Environmental & Social Information • Dec 9, 2022
Environmental & Social Information
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| LETTER FROM THE | EMPLOYEE MATTERS 17 |
COMPLIANCE 24 |
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| FREEDOM OF ASSOCIATION 25 |
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| INFORMATION SECURITY 25 |
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| EU TAXONOMY 26 |
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| STABILUS SUSTAINABILITY STRATEGY | ||||
| MATERIALITY ANALYSIS AND STAKEHOLDER ANALYSIS | GLOBAL SUPPLY CHAIN RISKS 20 |
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| NON-FINANCIAL RISK ANALYSIS | SUSTAINABLE AND RESPONSIBLE PROCUREMENT 21 |
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| REGIONAL PROCUREMENT 22 |
INDEPENDENT LIMITED ASSURANCE | |||
| REPORT 28 |
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| ABOUT STABILUS | ||||
| INDEPENDENT ASSURANCE PRACTITIONER'S | ||||
| REPORT 28 |
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| ENVIRONMENT, HEALTH & SAFETY | ADDITIONAL INFORMATION 30 |
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| MANAGEMENT BOARD 4 ABOUT THIS REPORT 5 ORGANIZATION AND MANAGEMENT OF SUSTAINABILITY 5 6 7 8 9 SHAREHOLDER STRUCTURE 9 CORPORATE VALUES 10 11 GLOBAL ENVIRONMENT, HEALTH AND SAFETY MANAGEMENT 11 CO2 EMISSIONS 12 ENERGY 14 |
5 GLOBAL COVID-19 PANDEMIC 17 EMPLOYEE RECRUITMENT AND TRAINING 17 WORKING ENVIRONMENT, INTERNAL WORK CONDITIONS 18 DIVERSITY, INCLUSION AND EQUAL OPPORTUNITY 19 6 SUSTAINABILITY IN PROCUREMENT 20 7 PRODUCTS 23 8 SOCIAL COMMITMENT 24 |
9 10 11 12 |
WASTE 15 HEALTH AND SAFETY 15
| FIG. 1: GLOBAL SUSTAINABILITY BOARD | 5 |
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| FIG. 2: RATING PLATFORMS | 6 |
| FIG. 3: OVERVIEW OF MATERIAL AND IMPORTANT TOPICS FOR STABILUS | 7 |
| FIG. 4: MATERIALITY MATRIX | 8 |
| TABLE 1: CO2 EMISSIONS |
13 | |
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| TABLE 2: ENERGY CONSUMPTION | 15 | |
| TABLE | 3: WATER CONSUMPTION | 15 |
| TABLE | 4: WASTE | 15 |
| TABLE | 5: OCCUPATIONAL HEALTH AND SAFETY TRAINING HOURS | 16 |
| TABLE | 6: ACCIDENTS | 16 |
| TABLE | 7: EMPLOYEES | 19 |
| TABLE | 8: GENDER | 19 |
| TABLE | 9: EMPLOYMENT TYPE |
19 |
| TABLE 10: EMPLOYEE AGE STRUCTURE | 19 | |
| TABLE 11: SERIAL SUPPLIERS THAT HAVE SIGNED THE BUSINESS PARTNER | ||
| CODE OF CONDUCT | 21 | |
| TABLE 12: REGIONAL SUPPLIERS | 22 | |
| TABLE 13: COMPLIANCE CASES | 25 | |
| TABLE 14: EU TAXONOMY: REVENUES, CAPEX, OPEX | 27 |
2 ABOUT THIS 3 ABOUT STABILUS
REPORT
4 ENVIRONMENT, HEALTH & SAFETY 6 SUSTAINABILITY IN PROCUREMENT
5 EMPLOYEE MATTERS
7 PRODUCTS 9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 8 SOCIAL COMMITMENT 12 ADDITIONAL
Dealing with climate change is one of the biggest challenges of the modern day. Our goal is to substantially reduce CO2 emissions at our own production facilities and throughout our supply chain by 2030. Therefore, we will replace our current energy supplies by 100% renewable energy sources and further optimize our production and business processes.
ASSURANCE REPORT
Also regarding our employees, we have identified a number of key topics that we will focus on such as occupational safety, diversity, equal opportunities and additional training opportunities. Our employees are our most important resource. We would like to take this opportunity to thank them for their dedication. Based on this great commitment of our employees we have also been able to further improve our corporate sustainability program and set ambitious targets to contribute to the necessary CO2 reduction worldwide. Together with our employees, our business partners and all other stakeholders, we are looking forward achieving these goals.
We would like to thank you for your interest in our company and our Environmental commitment and we are looking forward to an open dialog with you.
DR. MICHAEL BÜCHSNER STEFAN BAUERREIS Chief Executive Officer (CEO) Chief Financial Officer (CFO)
permanent change has become the norm in our world. Companies have to continuously adapt and optimize in order to achieve sustained success in a long term perspective. We are embracing these changes and taking responsibility for our employees, our environment, and our future.
As part of our STAR 2030 strategy, we adopted a strong focus on responsible and sustainable corporate management. Therefore, we have fundamentally revised our materiality analysis for this year's non-financial report in order to identify the current sustainability topics that are most important to our internal and external stakeholders. This allows us to address the topics of highest relevance to our stakeholders and to Stabilus in a very target-oriented manner.
Stabilus SE is a public interest company within the meaning of § 316a and 264d of the German Commercial Code (HGB). The Stabilus Group, i.e. Stabilus SE and its consolidated subsidiaries, have more than 500 employees on average. This means Stabilus SE is obliged by the EU Directive and by German law1 to publish a non-financial report. Stabilus has opted to provide the necessary disclosures on the environment, diversity and social matters in this separate non-financial report that supplements the Annual Report.
This is the fifth non-financial report to be published by the Stabilus Group (hereinafter referred to as "Stabilus" or the "Group"). It is published annually after the end of Stabilus' fiscal year (October 1 to September 30) and with the corresponding Annual Report. The information in this report refers to the period from October 1, 2021 to September 30, 2022. In the case of selected key performance indicators (KPIs), the information also refers to the previous fiscal year from October 1, 2020 to September 30, 2021. This non-financial report is approved by the Supervisory Board and reviewed by an independent auditor in the context of a limited assurance review.
In the fiscal year 2021/2022 Stabilus performed a complete new materiality analysis and expanded analysis of non-financial risk. The report concentrates on the two main topics - the new defined CO2 targets for 2030 and the diversity targets with a focus on women in leadership positions. This report has been guided by the GRI Standards (2016 and 5 EMPLOYEE MATTERS 6 SUSTAINABILITY IN PROCUREMENT 7 PRODUCTS 9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 8 SOCIAL COMMITMENT 12 ADDITIONAL
ASSURANCE REPORT
2018). For readability, all references to groups of people in this report (e.g. employees, colleagues) use the masculine form to refer to all genders equally.
Stabilus' process for assessing the relevance of non-financial topics for this report is guided by the principles set out in the statutory provisions (Section 289b et seq. HGB): The assessment of material aspects for the company, its business activity and its performance on the one hand and the company's impact on the respective aspect on the other.
In order to introduce a Group-wide sustainability strategy, Stabilus established a central structure comprising the Global Sustainability Board as the development, coordination and implementation body and the CSR Steering Committee as the strategic and decision-making body. The CSR Steering Committee was chaired by the CEO at the start of the fiscal year. After Mr. Bauerreis joined the organization as the new CFO, the CSR Steering Committee was jointly chaired by the two Management 1 German CSR Directive Implementation Act (CSR-RUG) as set out in § 289b et seq.
HGB, which implements Directive 2014/95/EU of March 9, 2017.
1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT STABILUS HEALTH & SAFETY 2 ABOUT THIS REPORT
4 ENVIRONMENT,
5 EMPLOYEE MATTERS
6 SUSTAINABILITY IN PROCUREMENT 7 PRODUCTS 9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 8 SOCIAL COMMITMENT 12 ADDITIONAL
ASSURANCE REPORT INFORMATION
Board members from June 2022 onward. The CSR Steering Committee meets four times a year. It decides on Stabilus' global sustainability strategy and defines corresponding work programs on environmental, climate, social and governance topics. The Management Board reports to the Supervisory Board Audit Committee on sustainability topics at regular intervals.
In the fiscal year 2021/2022 a central Global Sustainability Board was introduced under the direction of the Chief Compliance Officer. The Global Sustainability Board is responsible for coordinating the Groupwide implementation and communication of all sustainability topics (environmental, social and governance) arising at the Group and acts as a central point of contact for internal and external stakeholders. The Global Sustainability Board meets every two weeks and discusses new issues, the implementation of the two sustainability initiatives resulting from the STAR 2030 strategy workshop, necessary coordination with other departments and reporting. In the year under review, it focused on defining the Stabilus Group's CO2 reduction target to 2030, the revision of the materiality analysis and the comprehensive analysis of non-financial risks, as well as the detailed assessment of the requirement profile of relevant rating agencies. The Global Sustainability Board also initiated a workshop with sales employees so that the measures taken by Stabilus in the area of sustainability can also be presented to customers.
The department heads (Operations, Human Resources, Procurement, Compliance and Sales) implement the necessary measures to fulfill the requirements defined by the Global Sustainability Board. The latter individuals may include the local officers at the sites where required.
In 2022, Stabilus fundamentally revised and formalized its sustainability strategy on the basis of the revised materiality analysis, the external stakeholder analysis and Stabilus' global strategy process STAR 2030, which defines the overarching Group targets for 2030.
In its STAR 2030 future strategy, Stabilus has adopted a focus on sustainability and social responsibility – because it considers active participation in environmental protection and human rights to be an element of good corporate governance.
Among other things, the sustainability strategy focuses on reducing CO2 Stabilus has set itself the goal of sustainably reducing CO2 emissions at its own production facilities and throughout its supply chain2 .
The "CO2 Roadmap" strategic initiative was launched in the year under review. Among other things, this aims to achieve a significant reduction in CO2 emissions at Stabilus' own sites by lowering energy consumption and ensuring that 100 % of electricity used is generated from renewable sources by 2030. The in-house generation of solar power was already expanded at two sites in the year under review. The switchover to renewable energy sources will be realized gradually at the other sites. The CO2 reduction in the supply chain will be achieved through targeted procurement strategies and supplier management.
When it comes to assessing a company, compliance with environmental, social and governance (ESG) criteria is playing an increasingly important role for customers, investors, applicants, business partners and the public. However, it is also something that the Stabilus Group pursues as a matter of course.
As part of its STAR 2030 strategy, Stabilus also launched a strategic initiative to implement the sustainability criteria applied by external rating agencies in the 2022 fiscal year. A gap analysis identified the most important topics for the company to focus on implementing. The rating platforms were selected on the basis of their market presence and perception as well as customer and investor preferences and requirements.
The following platforms were selected as a framework for Stabilus to improve its sustainability performance, including the adoption of a target rating to be achieved by 2030.
2 For information on CO2 reduction targets, see CO2 emissions.
Stabilus fundamentally revised its materiality analysis in the 2022 fiscal year to include all key corporate functions. This process was supported by external consultants and designed to satisfy the requirements for a materiality analysis in accordance with the corresponding provisions of the HGB and is based on the GRI Standards (2016). A longlist of all sustainability topics was drawn up using secondary research and peer analysis. This longlist formed the basis for the external and internal stakeholder analysis.
