Climate Change Data

Environmental Metrics

ESG Focus Areas

• Compliance
• Products (social affairs)
• Environment, Health and Safety Affairs
• Employee affairs
• Corporate citizenship

Environmental Achievements

• Reduced CO2 emissions by 3% in relation to economic output.
• Reduced energy consumption by 3% in relation to economic output.
• Reduced water consumption by 9% in relation to economic output.
• Reduced waste volume by 1% in relation to economic output.
• Introduced battery graphite with significantly lower energy consumption in production to series production.
• Procured energy from renewable sources at the Wackersdorf site.

Social Achievements

• Improved employee safety, with accident frequency remaining very low (2.5 accidents per million working hours).
• Launched a global Quality Initiative to improve product quality and reduce COPQ.
• Implemented a comprehensive Operations Management System in BU CFM to standardize processes.
• Implemented the Safety Pledge Program to encourage employee suggestions for safety improvements.
• Introduced a framework concept for expert careers.
• Implemented the “Alternating Teleworking” agreement for employees in Germany.
• Relaunched the Employee Assistance Program (EAP).

Governance Achievements

• Maintained a strong compliance program, including a Code of Conduct, Anti-corruption Program, and Whistleblower Policy.
• Conducted a group-wide compliance survey.
• Implemented a Business Partner Compliance Process (BPC) to monitor risks and control workflows with intermediaries.
• Participated in a Together for Sustainability audit (TFS).

Climate Goals & Targets

Environmental Challenges

• High energy consumption due to high-temperature technologies.
• Risk of accidents and process safety incidents.
• Shortage of specialists and high employee turnover.
• Maintaining compliance across a global supply chain.

Mitigation Strategies

• Investing in equipment with BAT technology (Best Available Technology), including regenerative thermal oxidization.
• Implementing a group-wide Risk Management System (RMS) and process safety management system.
• Implementing various measures to improve employee safety, including training and the Safety Pledge Program.
• Implementing a Code of Conduct for Suppliers and Sub-contractors, and conducting supplier audits.

Supply Chain Management

Supplier Audits: Two subsidiaries participated in a Together for Sustainability audit (TFS).

Responsible Procurement

• Code of Conduct for Suppliers and Sub-contractors

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, ISO 50001, OHSAS 18001, AS 9100, IATF 16949

Third-party Assurance: KPMG Wirtschaftsprüfungsgesellschaft (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Lightweight construction products based on carbon fibers
• Graphites for Li-ion batteries
• Components for fuel cells

Awards & Recognition

• SGL Group Award
• Swabian Scientific Prize
• Utz-Hellmuth-Felcht-Award

Environmental Metrics

ESG Focus Areas

• Compliance
• Products
• Environment, health and safety affairs
• Employee affairs
• Corporate citizenship

Environmental Achievements

• Reduced energy consumption and CO2 emissions based on adjusted sales in 2018
• Reduced water consumption based on adjusted sales in 2018
• Provided a local new housing area with low-temperature waste heat for their home heating free of charge for 20 years (Meitingen)

Social Achievements

• Introduced an eLearning program on anti-corruption, with 1,432 out of 1,736 white-collar employees completing the course by January 31, 2019
• 69% of production employees participated in the Safety Pledge Program
• Accident frequency was 3.45 accidents per million working hours, lower than the target of 3.61
• Concluded the overall works agreement for Alternating Teleworking, allowing employees to work from home for up to 40% of their working hours (Germany)
• Offered various health and wellbeing initiatives in Meitingen and Bonn (Germany)

Governance Achievements

• Implemented a group-wide Business Partner Compliance Process (BPC) to monitor risks and control workflows when dealing with sales agents, adding distributors in 2018
• Introduced a comprehensive, cloud-based IT solution for HR processes (starting 2019)
• Reworked the compliance program for export control and customs, adjusting it to the latest statutory requirements and successfully performing a new evaluation of customs procedures

Climate Goals & Targets

Environmental Challenges

• High energy consumption due to high-temperature technologies used in manufacturing
• Increasing dearth of specialists
• High employee fluctuation
• Changing employee requirements and wishes
• Risks connected with trade activities and customs regulations

