 9001, TISAX (security level 2)

Third-party Assurance: KPMG Austria GmbH

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 11
• SDG 12
• SDG 13
• SDG 16

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Electric motorcycles (KTM FREERIDE E, KTM E-SX 5, HUSQVARNA EE-5, GASGAS MC-E models)
• E-bicycles

Awards & Recognition

• Best Recruiter Award

Environmental Metrics

ESG Focus Areas

• Reliable Employer
• Sustainable Mobility
• Environmentally Conscious Production
• Fair Business Practices

Environmental Achievements

• Reduced residual waste by around 38% compared to 2019 (significantly exceeding the 10% target)
• Increased the proportion of reusable packaging for mass-produced items faster than planned
• 98.1% renewable energy share at main company and production sites

Social Achievements

• Invested around €2.8 million in further education of employees
• Opened a new training center for apprentices
• Employee turnover rate below 10%

Governance Achievements

• 0 compliance cases, incidents with fine or penalty after recalls
• Low ESG risk rating from Sustainalytics (rated 2nd in the automotive sector)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to higher energy prices and lingering effects of the COVID-19 pandemic
• Shortages of certain components from suppliers
• Multi-level supply chains

Mitigation Strategies

• High flexibility in production and sales planning enabled continuous operations
• ESG platform for suppliers to identify risks early and initiate appropriate activities
• Development of further concepts for supplier audits

Supply Chain Management

Supplier Audits: 116/year

Responsible Procurement

• Quality management system (ISO 9001)
• ESG SupplierAssurance platform
• Sustainability rating

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Climate-related regulations/driving bans
• Climate-related product lawsuits
• Resource scarcity/raw material price increases

Opportunities

• Development of energy-efficient products
• Use of synthetic fuels

Reporting Standards

Frameworks Used: GRI Standards 2021, EU Taxonomy Regulation

Certifications: ISO 9001:2015, ISO 14001:2015, ISO 26262, ISO/SAE 21434, ISO 10844

Third-party Assurance: KPMG Austria GmbH

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 17

See ESG Program for details

Sustainable Products & Innovation

• Electric motorcycles and bicycles
• In-house developed traction batteries

Awards & Recognition

• Sustainalytics ESG Regional Top Rated
• Sustainalytics ESG Industry Top Rated
• JEC Composites Innovation Award