In preparing the materiality analysis, Stabilus performed a new stakeholder analysis in the period under review including the main perspectives of internal and external stakeholders. The most important external stakeholders are customers, investors and suppliers, while the most important internal stakeholders are the Stabilus Group's employees.
In the period under review, Stabilus conducted structured interviews with a focus on the external stakeholder perspective of the Stabilus Group. The information and expectations obtained in this process formed part of the new materiality analysis. The external stakeholder perspective was supplemented by sustainability-specific written queries received by Stabilus during the year under review. Stabilus also informs its external stakeholders about sustainability initiatives and success stories in its annual non-financial report.
With the longlist as the starting point, the most important internal and external stakeholders conducted an analysis of the material sustainability topics. This assessment focused on the relevance of the respective topic for the stakeholders, its impact (inside-out perspective) and its social relevance (outside-in perspective). Representatives of the Procurement, Human Resources, Sales, Investor Relations, Compliance and Sustainability departments evaluated the issues raised by the stakeholders.
On this basis, the Management Board and representatives of the various departments held a workshop to examine the topics assessed with a view to developing a list of material sustainability topics for the Stabilus Group taking into account key topics. At the request of management, this list was amended slightly by the CSR Steering Committee to reflect the specific focus on core areas. This will enable targets and the measures required to achieve them to be defined more precisely. The final list of material and key topics was approved by the Stabilus Management Board.
The table below lists the "material" topics according to the materiality analysis alongside the focal points of fundamental importance to the Group, which are shown as "important" topics.
The material topics identified in the 2022 materiality analysis in the environment area are CO2 emissions & decarbonization, energy consumption & management and water management. Social concerns are taken into account in the Employees and Sustainable Procurement categories. With regard to employees, the material topics are occupational safety, diversity, inclusion, equality and talent acquisition and training. In the area of diversity, inclusion and equal opportunity, the aspect of women in leadership positions was identified as particularly relevant and was prioritized when determining the material aspects.
Within the material topic of talent acquisition and training, the focus will be placed on training as a tool for mitigating the impact of the skills shortage. Sustainable and responsible procurement are material topics for the supply chain and hence for Stabilus' Procurement department. The area of compliance is also classified as material.
| Overview of material and important topics for Stabilus |
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| Material topic in accordance with § 289b et seq. HGB |
Important topic for Stabilus |
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| Environment | CO2 emissions & decarbonization |
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| Energy consumption & management | |||
| Waste management, waste generation | |||
| Water management | |||
| Environmental compliance | |||
| Employees | Employee safety (Occupational Health & Safety) | ||
| Diversity, Inclusion, Equality | |||
| Talent acquisition and training | |||
| Working conditions (internal employees) | |||
| Sustainable procurement | Sustainable and responsible Procurement | ||
| Products | Sustainability in Innovation | ||
| Circular Economy and efficient use of materials | |||
| Compliance | Business Ethics and Corporate Behavior | ||
| Information security | Data protection & Information security |
In addition, Stabilus has identified other major issues that are important to external and internal stakeholders. These include waste management and waste generation, the general working atmosphere/working conditions within the Stabilus Group, sustainability in innovation, the circular economy, data protection and information security. Stabilus assumes corporate responsibility for these topics and has included corresponding disclosures in this report. Content relating to material aspects and relevant for non-financial reporting is indicated by a green line placed next to the respective paragraph in this report. This content has been reviewed by an independent auditor in the context of a limited assurance review as discussed in the corresponding report.3 4
The process for assessing and evaluating the Group's non-financial risks and the corresponding responsibilities were expanded in the year under review. Going forward, they will be integrated into the existing intragroup financial risk management system. This transition ensures that the aspects of business relevance and impact are included in the material risk types. It also places the focus on accurate evaluation as well as efficiency in the process and in documentation.
3 See Section 11: Independent limited assurance report
5 EMPLOYEE MATTERS
Materiality matrix
6 SUSTAINABILITY IN PROCUREMENT
7 PRODUCTS 9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 8 SOCIAL COMMITMENT 12 ADDITIONAL
4 The statement of assurance covers all disclosures on key performance indicators for the 2022 fiscal year. It does not cover disclosures on the 2021 fiscal year or comparisons with the disclosures on the 2021 fiscal year.
1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT STABILUS 2 ABOUT THIS REPORT
4 ENVIRONMENT, HEALTH & SAFETY 6 SUSTAINABILITY IN PROCUREMENT
5 EMPLOYEE MATTERS
7 PRODUCTS 9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 8 SOCIAL COMMITMENT 12 ADDITIONAL
ASSURANCE REPORT
In the future, the updated management process for non-financial risks will be structured using the bottom-up principle on the basis of functional and regional risk officers with centralized reporting. In preparation for this, a top-down approach for non-financial reporting including the global functional risk officers was selected in the year under review. The tasks of the functional and regional risk officers with regard to non-financial risks were geared toward the financial reporting process in the year under review. The risk inventory of non-financial risks was also expanded and additional assessment parameters were applied. In particular, this focused on the inclusion and further elaboration of risks in connection with climate change adaptation and its direct and indirect impact on Stabilus' global business activities.
The process includes the assessment of non-financial risks in gross terms and the definition of corrective measures to mitigate the probability of risks occurring and the severity of their impact if they do occur. A final net analysis of non-financial risks is prepared on this basis.
No non-financial risks expected to give rise to serious adverse consequences have been identified in connection with Stabilus' business activities, products, services or business relationships. The risk analysis and its findings have been assessed and approved by the Management Board.
The disclosures in this report generally refer to the entire Stabilus Group. The disclosures in the sections on environment, health and safety refer solely to the production sites, as these are the most relevant in terms of their environmental and occupational safety impact. The other KPIs published in this non-financial report for the first time include only the figures for the 2022 fiscal year. In the case of KPIs already published in other reports, the figures for the 2021 fiscal year are also shown.
Stabilus SE is a European Company (Societas Europaea) headquartered in Germany and subject to German law.
In the year under review, Stabilus changed its legal format and relocated its headquarter Germany. In a first step Stabilus S.A. was converted to Stabilus SE, Luxembourg, effective April 5, 2022. Stabilus SE then relocated to Germany by resolution of the Annual General Meeting on August 11, 2022. Stabilus SE was registered at the commercial register of Frankfurt/Main on September 2, 2022. Its administrative headquarter is in Koblenz.
With 20 production sites in eleven countries and numerous regional offices and sales partners around the world, Stabilus is represented in the EMEA region (Europe, Middle East and Africa), in North and South America and in the Asia/Pacific region (APAC). The Stabilus Group now has more than 6,5005 employees worldwide (previous year: same as 2022).
Its largest operations are the operational headquarters and the plant in Koblenz (Germany) and the plants in Ramos Arizpe (Mexico), Brasov (Romania), Gastonia (USA) such as Pinghu and Wujin (China).
7 https://www.stabilus.com/investors/financial-reports-presentations
Stabilus is an international provider of motion control solutions for customers across a broad spectrum of industries including mobility, health, recreation, furniture, energy, construction, industrial machinery and automation. With more than eight decades of demonstrated expertise, Stabilus offers reliable and innovative motion control solutions that enable, enhance and automate opening, closing, lifting, lowering and adjusting actions. The company's customized damping and vibration isolation technology protects against shocks, vibrations and noise. Stabilus generated revenues of 1,116.3 million € in the 2022 fiscal year (previous year: 937.7 million €). The full consolidated financial statements of the Stabilus Group and its subsidiaries can be found in the Stabilus Group Annual Report.6 Like most manufacturing companies, Stabilus sources production and non-production materials. Stabilus mainly purchases components and semi-finished products. Typical raw materials purchased by the Group include those contained in the semi-finished products/components, e.g. steel, copper, resin and rubber.
Stabilus' customers are international companies operating in the automotive and industrial sectors.
Shareholder structure of Stabilus SE is published annually in the Group annual report.7 According to the voting rights notifications received until September 30, 2022, the following shareholders held more than 3 % of total voting rights attached to Stabilus shares: Allianz Global Investors GmbH, Frankfurt am Main, Germany (11.29 %), The Goldman Sachs Group, Inc., Wilmington, USA (11.02 %), NN Group N.V., Amsterdam, Netherlands (10.05 %), Marathon Asset Management Limited, London, UK (6.63 %), FMR LLC, Wilmington, USA (5.74 %), Teleios Capital Partners LLC, Zug, Switzerland (5.03 %), Allianz SE, Munich, Germany (4.72 %), Fidelity Investment Trust, Boston, USA (3.7 %), Ameriprise Financial, Inc., Wilmington, USA (3.41 %).
5 Active and non-active employees, excluding temporary staff, trainees, interns and graduate students.
6 https://www.stabilus.com/investors/financial-reports-presentations
Corporate values
Stabilus' corporate values are encorporated in its value statement8 and set out in its Code of Conduct9 . For Stabilus, social responsibility also means engaging with society at its locations around the world, especially in the areas of science, education, culture and social and humanitarian issues.
4 ENVIRONMENT, HEALTH & SAFETY
Stabilus has undertaken to comply with the principles of the International Labour Organization (ILO)10 and also applies the United Nations Sustainable Development Goals (SDGs)11 as a signatory of the UN Global Compact. Stabilus has identified the following six goals as those with the highest priority for the Group:
5 EMPLOYEE MATTERS
Clean Water and Sanitation I Ensure availability and sustainable management of water and
Gender Equality I Achieve gender equality and
Quality Education | Ensure inclusive and equitable quality education and promote lifelong
learning opportunities for all
empower all women and girls
Decent Work and Economic Growth I Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Responsible Consumption and Production I Ensure sustainable consumption and production patterns
Climate Action | Take urgent action to combat climate change and its impacts
8 https://www.stabilus.com/company/stabilus-values
Focus SDGs at Stabilus
6 SUSTAINABILITY IN PROCUREMENT
SDG 4
SDG 5
1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT STABILUS & SAFETY
5 EMPLOYEE MATTERS 6 SUSTAINABILITY
IN PROCUREMENT 4 ENVIRONMENT, HEALTH 7 PRODUCTS 8 SOCIAL COMMITMENT
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED ASSURANCE REPORT
2 ABOUT THIS REPORT
As a manufacturing company, Stabilus is aware of its responsibility for the environment and its employees' health. Preventing accidents and adverse health effects is a central responsibility of Stabilus as an employer. In addition to the established internal focus on occupational health and safety as well as environmental protection, Stabilus is responding to the growing requirements of external stakeholders, such as customers and investors, by continuously improving its processes.
GRI 102-18 b GRI 102-19 GRI 103-2 c4 GRI 302-1 f GRI 305-1 g GRI 305-2 g
Responsibility for environmental management, occupational health and safety at Stabilus primarily lies with the Management Board of Stabilus SE for overarching environmental topics and the Chief Operating Officer (COO) for operational aspects relating to the environment and occupational health and safety (EHS). The COO has global responsibility for defining EHS targets and developing corresponding strategies and steering mechanisms at plant and regional level with the support of the VP Operations NA (Vice President Operations North America). The operational heads of the EMEA, Americas and APAC regions are responsible for collecting the KPIs on CO2 , energy, water, waste, health and safety. The EHS KPIs are reported to the COO and the VP Operations NA on a quarterly basis. The targets are implemented by the local management of each Stabilus plant and the environmental officers. Global Human Resources (HR) and the local HR management teams are responsible for implementing preventive employee health measures.
