Climate Change Data

Environmental Metrics

ESG Focus Areas

• Responsibility in the supply chain
• Green Products
• Commitment to Climate Protection
• Diversity

Environmental Achievements

• Reduced greenhouse gas emissions by 4.0% compared to 2016
• Increased recycling rate in Germany to 96.9%
• Implemented energy management system according to ISO 50001 at four locations
• Construction of four cogeneration plants in Herzogenaurach and Homburg

Social Achievements

• Launched initiative “Leadership and Corporate Values” to implement a globally valid management model
• Implemented a new concept for a customer satisfaction survey
• Established a reverse mentoring program to foster exchange between younger and older employees
• Exceeded the legal quota for employing people with disabilities in Germany by 0.5%
• Received 58 awards for customer satisfaction and product quality

Governance Achievements

• Groupwide implementation of the Schaeffler Supplier Code of Conduct
• Established a due diligence process for respecting human rights
• Initiated a company-wide project to identify the requirements of the EU General Data Protection Regulation (EU GDPR)

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Meeting growing expectations from stakeholders regarding sustainable management
• Reducing occupational accidents
• Achieving target proportion of women in management

Mitigation Strategies

• Established a multistep selection process for new suppliers, including on-site assessments
• Developed standardized, industry-specific sustainability questionnaires for on-site assessments
• Implemented an energy management system according to ISO 50001
• Implemented various measures to improve occupational health and safety, resulting in a 15% reduction in accident frequency
• Implemented structural and communicative measures to increase the proportion of women in management

Supply Chain Management

Supplier Audits: 157 initial assessments in 2017

Responsible Procurement

• Schaeffler Supplier Code of Conduct
• OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Entry into fuel cell technology

Reporting Standards

Frameworks Used: GRI (core option)

Certifications: ISO 14001, ISO 50001, OHSAS 18001, EMAS

UN Sustainable Development Goals

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

The report details how Schaeffler's initiatives contribute to these goals.

Sustainable Products & Innovation

• Electric wheel hub drive
• Electric axle
• Hybrid modules
• Metallic bipolar plates for fuel cells

Awards & Recognition

• EcoVadis Silver Recognition Level
• Econ Award (bronze)
• DMG MORI “Partner Award 2017”

Environmental Metrics

ESG Focus Areas

• Sustainability

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic and semiconductor shortages.
• Stringent environmental regulations.
• Intense competition in the automotive industry.
• Rapid technological change in the automotive industry.

Mitigation Strategies

• Cost reduction programs and restructuring plans.
• Investment in R&D for electrification technologies.
• Phasing out of non-core ICE technologies.
• Implementation of a compliance management system.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO

Third-party Assurance: KPMG

Environmental Metrics

ESG Focus Areas

• Eco-friendly drives
• Urban mobility
• Interurban mobility
• Energy chain
• Employee advancement and development
• Occupational health and safety
• Diversity and equal opportunity
• Corporate citizenship
• Environment and climate protection
• Social and ecological standards in the value chain
• Corporate compliance
• Information security

Environmental Achievements

• Absolute CO₂ emissions decreased by 1.9% compared to the previous year, from 1,045,627 to 1,026,057 tons of CO₂.
• 98.1% of Schaeffler production sites were EMAS certified and 98.8% were ISO 14001 certified.
• Water consumption decreased slightly by 5.0%.
• Schaeffler Brazil achieved Zero Waste to Landfill in its factory.

Social Achievements

• Accident rate reduced to 5.2 (prior year: 6.2), achieving the annual reduction target of 10% for the third year in a row.
• Received 66 awards for customer satisfaction and product quality.
• Launched a program to improve attendance at four pilot locations in Germany.
• Implemented the integrated product safety management system (IPSMS).

Governance Achievements

• Established a Sustainability Committee consisting of members of the Executive Board and selected leaders of the first-level management.
• Established a Diversity Council consisting of members of the Executive Board and senior employees.
• No reportable non-financial risks were identified in 2019.
• Implemented the IT-based "Business Partner Due Diligence Workflow".

