Climate Change Data

Environmental Metrics

ESG Focus Areas

• Responsible corporate governance
• Environmental management
• Sustainable innovations
• Sustainability in the supply chain
• Corporate citizenship
• Occupational health and safety
• Employee development
• Diversity and equal opportunity
• Human rights
• Energy and climate protection
• Waste prevention
• Sustainable procurement

Environmental Achievements

• Reduced relative energy consumption by 5% compared to the previous year.
• Reduced absolute greenhouse gas emissions by 11.7% and relative emissions by 7.8% compared to the previous year.
• McConnelsville plant reduced electricity consumption by 13.5% (equivalent to a CO2 saving of approximately 3,300 metric tons).
• St. Michael ob Bleiburg plant decreased annual energy requirement by around 7 gigawatt-hours.
• Izmir plant saved 747,000 kWh of natural gas (22% reduction).
• Mühlacker and Numazu plants decreased annual electricity consumption by around 360,000 kWh by switching to LEDs.

Social Achievements

• Reduced worldwide accident rate from 5.7 in 2018 to 4.8 in 2019 (around 16% reduction).
• Launched a global, mandatory training program for managers entitled “Managing safely.”
• Implemented unconscious bias training for all employees.
• Supported numerous social projects through employee engagement and the MAHLE Foundation.

Governance Achievements

• Implemented a compliance management system including the MAHLE Business Code, preventive measures, and training.
• Introduced the web-based whistleblower system Integrity Platform.
• Restructured the data protection organization in compliance with GDPR.

Climate Goals & Targets

Environmental Challenges

• Declining markets and tougher competitive environment leading to cost reduction and restructuring measures.
• Increasing environmental awareness and new emission reduction targets.
• Compliance risks, product responsibility, climate and environmental protection, employee development, and attractiveness as an employer.
• Supply chain disruptions.
• Conflict minerals in the supply chain.

Mitigation Strategies

• Cost reduction and restructuring measures.
• Development and application of new technologies to increase combustion engine efficiency and expand electric drive portfolio.
• Risk management system covering economic, environmental, and social aspects.
• Contingency plans to ensure business continuity.
• Supplier Code of Conduct and monitoring of supplier compliance.
• Using an internationally standardized form (CMRT) and monitoring responses using special software to ensure conflict-free sourcing of metals.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• MAHLE Supplier Guideline

Climate-Related Risks & Opportunities

Transition Risks

• Increasing environmental awareness and new emission reduction targets

Opportunities

• Development and application of new technologies to increase combustion engine efficiency and expand electric drive portfolio.

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: OHSAS 18001 or ISO 45001 (safety at work, 52 locations), ISO 14001 and/or EMAS (environmental management, over 80% of locations), ISO 50001 (energy management, 11 locations), FSC® Chain of Custody (11 plants)

Sustainable Products & Innovation

• Integrated Thermal System (ITS) heat pump for electric vehicles
• MAHLE Modular Hybrid Powertrain
• Cellulose air filter elements from responsibly managed forests

Awards & Recognition

• Energy Efficiency Champion Award (McConnelsville plant)
• MAHLE Safety Excellence Award

Environmental Metrics

ESG Focus Areas

• Responsible corporate governance
• Working at MAHLE
• Environmental management
• Sustainable innovations
• Sustainability in the supply chain

Environmental Achievements

• Reduced greenhouse gas emissions by 18% (Scope 1 and 2)
• Increased renewable energy use by 21%
• Reduced accident rate by 22%

Social Achievements

• Launched global #StrongerTogether HR marketing campaign
• Awarded LEADING EMPLOYER 2020 label in Germany
• Implemented various virtual initiatives for employee well-being during COVID-19 pandemic

Governance Achievements

• Updated MAHLE Business Code in January 2020
• Implemented a uniform group-wide Data Protection Management System (DPMS)
• 286 employees completed compliance trainings on prevention of corruption and antitrust law

Climate Goals & Targets

Environmental Challenges

• Decline in orders due to the COVID-19 pandemic and weakness in the automotive industry
• Increasing environmental awareness and new emission reduction targets
• Complexity of the supply chain and potential for social and environmental violations by suppliers

Mitigation Strategies

• Group restructuring to reposition MAHLE for external challenges
• Exploration of new technologies to increase combustion engine efficiency and expansion of electric drive portfolio
• Implementation of a Supplier Code of Conduct, supplier audits, and risk management system to ensure sustainability in the supply chain

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and alternative powertrain technologies

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 14001, EMAS, ISO 45001, ISO 50001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

Initiatives contribute to these goals through energy efficiency improvements, sustainable product development, waste reduction, and emission reductions

Sustainable Products & Innovation

• New condenser for faster charging of electric vehicles
• New generation of e-bike drive system
• Modular filter concept for fuel cells

Awards & Recognition

• LEADING EMPLOYER 2020 (Germany)
• Employer Excellence of China award
• Ford’s Supplier Diversity & Inclusion Development and Sustainability World Excellence Award
• MAHLE Safety Excellence Award

Environmental Metrics

ESG Focus Areas

• Climate & Environment
• Sustainable Procurement
• Working Conditions & Social Standards
• Human Rights
• Compliance and Ethics
• Sustainable Products

Environmental Achievements

• All German MAHLE production locations became carbon-neutral in 2021.
• Realized two photovoltaic projects in Parma, Italy and Montblanc, Spain in 2021.
• Increased renewable energy usage by 45% compared to 2020.
• Reduced chemical use from 12 tons/year to less than 2 tons/year in Atlanta location.
• Reduced plastic use by 40% in Pune location's packaging process.

