Corporate Non-Financial Reporting in Germany

Authors: Chris N. Bayer, PhD Gisella Vogel Sarah Kaltenhäuser Katherine Storrs Jiahua (Java) Xu, PhD Juan Ignacio Ibañez, LL.M.

Title: A New Responsibility for Sustainability: Corporate Non-Financial Reporting in Germany

Date published: May 6, 2019

Funded by: iPoint-systems gmbh www.ipoint-systems.com

Executive Summary Germany's economy is the fourth-largest in the world (by nominal GDP), and with 28% of the euro area market, it represents the largest economy in Europe.1 Considering the supply chains leading to its economy, Germany's cumulative environmental, social and governance performance reverberates globally. The EU Non-Financial Reporting Directive (NFRD) is the impetus behind this study – a new regulation that seeks to “increase the relevance, consistency and comparability of information disclosed by certain large undertakings and groups across the Union.”2 Large undertakings in EU member states are not only required to report on their financial basics, now they are also required by Article 1 of the Directive to account for their non- financial footprint, including adverse impacts they have on the environment and supply chains. In accordance with the Directive, the German transposition stipulates that the non-financial declaration must state which reporting framework was used to create it (or explain why no framework was applied), as well as apply non-financial key performance indicators relevant to the particular business. These requirements are our point of departure: We systematically assess the degree of non-financial transparency and performance reporting for 2017 applying an ex-post assessment framework premised on the Global Reporting Initiative (GRI), the German Sustainability Code (Deutscher Nachhaltigkeitskodex, DNK) and the United Nations Global Compact (UNGC). By benchmarking all German companies subject to the EU NFRD-transposed law, on the topics required to be disclosed – environmental, social (human rights), employee, gender, and anti-corruption matters – this study reveals which companies make an effort to demonstrate their degree of responsibility, and to what degree. Of the 516 companies identified to be subject to the law, we located a report pursuant to the law for 422 of them. Each report was subject to rigorous analysis on the basis of 67 key performance indicators. On average, disclosure transparency was higher for select gender, anti-corruption and employee rights issues. In contrast, companies tended to report less on environmental matters and even less on social and human rights issues. However, for most of the select indicators, there are examples of companies that successfully applied the indicator. The highest transparency per matter was offered for the following indicators: environmental: 47% disclosed their energy consumption within organization social / human rights: 31% reported that they had supplier labor practices criteria in place employee: 25% of companies reported on work injuries gender: 68% reported on their percentage of female employees anti-corruption: 62% reported employing a whistleblowing/ethics mechanism Once an indicator enjoys a critical mass of uptake, ESG trends are revealed.

Scope 1 emissions were reduced on average by 0.41% between 2016 and 2017:

Energy consumption increased by 1.62% between 2016 and 2017: nvironmental e

68.49% of new suppliers were screened using labor practices criteria:

human rights human

The total number of injuries was an average 35.99 per company: employee

The female workforce average was 45.88% female workers:

The female members on the Executive Board (“Vorstand”) average was 7.83%: gender

The average percentage of employees who received anti-corruption training was 84.34%: corruption - anti

If public disclosure is an indispensable step towards corporate responsibility, which is precisely the consensus opinion within civil society and government circles, the degree of individual company transparency is the first gauge of corporate non-financial performance. Thereafter, the question arises what calculation methods and assurance are applied to underpin the reported numbers. Transparency is one thing, performance another. With baseline data, the relative degree of political will within the company for year-over-year improvement furthermore becomes evident. In sum, some – but not all – companies under study are using the EU NFRD as an opportunity to put forward evidence that they deserve a social – not just a financial – license to operate.

Foreword The CSR-Richtlinien-Umsetzungsgesetz (CSR-RUG)-premised dialectic is alive and well in corporate Germany. The 2014-issued EU NFR Directive and its national transposition into German law has prompted profound and culture-shaping conversations within the directly and indirectly affected companies: how do financial and non-financial perspectives interact? How should companies handle risks – the term “risk” itself, and the processes behind the big issues?

Financial reporting has traditionally focused on the accounting of risks in the sense that “Risk means more things can happen than will happen” (Elroy Dimson) in the context of “The future is a distribution of possibilities” (Howard Marks). It is also rather self-centered, asking how exogenous factors impact the company’s performance, and how such material risks may affect the single bottom line.

The duty to report changes a lot. Situation-premised financial reporting is widened to an inclusive, long-term sustainability perspective. Lawmakers consider the company as an agent of change for better or worse. Better, if they take their responsibility in e.g. taking into account conditions in supplier countries, or public goods such as clean air and water and in steering company processes towards long-term profitability and future-fit business cases. Worse, if they neglect this perspective.

Increasingly, companies are getting down to business and internally sharing their understanding of risk, materiality, and impact. Reputational risk plays a prominent role. Consumer and civil society stakeholders have been considering non-financial matters for a long time, and especially after the global financial crisis in 2008. Shareholders influence the discussion with their Sustainable Finance perspective. Pension funds that apply environmental, social and governance (ESG) criteria and activist investors bring with them increased scale and force and new metrics for valuation. Concerning impact, conventional reporting on e.g. the number of local employees and an absence of work fatalities and injury is now, for example, being confronted with the proposition of inclusive value creation and socio-economic impact – “How is your business aligned with the Sustainable Development Goals (SDGs)?” The measurement of impact through key performance indicators (KPIs) and the use of appropriate reporting frameworks is a further challenge, and the mastery thereof reflects the extent to which non-financial matters are professionally managed and internationally aligned.

In sum, CSR-RUG has served as a clear impetus for internal and external conversations on these matters. The conflict lines run through companies and lobby groups alike. It is this path that good governance and smart co-regulation processes wish to inspire and facilitate. Evaluation and research are necessary to draw the right conclusions. Therefore, I´d like to thank the authors for their valuable work and contribution to the informed discussion.

Yvonne Zwick Deputy Secretary General of the German Council for Sustainable Development Head of the Sustainability Code Office (Deutscher Nachhaltigkeitskodex – DNK)

Contents Executive Summary ...... 1 Foreword ...... 4 I. Introduction ...... 6 A. Novelty of EU NFRD ...... 6 B. Germany’s transposition ...... 8 II. Methods ...... 10 A. Data ...... 10 B. Evaluation framework...... 11 C. Analyses ...... 12 D. Scoring and scorecards ...... 12 E. Data quality control ...... 12 F. Research team, competing interests statement ...... 13 G. Peer review ...... 13 III. Findings ...... 14 A. In-scope organisations ...... 14 B. Profile of assessed organisations ...... 14 C. Reporting modalities ...... 17 D. Corporate responsibility, risk mitigation and remediation ...... 22 a. Environmental matters ...... 23 b. Social and human rights matters ...... 51 c. Employee matters ...... 65 d. Gender matters ...... 69 e. Anti-corruption matters ...... 75 E. Disclosure transparency analyses ...... 82 a. Degree of transparency per indicator ...... 82 b. Degree of transparency per matter ...... 85 c. Degree of transparency by type of company / business sector (SIC) ...... 85 d. Degree of transparency, public vs. private ...... 86 e. Degree of transparency, revenue ...... 87 f. Degree of reporting framework adherence ...... 87 F. Material adverse impacts ...... 89 IV. Recommendations ...... 89 Acknowledgements ...... 92 Appendix A: Acronyms ...... 93 Appendix B: List of companies assessed ...... 96 Endnotes ...... 107

I. Introduction

A. Novelty of EU NFRD With the intention of stimulating a debate on corporate social responsibility at the European level, in 2001 the European Commission published a “Green Paper,” which marked the beginning of the EU’s “CSR policy.” In the paper, the European Commission defined CSR as “a concept whereby companies integrate social and environmental concerns in their business activities and in their interaction with their stakeholders on a voluntary basis.”3 Ten years later, in 2011, the European Commission published a white paper entitled “A New EU Strategy (2011-14) for Corporate Social Responsibility (CSR).” The focus, once more, was on voluntary implementation. Within this framework, however, the Commission offered a new definition in which it considered CSR as "the responsibility of companies for their impact on society."

The EU Non-Financial Reporting Directive (NFRD) 2014/95/EU, in Germany commonly referred to as “CSR-Richtlinie,” was adopted by the EU in 2014, amending Directive 2013/34/EU, adding enhanced non-financial disclosure requirements to the existing legislation. The Directive applies to the EU’s current 28-member states and was required to be transposed into the latter’s national laws by December 6, 2016, with companies obliged to provide enhanced disclosure from 2017 onwards. Considering the history of the CSR concept, one observer noted that what was once a voluntary format is now a legal requirement in the present Directive 2014/95/EU.4

Thus, the EU Directive joins other disclosure laws on the books, to also include public reporting requirements on environmental, anti-corruption and gender matters. The California Transparency in Supply Chains Act was passed in 2010, focusing on forced labor in supply chains. In 2011, the unanimous adoption of the UN Guiding Principles charged the private sector to respect human rights. Thereafter, the UK’s Modern Slavery Act of 2015, France’ Loi de Vigilance of 2017, and Australia’s Modern Slavery Bill of 2018 were passed, all part of the burgeoning legislation on Environmental, Social and Governance (ESG) due diligence and reporting across the world.

Target Targeted by the Directive are “large undertakings which are public-interest entities” (PIEs)5 exceeding “the average number of 500 employees during the financial year,” a threshold which would be met by an estimated 6,000 European companies.

Reporting scope In a departure with the conventional risk-centered disclosure requirements in financial disclosure laws,6 reporting on ESG impact is a fulcrum in the new reporting paradigm. The Directive provided that PIEs “include in the management report a non-financial statement containing information to the extent necessary for an understanding of the undertaking's development, performance, position and impact of its activity, relating to, as a minimum,

environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters.”

Furthermore, as per the EU NFR Directive, the statement of the “large undertaking, […] shall include”: “(a) a brief description of the undertaking's business model; (b) a description of the policies pursued by the undertaking in relation to those matters, including due diligence processes implemented; (c) the outcome of those policies; (d) the principal risks related to those matters linked to the undertaking's operations including, where relevant and proportionate, its business relationships, products or services which are likely to cause adverse impacts in those areas, and how the undertaking manages those risks; (e) non-financial key performance indicators relevant to the particular business.”7

With respect to the discussion of “principal risks,” Article 2 stipulates that non-financial matters must be disclosed to the “extent necessary for an understanding of the undertaking's development, performance, position, and impact of its activity.” Paragraph 8 of the Directive’s preamble specifies that information should be provided in “relation to matters that stand out as being most likely to bring about the materialisation of principal risks of severe impacts, along with those that have already materialised. The severity of such impacts should be judged by their scale and gravity.”

Legislative intent There are several stated rationales behind the now mandatory non-financial reporting (NFR), which serve the ends of various stakeholders.

From a business perspective, this NFR legislation may serve to nudge private sector actors to evaluate whether they are effectively managing and mitigating in-scope risks in view of long-term self-preservation and profitability. The European Parliament and the Council states that the objective of the Directive is "to increase the relevance, consistency and comparability of information disclosed by certain large undertakings and groups across the Union."8 The European Parliament highlights “the importance of businesses divulging information on sustainability such as social and environmental factors, with a view to identifying sustainability risks and increasing investor and consumer trust.”9

From an investor perspective, shareholder assessment of non-financial information allows them to determine whether the company’s practices are in line with their other material interests and goals.10 Mandatory ESG disclosure enhances symmetry of information on non- financial subjects, allowing the market itself to award performance. Furthermore, investors are increasingly integrating ESG metrics into their portfolios. Salient or material ESG issues taken into account, as for example advocated by researchers at the investment house State Street Global Advisors11 include:

E: greenhouse gas emissions, resource depletion, waste, pollution, deforestation; S: working conditions, health and safety, employee relations, diversity; G: executive pay, bribery, corruption, political lobbying, board structure, tax strategy.

From a governance perspective, non-financial information is “vital for managing change towards a sustainable global economy by combining long-term profitability with social justice and environmental protection.”12 Indeed, “disclosure of non-financial information helps the measuring, monitoring and managing of undertakings' performance and their impact on society.”13 As good governance is concerned with ensuring a level playing field and fair competition, mandatory ESG disclosures is just one measure to that end.

From a civil society point of view, the aspect of private sector accountability is notably highlighted in the 3rd Recital of the Directive, which references two European Parliament resolutions: ● Corporate Social Responsibility: accountable, transparent and responsible business behaviour and sustainable growth14 ● Corporate Social Responsibility: promoting society’s interests and a route to sustainable and inclusive recovery15

With the growing influence, as well as the social and environmental footprint of the private sector, civil society is concerned that the business community is, in the first place, held accountable for negative impacts on people and the planet as a result of companies’ operations and value chains. The ‘social’ footprint relates to the ways in which companies’ operations and value chains impact negatively on peoples’ ability to exercise their rights – right to education, right to health, right to privacy, etc. In sum, there is increasing expectation that businesses not simply take profit, but just as well account for their ESG impact. A proper accounting of the degree to which companies are responsible stewards, in line with the United Nations Guiding Principles (UNGPs), is in part enabled through the EU Directive.

B. Germany’s transposition

EU member states were given two years – December 6, 2014 to December 6, 2016 – to transpose the EU Directive 2014/95/EU into their own national laws.16 Denmark was, on May 21, 2015, the first country to put the Directive into force, adopting an amendment to the Danish Financial Statements Act. Yet nearly half the EU Member States, Germany as well, missed the December 2016 deadline for transposition.

On March 9, 2017, the German Parliament (Bundestag) voted on the Gesetz zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernlageberichten (CSR-Richtlinien-Umsetzungsgesetz), henceforth referred to as RUG.17 While the governing grand coalition parties CDU/CSU and SPD were in favor of the specific formulation, the opposition parties Die Linke and Bündnis 90/Die Grünen were against it, their points of critique being that the scope of the law was too limited, and that the reporting

duty was not sufficiently detailed. Furthermore, they criticized the absence of external assurance or verification and that the reports are not comparable because there was no duty to use a reporting framework.18 In their public comments, Amnesty International notably criticized the proposed law on the basis that non-public interest entities (i.e. privately-held, non-stock issuing companies) would be largely excluded from the purview of the law.19

However, at its meeting on March 31, 2017, the Bundesrat resolved not to invoke a mediation committee (“Vermittlungsausschuss”),20 and the law entered into force on April 19, 2017.21 The law was applied retroactively to have the effective starting date of January 1, 2017. The management report (“Lagebericht”) has a deadline of four months after the balance sheet due date -- the same deadline as for the group management report (“Konzernlagebericht”).

All in all, Germany transposed Article 19a of the EU Directive closely into national law. The new regulation was mainly incorporated into the Commercial Code (§§ 289a-f and § 315b-c of the Handelsgesetzbuch, HGB for short). The charge to report environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters, was transposed by the German legislature into § 289c II of the HGB. Most of the Directive’s wording in the 7th recital22 was integrated verbatim into § 289c II of the HGB. In addition to the suggested topics to be treated, biodiversity was integrated as an environmental matter in § 289c II no. 1 of the HGB. Apart from the biodiversity provision, there was no transposition of items which exceeded the suggested scope of the Directive.

Subject to these new reporting requirements are capital market-oriented,23 large24 corporations25 (“Große nichtbörsennotierte Unternehmen”) and company groups (“Konzerne”)26 employing an annual average of more than 500 employees. Furthermore, large credit institutions27 and large insurance companies28 employing an annual average of more than 500 employees are also subject to the regulation. In sum, targeted by the law are PIEs, in Germany defined as publicly listed companies, credit institutions, and insurance undertakings – privately-held, non-bank and non-insurance companies are thus excluded from the disclosure law. The German government estimated that a total of 548 companies in Germany would be covered by the regulation.29

Subject companies may use established national, European and international reporting frameworks (according to § 289d of the HGB). Companies however must state whether they did use a certain reporting framework, and if not, why it did not employ a suitable framework.30 While the 9th recital of the Directive suggests several reporting frameworks (e.g. Eco-Management and Audit Scheme (EMAS), the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD), the International Organization for Standardization's ISO 26000 and the GRI, these reporting frameworks were not were not specifically highlighted as examples in § 289d of the HGB.31

In line with the EU Directive,32 the German legislature provided for sanctions33 to ensure compliant behavior. The law foresees non-compliance with non-financial reporting obligations to be penalized as a criminal offence (“Straftatbestand”) in some cases, and in

other cases as a misdemeanor (“Ordnungswidrigkeit”).34 The misdemeanor involves mere infringements, whereas the criminal offence relates to actions of false reporting or disguising of the company’s position. In their RUG draft, the German government estimated 20 cases of infringements to the new law per year.35

In another instance, the German transposition gave companies more latitude. The Directive includes the option for a company not to disclose information concerning such matters that may lead to negative impacts to the development of the business situation if this corresponds with a balanced understanding of the company’s actual business course.36 In contrast to the Directive, which requires non-disclosure relating to adverse impacts on the business situation of a company, German law (§ 289e I no. 1 of the HGB) refers to adverse impacts on the company on the whole.

II. Methods

A. Data The data collected in this study comprised the subject company’s RUG-oriented disclosures reporting on year 2017, as 2017 marked the first year the German non-financial reporting law went into effect. Data were collected over the period of July 2018 to November 2018, well after the statement deadline.37

A non-financial report pursuant to the new § 289 b III of the HGB may be published in three ways: 1. as part of management report (“Teil des Lageberichts”); 2. as a special non-financial report published at the same time as the management report in the Federal Gazette (“Gesonderter nichtfinanzieller Bericht, zeitgleich mit Lagebericht im Bundesanzeiger veröffentlicht”); and/or 3. as a special non-financial report published on its website (“Gesonderter nichtfinanzieller Bericht, auf der Internetseite veröffentlicht”).

This study built its own repository of reports applying the parameters of the law, thereby consulting the following four sources:

● Bayer-Hoffmann study, which identified 536 companies subject to the law;38 ● UNGC-econsense study, released in June 2018, which identified 487 companies subject to the law;39 ● the database provided by akzente, in collaboration with sustainable, which lists 319 reports;40 ● DNK’s list of 246-member companies that have issued a special non-financial report (Gesonderter nichtfinanzieller Bericht) for the calendar year 2017.

The RUG-oriented statements in our repository, which amount to 422, are featured in Appendix B. Both web scraping and manual verification methods were employed to locate every available report pursuant to RUG.

When the required RUG information was reported in a separate non-financial report, we did not also consult the company’s management report (“Lagebericht”). Only when the non- financial report was part of the management report did we consider ESG-relevant information in the entire report. In other words, when a separate non-financial report was issued, we did not, in addition, consult the company’s management report (“Lagebericht”) regarding disclosed ESG information.

In the case a company published an additional comprehensive CSR/Sustainability report, such a report was not assessed. Only the non-financial report pursuant to RUG was in-scope of this study.

Data on organizations’ profiles, e.g. turnover, capitalization, industry, and Global Ultimate Owner (GUO), were obtained from Orbis.41

B. Evaluation framework Article 1 of the Directive states that the non-financial statement must contain information including: “e. non-financial key performance indicators relevant to the particular business.”42 The successive Guidance of the Directive furthermore explains: “The non- financial statement should include material narratives and indicator-based disclosures, commonly referred to as key performance indicators (KPIs).”43

In Germany, the non-financial declaration must state which framework was used to create it (§ 289d of the HGB). If no framework was used, this must be justified. In addition, the application of KPIs is required (§ 289c of the HGB).44 Thus, this study sets out to gauge to what extent existing KPIs were applied in the company’s reporting according to RUG.

The selection of indicators for this study involved the following criteria: 1. Indicator derived from a leading reporting framework;45 2. Indicator in-scope of the five matters highlighted in the EU NFRD;46 3. Preference for indicators with a value/supply chain and/or a circular economy dimension (with regard to the environmental, social/human rights and anti- corruption matters); 4. Preference for outcome over process indicators.

The III. Findings section of this report features each selected indicator and the corresponding findings, both in terms of indicator use as well as each company’s reported performance.

For Germany, data were collected on a total of 72 indicators, 67 of which were ESG indicators, and 5 concerned disclosure modalities. A company which did not use a particular reporting framework (GRI, DNK, UNGC, etc.), was not automatically disadvantaged as we applied a keywords/key terms search method in parallel to indicator codes of established frameworks. The keywords/key terms we applied are listed in section III. Findings along with each indicator. The study did not, however, examine why a particular indicator was or was not applied (e.g. on the basis of the company’s stated materiality).

C. Analyses Descriptive statistics, in particular measures of central tendency, were applied. Correlations between indicators were calculated in select cases. Transparency performance was broken down by company type, sector, and size. Furthermore, the degree of reporting framework adherence was assessed. We also qualitatively highlighted specific cases of companies that either deviated positively or negatively. Where negative examples are referenced, the reporting company was anonymized so as generally not to disincentivize transparency.

D. Scoring and scorecards There are three main classes of public-interest entities subject to RUG in Germany: capital market-oriented large corporations (“große börsennotierte Unternehmen”), large banks, and large insurance companies. Although banks and insurance companies typically do not have traditional supply chains, apart from procurement related to their own operation, the financial sector has a crucial role to play in the implementation of the UN Guiding Principles on business and human rights, seeing as they finance or underwrite companies and projects that have an ESG impact.

Individual indicators were designed to be binary or to collect a performance value. Where data were provided, it was collected as a “yes” or value. These data are also summarized in the form of individual company scorecards, issued a part of this study. Where data were absent, that was noted. The “comply or explain” provision was however not taken into account, on a per company basis, in the data collection and analysis – i.e. in such cases the data were treated as “absent.”

E. Data quality control In order to ensure that all evaluators had the same level of understanding and consistently applied the evaluation criteria, initial orientations with each evaluator were conducted and frequent meetings were held that featured discussions of individual cases. Upon data verification, in the case of any discrepancy, the point of divergence was resolved. Data collection redundancy was built into the process for quality control purposes. These steps, taken together, ensured that the highest possible data quality was obtained.

F. Research team, competing interests statement The research team for this study comprises seven individuals. Gisella Vogel, Sarah Kaltenhäuser, Daniel Castro Morales, and Juan Ignacio Ibañez served as evaluators, collecting the data. Dr. Chris N. Bayer served as the Principal Investigator of the study, and Gisella Vogel served as the coordinator of the study. Dr. Chris N. Bayer, Sarah Kaltenhäuser, Juan Ignacio Ibañez, Gisella Vogel, and Katherine Storrs authored this report. Dr. Jiahua (Java) Xu and Juan Ignacio Ibañez prepared the graphs.

The Principal Investigator of the study and research team members declare that they have no competing interests, nor conflict of interests, in their execution of this evaluation. They do not knowingly or directly own stocks or other forms of equity in any evaluated issuer or in the entities making up the Stakeholder Forum of the study. Neither DI, nor the project team members, provided services to any of the assessed companies at the time of the study. In sum, they had no known vested interests vis-à-vis the individual scores and findings of this study.

G. Peer review The Stakeholder Forum of the study functions as a peer review mechanism that offers critique at two junctures of the research: (1) review of the study’s indicators just before the evaluation framework is deployed, and (2) review of the study’s draft evaluation report. The Forum, however, had absolutely no involvement in data collection, evaluation, or scoring. All findings and any errors are fully DI’s responsibility. Furthermore, participation in the Stakeholder Forum is not an endorsement of the report or its findings.

The following 10 individuals served as peer reviewers on the study’s Stakeholder Forum: Loreen Wachsmuth Deutscher Nachhaltigkeitskodex (DNK) Sophie von Gagern UNGC (Global Compact Network Germany) Kris Spriano Sustainable Purchasing Leadership Council (SPLC) Dr. Elmer Lenzen macondo publishing GmbH, GRI Stakeholder Council Prof. Dr. Ulrich Ellinghaus Baker McKenzie, Justus-Liebig-Universität Gießen Mairead Keigher Shift Dr. Katie Böhme iPoint-systems Martina Prox ifu Institut für Umweltinformatik Hamburg GmbH (part of iPoint Group); Member of the Board of Verband für Nachhaltigkeits- und Umweltmanagement e.V. (VNU)

Matthias Keitel ifu Institut für Umweltinformatik Hamburg GmbH (part of iPoint Group)

Lawrence Heim Elm Sustainability Partners

III. Findings

A. In-scope organisations In its modeling of the economic cost of the law, the German government estimated that 548 companies were subject to the study.47 The UNGC-econsense study, released in June 2018, identified 487 companies subject to the law.48 The Bayer-Hoffmann study identified 536 companies.49 The company overlap between the latter two sources comprised 602 companies, i.e. the companies either confirmed to be – or potentially – in scope.

For calendar year 2017, we identified 516 companies subject to RUG, i.e. companies that met the threshold of 500 employees, and had a turnover of at least EUR 40 million, and a capitalization of at least EUR 20 million.50 Of those, we located a statement pursuant to RUG issued by 422 individual organizations (see Appendix B). Conversely, we identified 94 companies without a statement. However, the fact that we found fewer reports than the number of subject companies need not be due to non-compliance, as the law allows for mother/holding companies of subsidiaries to report on behalf of the latter.51

B. Profile of assessed organisations

1. Industry Sector

A discussion of the company’s business model is required under § 289c of the HGB.52 We note that with respect to industry representation, by far the largest cohort among the companies disclosing non-financial information were 142 financial/depository institutions, as is illustrated in Figure 1. Insurance carriers, with 38 companies, followed.

