Stadtwerke München Sustainability Report 2020

The pulse of Munich Sustainability Report 2020 For a sustainable Munich

From 2025 onwards, By 2040 at the latest, we will By 2035, we will fully convert we will generate sufficient ensure CO2-neutral coverage MVG buses to battery-­ green electricity in our of Munich’s demand for dis- electric drives. own plants to cover all of trict heating, mainly relying Munich’s consumption. on deep geothermal energy.

By 2030, we will convert 75 % Our aspiration is to become By 2040, we will achieve CO2- of our vehicle fleet (passenger one of the top 5 employers in neutral operation of all public cars and light commercial the region by 2025. pools in Munich. ­vehicles) to electromobility. Contents

We will support the city of 02 – 03 Foreword Munich in the achievement 04 – 07 Stadtwerke München — a portrait of its climate goals in the 08 – 13 Sustainability ­management ­areas of mobility and energy. 14 – 27 Essential services and product responsibility­ 28 – 37 Operational environmental protection­ 38 – 51 Employees 52 – 55 Corporate governance 56 – 58 About this report 58 – 62 GRI Content Index 2 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Foreword

Dear readers,

While the topic of sustainability has attracted society’s attention for quite some time, the concept of “resilience” has gained wider popularity during the Covid-19 pandemic. In the context of organisations, resilience describes the ability to efficiently address disruptions and, during times of change, adopt a positioning that allows the organisation to keep key structures and functions intact. ­Together, sustainability and resilience are a strong team — and this also ­describes Stadtwerke München.

We have always proven that we live up to our responsibility even under the most difficult circumstances — and this is especially true during this pandemic: we are keeping the city running. The citizens of Munich and the metropolitan region can rely on safe and secure energy and water supply at all times. MVG is ensuring their continued mobility in an environmentally benign manner. And M-net’s powerful communications solutions are making productive work possible for many people. With comprehensive protection measures — accompanied by transparent and compassionate communications — we are moreover fulfilling our duty of care for our employees, who are doing an extraordinary job in the prevailing environment.

Our successful crisis management is not the only joint effort we can all be proud of, however. We have also consistently stayed on course in our large pro- jects for the future. First and foremost, mention must made of our renewable energies expansion campaign, which we will continue beyond 2025 given the prospect of a further increase in electricity demand in Munich.

From 2025 onwards, we want to permanently generate sufficient green elec- tricity in our own plants to cover all of Munich’s consumption. Further impor-

tant ambitions on our agenda continue to be CO2-neutral operation of district heating and our bus fleet, major infrastructure projects in local public SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 3 Foreword

From left to right: Dr Florian Bieberbach, Werner Albrecht, Ingo Wortmann, Helge-Uve Braun

transport, and the further expansion of our powerful fibre-optic network. In all these endeavours, we recently reached or are on the verge of major milestones.

We have also made pleasing progress in our sustainability management: pro- ject teams throughout the Group are working on an even more sustainable and resilient positioning of SWM, from the strategic level to data capturing and analysis. Initial results have already been incorporated in this report. For example, we used a structured process to take an in-depth look at our impact on the United Nations’ Sustainable Development Goals.

You can therefore rest assured: SWM is working diligently and purposefully on the sustainable future of the Munich metropolitan region and achieving great success. We look forward to your continued support of our endeavors.

Sincerely yours

Dr Florian Bieberbach Werner Albrecht Ingo Wortmann Helge-Uve Braun

Chief Executive Officer Director, Personnel Director, Mobility Director, Technology and Social Affairs Stadtwerke München — a portrait

As one of Germany’s largest municipal companies, we while ensuring sustainability at the same time. We are are a major contributor to the quality of life of the fair-minded and seek to achieve mutual benefits in our ­people in Munich and the metropolitan region. From relation­ships with customers, suppliers, and business reliable energy and water supply to state-of-the-art partners. We keep an eye on our independence and urban mobility and fast Internet to Munich’s public exercise due diligence in all of our ventures. swimming pools, we offer award-winning services at fair prices. Our business segments We are committed to satisfying our customers with high-quality services and active relationship manage- We manage our business across all segments of the value ment. We embrace economic success while protecting chain: Energy – subdivided into Generation, Networks, natural resources and the environment. We make ambi- Sales, and Trade –, Water, Mobility, Telecommunications, tious investments in supply and infrastructure facilities and Public Pools.