Within its EHS management activities, Stabilus adopted a particular focus on the CO2 reduction strategy and initiated a CO2 reduction strategy in the year under review. Due to its considerable global importance, this special initiative is currently being coordinated by the Global Sustainability Board and will be successively integrated into the existing management structures next year. As part of the initiative, a global reduction target for CO2 emissions to 2030 has been defined and a corresponding plan of measures developed. Details of the CO2 target and the accompanying measures can be found in the CO2 emissions and energy section.
Global EHS management has three main tasks: reducing pollution (including CO2 emissions) as part of its environmental mandate, protecting employee health, safety and welfare as part of its occupational safety mandate and continuously reducing operational energy and water requirements as part of its energy efficiency mandate. Targets and responsibilities are defined on the basis of these mandates for the most important topics. All of Stabilus' production sites around the world form part of the EHS management system. Stabilus has an internal system for tracking energy and water consumptions, CO2 emissions and waste volumes that also encompasses all of its production sites. The Group has implemented environmental management systems in accordance with EMAS (Eco-Management and Audit Scheme) and ISO 14001. A new EHS policy describing Stabilus' principles in the area of the environment and occupational health and safety was developed and rolled out globally in the period under review.12
The process for monitoring and reporting EHS data and targets has been continuously improved in recent years. Starting with the quarterly reports on energy and water consumption and occupational safety by the EHS managers at all of the production sites, the KPIs on CO2 emissions, waste data and renewable energies were successively introduced and monitored in the 2021 and 2022 reporting years. In addition, corresponding definitions were standardized and optimized.
To improve the controlling of Stabilus' carbon footprint, expanded KPIs for CO2 and energy were introduced in the period under review and included in this non-financial report. Market-based and location-based Scope 2 emissions are reported in order to reflect purchases of energy from lower-CO2 sources. As part of the CO2 reduction initiative, the proportion of total energy consumption attributable to renewable energies is now reported.
The Stabilus Group continued to improve its global EHS reporting in the 2022 fiscal year: The reporting process was optimized with the help of reporting software and expanded EHS reporting guidelines were introduced that encompass the principles and definitions of the Greenhouse Gas Protocol (GHG), the US Environmental Protection Agency (EPA) and the Global Reporting Initiative (GRI). These reporting guidelines were introduced at all production sites around the world in the period under review.
Monitoring of EHS measures includes external and internal audits. External audits in accordance with ISO 14001, ISO 50001, EMAS and ISO 45001 are regularly performed as part of the recertification process.
12 https://www.stabilus.com/company/environment
2 ABOUT THIS REPORT 1 LETTER FROM THE MANAGEMENT BOARD
3 ABOUT STABILUS 5 EMPLOYEE & SAFETY
6 SUSTAINABILITY IN PROCUREMENT
MATTERS
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 4 ENVIRONMENT, HEALTH 7 PRODUCTS 8 SOCIAL COMMITMENT
Internal audits to review and optimize the EHS KPIs were expanded significantly in the year under review. They covered the Group's three main sites, which account for 38% of total production. Internal audits were conducted at the plants in China, while hybrid audits – local and virtual – took place at the plants in Romania and Mexico.
The audits were performed by the VP Operations NA as part of his responsibility for the global reporting of EHS KPIs with the support of the internal auditor and members of the Global Sustainability Board. The audits encompassed environmental and occupational safety topics and aimed to ensure compliance with the EHS policies and reporting guidelines. The findings of the internal audits and the corrective measures resolved are discussed at the quarterly EHS steering meetings.
Stabilus' Global Process Technology department, headed by the COO, monitors efficiency measures for production processes including improvements to energy and material efficiency. Best practices are shared among the Group companies. Material efficiency and resource optimization has been realized through process improvements in areas such as powder coating for gas springs and the flocking process for mechanical springs.
Stabilus has established environmental management systems and the majority of its plants are certified in accordance with ISO 14001. The main plant in Koblenz was the first to be certified in 1997. 13 Stabilus plants are now certified in accordance with ISO 14001, accounting for 96 % of total production. Environmental risk assessments form part of these certifications.
The Koblenz plant is also EMAS-certified and publishes a detailed environmental statement.13 The plant accounts for 33 % of total global production.
In light of the growing importance of energy efficiency measures, Stabilus Koblenz and Hahn Gasfedern, which account for 35% of the Group's global production output, obtained certification in accordance with ISO 50001, the international standard for implementing an energy management system.14 Stabilus' new production site in Pinghu (China) is also currently working to achieve ISO 50001 certification; this process will be completed in the coming fiscal year.
Stabilus aims to ensure compliance with all local laws and regulations. Compliance with environmental provisions is supported by the environmental management system and the ISO 14001 environmental certification. The IMDS database and the centralized Material Compliance function at the plant in Romania ensure that the materials used comply with the requirements for the respective chemicals as well as the environmental laws in the countries of production (REACH, RoHS, German End-of-life Vehicle Ordinance, etc.) and customer requirements.
Greenhouse gas emissions contribute to global climate change. Accordingly, Stabilus seeks to measure and reduce its CO2 emissions and largely prevent them in order to minimize its impact on the climate.
In the 2022 fiscal year, the EHS strategy focused on the enhancement of CO2 reporting and the reduction strategy with a defined CO2 reduction target to 2030. Stabilus aims to significantly reduce the CO2 emissions from its own operating activities and in its supply chain by 2030 and has defined the following targets:
These targets were determined on the basis of the Scope 1 and Scope 2 emission figures calculated in the previous year. Scope 3 emissions were estimated on the basis of product/component evaluations and other inputs. The individual reduction targets result in a total CO2 reduction of 43% across Scope 1, Scope 2 and Scope 3 between now and 2030.
ASSURANCE REPORT
In order to achieve these ambitious targets, Stabilus launched a Group-wide strategic initiative in the year under review with the aim of bundling the individual CO2 reduction measures around the world. The objective of the CO2 reduction initiative is to generate efficiency gains with regard to electricity and natural gas consumption and ensure the achievement of the targets to 2030.
The plan of action involves Stabilus switching to renewable energy sources for all its electricity purchases and producing renewable energy itself by installing photovoltaic systems at its sites. The individual projects implemented in the period under review are described in the Energy section of this non-financial report.
13 https://www.stabilus.com/company/environment
14 https://www.hahn-gasfedern.de/en/download
Direct Scope 1 emissions at the operational sites are total emissions from stationary combustion sources. Emissions from combustion sources at Stabilus plants are generated by the combustion of natural gas.
Indirect Scope 2 emissions from the consumption of purchased energy in the form of electricity and district heating. Stabilus calculates Scope 2 emissions only on the basis of the electricity purchased and the resulting emissions at the electricity providers (in metric tons), as other emission sources are not relevant to Stabilus. Location-based Scope 2 emissions describe the CO2 impact taking into account the average emission factor of electricity generation in the country in which the respective production site is located. Market-based Scope 2 emissions describe Stabilus' Scope 2 footprint on the basis of the electricity mix of the energy purchased.
Total Scope 1 emissions amounted to 9,423 metric tons in the year under review (previous year: 10,277 metric tons), while Scope 2 emissions (market-based) amounted to 29,940 metric tons (previous year: 35,949 metric tons). Scope 2 emission intensity (market-based) was 0.18 kg/pc (previous year: 0.21 kg/pc). Based on the total number of units produced, this results in Scope 1 & Scope 2 emission intensity (market-based) of 0.24 kg/pc in 2022 (previous year: 0.27 kg/pc). Scope 1 & Scope 2 emission intensity (location-based) was 0.30 kg/pc.
In the year under review, Scope 1 emission intensity remained unchanged and Scope 2 emission intensity (market-based) was improved. This already reflects the steps taken to switch the plants over to electricity generated from renewable and lower-CO2 sources. A comparison of market-based emission intensity and location-based emission intensity also serves to clearly illustrate that purchasing behavior has shifted in favor of lower-CO2 energy sources.
Only the figures for 2022 in this table have been audited.
The Stabilus Group's Scope 3 emissions were initially estimated using internal calculations of the product-specific carbon footprint in order to ensure that the overall reduction targets were calculated on the most realistic basis possible. A more detailed evaluation of Scope 3 emissions is currently in preparation in order to further improve CO2 reporting, increase transparency and generate insights into the emission drivers along the value chain. The identification of areas with particularly high emissions forms the basis for determining special measures aimed at significantly reducing Scope 3 emissions by 2030 in cooperation with the Group's business partners.
Stabilus is participating in the United Nations' international Climate Ambition Accelerator 2022 program, which aims to improve CO2 reporting and set strategic emission targets in compliance with the Paris Climate Agreement and the Science Based Target Initiative (SBTi). This allows Stabilus to benefit from a learning platform that lets program participants jointly improve their reporting and external communication and exchange their experiences of implementing sustainability strategies. The Group is also considering arranging for its CO2 target to be validated for conformity with the Paris Climate Agreement using scientific methods with the assistance of the Science Based Target Initiative (SBTi) in the future.
Stabilus also regularly engages with its customers on the topics of climate change and environmental protection. A process to allocate Stabilus' emissions to the products sold to customers was initiated in the 2021 fiscal year (see Sustainability in Innovation).
12 ADDITIONAL INFORMATION
| CO2 Emissions |
T_001 | |
|---|---|---|
| 2021 | 2022 | |
| CO2 Emissions Scope 1 (metric ton) (natural gas) |
10,277 | 9,423 |
| CO2 Emissions Scope 2 - location-based (metric ton) (electricity) |
– | 40,047 |
| CO2 Emissions Scope 2 - market-based (metric ton) (electricity) |
35,949 | 29,940 |
| CO2 Emissions Scope 1 & 2 - location-based (metric ton) |
– | 49,470 |
| CO2 Emissions Scope 1 & 2 - market-based (metric ton) |
46,226 | 40,051 |
| CO2 Emissions intensity Scope 1 (kg/pc) |
0.06 | 0.06 |
| CO2 Emissions intensity Scope 2 - location-based (kg/pc) (electricity) |
– | 0.24 |
| CO2 Emissions intensity Scope 2 - market-based (kg/pc) (electricity) |
0.21 | 0.18 |
| CO2 Emissions intensity Scope 1 & 2 - location-based (kg/pc) |
– | 0.30 |
| CO2 Emissions intensity Scope 1 & 2 - market-based (kg/pc) |
0.27 | 0.24 |
MATTERS
2 ABOUT THIS REPORT 1 LETTER FROM THE MANAGEMENT BOARD
3 ABOUT STABILUS & SAFETY 6 SUSTAINABILITY IN PROCUREMENT
5 EMPLOYEE
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 4 ENVIRONMENT, HEALTH 7 PRODUCTS 8 SOCIAL COMMITMENT
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6 SUSTAINABILITY IN PROCUREMENT
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 4 ENVIRONMENT, HEALTH 7 PRODUCTS 8 SOCIAL COMMITMENT
ASSURANCE REPORT
3 ABOUT
Energy consumption is the most important environmental factor for the Group's operating activities, as it is closely associated with the use of fossil fuels and the corresponding greenhouse gas emissions. Stabilus' main source of energy is electricity. The Group also uses gas to a limited extent. In the context of its direct business activities, production processes account for the vast majority of the energy consumed, while logistics and other non-production processes play a comparatively minor role.