2. Turnover/revenue

Figure 2 depicts the turnover (revenue) per sector. Combined, they had a global turnover of EUR 1.8 trillion in 2017. This amount represents more than half of Germany’s Gross Domestic Product (GDP), which was EUR 3.1 trillion in 2017.53

investment offices investment

institutions depository carriers insurance / equipment machinery industrial services business chemicals / allied products electronic / electric equipment equipment transportation communications / holding services sanitary / gas / electric institutions nondepository products related and instruments other

# companies of sector Figure 1: industry sector, # of companies.

other services

equip transportation chemicals / allied products services sanitary / gas / electric / equipment machinery industrial communications programs of economic administration products plastics / misc. rubber postal institutions depository offices investment / holding services business by air transportation

EUR) (billion revenue

sector Figure 2: revenue per sector.

3. Employees

The number of employees per industry sector is depicted in Figure 3. The industry that by far employed the most people is the transportation equipment industry, which includes the automotive sector.

services

equip transportation / equip machinery industrial chemicals / allied products services postal communications institutions depository products plastics / misc. rubber products related and instruments electric / gas / sanitary services business by air transportation industries metal primary other

employees (thousand)

sector Figure 3: employees per sector.

4. Domestic vs. foreign ownership

A further profile aspect concerns the question whether the Global Ultimate Owner (GUO) is domestic or foreign. The majority, 366 of subject organizations, were domestically-owned, and 24 were foreign-owned.

other 24

Figure 4: domestic vs. foreign ownership.

C. Reporting modalities

1. Type of report

Into which type of report was the non-financial disclosure integrated?

§ 289b I of the German Commercial Code (HGB) stipulates that the non-financial statement is to be an integral part of the management report. The non-financial declaration must therefore be published together with the annual financial statements in accordance with § 264 I s. 1 of the HGB. However, pursuant to § 289b III and § 315b III of the HGB, the obligation to add a non-financial statement to the (group) management report may be avoided if a separate non-financial report is published meeting the content requirements of § 289c of the HGB, which is either disclosed together with the management report or made available on the company's website for ten years.54 This separate non-financial report must be published on the website four months after the balance sheet due date.55

Thus, pursuant to the new § 289 b III HGB, there are three ways a non-financial report may be published: 1. as part of management report (“Teil des Lageberichts”); 2. as a special non-financial report published at the same time as the management report in the Federal Gazette (“Gesonderter nichtfinanzieller Bericht, zeitgleich mit Lagebericht im Bundesanzeiger veröffentlicht”); or 3. as a special non-financial report published on its website (“Gesonderter nichtfinanzieller Bericht, auf der Internetseite veröffentlicht”).

For example, every report submitted to the DNK is a special non-financial report (“Gesonderter nichtfinanzieller Bericht”).

We identified 68.6% (290) separate non-financial reports (“gesonderte nichtfinanzielle Erklärung”) and 31.4% (133) RUG-specific disclosures part of management reports (“nichtfinanzielle Erklärungen als Teil des Lageberichts”). Thus, more companies tended to report in the form of a separate non-financial report than in their management report. This finding matches that of the Global Compact Network Germany and econsense study, which identified 73.5% reports as separate, and 26.5% as part of the management report.56

Figure 5: the number of companies that published the non-financial information as part of their management report ("Teil des Lageberichts") vs. separate non-financial report ("Gesonderter nichtfinanzieller Bericht").

2. Report name

Into which report was the non-financial information integrated, or how was the non-financial report named?

There were over a dozen titles used for the report name that contained the required RUG- pursuant information: o “Bericht zu Umwelt- Arbeitnehmer und Sozialbelangen” (Report on Environmental, Employee and Social Issues), o “Geschäftsbericht” (Business Report), o “CSR Bericht” (CSR Report), o “Entsprechenserklärung” (Declaration of Compliance), o “Jahresbericht” (Annual Report), o “Gesonderter nichtfinanzieller Konzernbericht” (Separate Non-financial Group Report), o “Fortschrittsbericht” (Progress Report), o “Jahresfinanzbericht” (Annual Financial Report), o “Nachhaltigkeitsbericht” (Sustainability Report), o “Nichtfinanzielle Erklärung” (Non-financial Statement), o “Nicht-finanzieller Bericht” (Non-financial Report), o “Zusammengefasster gesonderter nichtfinanzieller Bericht” (Consolidated Separate Non-financial Report), o “Nicht-finanzieller Konzernbericht” (Non-financial Group Report), and o “Nichtfinanzielle Konzernerklärung” (Non-financial Group Statement).

3. Reporting framework(s)

Which reporting framework was applied?

Article 1 of the Directive states that the company’s non-financial disclosure must contain information including: “e. non-financial key performance indicators relevant to the particular business.”57 It furthermore states that if undertakings relied on national, union-based or international frameworks, they “shall specify which frameworks they have relied upon.”58 Transposed in Germany, the new provision (§ 289d of the HGB) requires that the non- financial declaration must state which framework was used to create it or justify why no framework was used.

In Germany, companies reported applying four main reporting frameworks: 1. Global Reporting Initiative (GRI),59 2. Deutscher Nachhaltigkeitskodex (DNK),60 3. The Ten Principles of the United Nations Global Compact (UNGC),61 and 4. European Federation of Financial Analysts Societies (EFFAS)’s ESG 3.0.62

Win-Charta63 and the sBPR64 were also each referenced once.

Figure 6: # of company reports that used the GRI, DNK, UNGC, or EFFAS reporting framework.

While the DNK checks member-company reports for completeness (“Prüfprozess”), the GRI, UNGC, and EFFAS do not. The DNK,65 GRI66 and UNGC67 each offer a platform that hosts company reports.

GRI DNK DNK and EFFAS EFFAS UNGC UNGC and GRI Win-Charta sBPR no overlap 83 1 2 28 0 1 97 GRI 30 1 7 0 0 32 DNK 1 0 0 0 DNK and EFFAS 1 2 0 0 2 EFFAS 0 0 19 UNGC 0 0 UNGC and GRI 0 1 Win-Charta 0 sBPR 114 no overlap

Figure 7: the overlap between reporting frameworks reveals the usage of multiple frameworks in a single statement.

Given that the majority (306 firms out of 422, 65.2%) of companies with reports stated they applied the GRI, DNK, and/or UNGC reporting frameworks, we reference these indicator associations and their overlap in section D. Corporate responsibility, risk mitigation and remediation.

4. Assurance services provider

Did the company obtain independent verification or assurance for the content of its report?

How does RUG provide for the effective monitoring of non-financial statements? In the first instance, the Board of Directors (“Aufsichtsrat”) reviews the non-financial statement (in accordance with § 171 I s. 4 AktG), which consists of a content check, not a plausibility check. This means the Board of Directors must check the non-financial information with the same rigor as the financial information, e.g. contained in the Annual Report (“Abschluss und Lagebericht”).68

While Article 19a (6) of the Directive 2014/95/EU provides the option for Member States to require verification by an independent assurance services provider, Germany however did not make use of such option.69 The Board of Directors (“Vorstand”) may voluntarily commission an external entity to examine the content of the non-financial statement.70

Our investigation yielded that 157 non-financial reports (37%) were subjected to an audit by an external auditor (“Wirtschaftsprüfer”).

AGIMUS AGIMUS GmbH BEST BEST AUDIT ECOVIS ECOVIS Wirtschaftstreuhand Genossenschaftsverband KPWT KPWT KWP Kölner Wirtschaftsprüfung und Steuerberatung Kurt Heller GmbH Peters Peters und Partner GmbH WKGT Warth & Klein Grant Thornton AG Mazars Mazars Ebner Ebner Stolz GmbH & Co. KG RSM RSM GmbH BDO BDO AG Deloitte Deloitte EY Ernst & Young KPMG KPMG PwC PricewaterhouseCoopers

Figure 8: assurance services providers that audited non-financial disclosures. n = 422.

In the case of 109 companies, the International Standard on Assurance Engagements (ISAE 3000),71 an audit standard concerning assurance over non-financial information, was applied.

Figure 9: the International Standard on Assurance Engagements (ISAE) 3000 was applied by 26% of the companies under study. n = 422.

5. Type of assurance

Were audited non-financial statements subjected to “limited assurance” or “reasonable assurance”?

A further question was whether the non-financial reporting had been subjected to “limited assurance” or “reasonable assurance.” An external auditor collects less evidence for a limited assurance engagement than for a reasonable assurance engagement. Limited assurance engagements conclude with what could be viewed as a negative formulation (i.e., nothing was found in the audit indicating material misstatements were made in the audited document), whereas a reasonable assurance engagement positively states that the audit evidence was sufficient and appropriate to support the auditor’s conclusion and/or whether the statements are free of material misstatement (whether caused by error or fraud).

Thirty-seven (37) reports had undergone reasonable assurance (“unbegrenzte Sicherheit”), 114 reports had obtained limited assurance (“begrenzte Sicherheit”), while 6 reports did not specify the type of assurance to which they had been subject, and 265 reports indicated that the company did not obtain assurance.72

Figure 10: type of assurance per report. n = 422.

D. Corporate responsibility, risk mitigation and remediation

While the concept of risk permeates non-financial reporting, there is not just one way of understanding risk. The notion of risk emerges when there is a need to account for external circumstances that may affect the operations of a firm, but also when it is the company’s own activity that may affect its business, social or ecologic environment. Moreover, the interaction between the company and its environment pertains to the sustainability of the former, as well as to the interests of investors and other stakeholders.

It is not by accident that a number of indicators selected for this study are concerned with risk: risk of human right violations, risk of environmental damage, risk of corruption, and action to mitigate and remediate adverse impacts. In short, risk management plays a crucial role in corporate responsibility.

There is great variance in what is understood by risk, risk management, risk sources, risk control, potential events, their consequences, and likelihood. In turn, these perspectives influence how RUG is interpreted. While some companies emphasize risks to the company, others highlight the risk of adverse impacts caused by the firm. It is also worth noting that some companies mention positive material impacts in their reports, which does not correspond with the traditional notion of risk, which is typically limited to negative impacts.

For this reason, our study also analyzed the usage of risk management standards, which help the broader adoption of responsible practices. As shown by Figure 11, approximately a third of the firms that were studied for this report applied ISO 31000, a norm with principles and guidelines on risk management. This standard is known for interpreting the concept of risk as an effect of uncertainty, whereas the older standard conceptualized risk as the probability of loss. As such, this new understanding opens the door to the reporting of also positive impacts.

Figure 11: 31% of the companies under study applied ISO 31000. n = 422.

Figure 12 illustrates that over a quarter of firms under study used the term “MaRisk” (“Mindestanforderungen an das Risikomanagement”, minimum requirements for risk management), a risk management acronym for German financial institutions.

Figure 12: the acronym "MaRisk" stands for "minimum requirements for risk management" ("Mindestanforderungen an das Risikomanagement") and was mentioned by 28% of the companies under study. n = 422.

a. Environmental matters i. Select issues and corresponding corporate reporting

In the age of the Anthropocene, humans are impacting the environment at an unprecedented scale. The mobilization of society has influenced both government and business by demanding the curtailment of adverse impacts on the environment and rewarding responsible environmental practices. This has resulted in the enactment of legislation that regulates environmental business practices, as well as the voluntary adoption of conscientious measures in the corporate world.

Included in the analysis of companies’ reports pursuant to RUG, we observed the degree to which certain salient topics are discussed. As shown in the following figures, the matters of climate change and certain sources of pollution – such as greenhouse gases and plastic – are recurring topics in the companies’ reports.

Among gases at issue is CO2 (Figure 13), which is discussed by 75% of companies under study. Twice as many companies discuss greenhouse gases (Figure 14) as compared to climate change (Figure 15), indicating a general hesitancy of companies to link the cause and its effect.

Figure 13: 75% of the companies under study mentioned “CO2”, “Carbon dioxide”, “Kohlendioxid” or “Kohlenstoffdioxid” in their reports. n = 422.

Figure 14: 68% of the companies under study included terms related to Greenhouse Gas (“Treibhausgas”, GHG, THG) in their reports. n = 422.

Figure 15: 34% of the companies under study made use of the terms "Klimawandel", "climate change", "globale Erwärmung" or "Erderwärmung". n = 422.

Other gases include nitrogen oxides (NOx,73 Figure 17) in general and nitric oxide (Figure 18) in particular, two gases that are relevant to the automotive industry, since it has become known that diesel engines (though more fuel-efficient than petrol engines in that they produce more energy for a given volume74) produce more NOx than petrol engines.75

Figure 16: 3% of the companies under study (14 firms) included the term “carbon monoxide” (“Kohlenmonoxid”) in their reports. n = 422.

Figure 17: 8 companies included the term “nitrogen oxide” (“Stickstoffoxid”) in their reports. n = 422.

Figure 18: 35 firms mentioned nitric oxide (“Stickoxid”) in their reports. n = 422.

Although robust world population data on bees is lacking,76 there are several alarming trends (increases in colony collapse disorder, hikes in mortality, etc.) that raise concerns about the risk of an “unforeseen and rapid collapse of pollinator communities.”77 The notoriety of the matter is such that fifteen companies mentioned the term “bees” (“Bienen”) in their reports (Figure 19).

Figure 19: 4% of the companies under study included the term “bees” (“Bienen”) in their reports. n = 422.

Figure 20: the terms “ocean plastic” and “microplastics” (“Mikroplastik”) were mentioned by 1 and 3 companies, respectively, the sum of them comprising 1% of the total of reports under study. n = 422.

The protection of the environment is closely related to the UN Sustainable Development Goals (SDGs). These are a collection of 17 goals comprising 169 targets on social and economic development issues, set by the General Assembly of the United Nations as a part of the “2030 Agenda.”78 Several of them pertain to environmental matters: goal 6 (“clean water and sanitation”), 7 (“affordable and clean energy”), 12 (“responsible consumption and production”), 13 (“climate change”), 14 (“life below water”), and 15 (“life on land”).79 Figure 21 shows that a high proportion of the firms under scrutiny mention the SDGs.

Figure 21: 50% of the companies under study made reference to the Sustainable Development Goals (SDGs, "Ziele für nachhaltige Entwicklung") or used the term "Nachhaltigkeitsziele" in their reports. n = 422.

Other Sustainable Development Goals are pertinent to the five dimensions under study. SDG 2 – zero hunger – is connected to food security and food traceability. This norm provides principles and requirements for the implementation of a traceability system as a tool for the management for food chains. As Figure 22 shows, a considerable portion of the companies under study applied the ISO 22005 standard.

Figure 22: the ISO 22005 food traceability standard was applied by 27% of the companies under review. n = 422.

ii. Select Key Performance Indicators

# indicator unit source keywords

1. % of products sold and their packaging materials % GRIEN28, Recycling, that are reclaimed by category? reclaimed, UNGCP8 Wieder- verwendung

Figure 23: percentage of products sold and their packaging materials reclaimed by category. n = 0 is the number of observations, out of 422 reports assessed.

Hugo Boss (SIC 231, “Men's and Boys' Suits, Coats, and Overcoats”) provided a detailed figure which shows the recycled portions of sale packaging. The packing inputs are divided in cartons, shopping bags and other materials. Beside the total quantity of sale packing, a recycling rate is also provided. In 2017, the company used 912 metric tons of paper for shopping bags, with a recycling rate of 71% and 131 metric tons of paper cartons, with a recycling rate of 74% (p. 70). While Hugo Boss technically met the legal requirements by providing reclaimed percentages per category, the lack of an aggregate figure did not permit an inclusion into Figure 23.

# indicator unit source keywords

2. % of new suppliers that were screened using % GRIEN32, Umweltkriterien environmental criteria? UNGCP7

Figure 24: percentage of suppliers that were screened using environmental criteria. n = 12 is the number of observations, out of 422 reports assessed. The average percentage of screened suppliers for those twelve companies was 72.83%.

ProCredit Holding AG & CO. KGAA (SIC 615, “Business Credit Institutions”) screened all potential suppliers using environmental criteria (p. 93).

Beiersdorf AG (SIC 284, “Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations”) – a manufacturer of personal-care products – screened all of its 24,000 [24.000 – German notation] suppliers regarding environmental and other sustainability criteria (p. c-14).

Schaeffler-Gruppe (SIC 371, “Motor Vehicles and Motor Vehicle Equipment”) – a manufacturer of rolling element bearings for automotive and industrial uses – screened 157 new suppliers without giving a concrete percentage. During the initial assessment, a supplier must verify that pollution of water, air, and soil is adequately prevented. Eleven (11) of these initial assessments resulted in non-contracting, and 27 suppliers were accepted, however with conditions (p. 15).

ISO 20400, a standard aimed at the integration of sustainable policies and strategies with an organisation’s procurement system, was notably applied by 11% of the 422 reporting companies.

Figure 25: ISO 20400 was applied by 11% of the companies under study. n = 422.

The Eco-Management and Audit Scheme (“EMAS”), developed by the European Commission, is an instrument aimed at environmental management and the improvement of environmental performance. EMAS demands compliance with ISO 14001 requirements (which maps out a series of norms for the design and implementation of an environmental management system), but goes beyond this scope. It also plays the role of a reporting framework, since one of the EMAS implementation steps is the release of regular environmental statements and reports according to certain KPIs provided by the scheme.

As illustrated by Figure 26 and Figure 27, respectively, we identified 39 companies registered with EMAS and 146 firms applying ISO 14001.

Figure 26: 9% of the companies under study registered with the European Eco-Management and Audit Scheme (EMAS) 3000. n = 422.

Figure 27: 36% of the companies under study applied the ISO 14001 standard. n = 422.

We also found that 31% of the companies under study applied ISO 14040, which details the principles for conducting a life cycle assessment or LCA, as well as ISO 14044, applied by another 31%, specifying the requirements and guidelines thereof. Between ISO 14001 and ISO 14040, the correlation coefficient is very high (0.89), and identical between ISO 14001 and ISO 14044. Between ISO 14001 and ISO 14025, the correlation coefficient is 0.83.

Figure 28: the ISO 14040 and ISO 14044 standards were each applied by 31% of the companies under study. n = 422.

We further note that 39% of companies under study applied the ISO 14025 norm, which specifies the procedures for environmental labels and declarations that convey information about environmental impacts to other businesses and consumers.

Figure 29: 39% of the companies under study applied ISO 14025. n = 422.

ISO 14051 was also applied by 35% the companies evaluated. This standard serves as a framework for material flow cost accounting (MFCA), which differs from traditional cost accounting by emphasizing the actual loss of materials (i.e. waste), hence aiding in the reduction of some environmental impacts.

Figure 30: ISO 14051 was applied by 35% of the companies under study. n = 422.

Figure 31: the term “life cycle assessment” (“Lebenszyklusanalyse”) was included in 15% of the reports under study. n= 422.

Figure 32: The terms "Umweltbilanz" or "Ökobilanz" were included in 10% of the companies under study. n = 422.

# indicator unit source keywords

3. Significant actual and potential negative % GRIEN33, negative environmental impacts in the supply chain? Umwelt- UNGCP8 auswirkungen

Figure 33: percentage of companies having reported either actual or potential negative environmental impacts in their supply chain. n= 422.

# indicator unit source keywords

4. Corresponding type of environmental impact? type / GRIEN33, negative no Umwelt- UNGCP8 auswirkungen

Figure 34: one of the companies under study reported on the type of negative environmental impact in their supply chain. n= 422.

# indicator unit source keywords

5. Corresponding action taken on environmental yes / GRIEN33, negative impact? no Umwelt- UNGCP8 auswirkungen

Figure 35: one of the companies under study reported having taken action on the negative environmental impacts at issue. n= 422.

Only Merck KGaA (SIC 283, “Drugs”) – a pharmaceutical, chemical, and life sciences company – noted two suppliers with potential negative impacts on air emissions and an inappropriate waste management with the risk of soil contamination. To resolve these issues, rather than terminating business relations, the company elaborated an action plan with each of these suppliers. Reportedly, Merck then supervised the implementation of the action plans (p. 112).80

A number of companies, as is the case of a gardening tools company headquartered in Landau an der Isar, disclosed external environmental risks impacting the company rather than reporting on risks or impact on the environment due to the company’s activity.

# indicator unit source keywords

6. Grievances about environmental impacts filed, yes / GRIEN34, Missstand, addressed, and resolved through formal grievance no Beschwerde UNGCP8 mechanisms?

Figure 36: companies that reported on the filing, addressing and resolution of grievances about environmental impacts through formal grievance mechanisms.

# indicator unit source keywords

7. Corresponding # of grievances about environmental # GRIEN34, Missstand, impacts filed, addressed, and resolved through Beschwerde UNGCP8 formal grievance mechanisms?

Figure 37: number of grievances filed, addressed and resolved through formal grievance mechanisms. n = 4 is the number of observations, out of 422 reports assessed.

As most companies assessed, DekaBank reported no grievances concerning environmental impacts in 2017. It did, however, describe its grievance mechanism: If grievances regarding sustainability criteria are detected in supplier audits, a multi-level process is launched which can end in the termination of the contract were the defect not to be rectified. No supply relationship was however terminated in the year under review.81

A specialty chemicals company reported one significant environmental event in 2017. But the company did not report what kind of event it was and how it was resolved.

# indicator unit source keywords

8. Direct greenhouse gas (GHG) emissions (Scope # GRIEN15, Treibhaus- 1)? gasemission, UNGCP8, Treibhaus, DNK13 Scope 1

Figure 38: direct GHG emissions per company, in CO2e metric tons. Only 139 out of 422 companies (32.9%) reported their Scope 1 emissions. The average direct GHG emissions were 2,370,639.27 metric tons of CO2e.

The average Scope 1 emissions value lies to the very left of Figure 38 due to the presence of a few outliers to the right of the figure. The highest emissions value was reported by RWE AG (SIC 491, “Electric Services”), with 132,400,000 metric tons of CO2e.

Measurement/metric variation:

Greenhouse gas emissions were reported most commonly in metric tons of CO2 equivalents and less commonly in kilograms of CO2 equivalents. Centrotec Sustainable AG (SIC 308, “Miscellaneous Plastics Products”) combined their indirect and direct carbon emissions, such that it was indistinguishable which were Scope 1 emissions and which were Scope 2 or 3 (p. 16). In other cases, e.g. Fuchs Petrolub SE (SIC 299, “Miscellaneous Products of Petroleum and Coal”), emissions were reported per ton of produced goods. While emission targets were usually reported for the company or group level, for GHG-emitting products, emission goals were also reported e.g. per engine (e.g. Deutz AG, SIC 351, “Engines and Turbines”, p. 70).

# indicator unit source keywords

9. Scope 1 year-over-year measurement? (e.g. yes / GRIEN19, Scope 1 over 2016) no UNGCP8,

DNK13

Figure 39: companies measuring GHG emissions across consecutive years.

Innogy SE (SIC 493, “Combination Electric and Gas, and other Utility”) provides detailed information about the direct GHG emissions. It reported Scope 1 in million metric tons for 2017 and 2016 by using the GHG Protocol. Furthermore, the value of emissions from energy generation plants that are subject to certificate trading under the European Emissions Trading System (EU ETS) was also presented (p. 60).82

Gigaset AG (SIC 508, “Machinery, Equipment, and Supplies”) states that its Scope 1 emissions – mainly comprising gas and diesel – were reduced by 950 metric tons between 2006 and 2017 (p. 11).83

# indicator unit source keywords

10. Scope 1 year-over-year % change? % GRIEN19, Scope 1

UNGCP8,

DNK13

Figure 40: yearly percentage change in direct GHG emissions, understood as:

× 100%.

𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒−𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 On average, Scope 1 emissions were reduced by 0.41% between 2017 and 2016. n = 71 is the number of observations, out 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 of 422 reports assessed.

Deutsche Bank AG (SIC 602, “Commercial Banks”) presented in a figure that it had reduced its Scope 1 emissions by 9.61% (p. 80).

# indicator unit source keywords

11. Is a GHG emissions target specified (in the yes / GRIEN19, Treibhausgas future)? no UNGCP8,

DNK13

Figure 41: companies with a GHG emissions target specified.

Hamburger Hafen und Logistik AG (SIC 449, “Services Incidental to Water Transportation”) reports that they aim to reduce the emissions of each container handled by 30% by 2020, with 2008 as the base year. A decrease of 28.9% has been achieved so far, including a 2.2% drop in the year under review (p. 7).84

UBS Deutschland AG (SIC 602, “Commercial Banks”) aims to use only renewable power by 2020. It states that this will reduce the firm’s GHG footprint by 75%, with 2004 as base year (p. 11).85

A number of companies, such as Deutsche Apotheker (SIC 606, “Credit Unions”, p. 18), claim to have the objective of a “reduction” in GHG emissions. However, as they do not provide specific values, they are not regarded as disclosing GHG-emissions “targets.”

# indicator unit source keywords

12. GHG emissions target set for the report’s year yes / GRIEN19, Treibhausgas (2017) and met? no UNGCP8, DNK13

Figure 42: companies that set and met a GHG emissions target for the reporting year.

NATIONAL-BANK AG had planned to reduce GHG emissions by 28% to 32% in 2017, but in fact even reached 35% (p. 24).