Energy Water Mobility Telecommunications Public Pools SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 5 Stadtwerke München — a portrait

Energy deployment of our generation plants and the expansion Generation and operation of our virtual power station. Furthermore, We generate electricity and heat in Munich and the Trade gives Energy Generation, Sales, and individual SWM metropolitan region in approximately 70 plants, including majority shareholdings access to the energy markets. wind, hydroelectric, and solar energy plants, energy-­ efficient combined heat and power (CHP) plants, and Water geothermal plants. In addition, we operate wind parks Our additive-free M-Wasser drinking water is extracted and solar energy plants throughout Germany and Europe naturally and delivered from the foothills of the Bavarian at sites with lots of wind and sunshine. Since 2004, we Alps to Bavaria’s capital. It boasts excellent analytical have also provided district cooling, for which we use the results that are significantly better than the statutory natural cold temperature of groundwater and ­Munich’s limits. In fact, M-Wasser ranks among the best drinking underground­ streams. waters in Europe. We satisfy the water demand of more than 1.5 million people. To safeguard a secure and affordable natural gas supply for Munich, we also engage in gas production in North- Mobility western Europe via our shareholdings in Bayerngas Together with our MVG subsidiary, we are committed to GmbH (Bayerngas) and Spirit Energy Limited (Spirit Energy). providing state-of-the-art and environmentally benign Our activities in the gas extraction business reduce our mobility in Munich. Before the decline in passenger dependence on international oil and gas corporations ­numbers caused by the Covid-19 pandemic, up to 2 million and allow us to better control compliance with social and people per day used our underground trains, buses, and ecological standards in natural gas production. trams, which travel on a transport network that is more than 700 kilometres long. These services are interlinked Networks with personalised solutions such as the MVG Rad bike- Our essential public services for the Munich metropolitan rental service. In addition, we are driving forward the use region include the operation of distribution networks for of electro­mobility. Our offerings are continuously being electricity, gas, district heating and cooling, and water. expanded. All in all, we operate energy and water grids with a total length of more than 22,000 kilometres. In this task, our Telecommunications goal is to ensure above-average supply quality and reli­ We offer a broad range of Internet, voice, and bandwidth ability despite increasing cost pressure. services for residential and business customers on both a fixed-network and a mobile-communications basis Sales to large sections of Bavaria, the greater Ulm area, and We are the clear market leader in the Munich energy the Main-Kinzig district in Hesse. Our product portfolio market, which is characterised by keen competition. To is continuously developed further in order to maintain maintain our position, we bank on a positive image, a our competitiveness. The services are performed jointly high level of customer orientation, sustainability, reliabil- by M-net Telekommunikations GmbH (M-net), SWM ity, and relationships based on a spirt of partnership. In ­Services GmbH (SWM Services), and Stadtwerke these efforts, our tried-and-proven high service quality is München GmbH. a prerequisite for our customers’ loyalty. Public Pools Trade Before Covid-19 and the temporary pool closures that Trade is a key driver of our management and business became necessary because of the pandemic, slightly model for the energy sector. It helps us optimise our more than 3.7 million people visited our M-Bäder energy business and hedge against risks. In Trade, we public pools every year. With 18 modern indoor and are engaged in market-driven energy procurement and outdoor pools and ten sauna facilities, we offer some marketing as well as managing our aggregated market of the most modern pool landscapes in Germany. We price risks, especially for electricity, natural gas, coal, also ­operate two fitness centres and one ice-skating and energy-specific certificates. Trade also plans the stadium. 6 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Stadtwerke München — a portrait

