Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health, Safety and Environment
• Environmental Responsibility & Stewardship
• Supply Chain Responsibility
• Fairness and Concern for Employees
• Corporate Ethics and Compliance
• Contributing to Communities

Environmental Achievements

• 249 facilities ISO 14001 certified
• 36 facilities ISO 50001 certified
• Complete vehicle assembly plant in Graz, Austria, awarded the Green Award – City of Graz, Austria Ecological Project for Integrated Environmental Protection (ECOPROFIT) for reductions in waste, chemicals, water and energy use.
• $1 million spent on environmental clean-up and remediation costs in 2017

Social Achievements

• Implemented Leadership Development and Succession program
• Established Fairness Committees in most North American and many European manufacturing facilities
• Employee Advocate in most North American manufacturing facilities
• Participation in initiatives to advance career development and inclusiveness for women
• Sponsored over 40 diverse student teams globally to support STEM development
• Magna Matching Program matching employee donations to qualified non-profit initiatives

Governance Achievements

• Implemented ethics and legal compliance program (ELC Program)
• Confidential and anonymous whistle-blower hotline
• Supplier Code of Conduct and Ethics

Climate Goals & Targets

Environmental Challenges

• Climate change presenting opportunities and challenges
• Extreme weather events potentially causing facility damage and production disruption
• Environmental laws requiring investigation and clean-up of contamination
• Meeting supplier code expectations globally

Mitigation Strategies

• Sustainability-focused innovation (lightweight materials, energy-efficient technologies)
• Minimizing operational impact (energy, water, waste reduction)
• CO2 reduction through lean logistics
• Global property risk control program (risk assessment, mitigation strategies)
• Global environmental compliance program (third-party and internal audits)
• Supplier Code of Conduct and Ethics

Supply Chain Management

Supplier Audits: All new production suppliers audited

Responsible Procurement

• Supplier Code of Conduct and Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory targets for GHG reduction

Opportunities

• Development of energy-efficient products and powertrain products

Reporting Standards

Frameworks Used: Null

Certifications: ISO 14001, ISO 50001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Advanced and lightweight materials
• Innovative multi-material joining processes
• Increased use of electronics
• Reduced number of parts
• Solutions to optimize internal combustion engines
• Hybrid and fully electric drivetrains
• Electrified accessory systems

Awards & Recognition

• Green Award – City of Graz, Austria Ecological Project for Integrated Environmental Protection (ECOPROFIT)

Environmental Metrics

ESG Focus Areas

• Health, Safety and Environment
• Environmental Responsibility & Stewardship
• Supply Chain Responsibility
• Fairness and Concern for Employees
• Corporate Ethics and Compliance
• Community Investment

Environmental Achievements

• Achieved over 3.6 million kWh in electricity savings through projects improving lighting, compressed air systems, chillers, and other equipment.
• Implemented lean logistics initiatives to reduce CO2 emissions, energy use, water consumption, and waste.
• Implemented water reduction and reuse activities in water-stressed regions.

Social Achievements

• Implemented a Global Labour Standards Policy.
• Established Fairness Committees in most North American and European manufacturing facilities.
• Supported over 800 charitable donations and sponsorships globally.
• Maintained a Magna Matching Program, matching employee donations to non-profit initiatives.

Governance Achievements

• Implemented an ethics and legal compliance program (ELC Program), overseen by the Audit Committee.
• Maintained a confidential and anonymous whistle-blower hotline.
• Developed and implemented centralized enterprise cybersecurity policies, compliance measures, and training programs.

Climate Goals & Targets

Environmental Challenges

• Extreme weather events that may cause disruptions to production and supply.
• Potential supply chain disruptions due to natural hazards.
• Meeting environmental regulations and remediation costs.

Mitigation Strategies

• Maintained a global property risk control program including risk assessment and mitigation strategies.
• Implemented a lean approach incorporating sustainability considerations in materials management and logistics.
• Set aside approximately $14.3 million for 13 sites with active environmental remediation projects.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct and Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, windstorms, earthquakes)

Transition Risks

• Regulatory targets for GHG reduction or future GHG emission caps

Opportunities

• Sustainability-focused innovation; development of energy-efficient products; hybrid and fully electric drivetrains.

Sustainable Products & Innovation

• Components and systems with reduced mass; solutions to optimize internal combustion engines; hybrid and fully electric drivetrains.