Deutz AG aimed to reduce the GHG emission of every crafted engine by 2% per year. In 2017, the company reached a reduction of 18.5% in emissions per engine (p. 70).86

# indicator unit source keywords

13. Energy indirect greenhouse gas (GHG) emissions # GRIEN16, Scope 2 (Scope 2)? UNGCP8, DNK13

Figure 43: Scope 2 GHG emissions per company, in CO2e metric tons. The average reported level of emissions was 569,226.43 metric tons of CO2e. Only 112 out of 422 companies (26%) reported on their Scope 2 emissions.

The highest value of Scope 2 emissions was reported by Koenig Und Bauer AG, (SIC 355, “Special Industry Machinery, except Metalworking”), with 21,900,000 metric tons of CO2e.

Measurement/metric variation:

Most reports disclose the CO2e metric tons of Scope 2 emissions. Some, however, distinguish possible approaches for their calculation and present the different values that would be reached with each approach. This is the case of Osram Licht AG (SIC 364, “Electric Lighting and Wiring Equipment”), a company that besides calculating emissions according to the GHG Protocol, follows a “market-based approach,” requiring the emissions data directly from suppliers. When this is not possible (mostly in Asia, but also in North America) local or even national information is used (p. 29).87 Osram Licht’s report also distinguishes between “absolute” emissions and “specific” emissions (p. 29).

Nordex SE (SIC 491, “Electric Services”) – a company that designs, sells and manufactures wind turbines – reported their Scope 2 details, calculated on the basis of consumption values for electricity and district heating, requesting the specific data from the supplier and using country-specific emission factors when no contract for the specific location was concluded (p. 58).88

Eurogrid Gmbh (SIC 671, “Holding Offices”), instead of disclosing the metric tons of Scope 2 emissions, chose to provide the mega watt-hours (MWh) of energy consumption leading to Scope 2 emissions (p. 64).

While Gerresheimer AG (SIC 322, “Glass and Glassware, Pressed or Blown”) does not have an absolute emissions target, they do have a target for their emissions-to-sales ratio: the company aims at a growth in sales that is greater than the growth of currently unavoidable CO2 emissions. The company also takes part in the CDP, which has the overall aim of supporting companies and cities disclose the environmental impact.89

# indicator unit source keywords

14. Other indirect greenhouse gas (GHG) emissions # GRIEN17, Scope 3 (Scope 3)? UNGCP8, DNK13

Figure 44: Scope 3 GHG emissions per company, in CO2e metric tons. The average level of emissions was 30,865,434.53 CO2e metric tons. Only 72 out of 422 companies (17%) reported their Scope 3 emissions.

Scope 3 emissions comprise other “value-chain” emissions outside the companies’ walls, both upstream and downstream.90 Five companies of the Familien Porsche/Piech Group – of which Audi AG and Volkswagen AG fall within the scope of this study (see Appendix B) – reported the same level of Scope 3 emissions: 340,197,811 CO2e metric tons, the highest in Figure 44 (see, e.g., p. 62 in Volkswagen AG’s report). This cumulative figure is comprised by primarily (92.2%) two sources: o First, by the GHG resulting from the usage of the automotive products manufactured by the companies (73.3% of Scope-3 emissions, for 150,000 km driven), estimated following a well-to-wheels methodology.91 o Second, by the emissions corresponding to procured goods and services (18.9% of the GHG corresponding to this category).

Measurement/metric variation:

The values for Scope 3 GHG emissions are usually presented as company-level values or group-level values. Some companies such as Deutsche Telekom (SIC 481, “Telephone Communications”), however, also make the distinction between upstream (“Scope 3- Emissionen aus vorgelagerten Aktivitäten”) and downstream GHG emissions in the supply chain (“Scope 3-Emissionen aus nachgelagerten Aktivitäten”) (p. 80).

Deutsche Apotheker- und Ärztebank eG (SIC 606, “Credit Unions”) explained what Scope 3 includes all other indirect emissions, such as those resulting from the manufacture and transport of purchased goods, the disposal of waste and business travel (p. 21).92

Almost a third of the companies abided by norms related to greenhouse gases emissions accounting. The application of the ISO 14064 norm, according to which GHG emissions are voluntarily verified through a standardized process of quantification, reporting, monitoring, validation and verification, was applied by 31% of companies. ISO 14067, also applied by 31% of companies, specifies the requirements for the reporting of the carbon footprint of a product (CFP), in order to provide credible and reliable information, facilitate the tracking of performance data and, in general, “promote a sustainable low carbon economy.”93 The ISO 14060 family of norms, plotted in Figure 45, is based on the LCA guidelines, requirements and principles of ISO 14040 and ISO 14044.

Other corporate measures relevant to GHG emissions are shown from Figure 46 to Figure 48.

Figure 45: 31% of the companies (132) under study applied the ISO 14064 norm, which specifies principles and requirements at the organization level for quantification and reporting of greenhouse gas (GHG) emission. Another 31% (130) applied ISO 14067. n = 422.

Figure 46: the term “Greenhouse Gas Protocol” (“THG-Protokoll”, “Treibhausgas-Protokoll”, “Treibhausgasprotokoll”) was present in 14% of the reports under study. n = 422.

Figure 47: 11% of the companies mentioned the CDP (the former name of the organization, “Carbon Disclosure Project”, was also used as a search term) in their reports. It is an organization aimed at the reduction of climate and water risks. n = 422.

Figure 48: 2% of the companies under study included the term “Green Bond Principles” in their reports. n = 422.

# indicator unit source keywords

15. % of materials used that are recycled input % GRIEN2, recycling materials? UNGCP8

Figure 49: percentage of materials used that are recycled input materials. n = 7 is the number of observations, out of 422 reports assessed.

Measurement/metric variation:

Most companies did not disclose absolute recycling figures. Rather, they tended to disclose how much material was reportedly saved through recycling.

Hawesko Holding AG – a wine and champagne merchant, SIC 592, “Liquor Stores” – introduced a cardboard squeezer and produced 390 metric tons of recycled cardboard that could be sold for professional reuse (p. 13).94

Verallia Deutschland AG (SIC 322, “Glass and Glassware, Pressed or Blown”), a manufacturer of glass packing, uses 60% of materials that are recycled input materials. For green glass, the proportion rises to 90%. The reported benefit is not only a saving in raw materials, but also a reduction in GHG through savings in melting energy (p. 18).95

DMG MORI AG (SIC 354, “Metalworking Machinery and Equipment”) produces sheet metal and castings, a significant component of the final product (in terms of weight), with 47% of materials (also measured by weight) that are recycled input materials (pp. 22-23).96

# indicator unit source keywords

16. Recycled input materials year-over-year yes / UNGCP8 recycling measurement (e.g. over 2016)? no

Figure 50: companies reporting recycled-input-materials figures across consecutive years.

United Internet AG (SIC 737, “Computer Programming, Data Processing, and other Computer Related Services”) reported recycled input materials in a figure which provides a year-over- year overview (p. 72).

# indicator unit source keywords

17. Recycled input materials year-over-year % change? % UNGCP8 recycling

Figure 51: two companies reported on the percentage change between the previous year and the reporting year in recycled-input-materials figures. n = 2 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

18. Is a recycling target specified (in the future)? yes / UNGCP8 recycling no

Figure 52: out of 422 reports assessed, no companies had specified a recycled-input-materials target.

# indicator unit source keywords

19. Recycling target set for the report’s year (2017) and yes / UNGCP8 recycling met? no

Figure 53: out of 422 reports assessed, no company had set and met a target for the indicator “% of materials used that are recycled input materials.”

Figure 54: 7% of the companies under study included the term “circular economy” (“Kreislaufwirtschaft”) in their reports. n = 422.

# indicator unit source keywords

20. Description of significant impacts of activities, yes / GRIEN12, biologische products, and services on biodiversity in no Vielfalt, UNGCP8 protected areas and areas of high biodiversity Biodiversität value outside protected areas?

Figure 55: reports with descriptions of significant impacts on protected / high biodiversity areas.

Innogy SE (SIC 493, “Combination Electric and Gas, and other Utility”) disclosed having an impact on animals and plants. Specifically, wind farms may directly affect breeding birds, bird migration routes and bats. Indirectly, there can be influences on local water areas, and the resettlement of rare plants. The restoration of habitats through compensation or replacement measures is also reported (p. 53).97

Eurogrid’s (SIC 671, “Holding Offices”) report explains that given that its high voltage lines affecting the bird world, it launched a program of installation of cameras in a bird sanctuary that will allow the prevention of more collisions in the future (p. 47).

EnBW Energie Baden-Württemberg AG (SIC 491, “Electric Services”) provided descriptions of positive impacts reports that the living conditions of many endangered species have been improved since the implementation of amphibian and reptile protection programs, in 2011 and 2016, respectively (p. 80).

Figure 56: the term “biodiversity” (“Biodiversität”, “Biologische Vielfalt”) was included in 5% of the reports of the companies under study. n = 422.

“Water is the new greenhouse gas” the saying goes, on the one hand due to freshwater scarcity and associated water stress (“Wasserstress”) in select regions, and on the other hand to problems such as elevated solid particles or ocean acidification. Responses include water footprinting, water recycling (“Wasserrückführung”) and water stewardship in general.

Freshwater levels tend to oscillate, and water stress may be temporary, as the low Rhine levels in 2018 were a testament. Furthermore, a reduction of water use makes financial sense. Per vehicle produced, Volkswagen AG (SIC 371, “Motor Vehicles and Motor Vehicle Equipment”), for example, reported a reduction of water consumption: 3.76 m³ in 2017 compared to 3.89 m³ in the previous year (p. 65).98

The environmental impact of water usage, and the management of water systems for the reduction of such impact is also present in corporate disclosures. Figure 57 and Figure 58 show the recurrence of pertinent terms, while Figure 59 exhibits the application of the ISO 14046 norm. ISO 14040 is a family of standards pertaining to Life Cycle Assessment. ISO 14046, in particular, sets out specific requirements for the calculation of the water footprint of a product, based on the guidelines of ISO 14044.

Figure 57: 2% of the companies under study (9 firms) included the term “water pollution” (“Wasserverschmutzung”, “Meeresverschmutzung”) in their reports. n = 422.

Figure 58: 26% of the companies under study made use of the term “wastewater” (“Abwasser”) in their reports. n = 422.

Figure 59: 31% of the companies under study followed the ISO 14046. n = 422.

# indicator unit source keywords

21. % of water recycled and reused? % GRIEN10, Wasser, recycling UNGCP8

Figure 60: percentage of water recycled and reused. n = 3 is the number of observations, out of 422 reports assessed.

BayWa AG – a company which operates in the agriculture, building materials, and energy sectors, SIC 508, “Machinery, Equipment, and Supplies” – recycles 70% of used water using two water treatment plants. This leads to a reduction of the required fresh water amount (p. 49).

Beiersdorf AG (SIC 284, “Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations”) reported that 3.21% of its water consumption was recycled and reused (p. 70).

Villeroy & Boch AG – a manufacturer of ceramics, SIC 326, “Pottery and Related Products” – did not provide a percentage but states that it utilized 232.231 m³ of recycled water, next to a fresh water usage of 1,139,788 m³. For both types of water, this represents an increase in consumption, in relation to the previous year, which is attributed to increased production volume (p. 13).99

# indicator unit source keywords

22. % of water recycled and reused year-over-year yes / UNGCP8 Wasser, measurement (e.g. over 2016)? no recycling

Figure 61: companies reporting water-recycling figures across consecutive years.

# indicator unit source keywords

23. Water recycled and reused year-over-year % change? % UNGCP8 Wasser, recycling

Figure 62: percentage change in water recycling figures between the previous year and the reporting year. n = 7 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

24. Is a water consumption target specified (in the yes / GRIEN8, Wasser, future)? no Verbrauch, UNGCP8, Ziel DNK12

Figure 63: companies with a water consumption target specified for the future.

Zalando SE’s (SIC 565, “Family Clothing Stores”) goal is to reduce its water consumption by 10% until 2019 (p. 105).

Also Verallia (SIC 322, “Glass and Glassware, Pressed or Blown”) defined a water consumption target. It states that it will seek to reduce the water consumption by 5% by 2020 (p. 23).

# indicator unit source keywords

25. Water consumption target set for the report’s yes / UNGCP8 Wasser, year (2017) and met? no Verbrauch, Ziel

Figure 64: companies with a water consumption target for the reporting year that was met.

Rational AG (SIC 363, “Household Appliances”, p. 26) reached its target to reduce the consumption of water by 1% for every produced item (identical goals in electricity, fuel, gas, cardboard and paper consumption were also reached).100

# indicator unit source keywords

26. Water sources significantly affected by withdrawal of # UNGCP8 Wasser water?

Figure 65: No company reported it had significantly affected water sources through the withdrawal of water.

# indicator unit source keywords

27. Energy consumption within the organization # GRIEN3, Energie- (in MWh)? verbrauch UNGCP8,

DNK11

Figure 66: reported MWh consumption within the companies under study. The average energy consumption per firm was 7,734,797.09 MWh. All but one of the observations overlap on the left side of the graph, since it is necessary to fit in the scale the energy consumption of Deutsche Wohnen (see below). n = 198 is the number of observations, out of 422 reports assessed.

Measurement/metric variation:

Most companies reported their energy consumption measured in units of energy per reporting year. The most common unit used to report was gigawatts. Other units included: kilowatt, megawatt, gigajoule, terajoule, megajoule.

An exception, as far as measurement is concerned, is the case of Rational AG (SIC 363, “Household Appliances”), which reports in kWh the energy consumption of electricity and natural gas, but not that of diesel fuel and petrol. Those values, in turn, are reported in liters (p. 26).

A few companies, such as Osram Licht AG (SIC 364, “Electric Lighting and Wiring Equipment”) distinguish between “absolute” energy consumption and “specific” energy consumption (p. 28). Others, such as Deutsche Wohnen (SIC 653, “Real Estate Agents and Managers”), do not disclose their total energy consumption, but reveal their “energy intensity” instead, in this case defined as the energy consumption per square meter of rental inventory (Deutsche Wohnen had an energy intensity of 133.4 kWh/m2, see p. 171, and an “Inmobilienstand” of 345 Tm2, resulting in a rather large energy consumption value, mostly supplied with green energy, though, see indicator #32). This metric has some advantages in that company size is – albeit imperfectly – considered.

# indicator unit source keywords

28. Energy consumption year-over-year measurement yes / UNGCP8 Energie- (e.g. over 2016)? no verbrauch

Figure 67: companies with year-over-year measurements of energy consumption.

# indicator unit source keywords

29. Energy consumption year-over-year % change? % GRIEN6, Energie- UNGCP8, verbrauch DNK12

Figure 68: percentage year-over-year change in energy consumption. n = 83 is the number of observations, out of 422 reports assessed.

EDDING AG (SIC 395, “Pens, Pencils, and other Artists Materials”) disclosed a clear figure which provides the relevant information, including the total energy consumption and the measurement unit (kWh). It also shows the consumption of gas and energy. Moreover, it shows the consumption in 2016 and change in percentage (p. 50).

Another company tracking energy consumption change over time is Umweltbank AG (SIC 602, “Commercial Banks”). While most of the companies that disclose year-over-year measurements for energy consumption simply present the raw figures for each year (readers must themselves calculate the percentage change), Umweltbank AG is one of a few companies to also disclose the values of the percentage changes (p. 40).

ÜSTRA Hannoversche Verkehrsbetriebe AG (SIC 411, “Local and Suburban Passenger Transportation”) reported a figure that shows the energy consumption in total from 2010 until 2017 but it did not provide a percentage (p. 28).

# indicator unit source keywords

30. Is an energy consumption target specified (in the yes / GRIEN6, Energie- future)? no UNGCP8, verbrauch, DNK12 Ziel

Figure 69: companies with an energy consumption target specified for the future.

Sparkasse Bodensee (SIC 603, “Savings Institutions”) aims for a neutral energy balance by the end of 2020 (p. 4).

Wasgau Produktions & Handels AG (SIC 541, “Grocery Stores”) states that the Group goal is a 5% “reduction of the energy performance indicators (EnPIs)” from 2015 to 2019 (p. 21).101

LANXESS Aktiengesellschaft (SIC 282, “Plastics Materials and Synthetic Resins, Synthetic Rubber”) plans to reduce its energy consumption by 25% until 2025 (p. 6).

# indicator unit source keywords

31. Energy consumption target set and met for the yes / GRIEN6, Energie- year of the report (2017)? no UNGCP8, verbrauch, DNK12 Ziel

Figure 70: companies that set and met an energy consumption target for 2017.

Osram Licht AG (SIC 364, “Electric Lighting and Wiring Equipment”) reportedly reached its energy target. In 2017, the specific energy consumption was 160 MWh per €1 million sales. The target was set to 167 MWh per €1 million sales (p. 28).102

# indicator unit source keywords

32. Renewable energy, % of total consumption? % UNGCP8 erneuerbare, regenerative Energie

Figure 71: percentage of total energy consumption satisfied with energy from renewable sources. The average value was 50.67%. n = 74 is the number of observations, out of 422 reports assessed.

MEDION AG (SIC 573, “Radio, Television, Consumer Electronics, and Music Stores”) also obtains all its energy from renewable sources, which is certified by a proof of origin (“Herkunftsnachweis”) from the German Federal Environment Agency 103 (“Umweltbundesamt”). This is part of the company’s CO2 neutrality policy (p. 27).

Kreissparkasse Reutlingen (SIC 602, “Commercial Banks”) uses 99% green electricity as well as photovoltaic systems (p. 4).

Telefonica Deutschland Holding AG (SIC 489, “Communication Services, not elsewhere classified”) uses 71% green energy (p. 14).

Deutsche Wohnen (SIC 653, “Real Estate Agents and Managers”) supplies 90% of their rental inventory with green electricity from hydropower, which is very meaningful given the high energy consumption value reported under indicator #27. Specifically, the energetic needs at issue are those for entrance and corridor lighting as well as technical installations (p. 172).104

The management of energy is also an issue present in the conversation initiated by the EU NFRD. The existence of a corporate concern in this regard is illustrated by the fact that, as Figure 72 shows, a sizeable number of firms are applying ISO 50001. This standard provides a framework for the development of an energy management system (EnMS) in view of energy efficiency, by introducing technical guidelines for the planning, implementation and evaluation thereof. Improved energy efficiency allows the company implementing ISO 50001 to make a return on investment. The significance attached to this matter is evident in that 19% of the companies under study mentioning the term EnMS in their report.

Figure 72: the ISO 50001 norm was applied by 38% of the companies under study. n = 422.

Figure 73: DIN EN 16247-1 is an energy audit in accordance to ISO 50001, to which 7% of the companies under study declared to have been subject. n = 422.

Figure 74: the term “energy management system” (“Energiemanagementsystem”) was present in 19% of the reports under study. n = 422.

b. Social and human rights matters

i. Select issues and corresponding corporate reporting

Fundamental social and human rights include those explicitly highlighted in the International Bill of Human Rights,105 as well as United Nations treaties further elaborating human rights. The EU Guidance106 states that companies should identify and prioritize their salient human rights impacts (i.e. those rights that are at risk of the most severe negative impact), in order to start tackling potential and actual negative impacts. A good starting point for determining relevant risks is to apply a rights-based approach to the identification and prioritization of human rights risks, as e.g. set out in the UN Guiding Principles.

Serious issues are germane to supply chains. For example, the so-called “conflict minerals” originating from “conflict-affected and high-risk areas” as defined by the OECD are commodities that have been identified to drive conflict. ESG disclosures related to conflict minerals is a legal requirement in the United States for certain publicly-traded companies reporting to the US Securities and Exchange Commission.

Cocoa from Ghana and the Ivory Coast is produced in part by children exposed to hazardous child labor, which then automatically is classified as the worst forms of child labor (WFCL) (“schlimmste Formen der Kinderarbeit”) according to ILO C182. Also, “artisanal” cobalt mining in the DRC has recently been in the news due to pervasive hazardous child labor.

There are a number of countries and raw materials associated with an elevated risk of modern-day slavery and human trafficking: fish from Thailand, cotton from Uzbekistan, and garments sewn in Asia, are products which are, to a degree, tainted by modern-day slavery.107 An estimated 24.9 million people work in forced-labor conditions worldwide, almost half of them (47%) in the Asia-Pacific region.108 Children are not spared: “there were 4.4 child victims for every 1,000 children in the world.”109 There are also 2.2 million victims worldwide of state-imposed forced labor110 (e.g. Uzbek cotton, Chinese prison labor, etc.).

Figure 75: the 231 companies that made reference to child labor (“Kinder Arbeit”, “Kinderarbeit”, “Kinder- und Zwangsarbeit“) in their report constitute 58% of the reports under study. n = 422.

Figure 76: the 132 companies that were found to make use of the terms “forced labor”, “modern slavery” and their German equivalents (“Zwangsarbeit”, “moderne Sklaverei”, “Zwangs- und Kinderarbeit”) constitute 34% of the reports under study. n = 422.

Figure 77: the 22 companies that mentioned the term “conflict minerals” (“Konfliktmineralien”) in their report constitute 6% of the reports under study. n = 422.

One of the companies with products that contain tin, tungsten, tantalum, and gold (the so- called “3TG” that have been linked to conflict in the DRC) is Schaeffler-Gruppe (SIC 371, “Motor Vehicles and Motor Vehicle Equipment”), which reports having installed a monitoring process in 2013, also inquiring companies about the origin of materials. The reported reason is that the extraction of 3TG “in some countries contributes to the financing of armed conflicts and human rights violations.”111

On the other hand, Deutsche Telekom AG, which offers “a wide selection of wireless devices, including smartphones, tablets and other mobile communication devices, which are manufactured by various suppliers” as per T-Mobile’s US 10-K,112 does not mention conflict minerals (or the equivalent in German “Konfliktmineralien”) in its report.

Still other companies, while cognizant of significant risks and taking measures, are not specific about the type of risks they seek to control. The Sparkasse Hannover (SIC 602,

“Commercial Banks”), for example, reports that it does not do business with blacklisted companies based on the Vigeo Eiris database, since such companies violate the inclusion criteria (“Ausschlusskriterien”) of the firm.113

Figure 78: 10% of the companies applied ISO 26000. n = 422.

Figure 78 shows that 10% of the companies followed the guidance on social responsibility as per ISO 26000, a standard which covers issues such as human rights and labor practices (among others, including anti-corruption and environmental matters), explicitly addressing risk situations, the matter of avoidance of complicity, grievance systems fundamental rights at the workplace such as freedom of association, and health and safety practices.

ii. Select Key Performance Indicators

# indicator unit source keywords

33. Total number and % of significant # GRIHR1, Verträge, investment agreements and contracts that UNGCP1, Vereinbarungen, include human rights clauses or that DNK17 Menschenrechte underwent human rights screening?

Figure 79: number of significant investment agreements/contracts including human rights clauses or having undergone human rights screening. n = 10 is the number of observations, out of 422 reports assessed.

Ten companies reported on the number of significant investment agreements or contracts that underwent human rights screening, ranging from 0 to 650 suppliers or contracts.

# indicator unit source keywords

34. Total number and % of significant % GRIHR1, Verträge, investment agreements and contracts that UNGCP1, Vereinbarungen, include human rights clauses or that DNK17 Menschenrechte underwent human rights screening?

Figure 80: percentage of significant investment agreements/contracts including human rights clauses or having undergone human rights screening. n = 27 is the number of observations, out of 422 reports assessed.

The Sparkasse Hannover (SIC 602, “Commercial Banks”) screened all its financial assets for social, human rights, anti-corruption and environmental issues. Investments were excluded that do not meet their criteria concerning human rights violations, respect of minimum social standards, severe environmental pollution, and the production of controversial weapons (cluster bombs, landmines, ABC weapons), corruption and bribery (p. 8).114

By contrast, the Sparkasse Trier (SIC 603, “Savings Institutions”) reports a rather vague concern for supply chain issues, reporting that it cannot rule out to 100% that its technical equipment does not contain materials from countries in which it is manufactured under unacceptable conditions (p. 15).115

TAKKT AG (SIC 596, “Nonstore Retailers”), e.g., screened 46.8% of suppliers on issues concerning environment, ethics, social conditions, and the supply chain in cooperation with the EcoVadis platform (p. 1).116

# indicator unit source keywords

35. Existence of supplier labor practices yes / GRIHR10, Kriterien, criteria (e.g. supplier code of conduct)? no GRILA14, Verhaltenskodex, GRISO8, Ethikkodex, UNGCP1, Code of Conduct DNK17

Figure 81: companies reporting the existence of supplier labor practices criteria.

Zalando SE (SIC 565, “Family Clothing Stores”) regularly updates the supplier labor practice criteria present in their Code of Conduct, which include, among others, minimum wage, and freedom of association together with the prevention of forced labor, child labor, and discrimination (p. 30).117

Dürr AG’s (SIC 355, “Special Industry Machinery”) code of conduct obliges suppliers and sub- suppliers to respect human rights and forbids child labor and forced work (p. 4).

Bilfinger SE (SIC 162, “Heavy Construction”) uses uniform examining criteria to ensure that economic, social, human rights and ecological standards are upheld by suppliers.118

# indicator unit source keywords

36. Corresponding % of new suppliers that % GRIHR10, Kriterien, were screened using labor practices GRILA14, Verhaltenskodex, criteria? GRISO8, Ethikkodex, UNGCP2, Code of Conduct, DNK17 Lieferanten

Figure 82: percentage of suppliers screened using labor practices criteria. n = 19 is the number of observations, out of 422 reports assessed.