Committed to citizens’ well-being For the 2021—2025 period, we are currently planning to make investments As a company wholly owned by the city of Munich, we of approximately EUR 5.5 billion, to be are ultimately owned by Munich’s citizens. We are com- allocated as follows: mitted to their long-term and sustainable well-being — we strive to achieve economic success, but are not solely }}approximately EUR 2,000 million to local public seeking profit maximisation. We want to preserve and transport improve the quality of life for the people in Munich, }}approximately EUR 800 million to the expansion and maintain the city’s attractiveness as a business location, modernisation of the network and grid infrastructure and provide support to the metropolitan region. In these (electricity, gas, district heating, and water) efforts, we assume responsibility for both the environ- }}approximately EUR 800 million to the renewable ment and society, and cooperative and partnership-­ energies expansion campaign oriented action is a key element of our approach. In addi- }}approximately EUR 350 million to the expansion and tion, we see ourselves as a socially responsible company. maintenance of conventional generation plants This is reflected in many areas: not only are we one of the }}approximately EUR 250 million to geothermal largest workplace training organisations in the region, ­energy for our district heating vision we also sponsor education, sports, cultural events, and }}approximately EUR 250 million to the company-flat social projects, as well as build company-flats, develop expansion campaign digital service offerings, and champion a lively and }}approximately EUR 50 million to the expansion of ­diverse urban community. fibre optics for a future-proof Internet }}approximately EUR 50 million to maintenance and We create added value not only for our customers, modernisation of public pools but also for society: we offer attractive jobs to more than 9,000 employees, most of whom live in the Munich region. The salaries they earn total more than EUR 600 million per In education, we likewise contribute to making Munich annum. In addition, we usually contribute ­approximately an attractive location: our LHM Services subsidiary pro- EUR 250 million to the budgets of local municipalities in vides important information and communication tech- the form of profit distribution, concession fees, and trade nology services for Munich’s educational institutions tax. In the Covid-19-dominated year 2020, we did not and is investing in the expansion and digital transforma- reach this level. tion of the IT infrastructures of schools, day care centres, and sports facilities. Among other things, slightly more than EUR 50 million will be invested in better digital equipment for Munich’s schools in the period until 2024. In 2021, at least two thirds of Munich’s teachers shall already receive a total of 10,000 notebooks or converti- bles. The second key pillar of this strategy is WLAN (WiFi) installation in 50 schools and the acquisition of 2,000 LTE routers, which will support near-team WLAN service also independently of any networks. This greater locational flexibility will facilitate the realisation of vari- ous mobile working and virtual teaching scenarios. In the year under review, LHM Services moreover responded to the ­Covid-19 pandemic by developing various virtual learning solutions.

We operate muenchen.de, the official online portal for the city of Munich. With its broad coverage and many contacts, muenchen.de is one of the most frequently visited service websites in Munich. The muenchen.de central address is the gateway to information and ­services revolving around Munich’s urban life. In 2020, LHM Services ensures the digitalisation of Munich’s educational landscape. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 7 Stadtwerke München — a portrait

Low-income households receive free energy counselling from us. Our customer service employees analyse the consumption behaviour of residential customers and give them advice regarding tariffs and all personal con- cerns. Due to the Covid-19-induced contact restrictions, our energy counsellors are not conducting their usual in-person visits to customers’ homes, but are providing their service by phone.

We support Munich’s cultural landscape through initia- tives such as a cooperation with the operators of the “Muffatwerk” art and concert venue, the sponsoring of the “Tollwood” festival, and support for Tierpark Hellabrunn, the first geo-zoo.

In addition, we support recreational and professional sports in Munich. Among other things, we are the name- sake of the track-and-field club “Leichtathletikgemein- schaft Stadtwerke München” and the swimming club “Schwimmstartgemeinschaft Stadtwerke München”. Furthermore, we are partners in various sports offerings muenchen.de proved its worth as an important source of such as “Münchner Freizeitsport” for recreational sports information providing daily updates on everything relat- and the Munich Marathon. ed to the Covid-19 ­situation in Munich. In addition, we have created the muenchenhaeltzamm.de (Munich stands together) website that provides people in Munich with information on restaurants, shops, businesses, and service providers that are there for them even during Covid-19 times and ways to support them.

Our commitment to the community

Our mission to provide essential public services also in- cludes our commitment to a liveable and future-proof urban community.

Since 2007, our SWM Education Foundation has supported SWM EDUCATION FOUNDATION GETS projects aimed at improving the educational opportuni- FABLAB ROLLING ties of disadvantaged children and adolescents. Annually since 2013, it has awarded a sponsorship prize for out- Since late 2019, the mobile FabLab has given children standing commitment to education. Every year, SWM and adolescents in the Miesbach district playful access Education Foundation invests a total of EUR 500,000 in to state-of-the-art high-tech devices such as 3D printers the support of socially disadvantaged children and ado- and laser cutters. With a van that has been converted lescents. And with our “Stadtwerkeprojekt” initiative, we into a research and experimental laboratory, the FabLab help socially or individually disadvantaged young adults Oberland e.V. association has visited schools, educational to get their careers off the ground. facilities, and events. When on-site visits became impos- sible until further notice in March 2020, online courses We support schools with curriculum-related materials were developed on short notice. With grants totalling revolving around the topics of energy, water, and com- EUR 140,000, SWM Education Foundation has played a munication. In addition, we offer them free career orien- key role in the realisation of this project. tation, guided tours, and events. Sustainability ­management SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 9 Sustainability management­

