Sustainability.

Knorr-Bremse’s approach to corporate responsibility is based on the principle of development, and applies not only to our products and how they are manufactured but to our employees, the environment and society as a whole.

Since 2011, we have been informing our stakeholders of activities in our Sustainability Report (until 2018 the UN Global Compact (UNGC) Report). As is required of listed companies, Knorr-Bremse has been producing a report since 2018, which is also reviewed by the auditor. This report sets out in detail the impact the Company has on the environment and society, and presents key indicators as well as the targets and measures Knorr-Bremse uses to manage its sustainability activities.

The report includes the consolidated non-financial statement for the Knorr-Bremse Group pursuant to Sections 315b and 315c in conjunction with Sections 289b to 289e of the German Commercial Code (HGB). The Sustainability Report, which includes the non-financial statement, was published on the Company’s website on April 23, 2020 at www.knorr-bremse.com/en/responsibility .

Together with the Company’s corporate values and Code of Conduct, our Corporate Responsibility (CR) guidelines constitute a framework for the sustainable and responsible conduct of business at Knorr-Bremse. Knorr-Bremse is also guided by internationally recognized guidelines and conventions such as the UN Global Compact, or the Guiding Principles on Business and Human Rights published by the UN Human Rights Council. Together with our employees and external stakeholders, we engage in and cultivate close relationships with networks such as Railsponsible, and sit on committees that address sustainability issues in the German Association of the Automotive Industry (VDA) and German Rail Industry Association (VDB).

With its Group-wide CR strategy, Knorr-Bremse is fulfilling its voluntary commitment to corporate responsibility. In recent years we have been systematically striving to make Knorr-Bremse’s structures and processes even more sustainable. Our CR strategy provides a robust framework for this and is divided into the following six action areas: strategy and management, products and partners, employees and leadership, environment and climate, commitment and society, plus communication and cooperation.

2030 Climate Strategy

Since the start of 2020, Knorr-Bremse’s 2030 Climate Strategy has replaced the climate protection goals we set in 2015 and is now the cornerstone of our environmental and climate policy. By 2030, Knorr-Bremse aims to reduce direct CO2 emissions from in-house sources (Scope 1) and indirect CO2 emissions from external energy sources (Scope 2) by 50 percent. This represents an average annual reduction of 4.2 percent compared with the initial (baseline) figure of 143,000 metric tons of CO2 in 2018. To achieve this, Knorr-Bremse will apply three levers. First, the Company will invest in energy-saving measures, switching heating systems and the corporate vehicle fleet over to lower-carbon fuels. Second, Knorr-Bremse will make investments that aim to increase the proportion of renewable energy generated internally at Knorr-Bremse sites around the world. Third, Knorr-Bremse will ramp up procurement of renewable energy by means of long-term energy purchase agreements, green electricity products, and certificates.

Furthermore, starting in 2021, Knorr-Bremse aims to become carbon-neutral. This will be accomplished by increasing the share of renewable energy in our energy mix beyond the 4.2 percent target and – where necessary – offsetting any remaining emissions with high-quality climate protection certificates, such as Gold Standard certificates.

By 2030, Knorr-Bremse plans to invest in reducing Scope 1 & 2 CO2 emissions and, starting in 2021, in programs for offsetting CO2 emissions.

Knorr-Bremse is committed to the long-term continuation of its sustainable development efforts. With this in mind, the materiality analysis drawn up in 2018 was comprehensively validated in workshops held in 2019. Knorr-Bremse has launched global initiatives to help it attain the five UN Sustainability Development Goals (SDGs) targeted by the Group. As far as due diligence regarding the central issue of human rights is concerned, we are guided by the United Nations Universal Declaration of Human Rights. All these issues are covered in detail in Knorr-Bremse’s CR program, which is approved by the CR Council and regularly reviewed to verify compliance. The Group’s Corporate Responsibility department is responsible for sustainability and reports directly to the Executive Board.

Our commitment to sustainability is also recognized by external stakeholders. In fiscal 2019 we succeeded in maintaining our EcoVadis “Gold” rating for our sustainability performance in dealings with customers. In 2019, MSCI ESG Research, the world’s leading provider of sustainability analyses, awarded Knorr-Bremse an “A” rating for the first time, the third best out of seven categories. In addition, Knorr-Bremse retained the “Prime Status” rating first awarded by ISS ESG (formerly ISS-oekom) in 2018, in acknowledgement of the Group’s sustainability performance.