Technotrans AG (SIC 355, “Special Industry Machinery, except Metalworking”) reports that new suppliers must pass a standardized process and are only contracted when they meet the necessary criteria concerning standards including labor practices (p. 75).

SMA Solar Technology AG (SIC 367, “Electronic Components and Accessories”) initiated screening of 86% of the goods volume in their supply chain for compliance with standards on human rights, freedom of association, avoidance of child and forced labor and climate- friendliness and sustainability of the energy supply. It reports that as soon as the survey is completed, action will be taken on suppliers with insufficient performance. The type of action is undefined.119

Figure 83 and Figure 84 represent corporate labor practice initiatives. The former illustrates the application of SA 8000, a labor practices standard addressing the topics of child labor, forced labor, the rights to collective bargaining and freedom of association and health and safety matters. The latter shows the emergence of an initiative named Business Social Compliance Initiative (BSCI), aimed at the improvement of working conditions in supply chains and recognizing SA 8000 as the best practice in the subject.120

Figure 83: the SA 8000 labor practices standard was applied by 9% of the companies under study. n = 422.

Figure 84: the “Business Social Compliance Initiative”, “BSCI” for short, was mentioned by 3% of the companies under study. n = 422.

The assessment of suppliers, which is a recurring theme throughout this study, is not only a matter of CSR, but also one of product quality. The way in which a product is manufactured is relevant here. Supply chain management is essential as it affects the product’s intrinsic qualities, including what materials it does not contain.

The assessment of suppliers for labor practices is relevant here. Figure 85 shows that a significant number of firms under study applied the norms of the ISO 9000 family (and related), which involve the evaluation of suppliers in general, and the assessment of their compliance with regulatory requirements – such as labor practices standards – in particular.

While ISO 9000 specifies the terms and definitions for quality management systems, ISO 9001 (Figure 86) sets out the criteria for a quality management system. Finally, and perhaps surprisingly, the application of ISO 8402 (Figure 87), an ISO quality management norm that is being replaced by ISO 9000, was still applied by 11% of the companies reviewed.

Figure 85: the ISO 9000 standard was applied by 22% of the companies under study. n = 422.

Figure 86: ISO 9001 was applied by 40% of the companies under study. n = 422.

Figure 87: the ISO 8402 was applied by 11% of the companies reviewed. n = 422.

# indicator unit source keywords

37. Total hours of employee training on # of GRIHR2, Training, human rights policies or procedures hours UNGCP1 Schulung, concerning aspects of human rights that Menschenrechte, are relevant to operations, including the Fortbildung percentage of employees trained?

Figure 88: hours of employee training on human rights. n = 1 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

38. Total hours of employee training on % of GRIHR2, Training, human rights policies or procedures employees UNGCP1 Schulung, concerning aspects of human rights Menschenrechte, that are relevant to operations, Fortbildung including the percentage of employees trained?

Figure 89: percentage of the workforce having received human rights training. n = 5 is the number of observations, out of 422 reports assessed.

Bayer AG (SIC 283, “Drugs”) states that it is continuously sensitizing and training its employees regarding the value of human rights. In 2017, the company instructed more than 47% of its employees in approximately 190,000 hours of training (p. 89).

Brenntag AG (SIC 289, “Miscellaneous Chemical Products”) trained 10,079 employees (89% of the relevant employees) on human rights, through a mandatory one-hour online training course. The course covers twelve subject areas with practical questions and examples, and includes a final test to confirm the transfer of knowledge (p. 12).121

# indicator unit source keywords

39. Supplier/provider training on human rights yes / UNGCP1 Training, policies or procedures concerning aspects of no Schulung, human rights? Menschenrechte, Fortbildung

Figure 90: suppliers / providers having received human rights training.

Bayer AG (SIC 283, “Drugs”) reported integrating aspects of human rights in its training of suppliers (p. 89).

# indicator unit source keywords

40. Significant actual and potential negative yes / GRIHR11, negative impacts for labor practices in the supply no GRILA15, Auswirkungen, chain? GRISO10, Arbeitspraxis, UNGCP1, Arbeitsbedingungen DNK17

Figure 91: companies that reported significant and potential negative impacts for labor practices in the supply chain.

# indicator unit source keywords

41. Action(s) taken on negative impacts for yes / GRIHR11, negative labor practices in the supply chain? no GRILA15, Auswirkungen, GRISO10, Arbeitspraxis, UNGCP1, Arbeitsbedingungen DNK17

Figure 92: companies that took action against significant and potential negative impacts for labor practices in the supply chain.

Wacker Neuson Group screened 50 suppliers regarding their labor practices in 2017. It identified two cases of grievances about labor practice in the supply chain and established an action plan to solve these issues (p. 17).

Merck KGaA identified 100 cases of suppliers (out of a total of more than 730) with insufficient performance for issues of labor practices and human rights; i.e. suppliers with more than five critical deficiencies in the human rights or labor practices section of a sustainability audit, or a score of under 30% of the total points for the matter. For these suppliers, unspecified risk mitigation actions were performed (p. 111).122

# indicator unit source keywords

42. Grievances about labor practices filed, yes / GRIHR12, Missstand, addressed, and resolved through formal no GRILA16, Beschwerde grievance mechanisms? GRISO11, UNGCP1

Figure 93: companies with a formal grievance system for labor practices.

# indicator unit source keywords

43. # of grievances about labor practices filed, # GRIHR12, Missstand, addressed, and resolved through formal GRILA16, Beschwerde grievance mechanisms? GRISO11, UNGCP1

Figure 94: number of labor practices grievances resolved through a formal grievance system. n = 5 is the number of observations, out of 422 reports assessed.

Brenntag AG (SIC 289, “Miscellaneous Chemical Products”) reported 13 confirmed compliance grievances, discussed its formal grievance mechanism and indicated that most complaints relate to suspected cases of fraud, theft and violation of regulations. It also reported that if a suspicion is confirmed, it is punished within the scope of the sanctions permitted under labor law (p. 13).

# indicator unit source keywords

44. Operations and suppliers identified in # GRIHR4, Versammlungsfreiheit, which the right to exercise freedom of UNGCP3 Tarifverhandlungen, association and collective bargaining Lohnverhandlungen, may be violated or at significant risk? Kollektivverhandlungen

Figure 95: number of suppliers and operations identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk. n = 3 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

45. Corresponding measures taken to yes / GRIHR4, Versammlungsfreiheit, support freedom of association and no UNGCP3 Tarifverhandlungen, collective bargaining rights? Lohnverhandlungen, Kollektivverhandlungen

Figure 96: no companies reported having taken action to support the rights to collective bargaining and freedom of association, when risks were identified.

Hugo Boss (SIC 231, “Men's and Boys' Suits, Coats, and Overcoats”) reports one violation of its social standards by a supplier in 2017, concerning the exercise of freedom of association and collective bargaining (p. 53).

Figure 97: 50% of the companies under study made reference to “collective bargaining agreements” (“Tarifverhandlungen”,123 “Tarifvertrag”, “Tarifvereinbarung”, “Kollektivvertrag”) in their reports. n = 422.

Figure 98: 5% of the companies under study included the term “freedom of association” (“Versammlungsfreiheit”) in their reports. n = 422.

# indicator unit source keywords

46. Operations and suppliers identified as having # GRIHR5, Kinderarbeit significant risk for incidents of child labor? UNGCP5

Figure 99: among the 3 companies reporting on this indicator, none of their operations / suppliers were identified as having had significant risk for incidents of child labor. n = 3 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

47. Corresponding measures taken to contribute to yes / GRIHR5, Kinderarbeit the effective abolition of child labor? no UNGCP5

Figure 100: companies that reported having taken measures to contribute to the effective abolition of child labor incidents.

Bayer AG (SIC 283, “Drugs”) reported it had 0.07% of child labor in relation to the total number of the assessed workforce (96,000) in the production of cotton seed (p. 99). As a mitigation strategy it had established local sensitization and education initiatives and a “strict control system” (p. 98).124

Hugo Boss (SIC 231, “Men's and Boys' Suits, Coats, and Overcoats”) reported the detection of a case of child labor in a pre-sourcing audit (an audit prior to the commencement of the business relationship). The person concerned was released, compensation was paid and the contractual relationship with the supplier was terminated (p. 52).125

Bayerische Motoren Werke AG (BMW, SIC 371, “Motor Vehicles and Motor Vehicle Equipment”) reported having been notified about a child labor case by a subcontractor whose business activity is linked to the raw material cobalt. BMW indicated that activities related to responsible cobalt mining started in 2017 (p. 110).126

# indicator unit source keywords

48. Operations and suppliers identified as having # GRIHR6, Zwangsarbeit significant risk for incidents of forced or UNGCP4 compulsory labor?

Figure 101: number of operations / suppliers identified as having significant risk for incidents of forced / compulsory labor. n = 2 is the number of observations, out of 422 reports assessed.

No companies reported the identification of significant risk for incidents of forced or compulsory labor.

# indicator unit source keywords

49. Corresponding measures to contribute to the yes / GRIHR6, Zwangsarbeit elimination of all forms of forced or compulsory no UNGCP4 labor?

Figure 102: companies reporting having taken measures towards the elimination of forced labor.

No companies reported the identification of significant risk for incidents of forced or compulsory labor, and similarly no companies under study revealed the adoption of measures to eliminate forced or compulsory labor.

c. Employee matters

i. Select issues and corresponding corporate reporting

Apart from gender, equal pay and compensation matters, another area of high concern for worker wellbeing is Occupational Health and Safety (OHS), i.e. avoiding workplace accidents, injury, and death. This is clearly indicated by Figure 103, showing that work safety is one of the most discussed topics in the statements under study. Furthermore, we note the frequent application of ISO 45001 (Figure 105), a standard that specifies requirements for an OHS system intended to minimize and eliminate hazards at the workplace in order to prevent work-related injury and death. Another sizable number of firms mentioned OHSAS 18001 (Figure 106), a standard that is scheduled to be fully replaced by ISO 45001 by March 2021, with approximately the same orientation as the former.

Figure 103: 73% of the companies under study included the terms “Occupational Health and Safety” (“Arbeitssicherheit”, “Sicherheit am Arbeitsplatz” “OHS”, “OH&S”) in their report. n = 422.

Figure 104: 4 companies – constituting 1% of the total under study – included the term “OHRIS” (Occupational Health and Risk Management System) in their reports. n = 422.

Figure 105: the ISO 45001 and was applied by 35% of the companies under study. n = 422.

Figure 106: the Occupational Health and Safety Assessment Series 18001 certificate was mentioned by 16% of the companies under study. n = 422.

ii. Select Key Performance Indicators

# indicator unit source keywords

50. % of total workforce represented in formal joint % GRILA5 Vertretung, management–worker health and safety committees Gesundheit, that help monitor and advise on occupational Sicherheit health and safety programs?

Figure 107: percentage of total workforce represented in formal joint management–worker health and safety committees. n = 8 is the number of observations, out of 422 reports assessed.

BMW Group (SIC 371, “Motor Vehicles and Motor Vehicle Equipment”) reported that 88.4% of all employees were represented in formal joint management–worker health and safety committees (p. 123).

Also Beiersdorf AG (SIC 284, “Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations”) reported a high percentage (75%) of employees represented in formal joint management–worker health and safety committees (p. c-76).

# indicator unit source keywords

51. Total number of injuries? # GRILA6, Berufsunfälle, DNK16 Arbeitsunfälle

Figure 108: total number of injuries at work. n = 113 is the number of observations, out of 422 reports assessed.

Brenntag AG (SIC 289, “Miscellaneous Chemical Products”) reported a reduction of the rate of injuries from 2010 until 2016 by 66%, but in 2017 there was a slight increase of injuries from 1.5 to 1.7 accidents per million hours worked.127

RWE AG (SIC 491, “Electric Services”) used the Lost Time Incident Rate method: 2.29 accidents per million hours worked (2016: 2.1), including workers from partner companies (p. 70).128

Unlike many other companies, Kreissparkasse Augsburg (SIC 602, “Commercial Banks”) reported 7 injuries in total, not using a rate (p. 12).

Measurement/metric variation:

Companies’ approaches varied in the way they accounted for worker injuries, i.e. total injuries for the reporting year. Some companies reported this indicator as a rate, which was deemed acceptable if the total number of hours or workers was readily accessible within the report.

KRONES AG reported 19.76 accidents involving at least one day of work incapacity per thousand workers, using the “1000 men quota” method, which measures the number of work injuries for every 1000 employees (calculated as follows: number of injuries x 1000 employees/total number of full-time employees). Those units of measurement allow for comparisons between companies and industries.

MANZ AG reported 2.7 accidents per hundred workers. Another company reported injuries as a percentage reflecting the number of injuries per total number of employees.

LANXESS AG reported 1.7 accidents, WASHTEC AG reported 0.9 accidents, and HOCHTIEF AG reported 1.23 accidents per million hours worked, known as the Lost Time Injury Frequency Rate (LTIFR) or Lost Time Incident Rate (LTIR), in which a worker misses at least one shift or day of work. These cases in report work injuries by means of the MAQ (German: “Millionen Arbeitsstunden Quote” – English: “Million Working Hour Quota”), which comprises the number of industrial injuries for every million hours worked. While it was generally reported per 1 million person hours worked, but was also reported as the “number of incidents / number hours worked” ratio.

While many companies reported that there were no fatalities over the reporting year, the majority of companies did not report whether there were any fatalities.

# indicator unit source keywords

52. Total number of work-related fatalities? # GRILA6, Todesfälle, DNK16 tödliche Arbeitsunfälle

Figure 109: total number of work-related fatalities. n = 100 is the number of observations, out of 422 reports assessed.

E.ON SE (SIC 491, “Electric Services”) reports that 4 employees and one external worker died in 2017 due to an accident. It reports that typically, after a fatality, an investigation initiates immediately and a report is sent to the Management Board within 24 hours of the incident. The reported aim of the process is to identify the causes and prevent similar accidents in the future (p. 7).129

Measurement/metric variation:

The standard method for accounting for fatalities was to state the aggregate, absolute value. Only one company strayed from this standard, Heidelbergcement AG (SIC 324, “Cement, Hydraulic”), reporting fatalities as a rate of fatalities per 1 million working hours.

d. Gender matters

i. Select issues and corresponding corporate reporting

Article 157 of the Treaty on the Functioning of the European Union, as well as Article 23 of the charter of fundamental rights of the European Union, demand equal pay on wages. In Germany, the constitution prohibits the discrimination on the basis of gender (in Article 3 II, III GG). In addition, the General Act on Equal Treatment (Allgemeines Gleichbehandlungsgesetz – AGG) requires employers to pay equally (in § 2 I no. 2 and § 7 AGG).

July 6, 2017 saw the passage of the Remuneration Transparency Act (Entgelttransparenzgesetz – EntgTranspG), introducing new documentation duties to achieve transparency in wages. Pursuant to § 25 II EntgeltTranspG, employers with more than 500 employees, who must prepare a management report in accordance with §§ 264 and 298 HGB (i.e. also the companies for whom RUG applies), must now also prepare a report on remuneration transparency. The report must be published publicly and must cover the previous three years. To be legally compliant with German law, a company must report its equal pay disclosure in its non-financial report (nichtfinanzielle Erklärung), as well as in the Entgeltgleichheitbericht.

Figure 110: the terms "Chancengleichheit" and “Chancengerechtigkeit” (equal opportunity / opportunities) were mentioned in 69% of the reports under study. n = 422.

Figure 111: 15% of the companies under study treated the issue of “fair remuneration” (“gerechte / faire / angemessene Bezahlung / Entlohnung / Vergütung”) in their reports. n = 422.

Figure 112: 9% of the companies under study included the term “gender equality” (“Geschlechtergleichstellung”, “Gleichstellung der Geschlechter”, “ Gleichberechtigung der Geschlechter”) in their reports. n = 422.

ii. Select Key Performance Indicators

Our study investigated whether the company stated it had an "equal pay" policy. We awarded a “yes” if the report mentioned language describing “gleich vergütet” or “Bezahlung unabhängig vom Geschlecht“ or “Differenzierung nach Geschlecht, Hautfarbe,[...] ist weder nach der tariflichen noch nach der betrieblichen Vergütungenssystematik zulässig.” While in Germany equal pay is legally required by the AGG, we looked for an explicit commitment to equal pay.130

Even when the equal pay information was found in the Entgeltgleichheitsbericht section, we took that information into account for RUG reporting assessment purposes. If, however, the Entgeltgleichheitbericht was not included in the same report as the RUG-oriented report, we did not consult that separate Entgeltgleichheitbericht. For example, in the report issued by WWK Lebensversicherung auf Gegenseitigkeit, the chapter “Nichtfinanzielle Erklärung” does not include information about gender diversity, but the chapter “Bericht zur Entgeltgleichheit” does include the required information.

# indicator unit source keywords

53. Does the company have an explicit yes/ UNGCP5 gleiche Bezahlung, "equal pay" policy? no gleiche Entlohnung

Figure 113: almost half of the companies (45.7%) under study had an explicit "equal pay" policy.

A company from Landau an der Isar, which produces gardening equipment and power tools, explicitly rejects setting an equal pay policy, since they consider it contrary to the development of their employees and equal opportunities irrespective of gender.

By contrast, LVM Landwirtschaftlicher Versicherungsverein Münster (SIC 631, “Life Insurance”) – an insurance company – committed itself to an equal pay policy in 2012 (p. 28).

Another insurance company, the DEVK Deutsche Eisenbahn Versicherung Sach- und HUK- Versicherungsverein a.G. (SIC 632, “Accident and Health Insurance and Medical”), also has an equal pay policy in place, which is guaranteed by its collective bargaining agreement.131

# indicator unit source keywords

54. Percentage of female employees (total)? % GRILA12, Frauen, UNGCP5, weiblich, DNK16 Anteil

Figure 114: percentage of the workforce that is female. The average was 45.88% female workers. n = 285 is the number of observations, out of 422 reports assessed.

Generally, the percentage of female employees depends on the specific sector. Of all evaluated companies, those in the bank-, insurance-, and fashion retail sector had a high percentage of female employees. Adler Modemärkte AG (SIC 569, “Miscellaneous Apparel and Accessory Stores”, p. 14) and Bijou Brigitte modische Accessoires AG (SIC 391, “Jewelry, Silverware, and Plated Ware”), e.g., had 90% female employees (p. 6).

Koenig & Bauer (SIC 355, “Special Industry Machinery, except Metalworking”), on the other hand, a manufacturer of printing presses, only had 12% female employees. The company recognized this issue and reported organizing a technology camp named “Girls’ Day” as a measure to recruit more female specialist staff (p. 69).132

# indicator unit source keywords

55. Percentage of women on the first % GRILA12, Frauen, erste management level (“erste Führungsebene”)? UNGCP5, Führungsebene DNK16

Figure 115: percentage of women on the first management level. On average, the percentage of women on the first management level according to the findings of this study was 15.39%. n = 117 is the number of observations, out of 422 reports assessed.

With 70%, Bijou Brigitte modische Accessoires AG (SIC 391, “Jewelry, Silverware, and Plated Ware”, p. 6) had the highest percentage of women on its first management level (“erste Führungsebene”).

Nexus AG (SIC 737, “Computer Programming, Data Processing, and other Computer Related Services”) has a split percentage of men and women on the first management level (p. 7).

Conversely, seven companies reported that there were no females on the first management level of their company.

We also note that not every company has management levels other than an Executive Board, as is the case of Eifelhöhen-Klinik AG (SIC 806, “Hospitals”, p. 28).

# indicator unit source keywords

56. Percentage of women on Board of Directors % GRILA12, Frauen, (“Aufsichtsrat”)? UNGCP5, weiblich, Anteil, DNK16 Aufsichtsrat

Figure 116: percentage of women on the Board of Directors. The average was 21.46% female members on the Board of Directors. n = 197 is the number of observations, out of 422 reports assessed.

Most companies presented the information regarding the percentage of female members in the Board of Directors together with the self-imposed target percentage. Notably, however, a manufacturer of gardening equipment and power tools located in Landau an der Isar argues that setting gender quotas in itself causes discriminatory results. Therefore, they have symbolically set a 0% target. Coincidentally, the current percentage of women in the Board of Directors was also 0%.

Biotest AG (SIC 283, “Drugs”) had a 50-50 percentage breakdown of men and women in their board of directors (p. 25).

# indicator unit source keywords

57. Percentage of women on Management / % GRILA12, Frauen, Executive Board (“Vorstand”)? UNGCP5, weiblich, Anteil, DNK16 Vorstand

Figure 117: percentage of women on the Executive Board. The average percentage of women on the Executive Board was 7.83%. n = 170 is the number of observations, out of 422 reports assessed.

One of the largest German banks, headquartered in Frankfurt am Main, did not explicitly disclose the percentage of women in the Management Board. However, the list of members is available at the end of the report and it can be seen that the percentage of women on its Management/Executive Board (“Vorstand”) is 0%.133

With 80%, Erzgebirgssparkasse (SIC 602, “Commercial Banks”) reports the highest percentage of women in an executive board (p. 11).

Dürkopp Adler AG (SIC 355, “Special Industry Machinery, except Metalworking”) has a split 50-50 percentage of men and women in their executive board (p.23).

# indicator unit source keywords

58. Percentage of women in management % GRILA12, Frauen, positions (“Führungspositionen”)? UNGCP5, Führungspositionen DNK16

Figure 118: percentage of women in management positions. The average company reviewed had 23.05% of its management positions occupied by women. n = 171 is the number of observations, out of 422 reports assessed.

With 68.9%, ProSiebenSat.1 Media SE (SIC 483, “Radio and Television Broadcasting Stations”) was one of a few companies having more women than men at the management level (p. 118).

Sparkasse Vorpommern (SIC 602, “Commercial Banks”) reported that in 2017, 53.7% women were in management positions (p. 11).

Also Sparkasse Vogtland (SIC 603, “Savings Institutions”) has a high percentage (55.3%) of women in management positions (p. 13).

A large advertising firm headquartered in Cologne included a section on “women in management positions” in their report, but rather than reporting the numbers for this variable, it instead reported that in a training program for workers (named “Jump n’ Grow”) the issue “women in management positions” is included as a topic of study.

e. Anti-corruption matters

i. Select issues and corresponding corporate reporting

While society at large is the ultimate beneficiary when corruption is absent, the private sector also stands to benefit from efficient and fair public administration, public procurement and social justice. For one, the most capable and efficient companies get ahead. Operating outside the spectre of corruption allows businesses to demonstrate operational excellence and sustainability, improve business partner reliability, and in some cases also improve the very goods and services procured or provided. Many companies thus realize that they not only have a strong incentive, but also a role to play in stamping out corruption from their value chains.

Figure 119: the term “corruption” (“Korruption”) was mentioned in 91% of the reports under study. n = 422.

Figure 120: 67% of the companies under study mentioned the word “bribery” (“Bestechung”) in their reports. n = 422.

ii. Select Key Performance Indicators

# indicator unit source keywords

59. Total number and % of employees that have # GRISO4, Schulungen zur received training on anti-corruption? UNGCP10 Korruptions- bekämpfung

Figure 121: number of employees having received anti-corruption training. n = 48 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

60. Total number and % of employees that have % GRISO4, Schulungen zur received training on anti-corruption? UNGCP10 Korruptions- bekämpfung

Figure 122: percentage of employees having received anti-corruption training, the average value being 84.34%. n = 61 is the number of observations, out of 422 reports assessed.

Osram Licht AG (SIC 364, “Electric Lighting and Wiring Equipment”) reported that 6,666 employees had received training with a focus on anti-corruption (p. 13).

KSB AG (SIC 356, “General Industrial Machinery and Equipment”) – a supplier of pumps, valves and related services – has the goal of training all relevant employees on anti- corruption. As at the end of 2017, it had trained 5,240 employees (p. 25).134

A company that almost received credit for this anti-corruption indicator was United Internet AG (SIC 737, “Computer Programming, Data Processing, and other Computer Related Services”), which reported that 100% of purchasing department was trained on anti- corruption. It however did not report on the percentage of the total workforce having received such training.

# indicator unit source keywords

61. Total number and % of # UNGCP10 Schulungen zur suppliers/providers that have received Korruptions- training on anti-corruption? bekämpfung, Lieferanten

Figure 123: number of suppliers having received anti-corruption training. n = 2 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

62. Total number and % of suppliers/providers that % UNGC P10 Schulungen have received training on anti-corruption? zur Korruptions- bekämpfung, Lieferanten

Figure 124: no companies reported training their suppliers / providers on anti-corruption. n = 0 means there were no observations in 422 reports assessed.

Puma SE (SIC 394, “Dolls, Toys, Games and Sporting and Athletic”) – a manufacturer of sports equipment – is the only company which reported on supplier training on anti-corruption. It however did not provide a percentage, only reporting that 353 suppliers were trained on anti-corruption as an absolute number (p. 63).

A number of companies, such as a large telecommunications company, claimed to provide training to the suppliers, without indicating the number or percentage that had actually undergone said training.

# indicator unit source keywords

63. Was a whistleblowing mechanism yes/ UNGCP10 Hotline, Meldestelle, (ethics hotline) employed? 135 no Meldekanal, Hinweisgebersystem

Figure 125: 263 companies, out of 422 reports assessed, reported the employment of a whistleblowing mechanism.

For example, Henkel AG & Co. KGaA (SIC 284, “Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations”) reported a whistleblowing system.