As a company owned by the city of Munich, our activities are guided by the interests of the city and its inhabitants. Our organisation reflects the diversity of this city — and our sustainability management reflects the standards of our stakeholders, products, and services. Our energy ­services thus cover essential needs and are based on sus- tainable and low-emission operations. Drinking water supply, product quality, and nature conservation have always gone hand in hand in the regions where we source the water. In our mobility services, we strive for zero emis- sions and are committed to enhancing accessibility for all passenger groups and harmonious integration into the urban landscape. And our public pools are intended to be gathering places with near-natural greenspaces.

The best way to achieve our diverse goals is a decentral- ised sustainability management. At the same time, we ensure central relevance by assigning the responsibility for sustainability to our Management Board. Our Direc- tors delegate this task to specialists where this makes sense, e. g. in energy or environmental management. Group executives develop our strategic orientation in terms of energy consumption, emissions, and other envi- ronmental issues; the business segments then implement these strategies, see the chapter “Operational environmental This resulted in slightly under 200 topics that we pooled protection”, page 29. Our guideposts in these efforts are into 28 clusters. Next, our specialist departments assessed external and internal quality standards that also cover these clusters on the basis of two dimensions: impact on the areas of occupational health and safety. the environment and society, and significance for stake- holder decisions. Lastly, the SWM Management Board assessed the topics in terms of their business relevance. Materiality analysis Based on this materiality analysis, we derived 16 material SWM’s sustainability reporting is based on a materiality topics, which we have grouped into five action areas: analysis, which we carried out in three major steps in 2020. First, we developed the list of topics based on an }}Society analysis of pertinent expert information. The sources we }}Products and services used included national and international frameworks }}Environment such as the “National Action Plan for Business and ­Human }}Employees Rights” (NAP) and the United Nations’ “Sustainable }}Corporate governance ­Development Goals” (SDGs) as well as the recognised Global Reporting Initiative Standards (GRI Standards), The identified material topics are the focus of this the German Sustainability Code (DNK), and ISO 26000. ­Sustainability Report. 10 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Sustainability management­

Materiality matrix

very relevant E.1 B.1

E.5 A.1 C.2 C.1 E.4 E.2 B.2 E.3 C.4

D.1

C.3 D.4

Stakeholder relevance D.3

D.2 relevant medium Impact on the environment and society high

SOCIETY EMPLOYEES A.1 Social responsibility D.1 Working conditions D.2 Training and education PRODUCTS AND SERVICES D.3 Occupational health and safety B.1 Provision of essential services D.4 Diversity and equal opportunities B.2 Product responsibility CORPORATE GOVERNANCE ENVIRONMENT E.1 Value creation C.1 Energy E.2 Compliance C.2 Emissions E.3 Data protection C.3 Raw materials and supplies E.4 Competition C.4 Water E.5 Political engagement

Stakeholder management Our customers are crucial stakeholders. In the chapter “Essential services and product responsibility”, we de- Numerous stakeholder groups shape our actions, and scribe how we fulfil the expectations they place on us, our operations impact many people. These interactions see the chapter “Essential services and product responsibility”, are relevant for us; after all, we wish to do the best possi- page 14 et seq. The city of Munich, in its capacity of share- ble justice to all our stakeholders. To this end, our efforts holder, and the citizens of Munich are also important are based on target-group-aligned, transparent, and stakeholders. We make a broad range of contributions to regular exchanges. urban life — not just as a relevant employer, but also in the form of sponsorships and cooperations, see the ­chapter “SWM — a portrait”, page 6 et seq. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 11 Sustainability management­

Our employees are also a top priority. They are, of course, As a utility offering essential public services, we operate essential contributors to the provision of SWM’s services; in a highly regulated environment and are subject to in addition, they themselves are customers for our offer- particularly strict accountability. In this context, we are ings and usually live in the Munich region, which means also in dialogue with non-governmental organisations they are part of the (urban) society we address. Our (NGOs), which closely work with us in our activities, e. g. ­business success strongly depends on our ability to find in the areas of nature conservation and climate protec- highly qualified, motivated, and loyal people — they are tion. As legislation can have a significant impact on our the ones that make SWM the company we are today. business activities, we also engage in political debates at various levels, see the chapter “Corporate governance”, page 55.