Awards & Recognition

• Energy into Action Innovation Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Management
• Compliance
• Occupational Health and Safety
• Diversity and Inclusion
• Corporate Social Responsibility
• Supply Chain Responsibility

Environmental Achievements

• Implemented a 1.5% per year water reduction target, aiming for 15% reduction by 2030 (referencing 2019 as the baseline year).
• Implemented a zero waste to landfill target, aiming for elimination by 2022.
• Decreasing carbon intensity: Sales intensity down 4.3%, Employee intensity down 2.6%, Square footage intensity down 12.8% (2017-2019).

Social Achievements

• Maintained Fairness Committees in many North American, European, Indian, and Chinese facilities.
• Implemented and enhanced Leadership Development System.
• Strategic partnerships with various organizations promoting gender diversity in STEM.
• Magna Matching Program matching employee donations to non-profit initiatives.
• Employee Disaster Relief Fund providing financial assistance to employees affected by disasters.

Governance Achievements

• Implemented an ethics and legal compliance program (ELC Program) overseen by the Audit Committee.
• Magna Hotline, a confidential whistle-blower hotline overseen by the Audit Committee.
• Supplier Code of Conduct outlining ethical business conduct expectations for suppliers.

Climate Goals & Targets

Environmental Challenges

• Transition risks related to tightening emissions standards in the EU and China, impacting demand for certain Magna products.
• Potential risks to demand for personal-use vehicles from shared mobility solutions.
• Potential for property damage and business interruption due to extreme weather events.
• Water scarcity in some regions where Magna operates.
• Increased customer pressure to assume greater warranty responsibility.
• Reputational risks related to critical materials.

Mitigation Strategies

• Monitoring and evaluating global regulatory developments; early-stage interaction with OEM customers; in-house R&D; private equity and venture capital investments.
• Product and investment strategies aimed at the "mobility-as-a-service" market.
• Global property risk control program including risk engineering, facility inspections, and supply chain risk assessment.
• Water reduction and reuse activities.
• Product liability and recall provisions based on best estimates of costs, net of recoveries.
• Diversification of suppliers; carrying excess inventory; designing products to minimize use of scarce materials; conflict minerals program.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Coastal flooding
• Earthquakes

Transition Risks

• Changes in regulations (EU, China)
• Market shifts towards ZLEVs
• Technology investments in ZLEVs
• Supply constraints on rare earth minerals

Opportunities

• New product and service markets related to fuel efficiency and reduced emissions (lightweight products, efficient transmissions, powertrain electrification, electric vehicles, MaaS, energy-efficient vehicle lighting).

Reporting Standards

Frameworks Used: TCFD, SASB Auto Parts

Certifications: ISO 14001, ISO 50001

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)
• Goal 8 (Decent Work and Economic Growth)
• Goal 5 (Gender Equality)
• Goal 17 (Partnerships for the Goals)

Sustainable Products & Innovation

• Lightweight products and materials
• Efficient transmissions
• Active aerodynamics
• Powertrain electrification
• Electric vehicles
• MaaS
• Energy-efficient vehicle lighting

Environmental Metrics

ESG Focus Areas

• Sustainability

Social Achievements

• Developed and implemented COVID-19 protocols to protect employee health and safety, with expenditures for PPE and expanded safety protocols totaling approximately $50 million.
• Took steps to minimize the impact of temporary layoffs on employees, including maintaining benefits coverages and maximizing full compensation days.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly impacted the automotive industry and Magna's business in 2020, leading to production suspensions, volume reductions, and economic headwinds.
• Global shortage of semiconductors, supply constraints on steel, and increased employee absenteeism.
• Potential for prolonged disruptions of critical materials or components due to the pandemic.
• Deteriorating economic conditions and lower consumer confidence.
• Customer production volume reductions due to shutdowns.
• Elevated absenteeism or potential employee shortages.
• Challenges in commercializing certain ADAS programs due to technical complexity and OEM timelines.
• Shifting OEM and consumer preferences for transmissions, pricing pressures, and transmission insourcing by Chinese OEMs.
• Elevated OEM product warranty expectations and recall levels.