The mechanism is anonymous, available worldwide, operated by an independent external provider, and allows parties to inform the company of violations of the Code of Conduct (CoC), internal standards or relevant laws by both employees and third parties (p. 28).136

Telekom’s (SIC 481, “Telephone Communications”) “Tell me!” program is a grievance system that registered 146 complaints, of which 43 had indeed found to be misconduct (p. 89).

CANCOM SE (SIC 737, “Computer Programming, Data Processing, and other Computer Related Services”) reported having a whistleblowing mechanism for employees, also with the possibility of anonymity (p. 12).137

Figure 126: the German Banking Law (“Kreditwesengesetz” or KWG), wherefrom the duty to establish a mechanism for internal confidential whistleblowing emerges, was mentioned by 27% of the companies under study. n = 422.

# indicator unit source keywords

64. Total number and % of operations assessed for # GRISO3, Korruption, risks related to corruption and the significant UNGCP10, Risiko risks identified? DNK20

Figure 127: number of operations assessed for risks related to corruption. n = 11 is the number of observations, out of 422 reports assessed.

# indicator unit source keywords

65. Total number and % of operations assessed for % GRISO3, Korruption, risks related to corruption and the significant UNGCP10, Risiko risks identified? DNK20

Figure 128: percentage of operations assessed for risks related to corruption, on average being 71.59%. n = 15 is the number of observations, out of 422 reports assessed.

All of the evaluated companies reported that their operations assessed for risks related to corruption did not lead to the identification of significant risks. Deutsche Telekom AG (SIC 481, “Telephone Communications”, p. 89) reported on its Compliance Risk Assessment system, which was applied to 73 group departments in 2017, i.e. a coverage rate of 98% (by number of employees).138

Drägerwerk AG & Co. KGaA (Dräger, SIC 382, “Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments”) – a medical and safety technology company – carried out compliance reviews in four group departments as well as eight compliance audits of subsidiaries (p. 39).139

# indicator unit source keywords

66. Total number of confirmed incidents when # GRISO5, Vorfälle contracts with business partners were UNGCP10, Korruption terminated or not renewed due to violations DNK20 related to corruption?

Figure 129: number of confirmed incidents when contracts with business partners were terminated or not renewed due to violations related to corruption. n = 59 is the number of observations, out of 422 reports assessed.

None of the evaluated companies reported terminating or non-renewing contracts with business partners related to corruption. For example, Dürkopp Adler AG reported that it consulted a sanctioned-entity list to avoid corruption. Furthermore, its corruption alert system did not yield a message that would have resulted in the blocking of a delivery in the year under review (p. 40).140

Through transparency in donations to political parties, a company may avoid being accused of unduly influencing or unduly corrupting the political process. Hence this last indicator: “Disclosure of payments made pursuant to policy or political ends (e.g. to political parties)?”

# indicator unit source keywords

67. Disclosure of payments made pursuant to yes/ GRISO6, Parteispenden policy or political ends (e.g. to political no UNGCP19, parties)? DNK20

Figure 130: companies disclosing the existence or nonexistence of payments made pursuant to policy or political ends.

The Volksbank Mittelhessen (SIC 602, “Commercial Banks”) is rather detailed and transparent about its payments towards policy or political ends, even reporting the specific amount of funds that went to each recipient: EUR 4,500 to the political party CDU, EUR 2,550 to the SPD (partly in kind) and EUR 500 to the FDP (p. 32).141

Other companies were transparent in mentioning they do not support or fund any political party or political entity. The Sparkasse Chemnitz (SIC 603, “Savings Institutions”), e.g., transparently reports no contributions to governments, political parties or politicians (p. 15).142

Then again there were cases that reported the recipients but not the amount, an example being BMW Group (SIC 371, “Motor Vehicles and Motor Vehicle Equipment”, p. 30), which reported supporting the CDU, CSU, SPD, FDP and Büdnis 90/Die Grünen.143

Yet another example of a disclosure type is offered by the insurer INTER Versicherungsgruppe, which only reported a total amount and specified the recipients,

however without mentioning the specific amount that went to each of them: EUR 13,000 to CDU, CSU and FDP (p. 34).144

Another variant is Barmenia Lebensversicherung (SIC 631, “Life Insurance”), which instead of reporting a total amount, reported the percentage of their revenue that went to political parties: 0.0057 to CDU, CSU and FDP (p. 24).145

Lastly, there were companies that explicitly refused to report when the amount was low, e.g. the case of a company whose justification was that the donations did not exceed EUR 10,000 per party.146

Measurement/metric variation:

The observed variation is likely due to differences between GRI and EFFAS. While GRI is quite specific, foreseeing that companies report specific amounts and beneficiaries, EFFAS stipulates that companies specify which percentage of the revenue represents party funding, not necessarily the recipient. Also, GRI refers to “political contributions” in a broad sense, whereas the EFFAS indicator is circumscribed to political parties. Another difference is that GRI includes in-kind contributions, while EFFAS does not make any mention of in-kind contributions.

E. Disclosure transparency analyses

a. Degree of transparency per indicator

The transparency performance of each company, at the micro and macro level, was analyzed as a part of this study. If the company’s non-financial statement contained a data point that fulfilled one of the 67 indicators, the company received one "transparency point." Those points are then tallied, resulting in a transparency score for each company, where a higher score corresponds to more pertinent information provided. That is, a score is higher where the number of “yes” and numerical values disclosed is larger.

Figure 131 illustrates the degree of transparency per indicator, i.e. the average – for the 422 companies under study – of the transparency score corresponding to each indicator. The transparency value range is between 0 and 1, where 1 corresponds with maximum transparency and 0 to no transparency.

Thus, it is possible to observe that certain indicators remain opaque due to nondisclosure by the firms under study, such as indicator 49: Corresponding measures to contribute to the

elimination of all forms of forced or compulsory labor. In contrast, the average transparency scores are high for indicators 27 (Energy consumption within the organization) and 54 (Percentage of female employees).

The highest transparency per matter was offered for the following indicators. In the environmental category, almost half (47%) disclosed their energy consumption within organization. With respect to social and human rights matters, almost a third (31%) reported that they had supplier labor practices criteria in place. Work injuries were reported by more than one fourth (25%) of companies in the employee category. In the gender category, more than two thirds (68%) reported on their percentage of female employees, and with regard to anti-corruption, 62% of companies under study reported employing a whistleblowing mechanism (ethics hotline).

1 reclaimed products and packaging materials, % 2 new suppliers screened with environmental criteria, % 3 actual/potential negative environmental impacts in supply chain, # 4 corresponding type of impact 5 corresponding action taken 6 environmental impacts resolved 7 environmental impacts resolved, # 8 scope 1, # 9 year-over-year measurement (over 2016) 10 corresponding % change 11 ghg emissions target 12 target met (for 2017) 13 scope 2, # 14 scope 3, # 15 recycled input materials, % 16 year-over-year measurement (over 2016) 17 corresponding % change 18 recycling target 19 target met (for 2017) 20 significant impacts on biodiversity in protected areas 21 water recycled and reused, % 22 year-over-year measurement (over 2016) 23 corresponding % change 24 water consumption target 25 target met (for 2017) 26 water sources significantly affected by withdrawal 27 energy consumption within organization (in mwh), # 28 year-over-year measurement (over 2016) 29 corresponding % change 30 energy consumption target 31 target met (for 2017) 32 renewable energy, % of total consumption 33 human rights clauses/screening, # 34 human rights clauses/screening, % 35 supplier labor practices criteria 36 new suppliers screened with labor practices criteria, % 37 training on human rights policies/procedures, # hours 38 training on human rights policies/procedures, % of employees 39 supplier/provider training on human rights policies/procedures 40 actual/potential negative impacts for labor practices in supply chain 41 corresponding action taken 42 labor practices resolved 43 labor practices resolved, # 44 operations/suppliers with freedom of association/collective bargaining risk, # 45 corresponding measures taken to support these rights 46 operations/suppliers with significant risk for child labor, # 47 corresponding measures taken to abolish child labor 48 operations/suppliers with significant risk for forced labor, # 49 corresponding measures taken to eliminate forced labor 50 workforce representation in OHS 51 work injuries, # 52 work-related fatalities, # 53 "equal pay" policy 54 percentage of female employees (total), % 55 percentage of female senior management, % 56 percentage of women on Board of Directors, % 57 percentage of women on Executive Board, % 58 percentage of women in executive positions, % 59 employee training on anti-corruption, # 60 employee training on anti-corruption, % 61 supplier/provider training on anti-corruption, # 62 supplier/provider training on anti-corruption, % 63 whistleblowing mechanism (ethics hotline) employed 64 corruption risks assessed and significant risks identified, # 65 corruption risks assessed and significant risks identified, % 66 terminated contracts with business partners related to corruption, # 67 disclosure of payments for political ends

Figure 131: degree of transparency per indicator (67).

b. Degree of transparency per matter

This report studies corporate transparency on the five issues as stipulated by RUG: environmental, human rights, employee, social/gender, and anti-corruption matters. Each of the 67 implemented KPIs corresponds with one of these categories. Hence, it is possible to assess the degree of transparency for each of the topics under study. To this end, a weighted average was applied, in order to control for the number of indicators per category. The result is Figure 132, showing that disclosure is highest on gender issues, and lowest for human rights matters.

degree of transparencydegree of

Environmental Human Rights Employee Gender Anti-corruption

Figure 132: degree of transparency per category (matter).

c. Degree of transparency by type of company / business sector (SIC)

A breakdown by the most represented industry sectors is depicted in Figure 133, where the average company score (for the five categories) per sector is depicted. The electric, gas and sanitary services sector (SIC 49) displays the highest degree of transparency of all company types. In contrast, nondepository institutions (SIC 61) represent the least transparent group.147

degree of transparencydegree of

depositoryinstitutions insurance carriers /equipmentindustrial machinery business services /allied chemicals products electronic electric/ equipment equipmenttransportation communications holdinginvestment offices / electric /gas sanitary / services institutions nondepository andrelated instruments products

sector

Figure 133: degree of transparency by type of company / business sector (SIC).

d. Degree of transparency, public vs. private

Figure 134 displays transparency scores between publicly-listed (stock-issuing) companies and private, non-listed (unlisted / delisted) ones, showing that the former exhibit a slightly higher average degree of transparency than the latter.

degree of transparencydegree of

Figure 134: degree of transparency, public vs private companies.

e. Degree of transparency, revenue

For each company under study, yearly turnover data was collected. This allows an assessment of the interplay between the transparency variable and revenue. No linear relationship between transparency and revenue is apparent, as is shown in Figure 135.

degree of transparencydegree of

revenue

Figure 135: degree of transparency, revenue.

f. Degree of reporting framework adherence

A company may claim to make use of one or more reporting frameworks. However, this does not mean that it actually implements the framework in full, or at all. It is possible for a firm not to disclose data for every (any) indicator of a framework, yet to claim to have implemented said framework. There are six DNK indicators in scope of this study that correspond with 28 GRI indicators.

In order to observe the composition of discrepancy, Figure 136 shows the transparency gap for DNK. In theory, if companies had fully conformed to the DNK, we would see 100% on the 28th bar. Yet as the graphic does not go past the 16th bar, it is clear how many companies are falling short in this regard. The bulk of the companies had reported on between 3 and 8 indicators.

Figure 137 shows the same for GRI. Similarly, 29 unique GRI indicators (not counting the within-GRI indicator overlap) correspond with 51 indicators featured in the study (as our study broke down some GRI indicators into multiple indicators). The majority of companies claiming to apply the GRI reported on between 6 and 11 indicators. We further note that most companies did not comply or explain, as is stipulated by the GRI.

i. DNK

frequency

transparency score (out of 28) Figure 136: transparency score for those who claimed they applied the DNK reporting framework.

Furthermore, thirty-one (31) companies that claimed to implement the DNK reporting framework did not actually go through the DNK verification process (“Prüfprozess”).148

ii. GRI

frequency

transparency score (out of 51)

Figure 137: transparency score for those who claimed they applied the GRI reporting framework.

F. Material adverse impacts

Only one company149 reported causing material adverse impacts, however not using the full term. The general lack of reporting on impacts, and taking responsibility thereof, may be in part explained by the manner in which the Directive 2014/95/EU was adopted in Germany. While the Directive uses in Article 19a the term “likely to cause adverse impact” (“wahrscheinlich negative Auswirkungen haben werden”), the German law adopted the term “very likely to cause material negative impact” (“sehr wahrscheinlich schwerwiegende negative Auswirkung”) in § 289c III no. 3 of the HGB.150

The transposed German law differs here from the EU Directive in two ways: The Directive requires a lower level of impact and a lower level of probability. The higher threshold of the German transposition leads to a tightening of the disclosure scope. It is possible that this factor contributed to the companies’ choosing not to report impacts, as companies may not consider their impacts to be material. If the German legislature had correctly transposed the wording of the Directive, companies would have been obliged to report also on impacts that did not meet the currently high materiality threshold.

The bottom line is that in Germany there is no legal definition and operational threshold for a material negative impact (“sehr wahrscheinlich schwerwiegende negative Auswirkung”). The missing definition (a so-called "unbestimmter Rechtsbegriff") and threshold leads to a rather flexible reporting requirement. Therefore, a binding definition and operationalization of the key terms is seen as necessary.

IV. Recommendations

A directive such as EU NFRD generates a large informational output. From a data collection point of view, it becomes necessary to condense and systematize it in order to process the universe of available data. In attempting such, this study offers a snapshot of Germany’s non- financial reporting practice, allowing stakeholders to largely draw their own conclusions. We would, however, like to put forward a few recommendations.

The adoption of these recommendations would increase transparency, consistency and comparability in corporate reporting. Moreover, it would make the information easier to process, which would enable larger sectors of civil society and, importantly, investors make significant usage of the data.

Companies:

The quality of the information disclosed reflects upon a company’s intent to become a responsible member of its social and environmental fabric. One cannot manage – nor report

– what one does not measure. A lack of measurement – and reporting by extension – indirectly reflects on a company’s position and intention on sustainability and responsibility. There are non-financial topics that companies tend to avoid. Notably, for social and human rights matters the dearth of reporting is apparent. An effort, on the companies’ side, to increase the visibility on pro-active steps, would constitute a step in the right direction.

Non-disclosure comes about in two ways. The first one is the omission of a matter. The second one is ‘inadequate’ reporting, which takes place when a company does reveal information on the topic at issue, which however is incomplete or insufficiently thorough. This could happen deliberately, with a view to obscuring non-financial dimensions where performance is poor (e.g. a firm that reports the number of women in management positions, rather than the percentage, with no indication of the total number of management positions, in order to hide the fact that the fraction of women in said positions is small). Hypothetically, companies might also take this course of action to reduce the verifiability of the reported data, such as could be the reporting of metric tons of waste ‘saved through recycling’ rather than the actual rates of waste recycled. However, it may also be an unintended shortcoming in an honest attempt at being transparent – e.g. a company reporting the percentage of renewable energies on each building of the firm, where the proportion is high, yet just not aggregating the data at the firm level.

Reporting standard setters:

The state of reporting is also not ideal even where adequate disclosure is indeed found. This study points to deficit with regards to the comparability (“Vergleichbarkeit”) of variables. The reason for this is the lack of uniformity in the choice of units, magnitudes (absolute versus relative values) and levels of analysis (information may come at a group level, company level, building level, etc.).

Unit asymmetry is less problematic in some cases (e.g. water reported in liters versus in cubic meters, energy reported in MWh versus in kWh) than in others (energy consumption per kilogram of output is almost incomparable with the consumption per square meter). In any case, however, there is a standardization problem that could be fixed at little cost and to a high benefit, if legislatures or reporting framework institutions took positions for recommended or mandatory units, magnitudes and levels.

Firms may nevertheless play their part by voluntarily making an effort to disclose both relative and absolute magnitudes for the variables they report. Reporting absolute GHG emissions helps identify the largest polluters, but it may unfairly punish large firms or reward small polluters over efficient polluters. The reporting as well of production-based emissions (e.g. emissions per kilogram of product produced, or emissions-revenue ratio) compensates for these weaknesses. We also encourage companies to report CO2e GHG emissions, rather than only CO2 emissions, since GHG involve pollutants other than just carbon dioxide. Finally, we reiterate our call for the inclusion in reports of year-over-year measurements of variables.

Government:

With the advent of Big Data, the 21st century keeps generating technology for the sharing of knowledge. Digital reporting is no exception, and non-financial reporting ought not to be exempted from the information age. We wish to advocate the development of digital tagging also for non-financial data. Recently, the European Securities and Markets Authority (ESMA) announced the requirement of compliance with the European Single Electronic Format (ESEF) for all financial reports as of 1st January 2020.151 This compels firms to adopt a procedure named “XBRL tagging,” which enables the machine-readability of data. Non- financial reporting is of too great importance not to also apply the most up-to-date usage of technology. Working towards systems of non-financial reporting is furthermore part of corporate responsibility and good governance.

Acknowledgements

The authors are most grateful to the members of the Stakeholder Forum – Lawrence Heim, Loreen Wachsmuth, Sophie von Gagern, Kris Spriano, Dr. Elmer Lenzen, Prof. Dr. Ulrich Ellinghaus, Mairead Keigher, Dr. Katie Böhme, Martina Prox, and Matthias Keitel – for their review of the evaluation instrument and this report and the invaluable advice they offered.

The heavy data collection lift was performed by the assessor team comprising Gisella Vogel, Sarah Kaltenhäuser, Daniel Castro Morales, and Juan Ignacio Ibañez. Gisella Vogel also served as the study’s coordinator, overseeing its myriad of moving parts, in addition to collecting profile data from Orbis. Katherine Storrs conscientiously cleaned data.

This report was authored by Dr. Chris N. Bayer, Gisella Vogel, Sarah Kaltenhäuser, Katherine Storrs, Dr. Jiahua (Java) Xu, and Juan Ignacio Ibañez. Dr. Jiahua (Java) Xu programmed the text mining function, and also prepared graphs and scorecards. Juan Ignacio Ibañez implemented the text mining function and produced those graphs. Sarah Kaltenhäuser provided the robust legal underpinning of this study.

We also wish to thank Yvonne Zwick for her apt foreword.

Dr. William Bertrand, the positive deviance methodology is alive and well.

A big thank you to Joerg Walden and the iPoint-systems team for privately funding research which is clearly in the public interest!

Appendix A: Acronyms

3TG Tin, tungsten, tantalum and gold Abs. Absatz (paragraph) AG Aktiengesellschaft (limited company) AGG Allgemeines Gleichbehandlungsgesetz (General Act on Equal Treatment) AktG Aktiengesetz (German Stock Corporation Act) ArbG Arbeitsgesetze (labor laws) AT Republic of Austria BE Kingdom of Belgium BMW Bayerische Motoren Werke (Bavarian Motor Works) BR Bundesregierung (Federal Government) BSCI Business Social Compliance Initiative BT-PlPr Bundestag Plenarprotokoll (Plenary protocol of the German Bundestag) CDP CDP (former Carbon Disclosure Project) CDSB Climate Disclosure Standards Board Alliance between the Christian Democratic Union of Germany (CDU - "Christlich CDU/CSU Demokratische Union Deutschlands") and the Christian Social Union in Bavaria (CSU "Christlich-Soziale Union in Bayern") CH Swiss Confederation CN People's Republic of China

CO2 Carbon Dioxide CoC Code of Conduct COP Communication on Progress CR Control Risk CSR Corporate Social Responsibility CSR-Richtlinien-Umsetzungsgesetz: Law to strengthen the non-financial reporting of CSR-RUG companies and group management reports ("Gesetz zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernlageberichten") DE Federal Republic of Germany DGCN Deutsches Global Compact Netzwerk DI Development International e.V. DNK Deutscher Nachhaltigkeitskodex" (German Sustainability Code) DRC Democratic Republic of the Congo "Der Berufsverband der Investment Professionals" (German Association for Financial DVFA Analysis and Asset Management / Professional Association of Investment Professionals) EFFAS European Federation of Financial Analysts Societies EMAS Eco-Management and Audit Scheme EnBW Energie Baden-Württemberg AG EnMS Energy Management System "Gesetz zur Förderung der Entgelttransparenz zwischen Frauen und Männern" (Pay EntgTranspG Transparency Act) ES Societas Europaea (European Company) ES Kingdom of Spain

ESEF European Single Electronic Format ESG Environmental, Social and Governance ESMA European Securities and Markets Authority ETS Emissions Trading System (EU) EU NFRD European Union Non-Financial Reporting Directive EY Ernst & Young FDP Freie Demokratische Partei (Free Democratic Party) FR French Republic GDP Gross Domestic Product GG German constitution (Grundgesetz) GHG / THG Greenhouse Gas / Treibhausgas GmbH Gesellschaft mit beschränkter Haftung (limited liability company) GRI Global Reporting Initiative GUO Global Ultimate Owner HGB Handelsgesetzbuch (Commercial Code of Germany) HHLA Hamburger Hafen und Logistik Aktiengesellschaft HK Hong Kong ICAR International Corporate Accountability Roundtable ifu ifu Institut für Umweltinformatik Hamburg GmbH ISO International Organization for Standardization IT Italian Republic JP Japan KGAA Kommanditgesellschaft auf Aktien (Commercial Partnership Limited by Shares) KPIs Key Performance Indicators KWP Kölner Wirtschaftsprüfung und Steuerberatung Kurt Heller GmbH KY Cayman Islands LCA Life Cycle Assessment LI Principality of Liechtenstein LTIR Lost Time Incident Rate LU Grand Duchy of Luxembourg Mindestanforderungen an das Risikomanagement (minimum requirements for risk MaRisk management) MFCA Material Flow Cost Accounting MWh Megawatt Hour OECD Organisation for Economic Co-operation and Development OHRIS Occupational Health and Risk Management System OHS / OH&S Occupational Health and Safety OHSAS Occupational Health and Safety Assessment Series PIEs Public Interest Entities PwC PricewaterhouseCoopers RUG CSR-Richtlinien-Umsetzungsgesetz SBPR Sustainability Best Practices Recommendations SC Stakeholder Council SDGs Sustainable Development Goals

SIC Standard Industry Classification SPD Social Democratic Party of Germany (Sozialdemokratische Partei Deutschlands) SPLC Sustainable Purchasing Leadership Council US United States of America WKGT Warth & Klein Grant Thornton AG XBRL Extensible Business Reporting Language

Appendix B: List of companies assessed Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

1&1 DRILLISCH AG URL to report ✓

11 88 0 SOLUTIONS AG URL to report ✓ ✓ ✓

2G ENERGY AG URL to report ✓

A.S.CREATION TAPETEN AG URL to report ✓ ✓ ✓

AACHENMÜNCHENER LEBENSVERSICHERUNG URL to report ✓

AACHENMÜNCHENER VERSICHERUNG URL to report ✓

AAREAL BANK AG URL to report ✓ ✓ ✓

ADESSO AG URL to report ✓ ✓ ✓

ADIDAS AG URL to report ✓ ✓ ✓

ADLER MODEMARKTE AG URL to report ✓

ADVA OPTICAL NETWORKING SE URL to report ✓ ✓ ✓

AHLERS AG URL to report ✓

AIXTRON SE URL to report ✓ ✓ ✓

ALBA SE URL to report ✓ ✓ ✓

ALLGEIER SE URL to report ✓ ✓

ALLIANZ SE URL to report ✓ ✓ ✓ ALTE LEIPZIGER LEBENSVERSICHERUNG AUF URL to report GEGENSEITIGKEIT ✓ ✓

ALZ CHEMIE URL to report ✓ ✓

AMADEUS FIRE AG URL to report ✓ ✓ ✓

AUDI AG URL to report ✓ ✓ AUMANN AG URL to report

AURUBIS AG URL to report ✓

AXEL SPRINGER SE URL to report ✓ ✓ ✓

BANK 1 SAAR EG URL to report ✓ ✓

BARMENIA LEBENSVERSICHERUNG A G URL to report ✓

BASF SE URL to report ✓ ✓ ✓ BASLER AG URL to report BASLER VERSICHERUNG AG DIREKTION FÜR URL to report DEUTSCHLAND ✓

BAUER AG URL to report ✓ ✓ ✓

BAUSPARKASSE SCHWÄBISCH HALL AG URL to report ✓

BAYER AG URL to report ✓ ✓ ✓

BAYERISCHE LANDESBANK URL to report ✓ ✓ ✓

BAYERISCHE MOTOREN WERKE AG URL to report ✓ ✓ ✓ BAYERISCHER VERSICHERUNGSVERBAND

VERSICHERUNGS-AG URL to report ✓

BAYWA AG URL to report ✓ ✓

BECHTLE AG URL to report ✓ ✓ ✓

BEIERSDORF AG URL to report ✓ ✓ ✓

BERENTZEN-GRUPPE AG URL to report ✓

BERLIN HYP AG URL to report ✓ ✓ ✓

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

BERLINER VOLKSBANK EG URL to report ✓ ✓ ✓

BERTELSMANN SE & CO. KGAA URL to report ✓ ✓ ✓

BGV-VERSICHERUNG AKTIENGESELLSCHAFT URL to report ✓ ✓ ✓

BHS TABLETOP AG URL to report ✓ ✓ ✓

BIJOU BRIGITTE MODISCHE ACCESSOIRES AG URL to report ✓ ✓ ✓

BILFINGER SE URL to report ✓ ✓ ✓

BIOTEST AG URL to report ✓ ✓ ✓ BREMER LAGERHAUS-GESELLSCHAFT - AG URL to report VON 1877 ✓ ✓ ✓