Stakeholders Topics Dialogue platforms

Lenders and – Promotional loans and sustainable finance – Personal conversations ­development banks – Risk management – Conferences – Compliance – Targets and target achievement – Product innovations

Customers – Services (energy, mobility, telecommunications, – Personal conversations (Customer Centre, visits at drinking water, public pools) customer locations) – Product quality and safety – Direct dialogue by phone, by e-mail, and through – Environmental protection social media – Innovation and technologies – Customer magazine and newsletter – Fairs and events – Customer surveys

Suppliers – Product quality and safety – Supplier portal – Environmental protection – Personal conversations (by phone and on site) – Compliance – Audits

Local stakeholders – Infrastructure quality – Personal conversations – Economic strength – Information events – Environmental protection – On-site visits and facility tours – Location development – Construction site communications (information – SWM, the employer sheets, construction site map, press) – Social engagement – Innovation and technologies

Media – Innovation and technologies – Press releases – Location development – Facility tours – Finances – Information events – SWM, the employer – Interviews – Social engagement – Services (energy, mobility, telecommunications, drinking water, public pools)

Employees – Health and safety – Internal media (intranet, employee magazine, etc.) – Career and professional development – Employee surveys – Diversity and equal opportunities – Idea management – Co-determination – Internal events – Work/life balance – On-site visits – Corporate development and corporate strategy – Staff meetings – Company and task-relevant information – Improvement and change processes

Networks and – Energy and transport policy targets – Attendance of conferences and meetings associations­ – Environmental protection – Political framework conditions and regulations – Technology development and promotion

NGOs – Energy and transport policy targets – Personal conversations – Environmental protection – Attendance of conferences and meetings

Policy-makers and – Energy and transport policy targets – Personal conversations authorities – Environmental protection – On-site visits and facility tours – Political framework conditions and regulations – Information events – Location development – City council newsletter – Technology development and promotion 12 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Sustainability management­

Sustainable Development: SDG 6: Clean Water and Sanitation SWM supports the United Nations’ As drinking water supplier of the city of Munich, we provide high-quality water ­Sustainable Development Goals to a large number of people every day. With this, we contribute to ensuring the As a future-oriented company that feels committed to availability of water and sanitation for all, see the chapter the public wellbeing, we want to make relevant contribu- “Essential services and product responsibility”, page 19. In addi- tions to sustainable development. For us, this also means tion, we conserve this vital resource by fostering sustain- playing an active role in achieving the Sustainable Devel- able cultivation of the land around our extraction sites, opment Goals (SDGs). see the chapter “Operational environmental protection”, page 36.

To analyse our business activities from the perspective SDG 7: Affordable and Clean Energy of the SDGs, we held a workshop with sustainability According to Ban Ki-moon (former UN experts from different business segments. The various Secretary-General), climate change is goals and targets were discussed in this workshop. the greatest challenge facing humanity. ­Subsequently, we assessed our positive, and also our With its renewable energies expansion negative impact on the achievement of these goals. The campaign and its district heating vision, SWM makes evaluation of the workshop showed that we have a important contributions to mastering this challenge. We ­particular impact on the following eight SDGs: ensure that the people in Munich have reliable access to affordable and sustainable energy, heating, and cooling, SDG 4: Quality Education of which a steadily increasing share is generated from As one of Munich's largest employers, renewable sources, see the chapter “Operational environmen- we are committed to contributing to tal protection”, page 31 et seq. inclusive and equitable quality educa- tion. This is why we train young people SDG 9: Industry, Innovation and and help them start their professional careers, see the Infrastructure chapter “Employees”, page 40 et seq. With SWM Education Using five megatrends as our guideposts, Foundation, we help improve the opportunities of disad- we are developing new service areas to vantaged children and adolescents. In addition, we safeguard the high quality of life in the ­provide important information and communication region and turn Munich into a sustainably smart city in technology services for Munich’s educational institutions, every respect. The changes in the energy and transport see the chapter “SWM — a portrait”, page 6. sectors, in particular, as well as digitalisation and inter- connected networks, and the desire for sustainable and SDG 5: Gender Equality local production processes expressed by many customers Active support of women’s equality is provide us numerous opportunities for new business important to us. We have set ourselves models. We have established a dedicated unit for this the goal of increasing the share of wom- that exclusively focuses on innovations, see the chapter en in both our workforce and leadership “Essential services and product responsibility”, page 25 et seq. positions to 25 % by 2025. To achieve this goal, we initiat- ed quite a number of measures in the last few years, such SDG 11: Sustainable Cities and as cross-mentoring for female managers or the “Female Communities Empowerment” seminar series, as well as offers to enable Our entrepreneurial vision is to turn our employees to achieve the best possible balance Munich into a trail blazer among sustain- ­between their professional and family lives. We have able cities. All citizens are to benefit received external feedback on our commitment, e. g. from this — irrespective of their age, gender, ethnic within the framework of the Women Career Index background, or other characteristics. In addition to a (Frauen-­Karriere-Index) under the auspices of the sustainable supply of essential services — electricity, ­German Federal Ministry for Family Affairs, Senior heating, cooling, and water — we see it as our tasks to ­Citizens, ­Women, and Youth, see the chapter “Employees”, ensure affordable high-quality mobility for all people in page 48. Munich, see the chapter “Essential services and product SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 13 Sustainability management­

