BMW GROUP REPORT 2020 OUR RESPONSIBILITY. OUR FUTURE. Report on the BMW Group’s economic performance and its ecological and social contributions. LINK TO THE ONLINE REPORT BMW Group Contents 2 Report 2020 CONTENTS 35 COMBINED MANAGEMENT REPORT 36 General Information and Group Profile 69 Products and Services 87 Production, Purchasing and Supplier Network 4 About This Report 105 Employees and Society (Part of the Combined 122 Report on Economic Position Management Report) 159 Report on Outlook, Risks and Opportunities 7 TO OUR 179 Internal Control System Relevant for Accounting and Financial Reporting STAKEHOLDERS Processes 180 Disclosures Relevant for Takeovers 8 BMW Group in Figures and Explanatory Comments 13 Report of the Supervisory Board 23 Statement of the Chairman of the Board of Management 29 Dialogue with Stakeholders 33 BMW Stock and Capital Markets in 2020 BMW Group Contents 3 Report 2020 281 CORPORATE GOVERNANCE 185 GROUP 282 Fundamental Aspects of Corporate FINANCIAL Governance (Part of the Combined Management Report) STATEMENTS 291 Remuneration Report (Part of the Combined Management Report) 186 Income Statement for Group and Segments 326 Glossary and Explanation of Key Figures 187 Statement of Comprehensive Income for Group 188 Balance Sheet for Group 330 Responsibility Statement by the and Segments Company’s Legal Representatives 190 Cash Flow Statement for Group 331 Independent Auditor’s Report and Segments 340 Independent Practitioner’s Report 192 Statement of Changes in Equity for Group 194 Notes to the Group Financial Statements 344 Further GRI Information 343 OTHER 357 Reporting Concept INFORMATION 359 TCFD-Index 363 NFE-Index 364 BMW Group Fuel Consumption and CO₂ Emissions Information 365 BMW Group Ten-year Comparison 367 Financial Calendar 368 Contacts BMW Group About This Report 4 Report 2020 This version of the Annual Report is a translation OBJECTIVE ABOUT THIS REPORT from the German version. Only the original German version is binding. (PART OF THE COM- As a premium manufacturer, the BMW Group aspires to lead the way in terms of sustainability. It is therefore taking responsibility and placing this topic at the core BINED MANAGEMENT SYMBOLS AND OTHER INFORMATION of its corporate strategy moving forward. This change has involved taking a major step, as the BMW Group is REPORT) including sustainability as a prime factor in its corporate ... The contents of these sections were subjected to decision-making processes. This integrated approach a separate limited assurance engagement by the obviates the need to pursue a separate sustainability independent auditor. All other audited sections strategy. Sustainability principles – such as the prudent of the report underwent a reasonable assurance use of resources – are increasingly playing a key role in This report represents a new approach to reporting audit engagement by the independent auditor. shaping the BMW Group’s corporate strategy and serving for the BMW Group. For the reporting year 2020, the as key parameters for an integrated and multidimension- BMW Group has combined its Annual Report and its The following symbols help the reader to navigate al approach. Sustainability Report (formerly the Sustainable Value through the report: Report) in a single document. It is therefore important As it embraces this process, the BMW Group is build- for us to begin by briefly explaining the structure and Return to previous page ing on a solid foundation, given that it has repeatedly rationale behind the new approach so that you, as a set itself ambitious sustainability targets and assumed a stakeholder in the company, can make the best possible Go to table of contents pioneering role in this area over decades. For example, use of the report. Above all, this means being able to the BMW Group was the first company in the automotive find and categorise the information you are looking Continued on next page sector to appoint an environmental protection officer for both quickly and reliably. Integrated reporting is a back in 1973. Under the umbrella of Efficient Dynamics, dynamic process for the BMW Group that works in both Cross reference the BMW Group proceeded to innovate in the field of directions. For this reason, we are not only seeking a electrified drivetrains, while at the same time developing dialogue based on assertions underpinned by content, highly efficient combustion engines, and has systematical- we are equally convinced that it enables us to report in ly continued to take this dual approach ever since. With the most effective way. a trial fleet of around 600 fully electric MINI E vehicles made available to customers, the BMW Group demon- strated as long ago as 2009 that electric mobility can be a source of great driving pleasure as well as being suitable for everyday use. The all-electric BMW i3 followed in 2013, effectively setting the benchmark for sustainable mobility going forward. In 2020, the Group also achieved its car- bon