Climate Change Data

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Places

Environmental Achievements

• Reduced energy consumption by 16% in Celaya, Mexico (2019-2020)
• Increased waste recycling to 38.2% of total waste
• Achieved 9.5% renewable energy share (19.5% at sites able to ascertain source)

Social Achievements

• Launched Diversity, Equity, and Inclusion Council
• Launched Gentherm Women’s Network mentoring program
• Implemented COVID-19 PULSE Survey to understand employee needs
• Reduced lost time work case accidents by over 75% since 2018

Governance Achievements

• Strengthened Sustainability leadership structure with ESG Steering Committee and Board oversight
• Improved process for managing reported ethical issues
• Published Global Human Rights policy

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and community support
• Opportunities for improvement in water usage and renewable energy

Mitigation Strategies

• Implemented Safe Work Playbook and remote work options
• Provided community support through donations and equipment
• Set environmental targets for electricity, water, and waste reduction

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Supplier Requirements Manual

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB (Auto Parts), UN SDGs

Certifications: ISO 14001 (at approximately 80% of locations in 2020)

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 8: Decent Work and Economic Growth
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation, and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Gentherm's initiatives contribute to these goals through various programs and actions detailed in the report.

Sustainable Products & Innovation

• Climate Control Seats
• ClimateSense system
• Cell Connecting Boards
• Battery Performance Solutions
• Blanketrol III

Awards & Recognition

• General Motors Supplier of the Year (2019)
• Vietnam HR Awards 2020
• General Motors “Supplier Quality Excellence” Award
• Top Employer for Engineering in 2020 (Germany)
• Ford Q-1 supplier (Acuña, Mexico)
• Honda Excellence in Value award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Achieved seven-year environmental targets in two years
• Invested over $800,000 in energy-saving projects
• Increased renewable energy share to 12% of total electricity used

Social Achievements

• 97% response rate on global employee engagement survey
• Reduced lost work-time incidents by 75% since 2018
• Launched global web-based compliance training program

Governance Achievements

• Filed first CDP Climate Change response
• Added oversight of sustainability initiatives to the Nominating and Corporate Governance Committee charter

Climate Goals & Targets

Environmental Challenges

• Global supply chain disruptions
• COVID-19 pandemic

Mitigation Strategies

• Implemented "near miss reporting" for safety improvements
• Introduced flexible working guideline "Locate for Your Day"
• Developed a web-based sustainability application for improved data tracking

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Supplier Requirements Manual

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB Standards for Auto Parts, United Nations Sustainable Development Goals (SDG), TCFD, Ten Principles of the UN Global Compact

Certifications: ISO 14001, ISO 45001, ISO 50001 (North Macedonia site)

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 8
• SDG 6
• SDG 7
• SDG 9
• SDG 10
• SDG 12
• SDG 13

See Appendix for details

Sustainable Products & Innovation

• Climate Control Seats
• ClimateSense
• Cell Connecting Boards
• Battery Thermal Management

Awards & Recognition

• Investor’s Business Daily 100 Best ESG Companies
• Newsweek’s America’s Most Responsible Companies
• German Innovation Award
• China Automobile Parts Industry Development and Innovation Award
• Bosch Global Supplier Award
• GM Supplier of the Year
• Honda Excellence in Value Award
• Lear Changan Excellent Supplier Award
• San yo Trading Top Performing Supplier

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced water consumption by 20-30% per year at the South Korea office through updated faucets and equipment.
• Recycled approximately 80% of all water used at the Celaya, Mexico location.
• Recorded over 130 individual energy and resource saving projects across almost every location, resulting in $210,500 cost savings, 530 MT CO2e emissions reduction, 640,350 KWh electricity savings, and 5,500 M3 water reduction in 2022.

Social Achievements

• Over 2,200 employees completed training on human trafficking, modern slavery, and child labor risks in 2022.
• Delivered over 500,000 hours of employee training in 2022 (approximately 35 hours per employee).

Governance Achievements

• Approximately 57% of Gentherm employees worked in ISO 45001 certified facilities in 2022. Two major facilities are working towards certification, expected in 2023.
• Achieved ISO 50001 certification at one major manufacturing site (North Macedonia) in 2023.

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 1 and 2 emissions (94.3% related to purchased energy).
• Managing climate-related risks (transition to lower-carbon economy, physical impacts of climate change).

Mitigation Strategies

• Engaged an energy consulting firm to analyze renewable energy options.
• Maintains property damage insurance to address short-term climate risks.
• Business strategy focused on talent, technology leadership, focused growth, and financial excellence to address long-term climate risks.
• Supplier Code of Conduct, Supplier Requirements Manual, and Terms and Conditions of Purchase to promote vendor sustainability.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Supplier Requirements Manual
• Terms and Conditions of Purchase

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather events affecting operations

Transition Risks

• Shifting industry and consumer behaviors
• Changes in technology
• Shifting market demands

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001, ISO 50001

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Completed and activated a large-scale solar power installation in North Macedonia, generating approximately 650,000 KWH per year (10-12% of site's annual electricity use).
• Began construction of an on-site solar power installation in Vietnam (expected activation in 2024), generating approximately 1,800,000 KWH per year (20% of site's needs).
• Eliminated over 55,000 plastic bags per year from the supply chain.
• Increased the percentage of recycled metals used in products.

Social Achievements

• 3.6% growth of diversity representation (global females and minorities in the U.S.) for global Director and VP population.
• Delivered Unconscious Bias and “Elevate the Dialogue” trainings to nearly 80% of global leaders.
• 89% response rate on global employee engagement survey (17 points above industry benchmark).

Governance Achievements

• Reviewed and revised policies and procedures for incident response, risk management, roles and responsibilities, and disclosure management in accordance with new SEC cybersecurity reporting requirements.
• Updated Global Human Rights Policy to reflect best practices and align with UN Universal Declaration of Human Rights.

Climate Goals & Targets

Environmental Challenges

• Integrating two recently acquired companies into Gentherm's ESG program and reporting.
• Supply chain disruptions (implied).

Mitigation Strategies

• Developing ESG targets that reflect the new footprint.
• Establishing sustainability guidance for suppliers, including measuring and reporting emissions data and developing emissions targets.
• Conducting supplier audits (over 100 in 2023).

Supply Chain Management

Supplier Audits: Over 100/year

Responsible Procurement

• Supplier Code of Conduct
• Supplier Requirements Manual

Climate-Related Risks & Opportunities

Opportunities

• Increased use of renewable energy
• Development of energy-efficient products (ClimateSense, WellSense)

Reporting Standards

Frameworks Used: SASB, United Nations Sustainable Development Goals

Certifications: ISO 14001 (93% of employees at certified sites), ISO 50001 (18% of employees at certified sites), ISO 45001 (53% of employees at certified sites)

Sustainable Products & Innovation

• ClimateSense
• WellSense
• Climate Control Seats (CCS)
• Pneumatic Controlled Seat (PCS)
• puls.a

Awards & Recognition

• Reuters’ Automotive D.R.I.V.E Honour for ClimateSense
• Finalist for 2023 Automotive News PACE Award
• Top Employer in Germany
• Trusted Employer Award for Gentherm Hungary
• Michigan Top Workplaces 2023