BRENNTAG AG URL to report ✓ ✓ ✓

CANCOM SE URL to report ✓ ✓ ✓

CENIT AG URL to report ✓ ✓ ✓

CENTRAL KRANKENVERSICHERUNG AG URL to report ✓

CENTROTEC SUSTAINABLE AG URL to report ✓ ✓ ✓

CEWE STIFTUNG & CO. KGAA URL to report ✓ ✓ ✓

COMDIRECT BANK AG URL to report ✓ ✓

COMMERZBANK AG URL to report ✓ ✓ ✓

COMPUGROUP MEDICAL SE URL to report ✓ ✓ ✓ CONCORDIA VERSICHERUNGS-GESELLSCHAFT URL to report AUF GEGENSEITIGKEIT ✓ ✓

CONTINENTAL AG URL to report ✓ ✓ ✓ CONTINENTALE KRANKENVERSICHERUNG URL to report A.G. ✓ ✓

COVESTRO AG URL to report ✓ ✓

CTS EVENTIM AG & CO. KGAA URL to report ✓ ✓ ✓

DAIMLER AG URL to report ✓ ✓ ✓

DEBEKA VERSICHERUNGSGRUPPE URL to report ✓ ✓

DEGUSSA BANK AG URL to report ✓ ✓ ✓

DEKABANK DEUTSCHE GIROZENTRALE URL to report ✓ ✓ ✓ DELIGNIT AG URL to report

DELIVERY HERO AG URL to report ✓

DEUTSCHE APOTHEKER- UND ÄRZTEBANK EG URL to report ✓ ✓ ✓

DEUTSCHE BANK AG URL to report ✓ ✓ ✓

DEUTSCHE BOERSE AG URL to report ✓ ✓ ✓

DEUTSCHE KREDITBANK AG URL to report ✓ ✓

DEUTSCHE LUFTHANSA AG URL to report ✓ ✓

DEUTSCHE PFANDBRIEFBANK AG URL to report ✓ ✓ ✓

DEUTSCHE POST AG URL to report ✓ ✓

DEUTSCHE POSTBANK AG URL to report ✓ ✓

DEUTSCHE TELEKOM AG URL to report ✓ ✓ ✓

DEUTSCHE WERTPAPIERSERVICE BANK AG URL to report ✓ ✓ ✓

DEUTSCHE WOHNEN SE URL to report ✓

DEUTZ AG URL to report ✓ ✓ ✓

DEVK VERSICHERUNG URL to report ✓

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

DIE SPARKASSE BREMEN AG URL to report ✓ ✓ ✓

DIEBOLD NIXDORF AG URL to report ✓

DMG MORI AG URL to report ✓ ✓ ✓

DRAGERWERK AG & CO. KGAA URL to report ✓ ✓ ✓

DÜRKOPP ADLER AG URL to report ✓ ✓ ✓

DURR AG URL to report ✓ ✓ ✓

DVB BANK SE URL to report ✓ ✓ DZ BANK AG DEUTSCHE ZENTRAL- URL to report GENOSSENSCHAFTSBANK ✓ ✓

E.ON SE URL to report ✓ ✓ ✓ ECKERT & ZIEGLER STRAHLEN- UND URL to report MEDIZINTECHNIK AG ✓ ✓

EDDING AG URL to report ✓ ✓ ✓

EIFELHOHEN-KLINIK AG URL to report ✓

EINHELL GERMANY AG URL to report ✓ ✓ ✓

ELMOS SEMICONDUCTOR AG URL to report ✓ ✓ ✓

ELRINGKLINGER AG URL to report ✓ ✓ ✓

ELUMEO SE URL to report ✓ ✓ ✓

ENBW ENERGIE BADEN WÜRTTEMBERG AG URL to report ✓ ✓ ✓

ERZGEBIRGSSPARKASSE URL to report ✓ ✓ ✓

EUROGATE GMBH & CO. KGAA, KG URL to report ✓ ✓

EUROGRID GMBH URL to report ✓ ✓ ✓

EUROKAI GMBH & CO. KGAA URL to report ✓ ✓ ✓

EUROMICRON AG URL to report ✓ ✓ ✓

EVONIK INDUSTRIES AG URL to report ✓ ✓ ✓

EVOTEC AG URL to report ✓ ✓ ✓

EWE AG URL to report ✓ ✓ ✓

FIELMANN AG URL to report ✓ ✓ ✓

FIRST SENSOR AG URL to report ✓ ✓ ✓ FORDE SPARKASSE URL to report

FRANCOTYP-POSTALIA HOLDING AG URL to report ✓ ✓ ✓

FRANKFURTER VOLKSBANK EG URL to report ✓ ✓ ✓ FRAPORT AG FRANKFURT AIRPORT SERVICES URL to report WORLDWIDE ✓ ✓

FREENET AG URL to report ✓ ✓ ✓

FRESENIUS MEDICAL CARE AG & CO. KGAA URL to report ✓ ✓ ✓

FRESENIUS SE & CO. KGAA URL to report ✓ ✓ ✓

FRIWO AG URL to report ✓

FUCHS PETROLUB SE URL to report ✓ ✓ ✓

GEA GROUP AG URL to report ✓ ✓ ✓

GELSENWASSER AG URL to report ✓ ✓ ✓

GERRESHEIMER AG URL to report ✓ ✓

GESCO AG URL to report ✓ ✓

GFT TECHNOLOGIES SE URL to report ✓

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

GIGASET AG URL to report ✓ ✓ ✓

GK SOFTWARE AG URL to report ✓ ✓ ✓

GRAMMER AG URL to report ✓ ✓ ✓

GRENKE AG URL to report ✓ ✓ ✓

H&R AG URL to report ✓ ✓ HALLESCHE KRANKENVERSICHERUNG AUF URL to report GEGENSEITIGKEIT ✓ ✓

HAMBURGER HAFEN UND LOGSTIK AG URL to report ✓ ✓ ✓

HAMBURGER SPARKASSE AG URL to report ✓ ✓ ✓

HANIEL & CIE. GMBH URL to report ✓ ✓ ✓

HANNOVER RÜCK SE URL to report ✓ ✓ ✓

HAPAG-LLOYD AG URL to report ✓ ✓ ✓

HAWESKO HOLDING AG URL to report ✓ ✓ ✓

HDI GLOBAL SE URL to report ✓

HEIDELBERGCEMENT AG URL to report ✓ ✓ ✓

HENKEL AG & CO. KGAA URL to report ✓ ✓

HOCHTIEF AG URL to report ✓ ✓ ✓

HORNBACH HOLDING AG & CO. KGAA URL to report ✓ ✓

HSH NORDBANK AG URL to report ✓ ✓ ✓

HUGO BOSS AG URL to report ✓ ✓ ✓

HUK-COBURG URL to report ✓

HYPOPORT AG URL to report ✓ ✓ ✓ IDUNA VEREINIGTE LEBENSVERSICHERUNG

AG URL to report ✓ ✓ ✓

IFA HOTEL & TOURISTIK AG URL to report ✓ ✓ ✓ IKB DEUTSCHE INDUSTRIEBANK URL to report AKTIENGESELLSCHAFT ✓ ✓

INDUS HOLDING AG URL to report ✓ ✓ ✓

INIT INNOVATION IN TRAFFIC SYSTEMS AG URL to report ✓ ✓ ✓

INNOGY SE URL to report ✓ ✓ ✓

INNOTEC TSS AG URL to report ✓ ✓ ✓

INTER KRANKENVERSICHERUNG AG URL to report ✓

INTER VERSICHERUNGSGRUPPE URL to report ✓ ✓

INTICA SYSTEMS AG URL to report ✓

INVESTITIONSBANK SCHLESWIG-HOLSTEIN URL to report ✓ ✓ ✓

INVESTITIONSBANK BERLIN URL to report ✓ ✓ ✓ INVESTITIONSBANK DES LANDES

BRANDENBURG URL to report ✓ ✓ ✓ ITZEHOER VERSICHERUNG/BRANDGILDE VON

1691 VVAG URL to report ✓ ✓

JENOPTIK AG URL to report ✓ ✓ ✓

JUNGHEINRICH AG URL to report ✓ ✓ ✓

K+S AKTIENGESELLSCHAFT URL to report ✓ ✓ ✓

KAP BETEILIGUNGS AG URL to report ✓ ✓ ✓

KASSELER SPARKASSE URL to report ✓ ✓ ✓

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

KHD HUMBOLDT WEDAG INTERNATIONAL AG URL to report ✓ ✓ ✓

KION GROUP AG URL to report ✓ ✓ ✓

KLOECKNER & CO SE URL to report ✓ ✓ ✓

KOENIG UND BAUER AG URL to report ✓ ✓ ✓

KREISSPARKASSE AUGSBURG URL to report ✓ ✓

KREISSPARKASSE BIBERACH URL to report ✓ ✓

KREISSPARKASSE BOBLINGEN URL to report ✓ ✓

KREISSPARKASSE ESSLINGEN NURTINGEN URL to report ✓ ✓ KREISSPARKASSE GROSS-GERAU URL to report ✓ ✓

KREISSPARKASSE HEILBRONN URL to report ✓ ✓

KREISSPARKASSE HEINSBERG URL to report ✓ ✓

KREISSPARKASSE KAISERSLAUTERN URL to report ✓ ✓ ✓

KREISSPARKASSE KOLN URL to report ✓

KREISSPARKASSE LUDWIGSBURG URL to report ✓ ✓ ✓ KREISSPARKASSE MUNCHEN STARNBERG URL to report EBERSBERG

KREISSPARKASSE OSTALB URL to report ✓ ✓

KREISSPARKASSE RAVENSBURG URL to report ✓ ✓

KREISSPARKASSE REUTLINGEN URL to report ✓ ✓

KREISSPARKASSE SAARLOUIS URL to report ✓ ✓

KREISSPARKASSE STEINFURT URL to report ✓ ✓

KREISSPARKASSE SYKE URL to report ✓ ✓ KREISSPARKASSE TUBINGEN URL to report

KREISSPARKASSE WAIBLINGEN URL to report ✓ ✓

KRONES AG URL to report ✓ ✓ ✓

KSB AG URL to report ✓ ✓ ✓

KUKA AG URL to report ✓ ✓ ✓

KWS SAAT SE URL to report ✓ ✓

LANDESBANK BADEN-WÜRTTEMBERG URL to report ✓ ✓ ✓

LANDESBANK BERLIN AG URL to report ✓ ✓ ✓ LANDESBANK HESSEN-THÜRINGEN URL to report GIROZENTRALE ✓ ✓ ✓

LANDESBANK SAAR URL to report ✓ ✓ ✓

LANDESKREDITBANK BADEN-WÜRTTEMBERG URL to report ✓ ✓ ✓

LANXESS AG URL to report ✓ ✓ ✓

LBS LANDESBAUSSPARKASSE SÜDWEST URL to report ✓ ✓

LEG IMMOBILIEN AG URL to report ✓ ✓ ✓

LEIFHEIT AG URL to report ✓ ✓ ✓

LEONI AG URL to report ✓ ✓ ✓

LINDE AG URL to report ✓ ✓

LPKF LASER & ELECTRONICS AG URL to report ✓ ✓ ✓ LUDWIG BECK AM RATHAUSECK - URL to report TEXTILHAUS FELDMEIER AG ✓ ✓

100

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study LVM LANDWIRTSCHAFTLICHER URL to report VERSICHERUNGSV. MÜNSTER A.G. ✓

M.A.X. AUTOMATION AG URL to report ✓

MAINOVA AG URL to report ✓ ✓ ✓

MAINZER VOLKSBANK EG URL to report ✓ ✓ ✓

MAN SE URL to report ✓ ✓

MANZ AG URL to report ✓ ✓ ✓

MASCHINENFABRIK BERTHOLD HERMLE AG URL to report ✓ ✓ ✓

MASTERFLEX SE URL to report ✓ ✓ ✓

MATERNUS-KLINIKEN AG URL to report ✓ ✓ ✓

MBB SE URL to report ✓ ✓ ✓ MECKLENBURGISCHE VERSICHERUNGS- URL to report GESELLSCHAFT AG ✓

MEDICLIN AKTIENGESELLSCHAFT URL to report ✓ ✓ ✓

MEDION AG URL to report ✓ ✓

MERCK KGAA URL to report ✓ ✓ ✓ MLP SE URL to report

MS INDUSTRIE AG URL to report ✓ ✓ ✓

MTU AERO ENGINES AG URL to report ✓ ✓ ✓

MÜNCHNER BANK EG URL to report ✓

MULLER-DIE LILA LOGISTIK AG URL to report ✓ ✓ MÜNCHENER RÜCKVERSICHERUNGS- URL to report GESELLSCHAFT AG ✓ ✓ ✓

MVV ENERGIE AG URL to report ✓ ✓ ✓

NASSAUISCHE SPARKASSE URL to report ✓ ✓ ✓

NATIONAL-BANK AKTIENGESELLSCHAFT URL to report ✓ ✓ ✓

NEMETSCHEK SE URL to report ✓ ✓ ✓ NEXUS AG URL to report ✓ ✓ ✓ NIEDERRHEINISCHE SPARKASSE RHEINLIPPE URL to report

NORD OSTSEE SPARKASSE URL to report ✓ ✓ NORDDEUTSCHE LANDESBANK URL to report GIROZENTRALE ✓ ✓ ✓

NORDEX SE URL to report ✓ ✓ ✓

NORMA GROUP SE URL to report ✓ ✓ ✓

NRW.BANK URL to report ✓ ✓ ✓ NÜRNBERGER ALLGEMEINE VERSICHERUNGS- URL to report AG ✓ ✓ ✓ NÜRNBERGER LEBENSVERSICHERUNG URL to report AKTIENGESELLSCHAFT ✓

OHB SE URL to report ✓ ✓

OLDENBURGISCHE LANDESBANK AG URL to report ✓ ✓ ✓

OSRAM LICHT AG URL to report ✓ ✓

PATRIZIA IMMOBILIEN AG URL to report ✓ ✓ ✓

PFEIFFER VACUUM TECHNOLOGY AG URL to report ✓ ✓ ✓

PROCREDIT HOLDING AG & CO. KGAA URL to report ✓

101

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

PROGRESS-WERK OBERKIRCH AG URL to report ✓ ✓ ✓

PROSIEBENSAT.1 MEDIA SE URL to report ✓ ✓ ✓

PROVINZIAL RHEINLAND VERSICHERUNG AG URL to report ✓ ✓ ✓

PSI AG URL to report ✓ ✓

PUMA SE URL to report ✓ ✓ ✓

QSC AG URL to report ✓ ✓ ✓

R STAHL AG URL to report ✓

R+V VERSICHERUNG AG URL to report ✓ ✓ ✓

RATIONAL AG URL to report ✓ ✓ ✓

RENK AG URL to report ✓ ✓ RHEINLAND VERSICHERUNGS URL to report AKTIENGESELLSCHAFT ✓ ✓ ✓

RHEINMETALL AG URL to report ✓ ✓ ✓

RHON-KLINIKUM AG URL to report ✓ ✓ ✓

RIB SOFTWARE AG URL to report ✓ ✓ ✓

ROCKET INTERNET SE URL to report ✓ ✓ ✓ ROLAND RECHTSSCHUTZ-VERSICHERUNGS- URL to report AKTIENGESELLSCHAFT ✓

RWE AG URL to report ✓ ✓ ✓

SÄCHSISCHE AUFBAUBANK - FÖRDERBANK URL to report ✓

SALZGITTER AG URL to report ✓ ✓ ✓

SAP SE URL to report ✓ ✓ ✓

SARTORIUS AG URL to report ✓ ✓ ✓

SCHAEFFLER AG URL to report ✓ ✓ ✓

SCHALTBAU HOLDING AG URL to report ✓ ✓ ✓

SCHWEIZER ELECTRONIC AG URL to report ✓ ✓ ✓

SCOUT24 AG URL to report ✓ ✓ ✓

SGL CARBON SE URL to report ✓ ✓ ✓

SHW AG URL to report ✓ ✓ ✓

SIEMENS AG URL to report ✓ ✓ SIGNAL IDUNA KRANKENVERSICHERUNG URL to report

SILTRONIC AG URL to report ✓ ✓ ✓

SIMONA AG URL to report ✓ ✓ ✓

SIXT LEASING SE URL to report ✓

SIXT SE URL to report ✓ ✓ ✓

SKW STAHL-METALLURGIE HOLDING AG URL to report ✓ ✓ ✓

SMA SOLAR TECHNOLOGY AG URL to report ✓ ✓ ✓

SNP SCHNEIDER-NEUREITHER & PARTNER SE URL to report ✓

SOFTWARE AG URL to report ✓ ✓ ✓ SPARDA BANK SUDWEST EG URL to report SPARDA BANK WEST EG URL to report SPARDA-BANK BADEN WÜRRTEMBERG EG URL to report

SPARDA-BANK BERLIN EG URL to report ✓ ✓

SPARDA-BANK MÜNCHEN EG URL to report ✓ ✓

102

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

SPARDA‐BANK SÜDWEST EG URL to report

SPARKASSE AACHEN URL to report ✓ ✓ SPARKASSE ALLGAU URL to report

SPARKASSE AM NIEDERRHEIN URL to report ✓ ✓ SPARKASSE ANSBACH URL to report

SPARKASSE ASCHAFFENBURG ALZENAU URL to report

SPARKASSE BAMBERG URL to report ✓ ✓

SPARKASSE BIELEFELD URL to report ✓ ✓ ✓

SPARKASSE BODENSEE URL to report ✓ ✓

SPARKASSE CHEMNITZ URL to report ✓ ✓

SPARKASSE COBURG-LICHTENFELS URL to report ✓ ✓

SPARKASSE DORTMUND URL to report ✓ ✓

SPARKASSE DUISBURG URL to report ✓ ✓ ✓

SPARKASSE DÜREN URL to report ✓ ✓ ✓

SPARKASSE ESSEN URL to report ✓ ✓ ✓

SPARKASSE FULDA URL to report ✓ ✓ SPARKASSE FURSTENFELDBRUCK URL to report SPARKASSE FURTH URL to report

SPARKASSE GELSENKIRCHEN URL to report ✓ ✓ SPARKASSE GOTTINGEN URL to report

SPARKASSE HANNOVER URL to report ✓ ✓

SPARKASSE HEIDELBERG URL to report ✓ ✓

SPARKASSE HERFORD URL to report ✓ ✓

SPARKASSE HILDEN RATINGEN VELBERT URL to report ✓ ✓

SPARKASSE HILDESHEIM URL to report ✓ ✓

SPARKASSE HOLSTEIN URL to report ✓ ✓

SPARKASSE INGOLSTADT URL to report ✓ ✓

SPARKASSE KARLSRUHE ETTLINGEN URL to report ✓ ✓

SPARKASSE KOBLENZ URL to report ✓ ✓ ✓ SPARKASSE KOLNBONN URL to report

SPARKASSE KRAICHGAU URL to report ✓ ✓

SPARKASSE KREFELD URL to report ✓ ✓

SPARKASSE LEERWITTMUND URL to report ✓ ✓

SPARKASSE LEMGO URL to report ✓ ✓

SPARKASSE LEVERKUSEN URL to report ✓ ✓ SPARKASSE MARBURG BIEDENKOPF URL to report SPARKASSE MEMMINGEN LINDAU URL to report MINDELHEIM SPARKASSE MINDEN LUBBECKE URL to report SPARKASSE MUNSTERLAND OST URL to report

SPARKASSE NEUSS URL to report ✓ ✓

SPARKASSE NIEDERBAYERN MITTE URL to report ✓ ✓

SPARKASSE OFFENBURG/ORTENAU URL to report ✓ ✓ SPARKASSE OSNABRUCK URL to report

SPARKASSE PADERBORN-DETMOLD URL to report ✓ ✓ ✓

103

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

SPARKASSE PFORZHEIM CALW URL to report ✓ ✓

SPARKASSE REGENSBURG URL to report ✓ ✓ SPARKASSE RHEIN NAHE URL to report

SPARKASSE RHEIN NECKAR NORD URL to report ✓ ✓ SPARKASSE ROSENHEIM BAD AIBLING URL to report SPARKASSE SAARBRUCKEN URL to report SPARKASSE SCHWARZWALD BAAR URL to report SPARKASSE SUDHOLSTEIN URL to report

SPARKASSE TRIER URL to report ✓ ✓

SPARKASSE ULM URL to report ✓ ✓

SPARKASSE VEST RECKLINGHAUSEN URL to report ✓ ✓

SPARKASSE VOGTLAND URL to report ✓ ✓

SPARKASSE VORDERPFALZ URL to report ✓ ✓

SPARKASSE VORPOMMERN URL to report ✓ ✓

SPARKASSE WESTERWALD-SIEG URL to report ✓ ✓ SPARKASSE WESTMUNSTERLAND URL to report

SPARKASSE WORMS-ALZEY-RIED URL to report ✓ ✓

SPARKASSE ZOLLERNALB URL to report ✓ ✓

STADA ARZNEIMITTEL AG URL to report ✓ ✓ ✓ STADT SPARKASSE SOLINGEN URL to report

STADTSPARKASSE AUGSBURG URL to report ✓ ✓

STADTSPARKASSE DÜSSELDORF URL to report ✓ ✓ STADTSPARKASSE MUNCHEN URL to report

STADTSPARKASSE OBERHAUSEN URL to report ✓ ✓

STADTSPARKASSE WUPPERTAL URL to report ✓ ✓

STO SE & CO. KGAA URL to report ✓ ✓ ✓

STRABAG AG URL to report ✓ ✓ ✓

STRATEC BIOMEDICAL AG URL to report ✓ ✓ ✓

STROER SE & CO. KGAA URL to report ✓ ✓ ✓

STUTTGARTER LEBENSVERSICHERUNG A.G. URL to report ✓ ✓ ✓

SÜDDEUTSCHE KRANKENVERSICHERUNG A.G. URL to report ✓ ✓ ✓

SÜDWESTDEUTSCHE SALZWERKE AG URL to report ✓ ✓ ✓

SÜDZUCKER AG URL to report ✓ ✓

SURTECO SE URL to report ✓ ✓ ✓

SÜSS MICROTEC AG URL to report ✓ ✓ ✓ SV SPARKASSENVERSICHERUNG HOLDING URL to report AKTIENGESELLSCHAFT ✓ SYMRISE AG URL to report ✓ ✓ ✓

TAG IMMOBILIEN AG URL to report ✓ ✓ ✓

TAKKT AG URL to report ✓ ✓ ✓

TALANX AG URL to report ✓ ✓ ✓

TECHNOTRANS AG URL to report ✓ ✓ ✓

TELE COLUMBUS AG URL to report ✓

TELEFÓNICA DEUTSCHLAND HOLDING AG URL to report ✓ ✓ ✓

104

Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study THYSSEN KRUPP URL to report

TOM TAILOR HOLDING AG URL to report ✓ ✓ ✓

TUI AG URL to report ✓ ✓

TURBON AG URL to report ✓ ✓ ✓

UBS DEUTSCHLAND AG URL to report ✓ ✓

UMWELTBANK AG URL to report ✓ UNICREDIT BANK AG URL to report ✓ ✓

UNIPER SE URL to report ✓ ✓

UNITED INTERNET AG URL to report ✓ ✓ ✓

UNIVERSA KRANKENVERSICHERUNG A.G. URL to report ✓ ✓ ✓

UNIVERSA LEBENSVERSICHERUNG A.G. URL to report ✓ ✓ ÜSTRA HANNOVERSCHE VERKEHRSBETRIEBE URL to report AG ✓ ✓ ✓

USU SOFTWARE AG URL to report ✓ ✓

UZIN UTZ AG URL to report ✓ ✓ ✓

VAPIANO SE URL to report ✓ ✓

VERALLIA DEUTSCHLAND AG URL to report ✓ ✓ VERSICHERUNGSKAMMER BAYERN ANSTALT URL to report VHV VEREINIGTE HANNOVERSCHE URL to report VERSICHERUNG A.G. ✓ ✓

VIER GAS TRANSPORT GMBH URL to report ✓ ✓ ✓

VILLEROY & BOCH AG URL to report ✓ ✓ ✓ VOLKSBANK ALZEY WORMS EG URL to report

VOLKSBANK BIELEFELD-GÜTERSLOH EG URL to report ✓ ✓ ✓ VOLKSBANK BRAUNSCHWEIG WOLFSBURG EG URL to report VOLKSBANK KRAICHGAU WIESLOCH URL to report SINSHEIM EG

