Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Published first Sustainability Report detailing ESG practices and achievements.
• Rayong Manufacturing Facility in Thailand received a Corporate Social Responsibility Award from the American Chamber of Commerce (second year in a row).

Social Achievements

• Enhanced diversity, equity, and inclusion policies.
• Solidified diversity, equity and equality statement.
• Established a DEI Steering Committee.
• Provided more than 2,700 meals to hospitals, more than 2,400 meals to Detroit and Hamtramck Police Departments, and approximately 800 meals to the Detroit Fire Department.
• Provided PPE to hospitals, first responders, and emergency workers.
• Continued support of charitable organizations.
• Kept 2020 Summer Internship Program in place virtually.

Governance Achievements

• Ranked 1st overall out of 81 small cap, consumer companies for Financially Material ESG Disclosures by Institutional Investor.
• Named to Newsweek’s list of America’s Most Responsible Companies and Forbes list of the World’s Best Employers for 2020.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting automotive production and causing temporary plant shutdowns.
• Significant industrial fire at Malvern Manufacturing Facility.
• Supply chain disruptions.

Mitigation Strategies

• Instituted downside protection playbook and implemented COVID-19 workplace safety guidelines.
• Flexed variable expenses and structurally reduced fixed costs.
• Implemented disaster management plan to mitigate Malvern fire impact.
• Utilized production capacity and resources at other AAM facilities to avoid customer supply disruptions.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Electric Drive (eDrive) Technology
• EcoTrac® Disconnecting AWD system
• QuantumTM lightweight axle technology
• High-efficiency axles
• PowerLite® axles
• PowerDense® gears
• High strength connecting rod technology
• Refined vibration control systems
• Forged axle tubes

Awards & Recognition

• GM Supplier of the Year award (fourth consecutive year)
• Two PACE Awards (for Electric Drive technology on Jaguar I-PACE)
• Corporate Social Responsibility Award (Rayong facility)
• Newsweek’s list of America’s Most Responsible Companies
• Forbes list of the World’s Best Employers for 2020

Environmental Metrics

ESG Focus Areas

• Energy and Emissions Reduction
• Reduce Water Use
• Reduce, Reuse, Recycle Industrial Materials
• Associate Health, Safety and Wellness
• Attract, Develop, Engage and Retain Diverse Talent
• Partner with Global Communities
• Investment in Technology
• Product Quality and Safety
• Cascade and Verify Supplier Compliance
• Ethical Business Practices and Training

Environmental Achievements

• Exceeded 2019 goals to reduce GHG emissions, energy usage, and water consumption by 5% by the end of 2024 ahead of schedule.
• Achieved a reduction in emissions intensity of approximately 38% and similar reductions in energy usage and water consumption.
• Launched the E4 Environmental Sustainability System.
• Improved CDP score from D to C.

Social Achievements

• Launched the S4 Safety program, resulting in a TRIR of 0.9 for both 2020 and 2021 and a 57% reduction in recordable injuries since 2015.
• Established our Mutual Respect statement and translated both statements into 17 languages.
• Formed a DEI Steering Committee.
• Created AAM’s comprehensive DEI Strategic Roadmap.
• Expanded DEI training to all U.S. salaried Associates.
• Launched the AAM University program in Mexico.
• Relaunched the AAM Charitable Contributions Program on a global basis, committing nearly $10 million in charitable contributions since 2017.

Governance Achievements

• Strengthened board level governance, appointing a senior executive to be AAM’s Environmental Sustainability champion.
• Fortified efforts in environmental sustainability by adding resources to support the mission of improving AAM’s sustainability performance.
• Formed a cross-functional ESG Working Group.
• Developed a global ethics and compliance program.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the global semiconductor shortage impacting the automotive industry.
• 86% of AAM’s GHG emissions originate from our suppliers.

Mitigation Strategies

• Developed a full sustainable procurement strategy to launch in 2022.
• Developed a plan to achieve top level scores on CDP by 2025.
• Working with suppliers to commit to the same environmental stewardship goals.