Stabilus has defined an energy reduction target for all its global production sites. In connection with the CO2 reduction initiative, Stabilus aims to increase the proportion of electricity consumption from renewable energy sources to 100% by 2030 and has drawn up a corresponding plan of action. In line with the GRI definition, Stabilus considers renewable energies to be energy from sources that are capable of being replenished in a short time through ecological cycles or agricultural processes. This may include geothermal energy, wind energy, solar energy, hydro power and biomass. The proportion of total energy consumption attributable to renewable energies is included in external reporting.
MATTERS
generate
cover >40% of annual electricity requirements
save >600 metric tons of CO2 every year
>1,000 MWh
of electricity every year
In the period under review, the Group already implemented two important projects forming part of its plan of action with the aim of promoting the transition to renewable energy sources through in-house energy generation.
Around 500,000 € was invested in installing photovoltaic modules at the new Stabilus plant in Pinghu, China, in order to generate around 1,020 MWh of solar energy every year. This represents more than 40% of the plant's annual electricity requirements and will lead to savings of over 600 metric tons of CO2 a year.
In the 2022 fiscal year, Stabilus also launched a project to install photovoltaic modules at its main plant in Koblenz. This system will generate over 100 MWh in solar energy annually, thereby saving around 18 metric tons of CO2 . This covers the current electricity requirements for charging electric company cars and employees' electric cars at the site.
LED CHANGEOVER AT THE MAIN PLANT IN KOBLENZ
LED lighting was installed at the main plant in Koblenz in the year under review. This will save almost 700 MWh of electricity a year in the future, corresponding to CO2 emissions of over 100 metric tons.
The CO2 reduction plan includes additional measures to be implemented at the Group's various locations between now and 2030, including the use of new air compression technology, the replacement of lighting and the use of LED lighting, the expansion of measurement technology to record energy KPIs and the generation of renewable energy.
Total energy consumption (including natural gas and electricity) within the Group amounted to 151,732 MWh in the 2022 fiscal year (previous year: 156,931 MWh). Based on the number of units produced (across all products), this resulted in an energy intensity of 0.92 kWh/pc (previous year: 0.92 kWh/pc). Renewable energies accounted for 36% of total electricity consumption in the 2022 fiscal year.
Stabilus maintained the energy intensity per produced unit at a constant level in the year under review while reducing the resulting CO2 emissions through the increased use of renewable energy sources.
renewable sources (%) – 36.4%
Electricity consumption from
Water is used in the production process mainly as a coolant and detergent/ solvent, e.g. for washing parts between manufacturing steps. Water is also used for employee rooms and sanitary facilities. The availability of sufficient good-quality water is essential for operations at many Stabilus sites. Accordingly, Stabilus will closely monitor and assess water-related risks so that it can develop risk mitigation strategies as required.
Stabilus aims to reduce water consumption per unit produced at site level.
Water reduction measures include optimizing water usage in production as well as options for water-efficient sanitary installations. In the 2021 fiscal year, production volumes picked up again following the COVID-19 crisis, meaning that total water consumption also increased. In fiscal
(previous year: 2.11 l/pc). Total water consumption is shown in the table above.
The Koblenz plant is located in a water protection area and complies with the local regulations. Stabilus adheres to the local standards for waste water quality.
achieve the goal of reducing water consumption per production unit.
Total water consumption in the 2022 fiscal year amounted to 374,002 m³ (previous year: 359,253 m³). Based on the number of units produced (across all products), this resulted in a water intensity of 2.28 l/pc
However, the deviation from the set target is minor.
Stabilus generates waste through the production and packaging of products. Deliveries to automotive OEMs are typically packaged in reusable containers. Stabilus is committed to reducing material losses in production through efficient production processes and to correctly collecting, disposing of and recycling waste. Stabilus complies with the local environmental laws and aims to reduce the negative impact of waste generation, disposal and treatment as a result of its business processes.
Stabilus records the volume of hazardous and non-hazardous waste at its operational sites. Additional disclosures on waste recycling, especially steel scrap, will be included in regular reporting in the future.
The operational sites reported 5,334 metric tons of non-hazardous waste and 1,916 metric tons of hazardous waste in the 2022 fiscal year (previous year: 6,480 metric tons of non-hazardous waste and 1,999 metric tons of hazardous waste). This results in a waste intensity (in kg/pc) of 0.032 for non-hazardous waste (previous year: 0.038 kg/pc) and 0.012 for hazardous waste (previous year: 0.012 kg/pc). An improvement was achieved here compared to the previous year.
Occupational health and safety risks primarily arise in connection with production. This applies in particular to jobs with heightened risk profiles, such as metal processing and painting/coating processes.
ASSURANCE REPORT
12 ADDITIONAL INFORMATION
| Water intake | T_003 | Waste | T_004 | ||
|---|---|---|---|---|---|
| 2021 | 2022 | 2021 | 2022 | ||
| Water intake in m³ | 359,253 | 374,002 | Non-hazardous waste (metric ton) | 6,480 | 5,334 |
| Water intake intensity (l/pc) | 2.11 | 2.28 | Hazardous waste (metric ton) | 1,999 | 1,916 |
| Non-hazardous waste intensity (kg/pc) |
0.038 | 0.032 | |||
| year 2022 the water consumption continued to rise. The water intensity increased compared to the previous year. Therefore Stabilus did not |
Hazardous waste intensity (kg/pc) | 0.012 | 0.012 |
| 2021 | 2022 | 2021 | 2022 | ||
|---|---|---|---|---|---|
| Water intake in m³ | 359,253 | 374,002 | Non-hazardous waste (metric ton) | 6,480 | 5,334 |
| Water intake intensity (l/pc) | 2.11 | 2.28 | Hazardous waste (metric ton) | 1,999 | 1,916 |
| Non-hazardous waste intensity (kg/pc) |
0.038 | 0.032 | |||
| year 2022 the water consumption continued to rise. The water intensity |
| Energy consumption | T_002 | |
|---|---|---|
| 2021 | 2022 | |
| MWh | 156,931 | 151,732 |
| thereof natural gas (MWh) | 56,780 | 52,061 |
| thereof electricity (MWh) | 100,151 | 99,670 |
| Energy intensity (KWh/pc) | 0.92 | 0.92 |
2 ABOUT THIS REPORT 1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT STABILUS
& SAFETY
5 EMPLOYEE MATTERS
2021 2022
6 SUSTAINABILITY IN PROCUREMENT
4 ENVIRONMENT, HEALTH 7 PRODUCTS 8 SOCIAL COMMITMENT
1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT STABILUS & SAFETY
5 EMPLOYEE MATTERS 6 SUSTAINABILITY IN PROCUREMENT
4 ENVIRONMENT, HEALTH 7 PRODUCTS 8 SOCIAL COMMITMENT
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED ASSURANCE REPORT
12 ADDITIONAL INFORMATION
Stabilus aims to promote an active culture of safety through preventive measures such as risk analyses, assessments and regular training. This is based on the belief that safe working conditions can be achieved only with motivated employees who have been given comprehensive training.
2 ABOUT THIS REPORT
In this reporting system blue and white collar employees are considered. The report covers 97% of the total workforce.
In terms of health and safety management, ten Stabilus sites are currently certified in accordance with ISO 45001. These sites account for 93% of total production output. Stabilus has formal written health and safety policies in place as required by ISO 45001 and OHSAS (Occupational Health and Safety Assessment Series). These policies comply with local law and cover the topics of personal protective equipment, machine safety, emergency preparations, incident and accident management, workplace ergonomics, handling chemicals and fire protection.
Responsibility for occupational health and safety lies with the respective plant manager. Employee participation in occupational safety matters is ensured through regular plant-wide meetings and safety committee meetings.
| On average, employees at the operational sites received 6.64 hours of | |
|---|---|
| training on health and safety topics in the year under review (previous |
|
| year: 5.98 hours). |
Within the EHS management system, regular EHS steering groups have been established at all plants in order to coordinate health and safety topics on a Group-wide basis, identify work-related hazards and define preventive measures. It was established that the minimum standards for personal protective equipment met the respective local regulations but were not consistent from site to site. Stabilus is currently working on a Group-wide standard for protective equipment for production employees. The implementation of the global standard began in the 2022 fiscal year and will be completed in the 2023 fiscal year.
| 2021 | 2022 | |
|---|---|---|
| Number of accidents | 64 | 54 |
| Accident rate (per 200k hrs worked) Lost time injury incident rate (LTIIR) |
1.08 | 1.04 |
| Lost Workday Incident Rate (LWDI) | 11.67 | 15.00 |
The total number of accidents in the 2022 fiscal year was 54 (previous year: 64), corresponding to an accident rate of 1.04 per 200,000 hours worked (2021: 1.08).15 The lost workday indicator rate has been introduced as a primary indicator of overall safety within the Group. The figure for the 2022 fiscal year was 15.00 (previous year: 11.67).
| T_005 | |
|---|---|
| 2021 | 2022 |
| 5.98 | 6.64 |
Only the figures for 2022 in this table have been audited.
15 This figure is based on the number of hours worked by employees included in the time recording system. Accidents are counted if they result in at least one day of absence.
3 ABOUT STABILUS
4 ENVIRONMENT, HEALTH & SAFETY
6 SUSTAINABILITY IN PROCUREMENT MATTERS
5 EMPLOYEE 7 PRODUCTS 8 SOCIAL COMMITMENT
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED ASSURANCE REPORT
2 ABOUT THIS REPORT
Stabilus' long-term corporate success is driven by its employees.16 With a view to the current and future challenges of the employment market, Stabilus aims to support its employees' development, retain them and promote innovation.
Occupational safety has been identified as a material topic and is reported in the Environment, health & safety section. Other material topics include employee acquisition and training, especially training is considered as counter measure against the leck of skilled workforce. Further material topics are diversity, inclusion and equality with a particular focus on women in leadership positions.
With its STAR 2030 strategy, Stabilus has adopted a specific focus on its employees and social responsibility. The "Company of Choice" strategic initiative focuses on the companys employees and aims to engage in an open dialog and achieve joint success through active employee participation. A global policy at Stabilus, "Model Corporate Citizen", highlights the importance of taking social responsibility. This includes respect for human rights and ensuring the highest possible degree of occupational safety. Trust, reliability, honesty, fairness and respect should form the basis of leadership at the Stabilus Group.
Stabilus supports its employees in their professional and personal development with extensive training opportunities. It also seeks to engender a corporate culture that promotes innovation, e.g. by implementing an idea management system. Employee training and development is one of the most important factors for success in an industry that relies on continuous innovation and operational excellence, including in the context of the ongoing skills shortage. Attracting and retaining qualified employees means not only complying with fundamental legal and ethical standards, but also offering positive and attractive working conditions.
The global HR function coordinates Group-wide activities and defines strategies for working conditions, employment, recruitment and employee development. It also drives organizational development and performs central services for the Group.