Social Achievements

• 93 global locations were certified to ISO 45001 by the end of 2021.
• Launched ‘I create my space’ campaign with a gender-focus.
• Achieved 7% female managers on the first executive level and 10% on the second executive level (exceeding targets).

Governance Achievements

• Established a Central Sustainability Department and a Sustainability Steering Committee in 2021.
• Updated MAHLE Business Code in July 2021.
• 4,423 active employees completed compliance trainings in 2021.

Climate Goals & Targets

Environmental Challenges

• Stricter fuel efficiency and/or emissions regulations in several markets.
• Potential reductions in demand for combustion engine components.
• Supply shortages and issues caused by COVID-19.
• Increased environmental awareness in the markets and new emission reduction targets.

Mitigation Strategies

• Efficiency increase of components and expansion of electric drives and auxiliary components portfolio.
• Regular monitoring of fire and natural hazard risks.
• Long-term strategy to reduce risks.
• Contingency plans to maintain deliveries to customers.
• Risk monitoring of suppliers and implementation of mitigation measures.
• Energy and CO2 savings workshops in North America.
• Pilot energy-saving project in St. Michael/Austria.
• Contracted renewable electricity in Chengdu/China.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• MAHLE Supplier Guideline
• Conflict Mineral Reporting Template (CMRT)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Stricter fuel efficiency and/or emissions regulations

Opportunities

• Development of energy-efficient products
• Expansion of portfolio of electric drives and auxiliary components

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Not disclosed

SDGs chosen based on analyses of customer requirements and the MAHLE Materiality Matrix.

Sustainable Products & Innovation

• Magnet-free electric motor
• Intelligent charging management system (chargeBIG)

Awards & Recognition

• Careers Best Recruiters
• Germany’s most attractive employers
• Best Recruiters no 1 in our industry
• PotentialPark
• Great Place to Work
• Leading Employers
• MINT minded Company
• Ford Excellence Award
• Diversity Leaders
• MAHLE Safety Excellence Award (Ramos Arizpe/Mexico)

Environmental Metrics

ESG Focus Areas

• Climate and Environment
• Social Topics & Employees
• Occupational Health and Safety
• Sustainable Procurement
• Sustainable Finance
• Human Rights
• Responsible Corporate Governance
• Sustainable Innovations

Environmental Achievements

• Reduced total Scope 1 and 2 emissions by 12% compared to 2021
• Reduced CO2e emissions from electricity use by 14% compared to 2021 despite a slight increase in electricity consumption.
• Set Scope 3 emission reduction targets (28% reduction by 2030 for categories 1 and 11)
• Developed methodologies to assess the environmental footprint of products with lifecycle assessments and carbon footprints.
• 140 of 152 locations certified according to ISO 14001 and/or EMAS.
• Ethanol use in Brazil cut carbon emissions by half in company cars.

Social Achievements

• Continued to drive the MAHLE HR Roadmap forward, including a new competence model and talent cycle.
• Set new 5-year targets for women in leadership positions.
• Employee turnover rate remained almost unchanged at 1.8% despite increasing labor market movement.
• Launched employee-led D&I Councils in North and South America.
• Achieved 20% representation of women on the Supervisory Board for employee representatives.
• Improved water reporting to CDP Water, receiving a B- rating.

Governance Achievements

• Expanded sustainability program to include Occupational Health and Safety and Sustainable Finance.
• Updated materiality analysis with Diversity and Talent Management as new material topics.
• Developed a Sustainable Finance Framework.
• Updated MAHLE Business Code in November 2022.
• Adjusted existing web-based whistleblower system (Integrity Platform).

Climate Goals & Targets

Environmental Challenges

• Disturbed supply chains, hefty price increases for freight, energy, and raw materials, and the threat of energy shortages.
• Global shortage of skilled workers.
• Decreased volumes of resins from renewable materials due to market conditions.
• Significant impact of parts and assemblies from external suppliers on MAHLE’s CO2e footprint.
• Increasing environmental awareness in the markets and stricter emissions regulations.