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 3 emissions.
• Reducing the number of accidents involving lost time.
• Increasing the share of purchased green electricity to 100%.
• Increasing the share of suppliers evaluated via self-assessments.

Mitigation Strategies

• Initiated projects with the support of external experts to identify, classify, and potentially reduce Scope 3 emissions.
• Implemented appropriate measures taking local conditions into account.
• Implemented a comprehensive corporate energy efficiency program, for example through heat recovery and optimized machine cooling.
• Increase in the share of suppliers evaluated via self-assessments.

Supply Chain Management

Supplier Audits: 86 new suppliers reviewed in initial assessments in 2019

Responsible Procurement

• Supplier Code of Conduct (SCoC) based on UN Global Compact and ILO core labor standards.
• Material Compliance department evaluates requirements for choosing suppliers, including chemical substances, preparations, packaging, and materials.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and technologies for e-mobility and renewable energy.

Reporting Standards

Frameworks Used: GRI (Core Option), UN Global Compact

Certifications: ISO 14001, EMAS, ISO 50001, OHSAS 18001/ISO 45001, IATF 16949:2016, ISO/TS 22163, SAE AS 9100D:2016-09-20, ISO 9001:2015

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 7 (Affordable and clean energy)
• SDG 8 (Decent work and economic growth)
• SDG 9 (Industry, innovation, and infrastructure)
• SDG 11 (Sustainable cities and communities)
• SDG 12 (Responsible consumption and production)
• SDG 13 (Climate action)
• SDG 17 (Partnerships for the goals)

Schaeffler's products and technologies contribute to these goals through eco-friendly drives, urban mobility solutions, renewable energy initiatives, and responsible supply chain management.

Sustainable Products & Innovation

• Electric motors for hybrid and all-electric vehicles; hybrid modules; bipolar plates for fuel cells; energy-efficient direct drives; X-life bearings; Schaeffler Mover; Bio-Hybrid.

Awards & Recognition

• German Mobility Prize (Schaeffler Mover); Red Dot Award (Bio-Hybrid); Supplier of the Year (NEXUS Automotive International, TEMOT International, GROUPAUTO International); Excellence class for the Corporate Health Award.

Environmental Metrics

ESG Focus Areas

• Climate protection
• Occupational safety
• Sustainable supply chain
• Employee advancement and development
• Diversity and equal opportunity
• Social responsibility
• Compliance

Environmental Achievements

• Reduced greenhouse gas emissions by approximately 27% compared to the prior year (from 1,026,057 to 754,656 tons of CO2).
• Achieved 100% green electricity at all German production sites.
• Elgoibar, Spain plant achieved 100% carbon-neutral production.
• Planted more than 2,000 native trees.
• Reduced water withdrawal by around 16% (from 5,783,781 m³ to 4,957,818 m³).

Social Achievements

• Reduced accident rate (LTIR) to 4.6 (prior year: 5.2), exceeding the annual reduction target of 10% for the fourth consecutive year.
• Offered more than 100 trainings live and online.
• Launched the Mobi-Health initiative in India, providing free basic medical care in over 80 villages.
• Donated EUR 1.63 million to organizations and social institutions to mitigate the consequences of the coronavirus pandemic.

Governance Achievements

• Improved CDP climate rating from “B-” to “A-”.
• Implemented the “Know Your Business Partner” process for assessing business contacts.
• Rolled out the digitalized Competitor Contacts and Associations Register (CARe) worldwide.
• Revised and further defined guidance for identifying and addressing conflicts of interest.
• 34,879 employees participated in online compliance trainings.

Climate Goals & Targets

Environmental Challenges

• Coronavirus pandemic impacting business operations and supply chains.
• Global water scarcity.
• Climate change impacting supply chains.
• Reducing Scope 3 emissions.