responsibility”, page 20 et seq. Our public pools as places SDG 13: Climate Action where people can gather and do something for their SWM is addressing the challenges posed health, see the chapter “Essential services and product responsi- by climate change and the energy transi- bility”, page 24 and our social engagement, see the chapter tion. Within the framework of our re- “SWM — a portrait”, page 7 likewise contribute to this goal. newable energies expansion campaign, we have been building a powerful generation portfolio SDG 12: Responsible Consumption for green electricity since 2008, see the chapter “Operation- and Production al environmental protection”, page 31 et seq. With the help of

With attractive green electricity and geothermal energy, we provide CO2-neutral heating and green natural gas offers, see the chapter cooling, see the chapter “Operational environmental protection”, “Essential services and product responsibility”, page 33. As the last major pillar of our local public trans- page 16 et seq., diverse and intermodal mobility services, port system after underground trains and trams, we are see the chapter “Essential services and product responsibility”, now electrifying our bus fleet, too, see the chapter “Opera- page 20 et seq., and our photovoltaic and charging solu- tional environmental protection”, page 34 et seq.; in addition, we tions, see the chapter “Operational environmental protection”, are continuously expanding the charging infrastructure page 34 et seq., we support the people in Munich in ­leading for electric vehicles. By 2040, we moreover want to a sustainable lifestyle. We also set high standards in our achieve climate-neutral operation of our public pool daily business with respect to SDG 12 — cases in point landscape. At present, our operation of a coal-fired are our virtually loss-free transport of water, environ- ­power plant still has a negative impact on SDG 13 — we mentally benign strategies within the framework of our intend to take this plant off the grid as soon as possible, numerous ­construction projects, or the use of renewable see the chapter “Operational environmental protection”, page 34. energy sources­ for our own business premises, see the chapter “Operational environmental protection”, pages 33 and 35 et seq.

THE SUSTAINABLE DEVELOPMENT GOALS (SDGS)

The Sustainable Development Goals were adopted in 2015 by the General Assembly of the United Nations as part of its Agenda 2030. They comprise a total of 17 goals and 169 specific targets. The ­objective linking all goals is to achieve a better and more sustainable future for all. This requires the participation of nations, regions, cities, as well as enterprises. Essential services and product responsibility SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 15 Essential services and product responsibility