Supply Chain Management

Supplier Audits: 108 completed SAQs (2021)

Responsible Procurement

• Code of Business Conduct
• Anti-Corruption Policy
• Conflict Minerals Policy
• Supplier Requirements Manual
• Sustainability Goals cascading in Q2 2022

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 14001:2015 (51 facilities), ISO 50001 (47 facilities), LEED (European Headquarters and Engineering Center)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Electric drive units
• e-Beam axle
• 3-in-1 electric propulsion system
• EcoTrac® AWD disconnecting systems
• TracRite differential portfolio
• Forged axle tubes

Awards & Recognition

• Forbes’ list of America’s Best Large Employers (top 5 in automotive industry)
• Newsweek’s list of America’s Most Responsible Companies
• Altair Enlighten Award (2021)

Environmental Metrics

ESG Focus Areas

• Energy and Emissions Reduction
• Reduce Water Use
• Reduce, Reuse, Recycle Industrial Materials
• Associate Health, Safety and Wellbeing
• Attract, Develop, Engage and Retain Diverse Talent
• Partner with Global Communities
• Investment in Technology
• Product Quality and Safety
• Cascade and Verify Supplier Compliance
• Ethical Business Practices and Training

Environmental Achievements

• Achieved SBTi validation of GHG Emission goals
• Achieved an A- on the CDP Climate Change survey
• Achieved Silver Status on the EcoVadis Sustainability Assessment
• Reduced GHG emissions footprint
• Increased renewable energy purchases
• Made progress towards Zero Waste-to-Landfill goal
• Improved on all Safety Performance metrics

Social Achievements

• Named one of America’s Best Large Employers by Forbes
• Hired first Executive of Diversity, Equity and Inclusion
• Expanded wellbeing program supporting physical, emotional, financial and social wellbeing
• Implemented expanded parental leave policy
• Improved on all Safety Performance metrics
• Completed a sustainability materiality assessment

Governance Achievements

• Advanced Board effectiveness and Director skills in promoting DEI and conscious inclusion
• Promoted a cybersmart culture through security awareness and training
• Expanded Sustainability Program governance
• Established a Supplier Sustainability Council

Climate Goals & Targets

Environmental Challenges

• Increased absolute energy consumption reflecting a more active business environment
• Supply chain disruptions due to climate events (implied)
• Scope 3 emissions comprising approximately 90% of total emissions footprint

Mitigation Strategies

• Improved internal efficiencies and overall energy and emissions intensity
• Renewable energy purchasing plan reduced net emissions by 19.2% year-over-year
• Developed alternative sourcing strategies (implied through sustainable procurement strategy)
• Launched the first phase of our sustainable procurement strategy
• Required 67% of suppliers (by emissions) to have targets validated by SBTi by 2027

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Requirements Manual
• Supplier Sustainability Council
• Sustainable procurement strategy
• Supplier Code of Conduct (2023)

Climate-Related Risks & Opportunities

Physical Risks

• Changing temperatures
• Heatwaves
• Extreme precipitation events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC (implied)

Certifications: ISO 14001 (52 facilities), ISO 50001 (all qualified locations)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3
• Goal 5
• Goal 7
• Goal 8
• Goal 9
• Goal 10
• Goal 12
• Goal 13
• Goal 16

See page 79 for details

Sustainable Products & Innovation

• Electric drive units (EDUs)
• E-Beam axles
• Lightweight components

Awards & Recognition

• GM Overdrive Award
• Three Automotive News PACE awards
• Eight quality performance awards
• Advanced Powertrain Award
• Vogel Award
• MHCC Chamber Advocate of the Year Award
• Nissan Motor Corporation Supplier Diversity Overachiever Award
• Michigan Hispanic Chamber of Commerce Certificate of Achievement
• Great Lakes Women’s Business Council’s Excellence in Supplier Diversity Award

Environmental Metrics

ESG Focus Areas

• Safety
• Supplier Diversity
• Human Rights
• Emissions Reduction
• Renewable Energy
• Cybersecurity

Environmental Achievements

• Exceeded 2023 U.S. renewable and carbon-free energy goal
• Launched a global transportation campaign to reduce emissions

Social Achievements

• Achieved 22,000+ consolidated days without a recordable safety incident
• Increased Supplier Diversity spend year-over-year by 12%
• Enhanced Human Rights policy
• Introduced a new Cybersecurity Awareness program, #AAMSecure
• Received 21 quality performance awards

Governance Achievements

• Achieved ISO 50001 certification at all manufacturing facilities

Climate Goals & Targets

Supply Chain Management

Responsible Procurement

• Increased Supplier Diversity spend

Climate-Related Risks & Opportunities

Awards & Recognition

• 21 quality performance awards