HR managers at the Stabilus plants report to the respective plant managers and the Group-wide HR department via a matrix structure. They are responsible for ensuring compliance with local employment law as well as Stabilus' Group-wide policies and standards.
As part of the revision of the materiality analysis and to control and monitor this strategic orientation, the 2022 fiscal year saw the development of additional policies, the definition of new targets and the inclusion of additional KPIs in the report. HR-related KPIs are reported via a centralized system. Based on this data, Stabilus creates and evaluates strategies for employee development at a global level and in the individual regions.
As in the previous two years, the global COVID-19 pandemic was a key topic for Stabilus in the year under review. The aim of pandemic management is to protect the health and safety of Stabilus' employees and to maintain operations and logistics. A Group-wide task force coordinates the global and local initiatives as well as local employee protection measures and the continued vaccination campaign at Stabilus' sites.
During the COVID-19 pandemic, Stabilus has introduced new software solutions for digital employee communication in order to ensure efficient virtual cooperation. In the period under review, employees who are able to perform their contractual duties remotely were again given the option of working from home, but a return to office-based work was also facilitated.
Most training programs and seminars that were affected by COVID-19 measures in the previous reporting years were continued or were completed in the year under review, either in person or in virtual formats.
Stabilus believes in the importance of employee training and development, which it sees as a vital tool in mitigating the impact of the increasing skilled workforce shortage.
Participation in performance management is recorded as a KPI for employee development. Regular performance and career development reviews are conducted as part of a formalized process. A Group-wide performance management system was introduced in the 2021 fiscal year. This covered
16 Unless otherwise stated, the number of employees relates to active and non-active employees, excluding temporary staff, trainees, interns and graduate students.
2 ABOUT THIS REPORT 1 LETTER FROM THE MANAGEMENT BOARD
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9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 5 EMPLOYEE 7 PRODUCTS 8 SOCIAL COMMITMENT
only the management functions in the initial stage but is now being successively expanded to include other employee groups. In the 2022 fiscal year, 37% of all employees were included in the review process (previous year: 25%).
Stabilus offers targeted and continuous training and qualification programs for all employees. In the 2022 fiscal year, Stabilus implemented a comprehensive learning management system (LMS) to ensure Groupwide access, standardization, high quality through process optimization and the monitoring and evaluation of employee training initiatives. In the 2022 fiscal year, 89% of all Stabilus employees had access to the digital learning management platform, where the first training packages and learning plans are now available17. For example, interactive information security training has already been loaded centrally and completed by employees throughout the Group. The introduction of the global LMS has laid the foundations for efficiently and effectively coordinating employee training in subsequent reporting periods and reviewing the measures taken in the area of employee training on the basis of additional KPIs.
In addition to the continuous and targeted qualification programs that Stabilus offers to all employees, dedicated programs are available as part of the Stabilus Leadership Map, which shows the management level of employees (e.g. talents, team leaders, department leaders and general managers) and defines corresponding programs with the aim of developing their potential:
The "YoungSTARs" program provides targeted development support for students who are combining their academic studies with vocational training as part of a dual study program. Stabilus only offers this program in Germany.
17 The calculation covers all active and non-active employees, including temporary staff, trainees, interns and graduate students.
The "STARt up" program supports young leaders and project managers in their first significant leadership role. With around 100 participants in Germany since it was launched in 2015, it is an important cornerstone of leadership development at Stabilus. In the period under review, the program was expanded significantly globally and rolled out at Stabilus' biggest sites, covering 64% of all employees.
"STARq" is another tailored development program that offers qualifications to shift managers so that they can strengthen and broaden their leadership and management skills.
The "Rising STARs" program for high-potential employees provides another structured format for the most talented young employees around the world who want to take on future leadership roles at Stabilus. All participants complete a two-year training program, work on projects together and enjoy a high degree of visibility with Group management, including because of their cooperation with a mentor from the Management Board who provides individual support for their development.
Stabilus employees with the potential for top management roles are addressed with the "TOP STARs" program, which was launched in 2020 and takes place in person and virtually.
Eight high-performing talents from senior management levels worldwide work together on different topics and projects during three years of training and workshops. They are mentored by the Management Board and provided with individual coaching in order to prepare them for potential future top management positions within the Stabilus Group.
The "Innovation Race" project focuses on innovation culture as a part of Stabilus' corporate culture. Launched in 2019, the project has already resulted in more than 400 ideas and a new edition is currently in the pipeline (see Sustainability in Innovation).
ASSURANCE REPORT
With its strategic focus on being a "Company of Choice" by 2030, Stabilus is expressing its aspiration to be an appreciative and attractive employer. Stabilus aims to create a fair and supportive working environment for its employees. Stabilus firmly believes that employees who receive fair compensation and attractive opportunities and development options are more motivated to help achieve the company's goals. The "Company of Choice" strategic initiative involves the measurement and continuous improvement of employee satisfaction as expressed in the form of an employee net promoter score (NPS).
Stabilus observes the right to freedom of association and fosters regular dialog with its local works councils and representatives. 62% of all employees were covered by collective bargaining agreements in the year under review (previous year: 65%). The onboarding process takes into account local employment law and internal rules and policies such as the Code of Conduct.
Stabilus offers its employees benefits specific to the local subsidiaries. Onsite doctors are available between 2-5 days a week for more than 70% of the workforce (previous year: more than 70%), while more than 80% of all employees worldwide (previous year: more than 75%) receive a lunch allowance.18 Depending on the location, this takes the form of subsidized meals at the in-house canteen or lunch vouchers. Full-time and part-time employees have an equal entitlement to standardized benefits. Flexible working options such as flexitime, shorter working hours and workplace flexibility, e.g. working from home, are offered at the subsidiaries worldwide. Looking ahead, the "Modern Office Workspace" pilot project is currently in progress at the Stabilus site in Koblenz with a view to designing the modern workspace of the future.
18 The calculation covers all active and non-active employees, including temporary staff, trainees, interns and graduate students.
Diversity, inclusion and equal opportunity GRI 102-7 a GRI 102-8 a GRI 102-8 c GRI 405-1 a GRI 405-1 b
Stabilus acknowledges diversity as an important factor in attracting and retaining employees and fostering equal opportunity in society. The company believes in the potential of diversity. Diverse skills and backgrounds have a positive impact on performance and satisfaction. Accordingly, Stabilus holds all employees in high regard and treats them with respect irrespective of their ethnic background and origin, religion, political or other views, gender, disability, age, sexual identity, national or social background and language. In its materiality analysis, the company classified diversity, inclusion and equality as material topics, with a particular focus on women in leadership positions.
As an automotive supplier, the Stabilus Group is a technically oriented company and still has a majority of male employees in leadership positions. However, Stabilus is keen to promote gender equality and defined targets and measures for increasing the number of women in leadership positions in the 2022 fiscal year. At management level 1, the Stabilus Management Board – which is composed of the business unit heads, the regional heads and strategically important functions (such as the heads of Procurement and HR) – the proportion of women is currently 0%. At management level 2, which comprises the direct reports of the CEO and CFO, who are not included in management level 1, the proportion of women is 7.5%. Stabilus aims to increase the proportion of women at management levels 1 and management level 2 to 10% by September 2027. To improve gender diversity within the Group, Stabilus is developing and implementing corresponding supporting measures. This includes targeted development programs, leadership training for women, succession planning initiatives, awareness campaigns, initiatives for improving work-life balance, vacation programs for children and flexible working time arrangements.
Due to the relocation from Luxembourg to Germany and the appointment of a new CFO, Stabilus reduced the size of the Management Board from five to two members (both men). Accordingly, the target for the Management Board is currently 0. The five-person Supervisory Board currently includes one woman. Additional information on the Management Board and the Supervisory Board can be found in the Corporate Governance Declaration of the Management Report in the Annual Report.
5 EMPLOYEE 7 PRODUCTS 8 SOCIAL COMMITMENT
6 SUSTAINABILITY IN PROCUREMENT
MATTERS
The Stabilus Group had 6,840 employees in the 2022 fiscal year (as at September 30, 2022; previous year: 6,571). Of this figure, 6,587 were full-time employees and 253 were part-time employees (previous year: 6,346 full-time, 225 part-time). Employees typically have permanent contracts.
In the period under review, Stabilus had 4,396 male employees and 2,444 female employees (previous year: 4,329 male employees and 2,242 female employees). In percentage terms, the gender split in terms of full-time and part-time employees alike was 64% men and 36% women (previous year: 66% men and 34% women for full-time employees, 59% men and 41% women for part-time employees).
Stabilus employs people from different age groups and places equal value on experience and new ideas. In terms of the age and gender profile, the majority of Stabilus employees are aged between 30 and 49 years (51 % of the workforce; previous year: 50%), 27% (previous year: 28%) are aged 50 years or over and 22% are aged below 30 years (previous year: 22%). The age group of 50 years and over has the highest proportion of male employees at 74 % (previous year: 75 %), while the highest proportion of female employees is found among those aged 30 to 49 years (40%; previous year: 39%). The age profile of the Stabilus Supervisory Board is as follows: 0% aged below 30 years, 40% aged between 30 and 49 years and 60% aged 50 years or over.
| Employees | T_007 | |
|---|---|---|
| 2021 | 2022 | |
| No. of employees | 6,571 | 6,840 |
| Gender | T_008 | |
| 2021 | 2022 | |
| No. of male employees | 4,329 | 4,396 |
| No. of female employees | 2,242 | 2,444 |
| Full-time, part-time | T_009 | |
| 2021 | 2022 | |
| No. of full-time employees | 6,346 | 6,587 |
| thereof male | 4,197 | 4,235 |
| thereof female | 2,149 | 2,352 |
| No. of part-time employees | 225 | 253 |
| thereof male | 132 | 161 |
| thereof female | 93 | 92 |
| Employees age structure | T_010 | |
| 2021 | 2022 | |
| No. of employees <30 years | 1,451 | 1,506 |
| thereof male | 950 | 950 |
| thereof female | 501 | 556 |
| No. of employees 30 – 49 years | 3,288 | 3,466 |
| thereof male | 2,012 | 2,064 |
| thereof female | 1,276 | 1,402 |
| No. of employees ≥ 50 years | 1,832 | 1,868 |
| thereof male | 1,366 | 1,382 |
| thereof female | 466 | 486 |
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED
12 ADDITIONAL INFORMATION In a global economy, the supply chain plays a key role in ensuring functional business workflows and in the implementation of sustainable corporate governance and its performance measurement. Stabilus' success depends on a reliable and sustainable supply chain that ensures delivery reliability. In its materiality analysis, Stabilus has identified sustainable and responsible procurement as a material topic.
SUSTAINABILITY
3 ABOUT STABILUS 4 ENVIRONMENT, HEALTH & SAFETY
IN PROCURE- MENT
2 ABOUT THIS REPORT
GRI 103-1 a GRI 103-1 b GRI 103-2 a GRI 103-2 c
Stabilus aims to significantly reduce the CO2 emissions in its supply chain by 2030 and has set itself the target of lowering Scope 3 emissions by 25% between now and 2030 (see the CO2 emissions section). Stabilus intends to increasingly integrate its suppliers into its CO2 and energy reduction measures in order to minimize its environmental impact. Enhanced regional sourcing will reduce the need for transportation and hence the associated environmental impact.