From energy and drinking water supply to eco-friendly city mobility, fast Internet, and recreational offerings such as Munich’s public pools: our services are an essen- tial basis for everyday life. They contribute to both the economic strength and quality of life in Munich and its metropolitan region. As a utility providing essential ­public services, it is our unique responsibility to offer all citizens affordable services for basic needs and ensure reliable availability of our services. In these efforts, we A crisis is defined as a situation in which significant place great emphasis on transparency and the provision ­corporate assets and core processes are at risk and the of product quality information to our customers. incident and emergency management procedures estab- lished in our day-to-day business do not suffice to ade- quately address these hazards. At SWM, crisis manage- Energy and water supply ment is decentralised across the divisions and business segments in order to achieve clearly targeted alignment The essential public services we provide to the city of with the different areas of activities and challenges. Munich include the energy and drinking water supply for When a cross-divisional event occurs, several crisis teams the city and some parts of the metropolitan region. As may meet simultaneously, with high-level topics such as such, this means that we provide the “critical services” communications or human resources being pooled cen- necessary for society to function. Accordingly, we are trally if required. The outbreak of the Covid-19 pandemic subject to special statutory requirements, including those created such a situation. stipulated in the German Energy Industry Act (EnWG) as the key legal basis for secure and macroeconomically In 2019, we had already taken the forward-looking step efficient energy supply and the German Ordinance for of establishing a Group-wide interdisciplinary “Opera- Defining Critical Infrastructures in Accordance with the tional Pandemic Planning” working group, which has BSI Act (BSI-KritisV) with its focus on the IT security of been exploring the potential hazards faced by SWM operators of critical infrastructures. Group due to the global spread of the SARS-CoV-2 ­pa­thogen since early 2020. Regular discussions by the The responsibility for the supply reliability of gas, water, ­Management Board and the enlargement of the working electricity, district heating, and district cooling grids group to create a central task force for the pandemic is assigned to the management team of the SWM (“Pandemic Task Force”) allowed us to identify hazards ­Infrastruktur GmbH & Co. KG grid operator. The technical and define measures even before the outbreak of the manager responsible for water extraction reports to pandemic was officially announced in Germany. SWM’s Director, Technology. In accordance with the legally binding regulations, SARS- Our goal is to safeguard essential services in all divisions CoV-2 risk assessments were prepared in the individual at all times, i.e. with as few outage occurances as possible. divisions, business segments, and specialist departments. This is why we protect our critical infrastructures against As a result of these assessments, we defined and imple- any physical and digital attacks, e. g. through strict access mented stringent hygiene concepts and precautionary management, video surveillance, redundant design of measures for employees, geared to the requirements of essential building services, and isolated networks. For the respective activities. Among other things, employees institutions requiring particular protection, e. g. nursing of power stations and water extraction facilities were homes and hospitals, we have made and agreed suitable distributed in teams across various sites or deployed in arrangements and plans. In addition, we have drawn up separate shifts. We exhausted every possibility to make high-level policies for the prevention of and response to work times and places more flexible wherever we could. crisis situations, including a Group policy on general Discussions, workshops, and project meetings were shift- principles, and rules of procedures for the Technology ed to the digital space, and almost all business trips were division on additional systematic structures as well as replaced by digital meetings or cancelled. This allowed emergency and crisis manuals. us to ensure secure energy and water supply at all times. 16 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Essential services and product responsibility

Energy for the future Similarly, we clearly and from the outset spoke out against Energy is one of our core business segments. From our a potential extension of the plant’s operating life in the facilities, we supply electricity, natural gas, district heat- public discussion. ing, and district cooling to our customers. We focus on providing a secure, affordable, consumer-friendly, In our gas supply, it is our goal to satisfy all of Munich’s resource-­saving, and efficient energy supply. Regular demand from our own sources in order to remain inde- independent surveys confirm our excellent reputation pendent of large gas corporations. We maintain a part- and our customers’ high level of satisfaction. Quality nership with the UK energy company Centrica for this hallmarks such as the “Top Lokalversorger 2021” desig- purpose. Our Spirit Energy joint venture produces natural nation assigned to local electricity and gas utility compa- gas and oil in the North Sea. This shareholding allows us nies by www.energieverbraucherportal.de, the “German to directly influence the origin and type of natural gas Service Award 2021“ by the ntv news service and the production: in Norway, the UK, and the Netherlands, the German Institute for Service Quality (DISQ), or the “Ger- production of natural gas is subject to particularly strin-

many’s Customer Champions 2021“ award collectively gent environmental and safety standards and CO2 emis- bestowed by F.A.Z. Institute, the German Association for sions are low compared to other countries. The energy Quality (DGQ), and 2HMforum bear testimony to our supply of Norwegian gas production platforms, for in- good value for money, our commitment to the environ- stance, is already largely covered by electricity generated ment, and our service quality. Furthermore, the awards in hydroelectric power plants. We intend to gradually we received in 2020 included “fairest electricity supplier” reduce our share in natural gas production as gas con- and “fairest gas provider”, for which FOCUS MONEY sumption in Munich decreases. Nevertheless, we will still magazine selected SWM for the ninth time in a row. need gas, especially for heating – 50 % of all Munich ­citizens use gas-fired heating systems –, until we have

completed the conversion to CO2-free heat supply, see also the chapter “Operational environmental protection”, page 33.