Mitigation Strategies

• Implemented measures to reduce the risk of infection (distancing, hygiene, remote work).
• Developed the Risk Tower tool for digital supply chain management.
• Introduced measures to reduce water usage and recycle withdrawn water.
• Initiated projects to identify, classify, and reduce Scope 3 emissions; calculated emissions for the entire purchasing volume using macroeconomic input-output models.

Supply Chain Management

Supplier Audits: 64 new suppliers evaluated in 2020; 30.9% of purchasing volume from suppliers with sustainability SAQs.

Responsible Procurement

• Supplier Code of Conduct (SCoC)
• Sustainable procurement of critical materials (e.g., conflict minerals)
• Use of certified suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and technologies for renewable energy

Reporting Standards

Frameworks Used: GRI (Core option), TCFD (partially aligned)

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

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft (Limited assurance)

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 4 (Quality Education)
• SDG 5 (Gender Equality)
• SDG 6 (Clean Water and Sanitation)
• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 11 (Sustainable Cities and Communities)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 17 (Partnerships for the Goals)

The report details how Schaeffler's initiatives contribute to these goals.

Sustainable Products & Innovation

• Electric axle drives
• Low-friction bearings for wind turbines
• INA FEAD KIT for 48-volt hybrid vehicles
• OPTIME condition monitoring system

Awards & Recognition

• 72 awards for customer satisfaction and product quality
• Gold award from Germany's “Healthy Companies” initiative
• CDP Climate rating A-

Environmental Metrics

ESG Focus Areas

• Climate change
• Energy efficiency
• Renewable energy
• Sustainable supply chain
• Occupational health and safety
• Diversity and equal opportunity
• Responsible corporate governance
• Human rights

Environmental Achievements

• Reduced own greenhouse gas emissions (Scope 1 and 2) by 5.5% to 703 thousand tons of CO2 compared to the prior year.
• Achieved 100% purchased power from renewable sources for its production sites in Europe.
• Implemented energy efficiency measures leading to cumulative annual savings of around 47 gigawatt hours starting in 2022.
• Agreed to procure 100,000 tons of nearly carbon-free, hydrogen-produced steel annually from H2greensteel starting in 2025, reducing annual CO2 emissions by 200,000 tons.

Social Achievements

• Reduced accident rate (LTIR) to 3.9 (prior year: 4.6), dropping by at least 10% for the fifth year in a row.
• Established the Schaeffler Foundation to emphasize the social responsibility of the Schaeffler Group and its family shareholders.
• Improved CDP water rating to “A-” (prior year: “B-”).
• Vaccinated approximately 22,000 employees in Europe against the coronavirus.

Governance Achievements

• Revised and adopted the Code of Conduct, taking into account the corporate strategy and increasing demand for responsible corporate governance.
• Improved sustainability ratings and rankings, achieving Platinum status in the EcoVadis rating.
• Achieved an “A-” in the CDP climate rating.

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 3 upstream emissions (supply chain emissions)
• Ensuring the responsible procurement of raw materials from conflict and high-risk areas
• Managing risks associated with corruption and export control
• Addressing human rights risks in the supply chain
• Maintaining business continuity during the coronavirus pandemic

Mitigation Strategies

• Collaboration with H2greensteel to source green steel.
• Implementation of the Sustainable Sites initiative to improve sustainability performance at all production sites.
• Use of the RCOI procedure to ascertain the origin of raw materials.
• Development of a holistic approach to risk assessment in accordance with OECD guidelines.
• Coronavirus vaccination campaign and implementation of 3G coronavirus measures.