VOLKSBANK KUR- UND RHEINPFALZ EG URL to report ✓ ✓ ✓

VOLKSBANK LÜNEBURGER HEIDE EG URL to report ✓ ✓ ✓

VOLKSBANK MITTELHESSEN EG URL to report ✓ ✓ ✓

VOLKSBANK RAIFFEISENBANK URL to report ✓

VOLKSBANK STUTTGART E.G. URL to report ✓

VOLKSWAGEN AG URL to report ✓ ✓ ✓

VOLKSWAGEN BANK GMBH URL to report ✓ ✓ VOLKSWOHLBUND LEBENSVERSICHERUNG

A.G. URL to report

VONOVIA SE URL to report ✓ ✓ ✓

VOSSLOH AG URL to report ✓ ✓ ✓

VR BANK KREIS-STEINFURT EG URL to report ✓ ✓ ✓

VR BANK MAIN-KINZIG-BÜDINGEN EG URL to report ✓ ✓

VR BANK RHEIN-NECKAR EG URL to report ✓ ✓ ✓

VR BANK ROTTAL-INN EG URL to report ✓

VTG AKTIENGESELLSCHAFT URL to report ✓ ✓ ✓

WACKER CHEMIE AG URL to report ✓ ✓ ✓

WACKER NEUSON SE URL to report ✓ ✓ ✓

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Source: Source: Source: Bayer/ Company URL UNGC + akzente + Hoffmann econsense sustainable study

WASGAU PRODUKTIONS & HANDELS AG URL to report ✓ ✓ ✓

WASHTEC AG URL to report ✓ ✓ ✓

WESTAG & GETALIT AG URL to report ✓ ✓ ✓

WESTDEUTSCHE LANDESBAUSPARKASSE URL to report ✓ ✓ ✓ WESTFÄLISCHE PROVINZIAL VERSICHERUNG URL to report AKTIENGESELLSCHAFT ✓ ✓

WIESBADENER VOLKSBANK EG URL to report ✓ ✓ ✓

WIRECARD AG URL to report ✓ ✓ ✓ WÜRTTEMBERGISCHE GEMEINDE- URL to report VERSICHERUNG AG ✓ ✓ ✓

WUESTENROT & WURTTEMBERGISCHE AG URL to report ✓ ✓ ✓ WWK LEBENSVERSICHERUNG AUF URL to report GEGENSEITIGKEIT ✓ ✓ ✓

XING AG URL to report ✓ ✓ ✓

ZALANDO SE URL to report ✓ ✓ ✓

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Endnotes

1 IMF. Germany: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany, 9781484307908/1934-7685, July 7, 2017, https://www.imf.org/en/Publications/CR/Issues/2017/07/07/Germany-2017-Article-IV-Consultation-Press- Release-Staff-Report-and-Statement-by-the-45048 2 Official Journal of the European Union, Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014, L 330/1, November 15, 2014, http://eur-lex.europa.eu/legal- content/EN/TXT/PDF/?uri=CELEX:32014L0095&from=EN, §21. 3 Commission of the European Communities, Green paper: promoting a European framework for Corporate Social Responsibility, DOC/01/9, 18/07/2001, http://europa.eu/rapid/press-release_DOC-01-9_en.pdf. 4 Andorfer: Symbol- oder Impulspolitik. Das Transparenzkonzept, ein mittelbares Instrument der Politik zur Forcierung einer ressourcenorientierten Unternehmensausrichtung. Eine konzeptionelle Betrachtungsweise am Beispiel der Richtlinie 2014/95/EU, Berlin 2018, p. 141. 5 PIEs are defined at the EU level in directives 2013/34/EU on accounting (the Accounting Directive) and 2014/56/EU on statutory audits (the Audit Directive). Privately-held, non-bank and non-insurance companies are thus excluded from the EU-intended reporting scope. In Germany, PIEs encompass listed entities, credit institutions, and insurance undertakings. See: Accountancy Europe, Definition of Public Interest Entities in Europe, November 30, 2017, https://www.accountancyeurope.eu/wp-content/uploads/171130-Publication-Definition-of-Public-Interest- Entities-in-Europe-published-version-1.pdf 6 In Germany, corporate public reporting was previously limited primarily to the financial dimension. The charge for corporations to supplement their annual financial statements with notes and with a management report is stipulated in § 264 of the HGB. These notes must explain the annual financial statements, the accounting policies applied to the balance sheet and the income statement or the ratio of current liabilities to total liabilities (§ 284 ff. of the HGB). The management report must describe the course of business and the position of the company (§ 289 of the HGB). 7 Official Journal of the European Union, Directive 2014/95/EU. 8 Ibid, Recital 21. 9 As such, human rights are considered by the EU to be part of the understanding of sustainability. 10 A common understanding of “materiality” is based on a judgement from the U.S. Supreme Court, which defines information as material if there is “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” See TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976). 11 Jennifer Bender, Todd Bridges, Chen He, Anna Lester, Xiaole Sun “A Blueprint for integrating ESG into Equity Portfolios”, Journal of Investment Management (JOIM) 2018. https://www.joim.com/a-blueprint-for-integrating-esg-into-equity-portfolios/ 12 see Recital 3, Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 13 Ibid. 14 European Parliament, Corporate Social Responsibility: accountable, transparent and responsible business behaviour and sustainable growth (2012/2098(INI)), 28.1.2013, http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A7-2013- 0017+0+DOC+PDF+V0//EN 15 European Parliament, Corporate Social Responsibility: promoting society's interests and a route to sustainable and inclusive recovery (2012/2097(INI)), 29.1.2013, http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A7-2013- 0023+0+DOC+PDF+V0//EN

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16 Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014, Art. 4 I. 17 Gesetz zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernberichten: https://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&start=//*%5b@attr_id='bgbl117s0 802.pdf'%5d 18 See BT-PlPr 18/221 , S. 22256C - 22262A and BT-PlPr 18/196 , S. 19559A - 19565B. Renate Künast (BÜNDNIS 90/DIE GRÜNEN): „Die Unternehmen können jetzt faktisch selber festlegen, über was sie berichten und über was sie lieber nicht berichten.“ „Sie machen nicht einmal die Vorgabe, dass man den Bericht anhand standardisierter Rahmenwerke erstellen muss, also zum Beispiel anhand der Standards der Global Reporting Initiative, des Deutschen Nachhaltigkeitskodex oder der Leitsätze der OECD.“ Birgit Menz (DIE LINKE): „Nur 3 Prozent der großen Unternehmen in Deutschland werden nach dem Vorschlag der Bundesregierung einen Bericht vorlegen müssen. Der Gesetzentwurf sieht sogar vor, dass Unternehmen Angaben über nachteilige Entwicklungen weglassen können. Und: Die Berichte müssen nicht einmal durch unabhängige Gutachter geprüft werden.“ 19 Amnesty International, Zu Art. 289b Absatz 1HGB-E, Adressatenkreis, 15/04/2016, https://www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/Stellungnahmen/2016/Downloads/04152016_St ellungnahme_Amnesty_International_RefE_CSR_Umsetzungsgesetz.pdf?__blob=publicationFile&v=3 See, also, Bayer and Hoffmann: "Der enge Anwendungsbereich zielt vorwiegend auf kapitalmarktorientierte Unternehmen mit mehr als 500 Arbeitnehmern ab. Großenichtbörsennotierte Unternehmen bleiben so außen vor. Insbesondere solche Unternehmen, die schon heute keine Lageberichterstattung wie bei börsennotierten Aktiengesellschaften leisten müssen, dürfen auch nach dem neuen Gesetz ihre Geheimwirtschaft gegenüber Kunden, Mitarbeitern und der gesamten Gesellschaft weiter betreiben. Beispielsweise Aldi, Lidl, Dr. August Oetker, Alba oder Würth mit Milliardenumsätzen würden nicht erfasst." Bayer, W. and Hoffman, T., Kreis der vom CSR-Richtlinie-Umsetzungsgesetz potentiell betroffenen Unternehmen, 11/2016, p. 4-32 in Kluge, N. and Slick, S., Geheimwirtschaft bei Transparenz zum gesellschaftlichen Engagement?, 11/2016, https://www.boeckler.de/pdf/p_mbf_report_2016_27.pdf 20 BR-Plenarprotokoll 956, p. 7, S. 174A. 21 Deutscher Bundestag, Gesetz zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernlageberichten (CSR-Richtlinie-Umsetzungsgesetz), 11/04/2017, http://dipbt.bundestag.de/extrakt/ba/WP18/769/76955.html. 22 The 7th recital of the Directive contains the following terms concerning environmental matters: “details of the current and foreseeable impacts of the undertaking's operations on the environment, and, as appropriate, on health and safety, the use of renewable and/or non-renewable energy, greenhouse gas emissions, water use and air pollution.” Compare with § 289c II no. 1 of the HGB: “Umweltbelange, wobei sich die Angaben beispielsweise auf Treibhausgasemissionen, den Wasserverbrauch, die Luftverschmutzung, die Nutzung von erneuerbaren und nicht erneuerbaren Energien oder den Schutz der biologischen Vielfalt beziehen können.” See: Directive 2014/95/EU and HGB. 23 A company is capital market-oriented if it issues, in an organized market, stock or has required the admission to provide commercial stock on an organized market („wenn sie einen organisierten Markt durch von ihr ausgegebene Wertpapiere in Anspruch nimmt oder die Zulassung solcher Wertpapiere zum Handel an einem organisierten Markt beantragt hat“), § 264d of the HGB. 24 A company is large if it has a turnover of at least EUR 40 million and a capitalization of at least Euro 20 million, § 267 III of the HGB. 25 § 289a of the HGB. 26 § 315b I s. 1 of the HGB. 27 § 340a Ia HGB. Credit institutions do not need to be capital market-oriented, but large in terms of § 267 III-V HGB. 28 § 341a Ia HGB. Insurance companies do not need to be capital market-oriented, but large in terms of § 267 III-V of the HGB. 29 BT-Drucks. 18/9982, s. 34 f. 30 As is stated in the HGB (§ 289d Nutzung von Rahmenwerken): „Die Kapitalgesellschaft kann für die Erstellung der nichtfinanziellen Erklärung nationale, europäische oder internationale Rahmenwerke nutzen. In der Erklärung ist anzugeben, ob die Kapitalgesellschaft für die Erstellung der nichtfinanziellen Erklärung ein

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Rahmenwerk genutzt hat und, wenn dies der Fall ist, welches Rahmenwerk genutzt wurde, sowie andernfalls, warum kein Rahmenwerk genutzt wurde.” This reflects the stipulation of the EU Directive in Article 19a I no. 1e that companies need to concretely state which reporting framework(s) they use. 31 Whereas the German legislative used the 7th recital to transpose examples of environmental matters in § 289c II no. 1 of the HGB, the terms of the 9th recital were not transposed as noted. 32 See Article 51 of the Directive ("Member States shall provide for penalties applicable to infringements of the national provisions adopted in accordance with this Directive and shall take all the measures necessary to ensure that those penalties are enforced. The penalties provided for shall be effective, proportionate and dissuasive.") 33 For example Spain, The Netherlands, and Estonia did not establish their own sanction system (GRI / Accountancy Europe / CSR Europe, Member State Implementation of Directive 2014/95/EU, 2017, https://www.globalreporting.org/resourcelibrary/NFRpublication%20online_version.pdf, p. 10). 34 See §§ 331 Nr. 1, 334 Abs. 1 no. 3 of the HGB. 35 Entwurf eines Gesetzes zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernlageberichten der Bundesregierung, 21.09.2016, p. 46 (https://www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/Dokumente/RegE_CSR- Richtlinie.pdf?__blob=publicationFile&v=1). 36 See Directive 2014/95/EU, Article 19a Ie. The German legislature decided to integrate this in § 289e of the HGB. 37 July 2018 was chosen as a start date in order to be sure that late publications were also taken into account. In Germany, the financial year is a flexible period (it must not be longer than 12 months as per § 240 II HBG but shorter is possible -- "Rumpfgeschäftsjahr"). The RUG-pursuant report is required to be submitted to the Federal Gazette for publication at the same time as the Annual Report, or alternatively no longer than four months after the end of the financial year on the company's website (§ 289b III no.2 of the HGB). 38 Bayer, W. and Hoffman, T., Kreis der vom CSR-Richtlinie-Umsetzungsgesetz potentiell betroffenen Unternehmen, 11/2016, p. 4-32 in Kluge, N. and Slick, S., Geheimwirtschaft bei Transparenz zum gesellschaftlichen Engagement?, 11/2016, https://www.boeckler.de/pdf/p_mbf_report_2016_27.pdf 39 Global Compact Network Germany and econsense, Neuer Impuls für die Berichterstattung zu Nachhaltigkeit? 06/2018, https://econsense.de/app/uploads/2018/06/Studie-CSR-RUG_econsense-DGCN_2018.pdf 40 akzente kommunikation und beratung gmbh, Veroeffentlichungen, http://www.csr-berichtspflicht.de/veroeffentlichungen 41 Bureau Van Dijk, Orbis, accessed September 2018, https://www.bvdinfo.com/en-gb/our- products/data/international/orbis 42 Directive 2014/95/EU, Article 1. 43 The European Commission’s guidelines further inform companies how to comply with the Directive. See: European Commission, Guidelines on non-financial reporting (methodology for reporting non-financial information), 05/07/2017, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52017XC0705%2801%29. 44 HGB § 289c, Inhalt der nichtfinanziellen Erklärung: „5. der bedeutsamsten nichtfinanziellen Leistungsindikatoren, die für die Geschäftstätigkeit der Kapitalgesellschaft von Bedeutung sind.“ 45 As an orientation for reporting, the EU Directive specifically refers to the Eco-Management and Audit Scheme (EMAS), United Nations (UN) Global Compact, the Guiding Principles on Business and Human Rights implementing the UN ‘Protect, Respect and Remedy’ Framework, the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the International Organisation for Standardisation's ISO 26000, the International Labour Organisation's Tripartite Declaration of principles concerning multinational enterprises and social policy, and the Global Reporting Initiative (GRI). 46 The EU Directive hones in on 5 issues: social / human rights matters, employee matters, environmental matters, anti-corruption matters, and gender matters. 47 Deutscher Bundestag, Gesetzentwurf der Bundesregierung, Entwurf eines Gesetzes zur Stärkung der nichtfinanziellen Berichterstattung der Unternehmen in ihren Lage- und Konzernlageberichten (CSR-Richtlinie- Umsetzungsgesetz), 17.10.2016, Drucksache 18/9982,

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https://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&start=//*%5b@attr_id=%27bgbl1 17s0802.pdf%27%5d#__bgbl__%2F%2F*%5B%40attr_id%3D%27bgbl117s0802.pdf%27%5D__154871692355 5 48 Global Compact Network Germany and econsense, Neuer Impuls für die Berichterstattung zu Nachhaltigkeit? 06/2018, https://econsense.de/app/uploads/2018/06/Studie-CSR-RUG_econsense-DGCN_2018.pdf 49 Bayer, W. and Hoffman, T., Kreis der vom CSR-Richtlinie-Umsetzungsgesetz potentiell betroffenen Unternehmen, 11/2016, p. 4-32 in Kluge, N. and Slick, S., Geheimwirtschaft bei Transparenz zum gesellschaftlichen Engagement?, 11/2016, https://www.boeckler.de/pdf/p_mbf_report_2016_27.pdf 50 Data collected June 2018 using Orbis. 51 See § 315 II, III of the HGB. If the reporting company is a “Konzern” (merger of several legally independent companies into a single economic entity under unified management), § 315b II s. 2 of the HGB states that a company can be exempted from reporting if the parent company releases a report that includes the non- financial information of its subsidiaries. Subsidiaries are exempted from the duty to create their own non- financial report if they are included in a consolidated financial statement of a parent company domiciled in a Member State of the European Union or the European Economic Area (“Konzernabschluss eines Mutterunternehmens mit Sitz in einem Mitgliedstaat der Europäischen Union oder des Europäischen Wirtschaftsraumes“), and the “Konzernlagebericht“ includes a non-financial report or there is a separate non- financial report. This applies to parent companies which are also subsidiaries. If the company is exempted, it has to state where the other company publishes the “Konzernlagebericht“ or the special non-financial report. If it is not a “Konzern,” § 289 b II of the HGB is applied. Since the language of § 289b II or § 315 b II does not state that the figures must be disaggregated by subsidiaries of the company, there is no such duty. For example, the company "Syzygy AG" claimed to be exempted from non-financial reporting under § 315 due to the mother company's report: “Die SYZYGY AG ist von der Aufstellung einer nichtfinanziellen Erklärung gemäß § 315b Abs. 2 Satz 2 befreit. Das Mutterunternehmen, die WPP plc., St. Helier, Jersey, macht auf der Homepage unter http://www.wpp.com/wpp/sustainability/ die nicht finanzielle Erklärung der Öffentlichkeit zugänglich.” While the link provided does not take the viewer to a report directly, the report can be found at this address: https://www.wpp.com/-/media/project/wpp/files/sustainability/reports/2017- 18/wpp_ar_2017_annual_report.pdf?la=en. 52 A brief description of the business model is, however, also required under § 289 I of the HGB. The business model should therefore be presented twice. At least a reference to the appropriate chapter in the report would have to occur in order to satisfy the legal requirements. 53 GDP, current USD/EUR. However, with raw turnover aggregation, inter-organizational transactions are double-counted. See: World Bank, Germany, 2018, https://data.worldbank.org/country/germany. 54 Compare also with Art. 19a (4) lit. b of Directive 2013/34/EU. 55 See § 289b III no. 2 b of the HGB. 56 Global Compact Network Germany and econsense, Neuer Impuls für die Berichterstattung zu Nachhaltigkeit? 06/2018, https://econsense.de/app/uploads/2018/06/Studie-CSR-RUG_econsense-DGCN_2018.pdf, p. 13. 57 Ibidem, §1 (e). 58 Directive 2014/95/EU. 59 The Global Reporting Initiative (GRI) is an international nonprofit organization founded in 1997 to help companies, governments, and other organizations understand and communicate the impact of business on critical sustainability problems such as climate change, human rights, and corruption. The GRI guidelines for sustainability reporting are internationally recognized as the standard and contain useful principles and implementation instructions for the preparation of company-specific sustainability reports. The GRI Generation 4 (G4) standard comprises indicators which are generally applicable for each company. https://www.globalreporting.org/ 60 The Sustainability Code (Deutscher Nachhaltigkeitskodex, DNK) sets a standard for corporate reporting, and requires companies to report against 20 criteria and a chosen set of indicators (either GRI SRS or EFFAS). See: https://www.deutscher-nachhaltigkeitskodex.de 61 The Ten Principles of the United Nations Global Compact are derived from: the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against

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Corruption. Companies that opt to participate in the UNGC publish in their annual report or similar corporate report (e.g. sustainability report) a description of the ways in which they are supporting the UN Global Compact and its ten principles (the so-called “Communication on Progress” -- COP). See: UNGC, https://www.unglobalcompact.org/what-is-gc/mission/principles 62 EFFAS ESG 3.0, published by the EFFAS Commission on ESG and DVFA, is a standard reporting framework on corporate Environmental, Social & Governance (ESG) issues. 63 Win-Charta is an initiative sponsored by the Ministerium für Umwelt, Klima und Energiewirtschaft Baden- Württemberg. Similar to the UNGC, the Win-Charta has 12 principles (“Leitsätze”), and as with the DNK, the Win-Charta refers companies to specific GRI indicators for reporting purposes. See: Win-Charta, Begleitmaterial, https://www.win-bw.com/fileadmin/downloads/4_service/WIN_Charta_Begleitmaterial_Leitfaden.pdf 64 European Public Real Estate Association, Non-financial reporting, http://www.epra.com/sustainability/sustainability-regulation/non-financial-reporting 65 DNK, Datenbank, https://www.deutscher-nachhaltigkeitskodex.de/de-DE/Home/Database 66 GRI, List of GRI Standards reports and published materials with their self-declared claims, https://www.globalreporting.org/reportregistration/verifiedreports 67 UNGC / Global Compact Netzwerk Deutschland, Teilnehmerverzeichnis, https://www.globalcompact.de/de/teilnahme/teilnehmerverzeichnis.php 68 In the legislative proceedings, the oversight duties of the supervisory board were discussed intensively, with the legislature consciously deciding for an integration of the non-financial report into § 171 I AktG (new version). 69 Not all companies’ financial statements require a mandatory audit by an external auditor. However, large corporations are subject to this accounting obligation under § 316 I s. 1 of the HGB. 70 Vgl. § 111 II S. 4 AktG. 71 Issued by the International Federation of Accountants (IFAC), the International Standard on Assurance Engagements -- ISAE 3000 (Revised) – consists of guidelines for the ethical behavior, quality management and performance of non-financial information gathering and reporting. 72 The term “reasonable assurance” is also called “uneingeschränkter Bestätigungsvermerk”, and the term “limited assurance” is also called “eingeschränkten Bestätigungsvermerk.” 73 The nitrogen oxides (NOx) are nitric oxide (NO), nitric dioxide (NO2) and nitrous oxide (N2O). 74 Omnagen, “NOx emissions – formation, reduction and abatement”, 2017, http://clean-carbonenergy.com/nox-emissions.html 75 Ibid. 76 Greenpeace, “Bees in decline – a review of factors that put pollinators and agriculture at risk”, 01/2013, http://sos-bees.org/wp-content/uploads/2014/04/BeesInDecline.pdf, p. 17. 77 Ibid, p. 17-18. 78 UN General Assembly, Resolution 70/1, 25/09/2017, http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/70/1&Lang=E. 79 Other SDGs are also pertinent to other sections of this report. Notably, goals 3 (“good health and well-being”) and 5 (“gender equality”). 80 “Unserem Risikoansatz folgend, führten wir 2017 fünf eigene CR-Audits durch. Dabei überprüften wir unsere Lieferanten sowohl auf ökologische als auch auf soziale Kriterien. Bei zwei Lieferanten wurden Mängel mit potenziellen ökologischen Auswirkungen festgestellt. Diese Mängel betrafen die Bereiche Luftemissionen und Abfallmanagement/Bodenkontamination. Bei keinem Lieferanten wurden Mängel unter sozialen Aspekten festgestellt. Um die ökologischen Mängel zu beheben, vereinbarten wir mit den Lieferanten einen Maßnahmenplan und überprüfen ob die Verbesserungen umgesetzt werden. Mit keinem Lieferanten mussten wir aufgrund der festgestellten Mängel die Geschäftsbeziehungen beenden” (p. 112). 81 “Sofern die DekaBank im Rahmen der regelmäßig durchgeführten Lieferantenaudits Verstöße gegen in der Nachhaltigkeitserklärung festgelegte Anforderungen identifiziert oder auf anderen Wegen davon erfährt, erhält der Lieferant die Möglichkeit, die festgestellten Mängel zu beseitigen. Geschieht dies nicht oder in aus Sicht der DekaBank unzureichender Weise, wird ein mehrstufiger Prozess in Gang gesetzt, an dessen Ende die Kündigung des Vertragsverhältnisses stehen kann. (...) Im Berichtsjahr kam es zu keiner Beendigung einer