The strategic procurement unit is responsible for the Group-wide controlling and coordination of procurement and supply chain management. The local procurement managers are responsible for implementation. Operational decisions, e.g. regarding the award of contracts, are the responsibility of the Procurement Committee. This is composed of representatives from various functions, including procurement, logistics, research and development (R&D) and controlling.
The process for the quarterly collection of supplier and supply chain data is managed centrally by the strategic procurement unit and encompasses Stabilus' global procurement organization. The data collected is used for management decisions and defining future targets and measures. These are continuously implemented by Stabilus' global and regional procurement teams in order to ensure conformity along the entire supply chain.
As well as the established supplier management processes, Stabilus launched additional projects in the period under review with the aim of further integrating the focus on sustainable procurement in terms of environmental considerations, human rights and information security. This is described in the Expansion of sustainable supplier management and supplier qualification section.
The war in Ukraine began in February 2022. Stabilus observed the situation for the Ukrainian people and its Ukrainian partners with great concern and expressly rejects any form of disregard for human rights and international law as well as any form of military aggression. Stabilus' employees and management have organized aid for the Ukrainian people as described in the Social commitment section. Stabilus continuously checks its business activities against embargoes and sanction lists to ensure compliance with the law. The export control officers at the Group companies also regularly consult with the Compliance department for coordination purposes.
Potential risks in Ukraine and Russia affecting Stabilus' supply chain are examined as part of procurement risk management in order to prevent potential disruptions or delays. In terms of the number of components and the available alternative procurement options, the conflict risk in Stabilus' supply chain is limited. The military conflict did not result in any major problems in the supply chain in the year under review.
The risk of reduced energy supply that emerged in the 2022 fiscal year, particularly with regard to gas deliveries from Russia to European countries, is being managed by a Stabilus task force team that includes the facility management, process technology, production, procurement and supplier management functions. There is a potential risk to the gas supply at the production sites in Germany and Romania in the 2022 fiscal year and the subsequent months. The production and procurement functions have developed risk mitigation and emergency planning strategies, including a reduction in gas consumption and compensation through electrical energy, technical measures to prevent interruptions to production and the outsourcing of processes.
The global COVID-19 pandemic continued to have an impact on global business and business processes in the year under review, albeit to a lesser extent. The greatest risk for Stabilus relates to the production sites in China and avoiding supply chain disruption. Interruptions to the supply chain due to lockdowns in regions of China are limited by regional sourcing and dual sourcing, while Stabilus has minimized the risk of interruption to its own operations by increasing stock levels and expanding its procurement base.
5 EMPLOYEE MATTERS IN PROCUREMENT
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 6 SUSTAINABILITY 7 PRODUCTS 8 SOCIAL COMMITMENT
ASSURANCE REPORT
1 LETTER FROM THE MANAGEMENT BOARD
ner_Code_of_Conduct.pdf
Sustainable and responsible procurement GRI 102-16 GRI 308-2 a GRI 308-2 b GRI 308-2 c GRI 414-1 GRI 414-2
Stabilus sets out its expectations for suppliers and other business partners in a central document, the Business Partner Code of Conduct.19 This builds on the Group's Code of Conduct, which includes detailed requirements for the following areas:
By signing the Stabilus Business Partner Code of Conduct, suppliers confirm their compliance with defined social standards. Stabilus only enters into business relationships with new serial suppliers that have signed the Business Partner Code of Conduct. In the case of existing business partnerships, recognition of the Business Partner Code of Conduct by serial suppliers is coordinated by the local purchasing companies. In this way, Stabilus seeks to ensure that the Business Partner Code of Conduct is
19 https://www.stabilus.com/fileadmin/user\_upload/02-Company/Stabilus\_Business\_Part-
recognized by all of its serial suppliers. In the 2022 fiscal year, the Business Partner Code of Conduct had been signed by 54% of serial suppliers (previous year: 41%).
Depending on their severity, violations of the Business Partner Code of Conduct may result in sanctions up to and including the immediate termination of the business relationship with the respective supplier.
| 2021 | 2022 | |
|---|---|---|
| % of serial suppliers signed the Business Partner Code of Conduct |
41% | 54% |
Share from 2021 has been revised down by 2 %.
5 EMPLOYEE MATTERS
The Business Partner Code of Conduct is currently being updated to reflect Stabilus' expanded supplier requirements in terms of the environment, respect for human rights and information security so that these elements can also be contractually agreed with the respective partners.
Regular training on the policies and practices of sustainable procurement and future statutory requirements ensure that employees of the Procurement, Supplier Development and Sustainability Department are adequately trained and qualified. In the year under review, training on the requirements and implementation of the German Supply Chain Due Diligence Act was completed by the sustainability team and strategic procurement employees. In the 2021 fiscal year, Stabilus buyers and supplier developers received training on sustainable procurement policies and practices, including human rights in the supply chain. To date, 90 % of the relevant employees worldwide have completed this training.
Potential serial suppliers undergo a pre-qualification process that includes a fundamental risk assessment containing financial and sustainability aspects. New serial suppliers must complete a self-assessment questionnaire covering topics such as their existing environmental, occupational safety and quality management and the corresponding certifications. The requirement to present valid ISO 14001, EMAS or ISO 50001 certification as well as ISO 45001 certification forms part of this evaluation. The renewal of serial suppliers' certifications is regularly and automatically checked.
In the 2022 fiscal year, 44 % (previous year: 39%) of serial suppliers completed the supplier qualification self-assessment with regard to their environmental impact. 27% (previous year: 22 %) of serial suppliers presented a valid environmental certification. The assessment did not identify any serious findings regarding negative environmental impacts. In the year under review, 6% (previous year: 4%) of serial suppliers presented valid ISO 45001 certification.
As part of its feasibility studies, Stabilus obtains confirmation that its suppliers comply with the statutory and customer-specific raw material requirements (including REACH and RoHS conformity and the Conflict Minerals Ordinance).
In the year under review, Stabilus initiated projects aimed at increasing the focus of its supplier management activities on environmental protection, human rights and information security. These projects will be integrated into the established processes of the procurement organization going forward.
2 ABOUT THIS REPORT 1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT
STABILUS 4 ENVIRONMENT, HEALTH & SAFETY
5 EMPLOYEE MATTERS
9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED 6 SUSTAINABILITY 7 PRODUCTS 8 SOCIAL COMMITMENT
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A new internal policy for sustainable procurement was developed in the year under review. This defines the Group's evaluation criteria with regard to sustainability requirements for suppliers. Sub-projects to implement the policy in the areas of supplier self-evaluation, risk assessment and supplier qualification on the basis of criteria fulfillment have already begun. The KPIs on environmental performance, social standards and information security that are collected as a result will form the basis for setting targets and measures for sustainable supply chain development together with suppliers and their subsequent achievement. A lack of cooperation or a failure to achieve the development targets may result in suppliers being removed from the supplier pool.
Three specific self-assessment questionnaires will be integrated into the global supplier management communication and evaluation tool: energy consumption and CO2 emissions, human rights, social standards and compliance and information security.
The questionnaire on energy consumption and CO2 emissions is initially intended for major component suppliers and covers their performance, the targets and KPIs for CO2 and energy performance and reductions in consumption and emissions. Major component suppliers are pre-selected on the basis of their size, the type of component and their global presence. An initial indication of the majority of the resulting Scope 3 emissions is possible once the requested information has been received. This also allows reduction measures to be developed together with the suppliers.
The area of human rights, social standards and compliance in supplier qualification is aimed at ensuring that the requirements for the implementation of the German Act on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Supply Chains are taken into account, especially with regard to supplier risk analysis. An assessment of all suppliers is currently taking place using a questionnaire on compliance and human rights. In the next stage, measures will be defined for suppliers that are found to have a heightened risk potential.
Information security was already integrated into the supplier qualification process in the year under review. The queries relate in particular to existing ISO 27001 and TISAX certifications and the measures taken by the supplier to ensure an adequate standard of information security.
Stabilus performs regular on-site audits of serial suppliers covering qualitative and technical aspects. These also take account of sustainability issues relating to occupational health and safety, working conditions and human rights, as well as the environment and energy. Where these onsite audits identify deficiencies in the areas of compliance or human rights, a defined escalation process is initiated with the involvement of the Group Chief Compliance Officer. As in the previous year, on-site audits had to be postponed due to travel and contact restrictions in connection with the COVID-19 pandemic. This backlog is being gradually remedied.
Stabilus pursues an "in the region, for the region" approach. This is reflected in its procurement strategy. Regional sourcing improves the carbon footprint by reducing transportation-related emissions in the supply chain and improves the reliability of supply and just-in-time deliveries. Developing a regional supplier base also serves to mitigate the exchange rate risk to which Stabilus is exposed. The gradual expansion of the sourcing strategy to include two or more suppliers means greater flexibility in procurement, thereby reducing the risk of supplier default.
With regard to regional sourcing, priority is given to regional procurement from suppliers for serial production. Purchases from non-serial suppliers, service providers, energy and water suppliers, are not included in reporting.
Stabilus aims for regional purchases from serial suppliers to account for at least 60% of its procurement budget. Procurement is considered to be local if the goods supplied remain in the same region. In the 2022 fiscal year, the basis of data collection for the regional sourcing quota (RSQ) KPI was modified for improved accuracy. Procurement within the Group, which typically takes place between regions, was included in data collection.
ASSURANCE REPORT
The three regions in the Stabilus Group are:
The level of regionalization was reported by each production unit in the Stabilus Group and consolidated by the central Procurement department. The figures for 2022 are 83% for the EMEA region (previous year: 86%), 63% for the Americas region (previous year: 62%) and 74% (previous year: 84%) for the APAC region. The defined target for the RSQ was achieved in all regions, also considering the data for intragroup procurement.
| Regional suppliers | T_012 | |
|---|---|---|
| 2021 | 2022 | |
| % of procurement budget spent on regional suppliers - EMEA |
86% | 83% |
| % of procurement budget spent on regional suppliers - Americas |
62% | 63% |
| % of procurement budget spent on regional suppliers - APAC |
84% | 74% |
CONFLICT MINERALS
One area that receives particular attention among stakeholders is conflict minerals, i.e. minerals and metals such as tin, tungsten, tantalum and gold that are extracted in conflict-ridden and unstable regions around the world and that are often associated with exploitative practices like forced labor and severe human rights violations. Several of the Group's customers have requested that Stabilus reports on the source and origin of products containing these materials. These requests are mainly based on the Dodd-Frank Act, which requires companies listed on the stock exchange in the US to disclose information on the use of conflict minerals in their own supply chain. On request, Stabilus provides customers with a report on conflict minerals according to the requirements of the US Securities Exchange Commission.
Within the Group, responsibility for conflict minerals is bundled in the R&D department in close cooperation with strategic procurement.
In its reporting on conflict minerals, Stabilus uses the Conflict Minerals Reporting Template (CMRT) published by the Responsible Minerals Initiative (RMI)20. Stabilus requires direct suppliers that run the risk of sourcing conflict minerals to complete this standardized report in order to trace the minerals through the entire supply chain. This information is then made available to Stabilus' customers via various platforms.