Mitigation Strategies

• Constantly making processes more energy efficient
• Implementing a group-wide employee survey to understand employee needs and improve areas for improvement
• Implementing a forward-looking competency management to identify future skill needs
• Standardizing the recruiting process globally
• Implementing a group-wide Business Partner Compliance Process (BPC) and a Global Trade Policy

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Conduct for Suppliers and Subcontractors (including adherence to integrity, anti-corruption, social and environmental standards, conflict materials, and UN Global Compact principles)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Use of SGL Carbon composites in wind turbines and battery/fuel cell solutions

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, ISO 50001, OHSAS 18001, AS 9100, IATF 16949

Third-party Assurance: KPMG Wirtschaftsprüfungsgesellschaft (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Recycled carbon fiber materials
• Electromobility solutions

Awards & Recognition

• Great Start certificate from Great Place to Work®

Environmental Metrics

ESG Focus Areas

• Compliance
• Products
• Environment, health and safety affairs
• Employee affairs
• Corporate citizenship

Environmental Achievements

• Reduced energy consumption by 17% and CO2 emissions by 19% compared to 2019.
• Reduced water consumption by 20% compared to 2019.

Social Achievements

• Launched the “SGL Carbon. Roadmap to Sustainability” strategic project.
• Implemented an Operations Management System (OMS) across production sites, improving the OMS maturity level by 8 index points.
• Achieved ISO 19600:2016 certification for its Compliance Management System.

Governance Achievements

• Established a new organizational structure with four clearly defined business units, each with full profit and loss responsibility.
• Implemented a restructuring program targeting over €100 million in annual savings by 2023.
• Improved free cash flow from continuing operations to €73.7 million.

Climate Goals & Targets

Environmental Challenges

• 15% drop in sales revenue due to the Covid-19 pandemic.
• Negative changes among customers in sectors like aerospace, severely affected by the pandemic.
• Need to develop more forward-looking and efficient structures and a more stringent cost basis.
• Impairment loss of €106.5 million in the CFM reporting segment.

Mitigation Strategies

• Developed effective measures against Covid-19, including preventative measures in the workplace.
• Implemented a comprehensive restructuring program with approximately 700 individual initiatives to improve profits.
• Radically adapted spending and investment policies.
• Divided businesses into four clearly differentiated units with full profit and loss responsibility.
• Reduced administrative functions from 20 to 10.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Conduct for Suppliers and Subcontractors; requirements for dealing with conflict materials; adherence to UN Global Compact principles.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Energy and climate protection regulations; stricter environmental regulations.

Opportunities

• Development of energy-efficient products.

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 9001, ISO 14001, ISO 50001, ISO 45001, ISO 19600:2016, AS 9100, IATF 16949

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Composite battery cases; gas diffusion layers for fuel cells; light composite solutions for automotive and aerospace industries.

Awards & Recognition

• Supplier of the Year by Hyundai

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Installed a photovoltaic system at the Ort im Innkreis site, preventing the emission of around 30 tons of CO2 per year.
• Reduced energy consumption by 3% compared to the 2017 baseline.

Social Achievements

• Achieved a lost time injury (LTI) frequency rate of 2.6 (target was 3.4).
• 100% apprentice takeover rate in Germany.
• Rolled out a new 360-degree feedback tool and process.

Governance Achievements

• Maintained ISO 37301 certification.
• Rolled out Human Rights Policy; management and office workers training by 2022.
• 99% of primary existing suppliers and 99% of new suppliers committed to the Supplier Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• Increased CO2 emissions due to higher production capacity utilization.
• Increased water consumption due to increased production volumes.
• Shortage of skilled workers.

Mitigation Strategies

• Plans to cover global power requirements from renewable sources by 2025.
• Plans to use electricity to operate high-temperature processes previously gas-fired or switch to hydrogen and biogas.
• Developing a global reduction target for Scope 3 emissions by the end of 2022.
• Active sourcing for recruitment on social networks.
• Forward-looking skills management.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI (Core option)

Certifications: ISO 9001, ISO 14001, ISO 50001, ISO 45001, ISO 37301, AS 9100, IATF 16949, TISAX

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Not disclosed

Intention to contribute to the UN Sustainable Development Goals (SDGs) within the scope of our business capabilities.