emissions targets for the new vehicle fleet, thanks to the growing size of its fleet of electrified vehicles. BMW Group About This Report 5 Report 2020 The BMW Group has long considered it both its obliga- CONTENT AND STRUCTURE The BMW Group has published sustainable value tion and its mission to take a pioneering role within the reports since 2001, initially every two years and annually automotive industry. since 2012. Prior to this period, the Group had a long On 9 March 2021, the Financial Statements of tradition of publishing environmental reports, in which The logical consequence, starting with this report, is BMW AG were authorised for issue by the Board of Man- it reported transparently on the impact of its operations to inform stakeholders about the BMW Group’s business agement and the Group Financial Statements approved on the environment, including mitigating measures. performance in a single integrated report. The objective for publication. is to provide a clear insight into the BMW Group as a Since 2005, the BMW Group has applied Global whole with the aim of making its activities transparent, Similar to annual reports in previous years, the Reporting Initiative (GRI) standards to report on sustain- accountable and measurable. At the same time, the in- new BMW Group Report combines the management ability matters. Since 2008, it has voluntarily complied tention is to make it as easy as possible for readers to reports of Bayerische Motoren Werke Aktiengesellschaft with the highest GRI application level (“comprehensive familiarise themselves with the contents of the report. (BMW AG) and the BMW Group in a Combined Manage- option”). Additional GRI-relevant information is provid- For this reason, key information is deliberately repeated ment Report. ed in the chapter Further GRI Information and in the GRI at various points in the document, providing a general Content Index. This information was also subjected to a overview for readers focusing on specific chapters and In accordance with § 289 b and § 315 b of the Ger- limited assurance review. sections who do not intend to read the entire report. man Commercial Code (HGB), BMW AG is required to issue a non-financial statement (NFS) at both Company In 2015, the General Assembly of the United Nations This approach not only underlines the BMW Group’s and Group level. This statement is published jointly for (UN) announced 17 Sustainable Development Goals determination to spearhead the transformation towards BMW AG and the BMW Group as a non-financial report (SDGs). The SDGs are at the core of the 2030 Agenda, a sustainability, but also its desire to shape the process and within the Combined Management Report. In order to global action plan aiming to ensure that economic pro- report on it in a transparent manner. This report com- identify this content more easily, an NFS index is includ- gress is environmentally friendly and socially equitable. bines the Sustainability Report and the Annual Report ed as an appendix that summarises the references for the The BMW Group has identified the SDGs to which it in a single Integrated Report, based on the framework reader. As in previous years, the NFS has been reviewed. can make a direct and thus the greatest possible con- of the International Integrated Reporting Council (IIRC). Contents that have been subjected to a limited assurance tribution with its own sustainability goals. Reference is It replaces the two previously separate publications and standard are marked with graphic symbols ... All made to these SDGs at the beginning of the Combined will be published each year on the date of the Annual other parts of the Management Report and the Group Management Report. Conference. The BMW Group is keen to demonstrate Financial Statements have been audited to a reasonable to shareholders, customers, employees and, last but not assurance standard, unchanged from the previous year. least, the general public how economic, ecological and Further information is provided in the Independent Auditor’s social issues can complement one another. In fact, they Report and the Independent Practitioner’s Report. are often mutually dependent and the pursuit of sus- tainability is the driving force of the Group. The report This report also contains information on the attain- also includes descriptions of corporate strategy, future ment of targets relating to the now completed sustaina- development and internal management processes and bility strategy for the period from 2012 to 2020. how the BMW Group, as part of society, creates value in economic, ecological and social terms. Join the conver- sation with the BMW Group Dialogue. BMW Group About This Report 6 Report 2020 The report is structured to ensure that essential con- tent is easily accessible, even at a glance. With this point in mind, the key information is presented in summarised form at the beginning of each section of the Management Report and subsequently discussed in detail.