Mitigation Strategies

• Developed and implemented a "Smart Start Playbook" for managing the pandemic in the workplace.
• Initiated and accelerated restructuring plans to right-size the business, aiming for $200 million in cost savings by the end of 2022.
• Reduced discretionary capital spending.
• Engaged emergency government support programs to maintain employee compensation and benefits.
• Implemented cost savings and efficiencies, including reduced discretionary spending and incentive compensation.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• EV battery enclosures
• CLEARVIEW™ camera and mirror technology
• FREEFORM™ surface seating trim

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Sustainability

Environmental Achievements

• Graz plant achieved carbon neutrality in 2022.
• Reduced heat and electricity consumption by approx. 3,096 MWh in 2021.
• Saved 1,509 tons of CO₂ and 7,070 m³ of water in 2021.
• Implemented Hektar Nektar project, creating a wildflower meadow and beehives to promote biodiversity.

Social Achievements

• Launched "Women Leadership Talent Pool" initiative in May 2021 to increase the proportion of women in STEM leadership positions.
• Achieved gold certification as a "bicycle-friendly company" through the Cycle Champ project.
• Created a safe and healthy working environment for employees during the COVID-19 pandemic.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Achieving a 100% renewable energy transition.
• Reducing landfill waste to less than 5%.

Mitigation Strategies

• Successful measures to create a safe and healthy working environment during the COVID-19 pandemic.
• Developing a roadmap for 100% renewable energy transition.
• Implementing a comprehensive waste strategy with monitoring and improvement targets.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Conduct for Suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: EMAS, UN SDGs

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• 1
• 3
• 4
• 5
• 6
• 7
• 8
• 9
• 10
• 11
• 12
• 13

Magna's actions contribute to these SDGs through various initiatives detailed in the report.

Sustainable Products & Innovation

• Fisker Ocean (recycled materials, optional solar roof)

Awards & Recognition

• ÖKOPROFIT® Award (2021)
• Austrian Supply Excellence & Digital Procurement Award (2021)
• Gold certification as a bicycle-friendly company (2021)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water
• Forests
• Biodiversity

Environmental Achievements

• Reduced Scope 2 emissions (Market-based) in connection with the purchase of Energy Attribute Certificates (RECs etc).
• Reduction of energy related emissions based on on-site energy reduction projects.
• Achieved a 15% reduction in water use at the end of 2023 compared to the 2019 baseline year.

Social Achievements

• Launched a global Fundamentals of Sustainability training, completed by around 66,000 employees.
• Increased the number of submissions for our annual Commitment to Sustainability Awards by 60% in 2023.

Governance Achievements

• Established a Governance Nominating and Sustainability Committee (GNSC) to support the Board’s oversight of Magna’s approach to sustainability/climate change issues.
• 35% of total C-suite and board-level monetary incentives linked to the management of climate change.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• intense competition
• customer concentration
• semiconductor chip supply disruptions and price increases
• regional energy supply and pricing
• product launch
• operational underperformance
• labour disruptions
• skilled labour attraction/retention
• commodity cost volatility
• Climate Change Risks (transition and physical risks)
• IT Security/Cybersecurity Risks
• Acquisition Risks
• risks of doing business in foreign markets
• environmental compliance

Mitigation Strategies

• Developed alternative sourcing strategies
• Global property risk control program including risk engineering, facility inspections, and supply chain risk assessment.
• Proactively managing our portfolio & evolving product mix and accelerate capital deployment towards megatrend/high-growth areas.
• Investing in R&D of low-carbon products and services.
• Implementing energy efficiency projects.
• Implementing water efficiency and water reduction projects.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct and Ethics
• SAQ 5.0 questionnaires
• AI-based risk monitoring tool
• M2030 emissions reporting platform

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Windstorms
• Wildfires
• Tornadoes
• Tsunamis
• Hailstorms
• Lightning
• Temperature changes
• Precipitation
• Water security

Transition Risks

• Reduced demand for combustion engine technology
• Pricing pressures on non-electrified products

Opportunities

• Increased demand for lower emission technology and products
• Growth in electrified products

Reporting Standards

Frameworks Used: GHG Protocol, TCFD, SBTi, IFRS, SASB Auto Parts, ISSB

Certifications: ISO 14001

Third-party Assurance: EY and SCS Global

UN Sustainable Development Goals

• Goal 13

Magna reports on its progress on the UN Sustainable Development Goals, which includes Goal 13 (Climate Action).

Sustainable Products & Innovation

• 800v eDrive Solution
• Battery enclosures
• Modular eDecoupling unit
• EcoSphere product family

Awards & Recognition

• U.S. Department of Energy Distinguished Achievement Award