21 https://stabilus.whistleblowernetwork.net/frontpage
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Stabilus' anonymous Ethics Reporting Line21 is available to all suppliers and business partners. The Ethics Reporting Line is provided via Stabilus' website for all countries with Stabilus sites and is available in over ten languages. Suppliers are informed about the anonymous communication tool during the supplier qualification process and in the Stabilus Business Partner Code of Conduct. No suppliers reported any incidents via the Ethics Reporting Line in the period under review.
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Stabilus believes that an innovative and successful company must foster innovation in products and manufacturing processes that conserve resources and reduce environmental impacts.
Studies on the carbon footprint of certain product types are being conducted in order to determine and successively reduce the environmental impacts resulting from the manufacture and use of Stabilus products. In the 2021 fiscal year, a pilot project was launched to calculate product-specific emissions on the basis of the respective bill of materials.
In the year under review, the calculation of the carbon footprint at product level was expanded with a focus on high-volume product models in the gas spring and Powerise® segments for the automotive industries. Stabilus' Development and Procurement departments are closely involved in the project.
The aim is to identify processes and products that generate or contain a high level of CO2 emissions in order to take further measures to reduce emissions at product level. The resulting measures are implemented on the basis of further evaluations relating to procurement decisions in favor of components with a better carbon footprint, CO2 reduction initiatives for internal processes, initiatives to reduce the use of materials and material evaluations with a view to using alternative materials with a lower CO2 impact. Going forward, sustainability measures at product level will be formalized in a comprehensive strategy.
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9 COMPLIANCE 10 EU TAXONOMY 11 INDEPENDENT LIMITED
Another milestone in the year under review was the successful sale of the winning idea from the 2019 Stabilus Innovation Race to a global automotive customer, where it is currently in series development. The aim of the Innovation Race, which was held for the first time in 2019 to great success, is to generate ideas and product and process innovations. Employees around the world and their ideas are included in this process in equal measure. All employees throughout the Group were invited to participate in the innovation challenge and contribute their product and process innovations as part of an open digital dialog. A new edition of the Innovation Race is planned for 2023 and is currently in preparation.
The core objective of the circular economy is to achieve the resourceefficient use of materials and ensure that recyclable materials and waste are reused. Stabilus firmly believes in the importance of conserving resources and already examines the options for using recycled materials as part of its product development process.
Depending on the technical requirements, Stabilus already successfully uses plastic-based recycled materials in its products. Stabilus uses regranulates from the injection molding process in one of its core components for the business unit Automotive Gassprings. This technique is already used throughout all production processes for the product group. Stabilus is already successfully using customer-specific recyclates in components for its Powerise® and strut products.
1 LETTER FROM THE
It plans to successively increase the use of recyclates across suitable product groups with the support of its Development department in cooperation with the procurement and sales teams.
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4 ENVIRONMENT,
The Development department is primarily responsible for the use of recyclates and regranulates and implements requirements in the development process. To ensure that materials satisfy the technical requirements, quality checks and requalification measures are part of the development process.
Stabilus is currently reviewing the existing measures and processes with a view to identifying and establishing structured targets and measures for implementing the circular economy along the value chain in the future. Examples include purchasing recycled materials, reducing the use of materials in products, implementing resource-efficient manufacturing processes internally and ensuring that products are resource-efficient during their usage phase and when they are disposed of or recycled.
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Having observed the war in Ukraine and the consequences for the Ukrainian people with concern, Stabilus decided to organize support on its own initiative. In March 2022, Stabilus launched a fundraising campaign to provide refugees from Ukraine with emergency shelter in Brasov, Romania, near to Stabilus' site in that country.
The Group-wide fundraising campaign was adressed to all employees. Employees at the sites around the world raised a total of 36,500 €. The Stabilus Group doubled this to 73,000 € and donated it to the project. Stabilus had already supplied the emergency shelter with care packages worth more than 20,000 €.
By the end of August 2022, the donations had been used to provide assistance including care packages for the emergency shelter and for people in Ukraine, COVID-19 rapid tests and summer activities for children. Document translation services were provided in order to help the refugees in Romania to integrate. In addition, 300 Ukrainian refugees were able to take advantage of medical care on site or at a clinic.
The donation project started last year to support the flood victims in the Ahr valley near Koblenz was continued this year.
Stabilus continuously supports social and education projects organized by the local sites. The principles governing social projects and donations are set out in Stabilus' internal donation policy.
ASSURANCE REPORT
Conducting business in accordance with the applicable laws, provisions, ethical standards and principles is central to Stabilus' global business activities. These principles and standards are set out in the Stabilus Code of Conduct, which is the central document in its compliance organization. The Stabilus Code of Conduct defines the corporate culture and the rules that apply to all employees, thereby creating a framework for legally compliant and responsible action. It applies to all business activities within the Stabilus Group, both internally and when interacting with external parties such as stakeholders, customers, suppliers and other business partners.
To ensure that all Stabilus employees are familiar with the applicable rules and standards, the Stabilus Code of Conduct forms part of the onboarding process. They are familiarized with the Code by employees of the HR department and sign a statement declaring that they have understood and will observe the applicable principles.22 The Code of Conduct is supplemented by the values and ethics described in the Stabilus corporate value statement.23
Stabilus has introduced a Group-wide compliance management system and defined compliance as a key management task. To this end, the Stabilus Management Board worked with the Chief Compliance Officer to draw up new Rules of Procedure describing the compliance management system in the year under review. Responsibility for all questions arising in connection with compliance, especially in the areas of antitrust law,
22 https://www.stabilus.com/company/compliance/code-of-conduct 23 https://www.stabilus.com/company/stabilus-values
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10 EU TAXONOMY 11 INDEPENDENT LIMITED 7 PRODUCTS 8 SOCIAL COMMITMENT 9 COMPLIANCE
12 ADDITIONAL INFORMATION
corruption and insider trading, lies with Stabilus' Chief Compliance Officer, who reports to the Chief Executive Officer (CEO) and to the Supervisory Board Audit Committee at least twice yearly. The Audit Committee informs the full Supervisory Board accordingly. The Supervisory Board monitors the measures taken by the Management Board in accordance with the applicable laws and the Articles of Association. Details of the Management Board and the members of the Supervisory Board can be found on the Stabilus website24 and in the Corporate Governance Declaration of the Management Report in the Annual Report.25
The Chief Compliance Officer also organizes trainings to ensure that all employees are informed about the content of the Code of Conduct. New general training documentation was created in the year under review. In particular, this is preceded by a video message from the CEO as a means of underlining the importance of compliance for the Group. Furthermore, the new e-learning management tool was implemented in the year under review. In addition to providing simplified access to the general compliance training, the tool allows compliance training to be offered to specific employee groups in line with their needs. In particular, the training provided in the year under review covered the criteria of the Code of Conduct, including ethical conduct, combating bribery and corruption and dealing with conflicts of interest. A particular focus was placed on the antitrust law training, which was the first to be provided via the new e-learning program.
In addition to training, adherence to compliance standards is ensured through audits in close cooperation with the Internal Audit department and specific approval procedures for sensitive transactions (e.g. donation policy).26
Stabilus regularly assesses its operating activities with a view to existing compliance risks. In the year under review, this focused in particular on compliance with human rights and ethical standards in the supply chain in preparation for the implementation of the German Act on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Supply Chains. Country-specific risks are identified, whereas the nature of the products and the supplier structure means that the risks associated with business activities are less material.
Stabilus employees are encouraged to report compliance violations to their line manager, the Chief Compliance Officer or the respective HR manager. In addition, an electronic reporting portal27 was implemented in the 2018 fiscal year. It provides a secure system for employees and business partners to anonymously report incidents or concerns to the Chief Compliance Officer. Reports may be submitted anonymously in more than ten languages. A procedural instruction describes how these reports are handled.
| Compliance violations | T_013 | |
|---|---|---|
| 2021 | 2022 | |
| Number of reports | 10 | 8 |
| Number of cases with further inves tigation |
5 | 6 |
In the 2022 fiscal year, eight potential compliance violations were reported via the Ethics Reporting Line and directly via the compliance e-mail address. Most of these cases were investigated further. No criminal offenses were identified in any of the cases investigated. No violations of antitrust law were reported in the year under review.
Stabilus prohibits and refuses to tolerate any form of discrimination due to personal characteristics, e.g. age, disability, ethnic origin, family status, race, religion, gender, sexual orientation or social background. Stabilus is a signatory of the UN Global Compact and recognizes its principles.
Stabilus supports the right to freedom of association and collective bargaining. Stabilus is an active member of the UN Global Compact, adheres to the applicable laws and has established works councils at several Group companies. The European Works Council of Stabilus SE is in the process of being established.
ASSURANCE REPORT
No controversies concerning freedom of association were reported in the period under review.
To ensure appropriate information security, including for our customers and suppliers, Stabilus has initiated TISAX certification at its German plant in Koblenz. This is expected to be completed toward the end of the calendar year. A preliminary audit was conducted in September 2022. Stabilus is aware of the growing importance of information security within the Group and intends to arrange for TISAX certification to be obtained for additional production and development sites.
As part of the TISAX project, Stabilus has already implemented the majority of the necessary procedural instructions in a global Group-wide policy. The position of Chief Security Officer reporting directly to the Management Board (CFO) has also been established and integrated into the organization. In this context, the new e-learning tool was also used to deliver training on information security.
27 https://stabilus.whistleblowernetwork.net/frontpage
24 https://www.stabilus.com/investors/corporate-governance/supervisory-board
25 https://www.stabilus.com/investors/financial-reports-presentations/
26 https://www.stabilus.com/fileadmin/user\_upload/02-Company/stabilus\_170718-Stabilus-Code-of-conduct-komprimiert.pdf
2 ABOUT THIS REPORT 3 ABOUT 4 ENVIRONMENT, HEALTH & SAFETY 5 EMPLOYEE MATTERS 6 SUSTAINABILITY IN PROCUREMENT
9 COMPLIANCE 11 INDEPENDENT LIMITED ASSURANCE REPORT 7 PRODUCTS 8 SOCIAL COMMITMENT 10 EU TAXONOMY
12 ADDITIONAL INFORMATION
Stabilus SE is subject to the European Union's reporting obligation for sustainable business (EU taxonomy) for the first time in the Fiscal Year 2022. The EU taxonomy is a classification system for defined economic activities that contribute to one of the six EU environmental objectives. For these economic activities quantitative KPIs need to be reported.
In the reporting year under review, the reporting obligation is limited to the disclosure of taxonomy-eligible economic activities that contribute to the first two EU environmental objectives: "Climate change mitigation" and "Climate change adaptation". In addition to taxonomy-eligible economic activities, reporting from the Fiscal Year 2023 onward will be required to report on taxonomy eligible and taxonomy alignment of the relevant economic activities for all six EU environmental objectives: "Climate change mitigation", "Climate change adaptation", "Sustainable use and protection of water and marine resources", "Transition to a circular economy", "Pollution prevention and control" and "Protection and restoration of biodiversity and ecosystems".
In the year under review, Stabilus established an interdisciplinary project team tasked with the introduction of EU taxonomy reporting. Employees from the Group Compliance/ESG, Controlling and Accounting functions are part of the project team. Identification of taxonomy-eligible economic activities was performed for the Stabilus Group including all legal entities.