Mitigation Strategies

• Risk monitoring of suppliers and implementation of mitigation measures.
• Contingency plans to maintain deliveries to customers.
• Local initiatives to introduce young people to STEM professions.
• Upgrade of global HR system landscape, including a new applicant management system.
• Retention measures designed for individual employee groups.
• Implementation of Energy Sprints to enhance energy management.
• Development of a Sustainable Finance Framework.
• Pilot project to determine product-related emissions in collaboration with suppliers.
• Setting of ambitious Scope 3 targets and submission to SBTi for validation.

Supply Chain Management

Supplier Audits: Initial audits for new suppliers; regular assessments of existing suppliers.

Responsible Procurement

• Supplier Code of Conduct
• MAHLE Integrity Platform
• Sustainable Purchasing Policy
• MAHLE Conflict Raw Materials Guideline

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Reductions in demand for emission-relevant components due to stricter emissions regulations and electrification.

Opportunities

• Efficiency increase of components and expansion of portfolio of electric drives and auxiliary components.

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, EMAS, ISO 50001, ISO 45001

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 3
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 10
• SDG 12
• SDG 13

MAHLE's initiatives contribute to these goals through various environmental, social, and governance programs.

Sustainable Products & Innovation

• SCT e-motor
• Modular structure of Thermal Management system for commercial vehicles
• Thermal Management solutions for fuel cell periphery of electrically powered watercraft
• Power cell unit for hydrogen combustion engines
• X20 traction motor for e-bikes

Awards & Recognition

• Special nationwide STEM award for commitment to Girls' Day
• 'Potential Park', 'MINT minded Company', and 'Great Place to Work' awards for HR Marketing and Employer Branding
• Top employer rankings in 'Best Recruiters', 'Leading Employers', and 'Diversity Leaders'
• sHero Award China for best International Women’s Day activities
• CADIA Certification for commitment to diversity

Environmental Metrics

ESG Focus Areas

• Climate and Environment
• Occupational Health and Safety
• Employees and Social
• Human Rights
• Compliance and Ethics
• Sustainable Products
• Sustainable Financing
• Sustainable Purchasing

Environmental Achievements

• Reduced Scope 1 & 2 emissions by 43 percent compared to 2019
• Reduced Scope 1 & 2 emissions by 13 percent compared to 2022
• Increased share of renewable electricity by 10 percent compared to 2022 to 372 GWh
• 145 energy efficiency projects in 2023 resulted in reported energy savings of about 32 GWh annually
• Obtained an external certification for calculating the Product Lifecycle and Carbon Footprint in accordance with ISO standards
• Reduced energy consumption as measured against sales by 3% YoY

Social Achievements

• Implemented a new global onboarding process
• Global online learning platform implemented in 30 countries
• Performance appraisal process completion rate > 93 percent
• Monthly average employee turnover rate remained at 1.6 percent
• Launched a new global employee survey to assess employee engagement and empowerment

Governance Achievements

• Created the new “Supplier Management and Governance” department
• Joined the Responsible Supply Chain Initiative (RSCI)
• Updated MAHLE Business Code in September 2023
• Expanded the guide Prevention of Corruption by fraud topics
• Over 98% of targeted employees trained on corruption and antitrust law
• Target of 20% female representation on the Supervisory Board met

Climate Goals & Targets

Environmental Challenges

• Rising interest rates, increases in energy and commodity prices, pressure on global trade
• Supply chain disruptions
• Global shortage of skilled workers
• Global shortage of glass filler required to produce recycled resins
• Increasing environmental awareness in the markets and stricter emissions regulations

Mitigation Strategies

• Risk monitoring of suppliers and implementation of mitigation measures
• Contingency plans to maintain deliveries to customers
• Support of local initiatives to introduce young people to STEM professions
• Intensifying collaboration with suppliers to gather and process emission data
• Specified expectations toward carbon management in the supply chain in our Supplier Code of Conduct
• Using an Industrial Internet of Things (IIoT) platform for ISO 50001-compliant energy recording
• Working closely with suppliers to source raw materials with higher recycled content
• Implementing a new global employee survey to assess employee engagement and empowerment and implement targeted actions based on feedback

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• Sustainability assessments
• CSR audits
• Conflict Minerals Reporting Template (CMRT) and Extended Minerals Report Template (EMRT)

Climate-Related Risks & Opportunities

Physical Risks

• Fire and other natural hazard risks

Transition Risks

• New regulatory emission reduction targets
• Decreasing demand for combustion engine components

Opportunities

• Increasing the efficiency of components
• Expanding the portfolio of electric drives and auxiliary components

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001, EMAS, ISO 45001, ISO 50001

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 10
• SDG 12
• SDG 13

Initiatives contributing to these goals are described throughout the report

Sustainable Products & Innovation

• SCT electric motor
• MCT technology
• Bionic battery cooling plate
• Thermal management modules combining coolant and refrigerant circuits

Awards & Recognition

• Building Public Trust Award (Germany)
• Award in China for the group’s sustainability strategy and its implementation
• Potential Park Award
• Best Recruiters
• Leading Employers
• MINT minded Company
• Diversity Leader
• Golden World Award (IPRA)
• Safety Excellence Award (Hungary)