Sustainable Products & Innovation

• Materials and products for electromobility, wind and solar energy production, LED technology.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate change
• Occupational safety
• Human rights
• Supply chain responsibility
• Governance and compliance

Environmental Achievements

• 3.3% CO2 reduction (scope 1 & 2) despite increased production volume
• Construction of PV installation at Ried site started
• Construction of biomass plant in Lavradio site (Portugal) started
• Initial calculation of scope 3 upstream emissions for 2021 and 2022

Social Achievements

• Reduction of LTI FR by around 15% compared with the previous year
• Target achievement of 20% women's quota in senior management in 2022
• Implementation of the new personnel development format "Personnel Conference" with the focus topic "Enhancing Diversity"
• Human rights training for all office workers worldwide in 2022

Governance Achievements

• Maintaining a Supplier Code of Conduct signing rate of 100%
• Analysis of suppliers' ESG performance
• Adaptation of the internal Corporate Governance Guidelines to the new legal requirements
• Confirmation of the certification of the Group-wide CMS in acc. to ISO 37301

Climate Goals & Targets

Environmental Challenges

• Dynamic price increases for raw materials, transport and logistics, and energy
• Temporary interruptions in the supply chains due to events in Eastern Europe and strict coronavirus policy in China
• Expiry of an important contract with an automotive customer
• Procuring green electricity proved to be extremely challenging in fiscal year 2022

Mitigation Strategies

• Hedging around 80% of energy requirements
• Establishing new supply routes
• Adjusting logistics routes and switching to smaller vessels
• Passing on additional costs to customers via pricing initiatives
• Utilizing newly available production capacities through orders with new customers in the wind energy sector

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Price increases in CO2 certificates

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 50001, ISO 37301, ISO 9001, ISO 14001, ISO 45001, TISAX

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 7
• SDG 13
• SDG 4
• SDG 5
• SDG 8
• SDG 12
• SDG 16

Not disclosed

Sustainable Products & Innovation

• Graphite anode material for lithium-ion batteries
• Gas diffusion layers for fuel cells
• Carbon fibers for wind turbines
• Composite components with natural fibers

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 10% CO2 reduction (Scope 1 and 2)
• Installation of biomass system in Lavradio (Portugal) with a reduction potential of approx. 40 kt CO2
• 8% reduction in Scope 3 emissions (367 kt in 2023 vs 399 kt in 2022)
• Energy intensity reduction by 7% compared to the previous year

Social Achievements

• Reduction of Lost-Time Injury (LTI) frequency rate from 2.3 to 1.6
• Achieved 22% women's quota in senior management (target 20%)
• 17% of production employees trained on Code of Conduct and Human Rights Policy (target 100%)
• Implementation of various initiatives worldwide to strengthen SGL Carbon's company values

Governance Achievements

• 100% Business Partner Code of Conduct signing rate
• Update of Business Partner Code of Conduct
• Re-certification of Compliance Management System (CMS) in accordance with ISO 37301
• Expansion of the CMS ISO certification with additional certification of the anti-corruption and bribery system

Climate Goals & Targets

Environmental Challenges

• High interest rates and inflation
• Increasingly tense geopolitical developments and difficult economic conditions
• Upheaval on energy markets due to the war in Ukraine
• Shortage of skilled workers

Mitigation Strategies

• Consistent work on reducing greenhouse gas emissions
• Installation of biomass plant at Lavradio site
• Sourcing of green electricity
• Improvement of energy efficiency
• Conversion of gas-powered processes to hydrogen, biogas and/or electricity
• Compensation
• Development of measures for Scope 3 reduction together with relevant suppliers
• Implementation of various initiatives worldwide to strengthen SGL Carbon's company values
• Employee engagement efforts to counteract high fluctuation

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Business Partner Code of Conduct
• Supplier Risk Assessment questionnaire
• Supplier development measures

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 50001, ISO 37301, ISO 9001, ISO 14001, ISO 45001, IATF 16949, EN/AS 9100

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 16

SGL Carbon's business model contributes to these SDGs through its products and operations.

Sustainable Products & Innovation

• Carbon fibers for wind industry
• Specialty graphite products for wind industry
• Graphite anode material for lithium-ion batteries
• Composite battery boxes for electric vehicles
• Automotive and mobility components

Awards & Recognition

• Not disclosed