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Lieferbeziehung aufgrund von Verletzungen der Nachhaltigkeitsverpflichtung. Die Verantwortung für diesen Prozess liegt beim Nachhaltigkeitsmanagement” (p. 33). 82 “Die Bilanzierung der Treibhausgase erfolgt in Anlehnung an das Greenhouse Gas Protocol (GHG). Darüber hinaus stellen wir auch den Scope 1 EU ETS-Wert dar, der nur die Emissionen aus Energieerzeugungsanlagen umfasst, die dem Zertifikatshandel des Europäischen Emissionshandelssystems (EU ETS) unterliegen” (p. 60). 83 “Unter Scope 1 fallen bei Gigaset die Verbrauchswerte aus Gas (Heizungsanlagen) und Diesel (Staplerfahrzeuge der Logistik). Die CO2‐Belastung konnte von 2006 mit 1.940 Tonnen auf 2017 mit 990 Tonnen reduziert werden” (p. 11). 84 “Die HHLA hat sich zum Ziel gesetzt, bis zum Jahr 2020 die spezifischen CO2-Emissionen– also die CO2- Emissionen je umgeschlagenen Container um mindestens 30 % zu verringern. Als Basisjahr wurde 2008 festgelegt. Im Zeitraum 2008 bis 2017 konnten die CO2-Emissionen je umgeschlagenen Container um 28,9 % gesenkt werden. Die Spezifischen CO2-Emissionen sanken im Berichtsjahr um 2,2 %” (p. 7). 85 “This will reduce the firm´s GHG footprint by 75% by 2020 compared with 2004 levels” (p. 11). 86 “Der DEUTZ Konzern hat das primäre Umweltziel, das die Senkung der CO2-Emissionen je hergestellten Motor um mindestens 2 % p. a. vorsieht, erreicht und im Berichtsjahr mit rund –18,5 % sogar deutlich unterschritten” (p. 70). 87 “Beim Ermitteln der indirekten CO2-Emissionen verfolgen wir den „market-based approach“, das heißt, wir erfragen explizit die spezifischen Emissionsfaktoren der uns gelieferten Sekundärenergien bei den Versorgern. Dies hat den Vorteil, dass wir hier Informationen erhalten, wie viel CO2 hier durch unseren Bedarf freigesetzt wird. Wo dies nicht möglich ist – überwiegend in Asien, aber auch in Nordamerika, verwenden wir bevorzugt lokale oder wenn nötig nationale Informationen zu den Netzen aus öffentlich zugänglichen Quellen. Zusätzlich berechnen wir die Emissionswerte „location-based“ nach den Anforderungen des GHG Protocol. Hier nutzen wir Werte der Netze auf nationaler und, soweit möglich, auf lokaler Ebene.” (p. 29). 88 “Unter SCOPE 2 werden Emissionen subsumiert, die sich aus dem Verbrauch eingekaufter Energie ergeben. Diese indirekten Emissionen wurden auf der Grundlage der Verbrauchswerte für Elektrizität und Fernwärme ermittelt. Für die Berechnung der aus dem Strombezug resultierenden Emissionen wurden die länderspezifischen Emissionsfaktoren berücksichtigt, sofern für die jeweiligen Standorte keine Verträge abgeschlossen wurden, die den Bezug von 100 % erneuerbaren Energien beinhalten. Fernwärme bezieht Nordex nur an einem Produktionsstandort und der dazugehörigen Lagerstätte in Rostock, hier liegt uns der spezifische Emissionsfaktor von unserem Fernwärmelieferanten, den Stadtwerken Rostock, vor” (p. 58). 89 CDP. About Us. https://www.cdp.net/en/info/about-us 90 World Resources Institute & World Business Council for Sustainable Development, Scope 3 Calculation Guidance, 2013, http://ghgprotocol.org/scope-3-technical-calculation-guidance 91 See European Comission, Well-to-Wheels Analysis, 2016, https://ec.europa.eu/jrc/en/jec/activities/wtw 92 “alle sonstigen indirekten Emissionen, darunter die aus der Herstellung, Transport eingekaufter Güter oder Verteilung und Nutzung der eigenen Produkte oder der Entsorgung von Abfällen; auch Emissionen aufgrund von Geschäftsreisen gehören hierzu” (p. 21). 93 International Organization for Standardization, ISO 14067:2018(en), 2018, https://www.iso.org/obp/ui#iso:std:iso:14067:ed-1:v1:en. 94 “Durch den Einsatz einer Papppresse am Standort können bereits seit 2010 (Um-)Verpackungen aus Pappe gepresst und einer Wiederverwendung zugeführt werden. 2017 wurden zirka 390 Tonnen Pappe so gepresst, dass sie zur fachgerechten Wiederverwendung verkauft werden konnten” (p. 13). 95 “Glas ist zu 100 % ohne Qualitätsverlust recycelbar. Neue Glasflaschen bestehen heute durchschnittlich zu 60 % aus Recyclingglas. Bei grünem Glas werden sogar Anteile von bis zu 90 % erreicht. Dies spart nicht nur Primärrohstoffe, sondern die Zugabe von Recyclingglas erfordert auch weniger Schmelzenergie und führt somit zur Reduzierung von Treibhausgasemissionen” (p. 18). 96 “Neben Materialeinsparungen ist die Verwendung von recycelten Materialien ein wichtiger Hebel, um natürliche Ressourcen zu schonen. Im Berichtsjahr nutzte DMG MORI in den Materialgruppen Guss- und Blechteile 47% (gewichtsbasiert) recycelte Materialien in Werkzeugmaschinen und im Service. Guss- und Blechteile stellen einen bedeutenden Gewichtsanteil in unseren Produkten” (p. 22-23). 97 “Gleichzeitig sind wir uns aber bewusst, dass wir mit dem Bau und Betrieb unserer Anlagen Einfluss an den jeweiligen Standorten nehmen. So bestehen die größten Herausforderungen beim Bau und Betrieb von Windanlagen im Zusammenhang mit brütenden Vögeln, Vogelflugrouten, Fledermäusen, Verhinderung von

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indirekten Einflüssen auf lokale Wassergebiete, Umsiedlung von seltenen Pflanzen sowie der Wiederherstellung von Lebensräumen durch Ausgleichs- oder Ersatzmaßnahmen” (p. 53). 98 “2017 konnten wir den Wasser¬verbrauch pro Fahrzeug auf 3,76 m³ senken gegenüber 3,89 m³ in 2016” (p. 65). 99 “Im Geschäftsjahr 2017 haben unsere Fertigungsstandorte – bedingt durch die gesteigerte Produktionsmenge – insgesamt 1.139.788 m³ Frischwasser (Vorjahr: 1.042.812 m³) und 232.231 m³ Recycling- Wasser (Vorjahr: 211.955 m³) verbraucht” (p. 13). 100 “Die für das Jahr 2017 gesetzten Ziele sahen vor, den Verbrauch von Strom, Kraftstoff, Gas, Wasser, Pappe und Papier um jeweils 1 % je produziertes Gerät zu verringern. Diese Ziele konnten wir erreichen” (p. 26). 101 “Übergeordnetes Ziel ist eine konzernweite Reduzierung der Energie- Leistungsindikatoren (EnPIs) um 5 % bis Ende 2019 zum Basisjahr 2015” (p. 21). 102 “Während der Energieverbrauch infolge erweiterter Produktion absolut gestiegen ist, zeigen die umsatzspezifischen Kennzahlen, dass die Energieeffizienz bei den berichteten Standorten weltweit erneut um 3 % verbessert werden konnte. Die Zielsetzung für den spezifischen Energieverbrauch lag 2017 bei 167 MWh pro 1 Mio. € Umsatz” (p. 28). 103 “Um unserer Verantwortung für den Klimaschutz nachzukommen und wertvolle Ressourcen zu schonen, stellen wir zudem seit Januar 2016 die CO2-Neutralität unseres Stromverbrauchs sicher. Dazu erwerben wir jährlich 2.500 MWh Strom aus regenerativen Quellen, was den Stromverbrauch unserer Standorte abdeckt. Entsprechend der europäischen Rechtsvorschriften wird durch sogenannte Herkunftsnachweise vom Umweltbundesamt bestätigt, dass die eingekaufte Energiemenge zu 100 % aus erneuerbaren und CO2-freien Energiequellen stammt” (p. 27). 104 “Der Strom für Eingangs und Flurbeleuchtung sowie technische Anlagen (Hausstrom im Vermietungsbestand stammt zu ca. 90 % aus Wasserkraft” (p. 172). 105 General Assembly of the United Nations, International Bill of Human Rights, 10/12/1948, http://www.un- documents.net/a3r217.htm. 106 European Commission, Guidelines on non-financial reporting (methodology for reporting non-financial information), 05/07/2017, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52017XC0705%2801%29. 107 High-risk countries or products are notably listed in USDOL’s List of Goods and List of Products, as well as the U.S. Department of State’s Trafficking in Persons (TIP) report: 1. USDOL’s List of Goods Produced by Child Labor or Forced Labor includes 148 items from 76 countries (as of September 20, 2018), www.dol.gov/ilab/reports/child-labor/list-of-goods/. 2. Pursuant to Executive Order 13126, USDOL’s ILAB also “maintains a list of products (and their source countries) that it has a reasonable basis to believe are produced by forced or indentured child labor.” See, e.g.,: USDOL, List of Products Produced by Forced or Indentured Child Labor, 2018, https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-products. 3. The U.S. Department of State’s annual TIP Report includes a list of countries in which there is a high risk for human trafficking. The full report is located at https://www.state.gov/j/tip/rls/tiprpt/2018/, 4. The U.S. State Department resource Tier Placements and Regional Maps is located here: https://www.state.gov/j/tip/rls/tiprpt/2018/282584.htm. 108 International Labour Organization (ILO), Walk Free Foundation, and the International Organization for Migration, Global estimates of modern slavery: Forced labour and forced marriage, 2017, https://www.alliance87.org/global_estimates_of_modern_slavery-forced_labour_and_forced_marriage.pdf. 109 Ibid. 110 ILO, International Labour Office, Profits and Poverty: The Economics of Forced Labour, Geneva, 2014, http://www.ilo.org/global/publications/ilo-bookstore/order-online/books/WCMS_243391/lang-- en/index.htm 111 “Zu den Aufgaben des Corporate Governance Systems der Schaeffler Gruppe zählt auch die materialspezifische Konformität mit Gesetzgebung und Standards (Material Compliance). Als wichtiges Instrument betreibt die Schaeffler Gruppe ein Material Compliance Management. Darüber hinaus pflegt die Schaeffler Gruppe einen verantwortungsvollen Umgang mit der Verwendung von Rohstoffen wie Zinn, Wolfram, Tantal oder Gold, deren Gewinnung in einigen Ländern zur Finanzierung von kriegerischen Auseinandersetzungen und Menschenrechtsverletzungen beiträgt. Die Schaeffler Gruppe hat bereits im Jahr

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2013 einen Monitoring-Prozess für die Lieferkette aufgesetzt und stellt anfragenden Unternehmen Informationen zur Materialherkunft zur Verfügung” (p. 19). 112 T-Mobile’s US 10-K: T-Mobile, Risks and opportunities, 2016, http://www.annualreport.telekom.com/site0317/management-report/risk-and-opportunity- management/risks-and-opportunities.html 113 “Die imug Beratungsgesellschaft liefert uns hierzu regelmäßig sogenannte Blacklists aus der Vigeo Eiris Datenbank, die Unternehmen enthält, welche gegen die Ausschlusskriterien der Sparkasse Hannover verstoßen. Neuanlagen in diese Unternehmen erfolgen nicht, bestehende Positionen werden veräußert oder laufen aus. Im Laufe des Jahres 2017 wurde vor dem Hintergrund der aktualisierten Blacklist eine Unternehmensanleihe veräußert” (p. 8). 114 “100 Prozent unserer Eigenanlagen werden einem Screening nach den formulierten Ausschlusskriterien unterzogen. Ausschlusskriterien beziehen sich auf: Verstoß gegen Menschenrechte, Nicht‐Einhaltung sozialer Mindeststandards, eklatante Umweltverschmutzungen, Produktion kontroverser Waffen (Streubomben, Landminen, ABC‐Waffen), Korruption und Bestechung” (p. 8). 115 “Wir können nicht zu 100 % ausschließen, dass in unseren technischen Geräten Materialien aus Ländern eingesetzt werden, in denen diese nicht unter akzeptablen Bedingungen hergestellt werden” (p. 15). 116 “Für TAKKT als Handelsunternehmen liegt bereits im Bezug der Waren ein wichtiger Teil der Wertschöpfungskette. Aus diesem Grund legt TAKKT ein hohes Augenmerk auf Nachhaltigkeit in der Lieferkette. Dazu kooperiert TAKKT mit der international anerkannten EcoVadis-Plattform. (...). Die vier Bereiche, die EcoVadis analysiert, sind „Umwelt“, „Sozialbedingungen“, „Ethik“ und „Lieferkette“. (...) 2017 belief sich das Einkaufsvolumen von durch EcoVadis zertifizierten Lieferanten auf 46,8%” (p. 1). 117 “Unser Verhaltenskodex legt die Mindeststandards fest, die wir von allen unseren Geschäftspartnern und deren Unterlieferanten erwarten. Er enthält Standards zu u.a. Mindestlohn, Vereinigungsfreiheit sowie der Verhinderung von Zwangsarbeit, Kinderarbeit und Diskriminierung und basiert auf den Prinzipien der Allgemeinen Erklärung der Menschenrechte (UDHR) und den Konventionen der Internationalen Arbeiterorganisation (ILO). Die Mindeststandards, die wir mit unserem Verhaltenskodex festgelegt haben, überprüfen wir kontinuierlich und aktualisieren sie regelmäßig” (p. 30). 118 “Um die für uns besten Lieferanten auszuwählen, ziehen wir konzernweit einheitliche Bewertungskriterien heran, zu denen neben Preis, Qualität, Vertragstreue und der Liefer- bzw. Ausführungsleistung auch die Kriterien Compliance, Risikomanagement, Umwelt, Kooperation und Innovation sowie Arbeitssicherheit und Gesundheitsschutz gehören. Wir haben uns dazu verpflichtet, über die gesamte Lieferkette hinweg ökonomische, soziale und ökologische Mindestanforderungen zu definieren und durchzusetzen. Hierzu zählt auch die Einhaltung der Menschenrechte”. No page number was available as the statement was posted in html. 119 “2017 haben wir damit begonnen, die Nachhaltigkeitsperformance unserer gesamten Lieferkette zu bewerten. Der Anteil der Lieferanten, bei denen die Bewertung bereits abgeschlossen ist, entspricht ca. 86 Prozent unseres Warenvolumens. Die Teilnahme an der Bewertung ist für Lieferanten verpflichtend. Sobald die Abfrage abgeschlossen ist, werden wir auf die Lieferanten mit unzureichender Performance einwirken. Zu den Bewertungskriterien gehört die garantierte Einhaltung allgemein gültiger SMA Standards, wie die Beachtung der Menschenrechte, Vereinigungsfreiheit und Vermeidung von Kinder- und Zwangsarbeit sowie eine nachhaltige und klimafreundliche Energieversorgung” (p. 40). 120 ABS Quality Evaluations, Business Social Compliance Initiative (BSCI), 2015, http://abs-qe.com/es/sistema- de-bsci.html 121 “Im Berichtsjahr wurde eine verbindliche, globale Schulung zum Brenntag Verhaltens- und Ethikkodex durchgeführt. Über die globale E-Learning-Plattform können die Mitarbeiter unabhängig von Zeit und Ort per Internet die ca. einstündige Schulung absolvieren. Es werden insgesamt zwölf Themenfelder – darunter Anti-Korruption und die Achtung von Menschenrechten – anhand von praktischen Beispielen und Übungsfragen erläutert. Der Wissenstransfer wird durch die Mitarbeiter in einem abschließenden Test bestätigt. Seit ihrer Einführung 2016 haben bis Ende 2017 weltweit insgesamt 10.079 Mitarbeiter von Brenntag an dieser Schulung teilgenommen, das entspricht ca. 89 %der relevanten Mitarbeiter” (p. 12). 122 Unsere Priorität lag dabei auf der Risikominderung bei den Lieferanten, deren TfS-Audit mehr als fünf kritische Mängel aufwies oder deren TfS-Bewertung eine Punktzahl von unter 30 (auf einer Skala von 1 bis 100 Punkten) erreichte. Die Befunde betrafen in 37 Fällen den Bereich Ökologie, in 100 Fällen Arbeitspraktiken und

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Menschenrechte sowie in 65 Fällen Auswirkungen auf lokale Gemeinschaften und die Gesellschaft. Bei einzelnen Lieferanten trafen mehrere Aspekte zu” (p. 111). 123 Berentzen-Gruppe uses the term “Tarifverhandlungen” as a synonym for “Tarifvertrag” (p. 18). Other companies using it are Leoni AG (“kollektivverträglichen Regelungen”, p. 88) and Hugo Boss (“kollektivveträglichen Vereinbarungen“, p. 37 & 42, also “Kollektivverhandlungen”). § 4 of the Austrian Arbeitsverfassungsgesetz (ArbVG) uses the term „Kollektivvertrag.“ In Germany the Tarifvertragsgesetz (TVG) uses the term „Tarifvertrag.“ 124 “Dank eines strikten Kontrollsystems, unterstützt durch lokale Aufklärungs- und Bildungsinitiativen, ist die Anzahl von Fällen mit Kinderarbeit bei unseren Kontraktoren gering” (p. 98). 125 “Des Weiteren wurde in einem sogenannten Pre-Sourcing-Audit (ein Audit vor Aufnahme der Geschäftsbeziehung) ein Fall von Kinderarbeit identifiziert. Die betroffene Person wurde umgehend freigestellt und alle erforderlichen Entschädigungen wurden geleistet. Die Zusammenarbeit mit dem Lieferanten wurde daraufhin strikt abgelehnt” (p. 52). 126 “Der dritte Fall aus dem Jahr 2016 zum Thema Kinderarbeit konnte 2017 noch nicht abgeschlossen werden. Dieser steht in Zusammenhang mit dem Rohstoff Kobalt, zu dem im laufenden Geschäftsjahr umfassende Aktivitäten gestartet wurden” (p. 110). 127 “Durch den kontinuierlichen Verbesserungsprozess ist es uns gelungen, die Anzahl der berichtspflichtigen Arbeitsunfälle im Unternehmen stetig zu senken, so dass wir die Konzernunfallquote von 2010 bis 2016 um 66 % auf einen Wert von 1,5 reduzieren konnten. Für das Jahr 2017 müssen wir nun erstmals wieder einen leichten Anstieg auf 1,7 berichten” (p. 36). 128 “Als Leistungskennzahl im Bereich Arbeitssicherheit dient uns die Anzahl der Unfälle mit mindestens einem Ausfalltag je 1 Mio. geleisteter Arbeitsstunden (LTIF). In dieser Kennzahl sind die Kollegen der Partnerfirmen mit einbezogen. Im Berichtsjahr 2017 konnten wir die Zahl der Arbeitsunfälle auf einem gleichbleibend guten Niveau halten und erreichten einen LTIF von 2,29 (2016: 2,1)” (p. 70). 129 “Trotz unseren intensiven Sicherheitsmaßnahmen verstarben 2017 tragischerweise vier unserer Mitarbeiter und ein Beschäftigter einer Partnerfirma. Nach tödlichen Unfällen leiten wir umgehend Untersuchungen ein, um den genauen Hergang nachzuvollziehen. Zudem erfolgt innerhalb von 24 Stunden eine Meldung an den Vorstand der betroffenen Einheit und den Verantwortlichen im Konzernvorstand. Ziel ist es, die Ursachen zu ermitteln und alle notwendigen Maßnahmen einzuleiten, um vergleichbare Unfälle in Zukunft zu verhindern” (p. 7). 130 We note that the issue of equal pay, in theory, would also apply to temporary work (Leiharbeit). However, pursuant to § 267 of the HGB, temporary workers, along with a host of other worker types, are not considered employees (Arbeitnehmer). See: IDW, https://www.idw.de/blob/101498/30d545b52d2fcc5d71a71035b8336a70/down-positionspapier-csr- data.pdf 131 “Die angemessene Bezahlung aller Mitarbeiterinnen und Mitarbeiter wird über die Anwendung und Einhaltung des Gehaltstarifvertrags für das private Versicherungsgewerbe durch die DEVK sichergestellt. Die in dem Gehaltstarifvertrag festgelegten Tarifgruppen und deren Voraussetzungen sind ein Garant dafür, dass die Mitarbeiterinnen und Mitarbeiter entsprechend ihrer Tätigkeit, unabhängig von ihrem Geschlecht o.Ä., angemessen bezahlt werden” (p. 17). 132 “Durch die regelmäßige Beteiligung am Girls´ Day, Technik-Camp für Mädchen und an einem Schnuppertag für Mädchen in technischen Berufen wollen wir den Anteil weiblicher Fachkräfte erhöhen” (p. 69). 133 “This company also has no disclosure of an equal pay policy, the percentage of women in the first management level, nor in the supervisory board. 134 “Unser Ziel ist es, alle relevanten Mitarbeiter zum Kartellrecht und zur Korruptionsprävention zu schulen. Über ein weltweites Anforderungsraster stellen wir sicher, dass wir sämtliche Personen, die Kunden- oder Lieferantenkontakte haben, mit diesen Themen vertraut machen. Derzeit sind konzernweit 5.240 Mitarbeiter entsprechend geschult” (p. 25). 135 According to German law (§ 25a I S. 6 Nr. 3 KWG), it is the duty of banks to establish a mechanism for internal confidential whistleblowing. However, for the purposes of this indicator, we note that a whistleblowing mechanism would not be limited to entirely internal use, but also includes a means for external stakeholders to raise a concern.

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136 “Für unsere Mitarbeiter besteht zusätzlich zu den internen Berichts- und Beschwerdewegen die Möglichkeit, Hinweise auf Verstöße gegen unseren Code of Conduct, interne Standards oder relevante Gesetze auch anonym über eine Compliance-Hotline mitzuteilen. Dieser Dienst wird von einem unabhängigen externen Anbieter betrieben und ist weltweit verfügbar, sodass sowohl eine offene als auch eine anonyme Berichterstattung möglich ist. Neben Mitarbeitern können auch Dritte die Hotline nutzen” (p. 28). 137 “Zudem werden alle Mitarbeiter ermutigt, Verstöße aktiv anzusprechen oder anonym über das CANCOM Hinweisgebersystem zu melden” (p. 12). 138 “Wir wollen Korruption vorbeugen und bekämpfen, dazu führen wir zahlreiche Maßnahmen durch. Grundlage unseres Compliance Management-Systems ist das Compliance Risk Assessment (CRA), mit dem wir Compliance-Risiken identifizieren und bewerten sowie geeignete Präventionsmaßnahmen einleiten können.(...) Das CRA im Berichtsjahr umfasste 73 Gesellschaften – eine Abdeckungsquote von über 98% (nach Mitarbeiterzahl)” (p. 89). 139 “In Ergänzung zum Compliance-Risk-Assessment und den daraus resultieren den Maßnahmen und Kontrollen finden bei Dräger an ausgewählten Standorten Compliance-Reviews statt, um den Compliance- Reifegrad der jeweiligen Landesgesellschaft zu ermitteln und Optimierungspotenziale für das CMS zu identifizieren. Im Jahr 2017 führte das Corporate Compliance Office in insgesamt vier Gesellschaften Compliance-Reviews durch. Darüber hinaus prüft die Abteilung Internal Audit jährlich auf Basis einer risikoorientierten Prüfplanung das interne Kontrollsystem (IKS) der Tochtergesellschaften von Dräger anhand von Business-Standard-Audits. In Ergänzung zu diesen führt Internal Audit auch Compliance-Audits durch. Im Jahr 2017 hat Internal Audit insgesamt zwölf Business Standard Audits und acht Compliance-Audits durchgeführt” (p. 39). 140 “Daher legen wir im Rahmen unseres Risiko-Management-Systems und unseres Compliance-Systems einen Schwerpunkt auf Korruptionsvermeidung. Sanktionslisten berücksichtigen wir konsequent und tragen so in angemessener Weise dafür Sorge, dass sanktionsrechtliche Vorgaben des Gesetzgebers eingehalten werden. Um diese ebenso effektiv wie effizient umzusetzen, haben wir weltweit einen systemgestützten Prozess eingeführt. Im abgelaufenen Jahr erhielten wir keine Systemmeldung, die eine Lieferung blockierte (Vorjahr: 0 Meldungen)” (p. 40). 141 “Gesamtwert der politischen Spenden, dargestellt nach Land und Empfänger/Begünstigtem. Im Jahr 2017 spendeten wir 4.500 Euro an die CDU und 500 Euro an die FDP. Im Vorjahr spendeten wir 1.000 Euro an die SPD. Darüber hinaus wurde an die SPD im Jahr 2017 durch das Aufstellen von Werbebannern 1.550 Euro gezahlt (Vorjahr 50 Euro)” (p. 32). 142 “Die Sparkasse Chemnitz tätigt keine Spenden oder Zuwendungen an Regierungen, Parteien, Politiker” (p. 15). 143 “Die BMW Group unterstützt die gesellschaftspolitische Arbeit folgender demokratischer Parteien in Deutschland: CDU, CSU, SPD, FDP und Bündnis 90 / Die Grünen” (p. 30). 144 “Parteispenden erfolgten in Höhe von 13.000 € ausschließlich nach Deutschland (CDU, CSU, FDP) (p. 34). 145 “Die Barmenia Lebensversicherung a. G. spendete 0,0057 Prozent an drei Parteien (CDU, CSU und FDP)” (p. 24). 146 “Weil eine Spendenhöhe von 10.000 € pro Partei im Kalenderjahr nicht überstiegen wird, sehen wir von einer Veröffentlichung der politischen Spenden ab.” 147 Transparency is considered by the OECD as part of due diligence also for institutional investors: “In line with the OECD Guidelines, due diligence involves: 1) identifying actual and potential adverse impacts; 2) preventing or mitigating adverse impacts; and 3) accounting for how adverse impacts are addressed, by (a) tracking performance and (b) communicating results.” See: OECD (2017), Responsible business conduct for institutional investors: Key considerations for due diligence under the OECD Guidelines for Multinational Enterprises, https://mneguidelines.oecd.org/RBC-for-Institutional-Investors.pdf 148 They include: adesso AG; BERENTZEN-GRUPPE AG; Berlin Hyp AG; Deutsche Pfandbriefbank AG; DEUTZ AG; Elmos Semiconductor AG; Eurogrid GmbH; First Sensor AG; FRIWO AG; GELSENWASSER AG; GFT Technologies AG; GK Software AG; HSH Nordbank AG; INDUS Holding AG; Itzehoer Versicherung/Brandgilde von 1691 VVaG; Landesbank Berlin AG; Landesbank Hessen-Thüringen Girozentrale; Manz AG; Masterflex SE; Mecklenburgische Versicherungs-Gesellschaft a.G.; Nassauische Sparkasse; NÜRNBERGER Allgemeine Versicherungs-AG; Salzgitter AG; Schaltbau Holding AG; Sixt SE; STRATEC Biomedical AG; technotrans AG; TELE COLUMBUS AG; Volksbank Stuttgart e.G.; Vossloh AG; VR Bank Kreis-Steinfurt eG.

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149 Eurogrid GmbH reports concerning significant risks from business activities. It reported the removal of trees (p. 46) and it states that its high voltage lines affect birds (p. 47). In this context it mentioned the term “adverse impact.” 150 In the legislative process, the Bundesrat argued that this was an inadmissible restriction of the Directive. The Bundesregierung rejected this, arguing with the 8th recital of the Directive 2014/95/EU, which states: “The undertakings which are subject to this Directive should provide adequate information in relation to matters that stand out as being most likely to bring about the materialization of principal risks of severe impacts, along with those that have already materialized.” 151 Laerman, M., Machine-Readable Disclosure and ESEF 2020 – A New Era of Corporate Digital Reporting?, 23/05/2018. https://www.sustainablebrands.com/news_and_views/marketing_comms/michael_laermann/machine- readable_disclosure_esef_2020_new_era_corp

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