The relevant taxonomy-eligible economic activities were determined using a top-down approach for the Group by group-wide interviews with the relevant business areas and functions. According to EU-taxonomy requirements applicable to the Company for this reporting period Stabilus only reviewed and analyzed its economic activities with regard to the two first taxonomy targets. Stabilus did also not perform an analyze of taxonomy alignment.
Data for the economic activities identified as taxonomy-eligible was collected by analyzing existing financial KPIs and performing structured reviews of relevant sales data at the individual sites. The accumulated figures (total sales, total CapEx, total OpEx) are based on the IFRS-data of the Company's consolidated annual accounts.
Any double counting was avoided through the systematic use of the financial systems as well as the clear allocation of the economic activities.
To determine taxonomy-eligible revenues, the Stabilus products were allocated to the defined economic activities considering the end-use applications in the industries supplied to.
The revenues generated in the year under review were applied as the numerator of the KPI.
The definition of revenues within the meaning of the EU Taxonomy Regulation for the denominator is identical to the definition of revenues in the consolidated financial statements of Stabilus SE.
Taxonomy-eligible CapEx includes investments related to the taxonomyeligible identified economic activities contributing to the revenue in addition to the investments in other non-revenue relevant taxonomy-eligible economic activities.
Taxonomy-eligible OpEx includes operating expenses for the manufacture of the products identified in connection with the revenue-relevant taxonomy-eligible economic activities in addition to other non-revenue relevant taxonomy-eligible operating expenses.
The majority of Stabilus' revenue-relevant economic activities were classified as non-taxonomy-eligible, as our products are primarily used in motion, motion control and damping applications for the purposes of optimizing security and improving comfort. These applications in our major customer industries – automotive, general industrial applications and aviation – are not covered by the economic activities set out in the EU taxonomy. Within the Stabilus Industrial Business Unit revenues relating to the economic activity 3.1 "Manufacture of renewable energy technologies" and relating to the economic activity 3.5 "Manufacture of energy efficiency equipment for buildings are generated". Stabilus' products covered by 3.1. are the solar dampers used for stabilization of PVCs whereas the sale of "Thermal Insulation Material TIM" used for insulation of building is identified as a 3.5 activity. Only a minor percentage share of the total revenue is identified to be taxonomy-eligible, and such also applies to the related CapEx and OpEx.
Taxonomy-eligible investments were made within the following economic activities:
3 ABOUT STABILUS 4 ENVIRONMENT, HEALTH & SAFETY 5 EMPLOYEE MATTERS
Taxonomy-eligible investments sum up to 2.9 mio. €.
Taxonomy-eligible operational investments were made within the following economic activities:
Taxonomy-eligible investments sum up to 0.3 mio. €.
6 SUSTAINABILITY IN PROCUREMENT
The following table shows the quantitative key performance indicators (KPIs) for reporting the taxonomy-eligible proportion of economic activities for the "Climate change mitigation" environmental objective, broken down into the revenues, CapEx and OpEx of the Stabilus Group.
| EU taxonomy: Revenues, CapEx, OpEx | T_014 | |||
|---|---|---|---|---|
| Total | Taxonomy-eligible | |||
| in mio. € | in mio. € | in % | ||
| Revenues | 1,116.3 | 20.9 | 1.9 % | |
| CapEx | 47.9 | 2.9 | 6.0 % | |
| OpEx | 121.8 | 0.3 | 0.3 % |
Stabilus did not identify any additional taxonomy-eligible revenues, CapEx or OpEx for the "Climate change adaptation" environmental objective.
December 8, 2022
Dr. Michael Büchsner Stefan Bauerreis
Management board
ASSURANCE REPORT
12 ADDITIONAL INFORMATION 1 LETTER FROM THE MANAGEMENT BOARD 3 ABOUT STABILUS
4 ENVIRONMENT, HEALTH & SAFETY 5 EMPLOYEE MATTERS 6 SUSTAINABILITY IN PROCUREMENT
9 COMPLIANCE 10 EU TAXONOMY 12 ADDITIONAL 7 PRODUCTS 8 SOCIAL COMMITMENT 11INDEPENDENT LIMITED
INFORMATION ASSURANCE REPORT
2 ABOUT THIS REPORT
To the Management Board of Stabilus SE, Koblenz
We have performed a limited assurance engagement on the combined separate non-financial statement of Stabilus SE, Koblenz (hereinafter the "parent company") for the period from 1 October 2021 to 30 September 2022 (hereinafter the "combined non-financial statement"). The combined separate non-financial statement included in our scope of our assurance engagement, is marked with a vertical green line on the left of the paragraph.
Not subject to our assurance engagement are the external sources of documentation or expert opinions mentioned in the non-financial statement, which are marked as unassured.
Management of the parent company is responsible for the preparation of the combined non-financial statement in accordance with Sections 315b, 315c in conjunction with 289c to 289e HGB ("Handelsgesetzbuch": German Commercial Code) and Article 8 of REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18. June 2020 on establishing a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088 (hereinafter the "EU Taxonomy Regulation") and the Delegated Acts adopted thereunder, as well as for making their own interpretation of the wording and terms contained in the EU Taxonomy Regulation and the delegated acts adopted thereunder as set out in section "EU Taxonomy" of the combined non-financial statement.
This responsibility includes the selection and application of appropriate non-financial reporting methods and making assumptions and estimates about individual non-financial disclosures of the group that are reasonable in the circumstances. Furthermore, management is responsible for such internal control as they consider necessary to enable the preparation of a combined non-financial statement that is free from material misstatement, whether due to fraud or error.
The EU Taxonomy Regulation and the Delegated Acts issued thereunder contain wording and terms that are still subject to considerable interpretation uncertainties and for which clarifications have not yet been published in every case. Therefore, management has disclosed their interpretation of the EU Taxonomy Regulation and the Delegated Acts adopted thereunder in section "EU Taxonomy" of the combined non-financial statement. They are responsible for the defensibility of this interpretation. Due to the immanent risk that indeterminate legal terms may be interpreted differently, the legal conformity of the interpretation is subject to uncertainties.
We have complied with the independence and quality assurance requirements set out in the national legal provisions and professional pronouncements, in particular the Professional Code for German Public Auditors and Chartered Accountants (in Germany) and the quality assurance standard of the German Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW) regarding quality assurance requirements in audit practice (IDW QS 1).
Our responsibility is to express a conclusion with limited assurance on the combined non-financial statement based on our assurance engagement.
We conducted our assurance engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000 (Revised): "Assurance Engagements other than Audits or Reviews of Historical Financial Information" issued by the IAASB. This standard requires that we plan and perform the assurance engagement to obtain limited assurance about whether any matters have come to our attention that cause us to believe that the company's combined non-financial statement other than the external sources of documentation or expert opinions mentioned in the non-financial statement are not prepared, in all material respects, in accordance with Sections 315b, 315c in conjunction with 289c to 289e HGB and the EU Taxonomy Regulation and the Delegated Acts issued thereunder as well as the interpretation by management disclosed in section "EU Taxonomy" of the combined non-financial statement.
In a limited assurance engagement, the procedures performed are less extensive than in a reasonable assurance engagement, and accordingly, a substantially lower level of assurance is obtained. The selection of the assurance procedures is subject to the professional judgment of the assurance practitioner.
In the course of our assurance engagement we have, among other things, performed the following assurance procedures and other activities:
Carrying out a risk assessment, inclusive of media analysis, on relevant information on sustainability performance of Stabilus SE in the reporting period.
Assessing the design and implementation of systems and processes for identifying, handling and monitoring information on environmental, employee and social matters, human rights and corruption and bribery, including the consolidation of data.
In determining the disclosures in accordance with Article 8 of the EU Taxonomy Regulation, management is required to interpret undefined legal terms. Due to the immanent risk that undefined legal terms may be interpreted differently, the legal conformity of their interpretation and, accordingly, our assurance engagement thereon are subject to uncertainties.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our assurance opinion.
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Based on the assurance procedures performed and the evidence obtained, nothing has come to our attention that causes us to believe that the combined non-financial statement of Stabilus SE, Koblenz, for the period from 1 October 2021 to 30 September 2022 has not been prepared, in all material respects, in accordance with Sections 315b, 315c in conjunction with 289c to 289e HGB and the EU Taxonomy Regulation and the Delegated Acts issued thereunder as well as the interpretation by management as disclosed in section "EU Taxonomy" of the combined non-financial statement.
This assurance report is solely addressed to Management Board of Stabilus SE, Koblenz.
Our assignment for Stabilus SE and professional liability is governed by the General Engagement Terms for Wirtschaftsprüfer (German Public Auditors) and Wirtschaftsprüfungsgesellschaften (German Public Audit Firms) (Allgemeine Auftragsbedingungen für Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in the version dated January 1, 2017 (https://www. kpmg.de/bescheinigungen/lib/aab\_english.pdf). By reading and using the information contained in this assurance report, each recipient confirms having taken note of provisions of the General Engagement Terms (including the limitation of our liability for negligence to EUR 4 million as stipulated in No. 9) and accepts the validity of the attached General Engagement Terms with respect to us.
Köln, 8 December 2022
KPMG AG Wirtschaftsprüfungsgesellschaft
Stauder Herr Wirtschaftsprüfer Wirtschaftsprüferin [German Public Auditor] [German Public Auditor]
9 COMPLIANCE 10 EU TAXONOMY 12 ADDITIONAL
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7 PRODUCTS 8 SOCIAL COMMITMENT 11INDEPENDENT LIMITED
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ADDITIONAL INFORMATION
Further information including news, reports and publications can be found in the Investors section of our website at www.stabilus.com/ investors
Investor Relations E-mail: [email protected]
This report is available in German and English. Publisher: Stabilus SE, Wallersheimer Weg 100, 56070 Koblenz, Germany Contact: Investor Relations department Published: December 9, 2022
The key figures presented in this non-financial report have been rounded. There may therefore be discrepancies between the actual totals of the individual amounts in the tables and the totals shown as well as between the numbers in the tables and the numbers given in the corresponding analyses in the text of the non-financial report.
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This non-financial report contains forward-looking statements that relate to the current plans, objectives, forecasts and estimates of the management of Stabilus SE. These statements take into account only Information that was available up and including the date that this non-financial report was prepared. The management of Stabilus SE makes no guarantee that these forward-looking statements will prove to be right. The future development of Stabilus SE and its subsidiaries and the results that are actually achieved are subject to a variety of risks and uncertainties which could cause actual events or results to differ significantly from those reflected in the forward-looking statements.
Many of these factors are beyond the control of Stabilus SE and its subsidiaries and therefore cannot be precisely predicted. Such factors include, but are not limited to, changes in economic conditions and the competitive situation, changes in the law, interest rate or exchange rate fluctuations, legal disputes and investigations and the availability of funds. These and other risks and uncertainties are set forth in the combined management report. However, other factors could also have an adverse effect on our business performance and results. Stabilus SE neither intends to nor assumes any separate obligation to update forward-looking statements or to change these to reflect events or developments that occur after the publication of this non-financial report.
Stabilus SE neither intends or assumes any separate obligation to update or change and forward-looking statements to reflect events or circumstances that occur after the publication of this non-financial report.
ASSURANCE REPORT
INFORMATION
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