Supply Chain Management

Supplier Audits: 68.6% of purchasing volume of production materials from suppliers with sustainability self-assessments (SAQs)

Responsible Procurement

• Supplier Code of Conduct
• Sustainability self-assessment questionnaires (SAQs)
• Supplier Initial Assessments
• RCOI procedure for conflict minerals
• Critical Raw Materials (CRM) Policy

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Expansion of business associated with wind power generation

Reporting Standards

Frameworks Used: GRI (Core option), UN Global Compact, TCFD

Certifications: ISO 14001, ISO 50001, ISO 45001, EMAS, IATF 16949:2016, ISO/TS 22163, SAE AS 9100D:2016

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft (Limited assurance)

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 4 (Quality Education)
• SDG 5 (Gender Equality)
• SDG 6 (Clean Water and Sanitation)
• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 11 (Sustainable Cities and Communities)
• SDG 12 (Responsible Consumption and Production)
• SDG 13 (Climate Action)
• SDG 17 (Partnerships for the Goals)

The report details how Schaeffler's initiatives contribute to these goals throughout its operations and supply chain.

Sustainable Products & Innovation

• 800-volt power electronics for electric axles
• Highly integrated 3-in-1 electric axle
• Chainless "Free Drive" bike-by-wire drive system
• Low-friction bearings for wind turbines
• Repair solutions for hybrid and 48-volt mild hybrid vehicles

Awards & Recognition

• 75 awards for customer satisfaction and product quality
• Platinum status in EcoVadis rating
• A- in CDP climate rating
• A- in CDP water rating
• Railsponsible Supplier Award

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced production-related CO2e emissions by around 30% compared to the prior year (from 699,000 to 488,000 metric tons)
• Achieved 100% of purchased power from renewable sources in European and Chinese plants in 2022.
• Achieved cumulative annual energy efficiency gains of 64.2 GWh by 2023 (target 100 GWh by 2024).

Social Achievements

• Reduced accident rate (LTIR) to 2.9 (prior year: 3.9), at least 25.6% lower than the previous year.
• Conducted an employee survey to reinforce commitment and identify potential for improvement.
• Achieved 90.7% of purchasing volume of production material from suppliers with sustainability self-assessments (target 90% by 2022).

Governance Achievements

• Transferred responsibility for sustainability to the Chief Executive Officer.
• Incorporated selected Schaeffler ESG targets into short-term variable remuneration.
• Improved sustainability ratings and rankings (CDP climate change and water security rating improved to “A”, EcoVadis Platinum status with 76/100 points, S&P global ESG rating increased to 54).

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 3 upstream emissions (supply chain emissions), particularly in high-energy areas like steel and aluminum.
• Achieving climate neutrality in the supply chain by 2040.
• Managing the large carbon footprint associated with steel procurement.

Mitigation Strategies

• Developed a comprehensive Climate Action Plan with six key elements (strategy, green purchasing, green production, green products, finance & IT, people).
• Entered into an agreement to procure 100,000 metric tons of nearly carbon-free steel annually from H2 Green Steel beginning in 2027.
• Identifying suppliers that manufacture flat steel primarily using scrap to reduce carbon footprint.

Supply Chain Management

Supplier Audits: Social audits conducted in justified cases based on Responsible Supply Chain Initiative (RSCI) standard.

Responsible Procurement

• Schaeffler Group Supplier Code of Conduct
• Sustainable Procurement Policy
• Drive Sustainability initiative’s standardized survey (SAQ)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Water scarcity

Transition Risks

• Regulatory changes
• Market shifts
• Increased costs for energy and raw materials

Opportunities

• Development of energy-efficient products
• Expansion of renewable energy generation

Reporting Standards

Frameworks Used: GRI Standards (2021), UN Sustainable Development Goals (SDGs), TCFD recommendations

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

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Goal 7
• Goal 12
• Goal 13

Targets and initiatives aligned with relevant SDGs.

Sustainable Products & Innovation

• 4-in-1 electric axle
• Centrifugal disc bearing
• High-performance ball bearing
• Components for wind turbines
• Components for fuel cells and electrolyzers

Awards & Recognition

• 67 awards for customer satisfaction and product quality

Environmental Metrics

ESG Focus Areas

• Climate Change

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: KPMG (limited assurance)

UN Sustainable Development Goals

• SDG 13

Reducing global GHG emissions