Alongside geothermal energy, CO2-neutral, i. e. decarbon- ised hydrogen can become an important building block for a climate-friendly future. We are already examining various production methods and are analysing how our gas infrastructure can be used for hydrogen — even though sufficient quantities of hydrogen will, in all likeli- hood, not be available in Munich until the 2030s at the earliest. As long as there are no adequate solutions to In Munich and the metropolitan region, we generate hydrogen storage or technology, the use of natural gas as renewable energy — electricity, heating, and cooling — a “bridge technology” will ensure a smooth transition to in approximately 70 energy-efficient combined heat and renewable energies. We use natural gas in the environ- power (CHP) plants, wind, hydroelectric, solar, biomass, mentally benign combined heat and power process with

and geothermal plants. In addition, we operate wind reduced CO2 emissions. parks and solar energy systems throughout Germany and Europe at sites where the wind blows more strongly and the sun shines more often than in our region. The “Isar 2” nuclear power station near the city of Landshut, in which SWM holds a stake of 25 %, will go off the grid by 31 December 2022 at the latest as stipulated by the amended German Nuclear Power Act. The project aimed at decommissioning and phasing-out this nuclear power station has already been underway for several years; the application for the initial decommissioning and phasing-­ out permit was filed in mid-2019. Dismantling will start once we receive the appropriate approval (presumably in 2023). We expect the dismantling work to be fully com- pleted by 2039. In the spirit of a consistent energy transi- tion, we already tried to sell our stake in the late 1990s, Decarbonised gases such as hydrogen shall replace but these efforts unfortunately proved unsuccessful. natural gas over time. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 17 Essential services and product responsibility

Energy generation and renewable energy ratio and M-Ökogas gas, we enable all Munich citizens to opt (in GWh and %, respectively)1) in favour of an environmentally friendly green energy sup-

2018 2019 2020 ply. Customers buying M-Ökostrom Regional are supplied with green electricity generated in Munich or within a Gas volume produced­ 1) 14,600.0 14,600.0 16,300.0 radius not exceeding 50 kilometres around the city. From Electricity volume 6,550.2 7,262.9 7,633.3 this tariff, for every kilowatt-hour sold we invest one cent ­generated in the construction of new photovoltaic and hydroelectric power plants in the region. On a nation-wide level, ap- RE ratio2), 3) 55 % 58 % 60 % proximately one fourth of our residential and business District cooling 49.3 52.3 54.2 customers have already opted in favour of green electricity volume generated products. M-Fernwärme district heating is sustainability-­ RE ratio2) 77 % 78 % 77 % oriented thanks to its use of efficient combined heat and District heating 4,928.0 5,023.5 4,888.2 power (CHP) plants. In addition, our natural gas filling volume generated stations supply M-Erdgas — a fuel based entirely on re- RE ratio2) 13 % 13 % 14 % generative biomethane. The latter is fully derived from domestic organic waste, which means that no food crops Energy generation (total)4) 26,127.4 26,938.7 28,875.8 are used in production. 1) The differences from 2020 onwards are due to the inclusion of natural gas liquids in the calculation. The specific gas composition also has an impact on the variation. Generation of our green electricity products from renew- 2) RE = renewable energies 3) Corrected electricity volumes for 2018 able energies is guaranteed through certificates of origin; 4) The differences from 2020 onwards are due to the inclusion of natural gas liquids in in addition, they have been awarded the TÜV SÜD eco the calculation. The specific gas composition also has an impact on the variation. certificate. What is more, we inform our customers about the electricity labelling that is required by law and list all Energy supply to final/end consumers (in GWh) relevant sustainability aspects on our website.

2018 2019 2020 3. Cost efficiency Gas supply 12,572.1 13,698.4 19,665.1 In a comparison to other large cities, we offer excellent Electricity supply 6,766.8 6,644.3 6,817.4 value for money regarding the total costs for electricity, District heating natural gas, and drinking water. To avoid dependence supply 4,144.0 4,369.0 4,157.3 on individual sources of raw materials and produce as District cooling supply 49.3 52.3 54.2 cost-efficiently and environmentally friendly as possible, we use a wide array of technologies for electricity and Total 23,532.2 24,764.0 30,694.0 heat generation in our own plants. In addition, we have secured our “key factors”: we have our own natural gas When it comes to the topic of energy, there are fields, agricultural fields, and plots of land for biogenic three aspects of particular importance to us: materials, as well as mining rights for geothermal energy, and storage facilities. This makes us a little less depend- 1. Supply reliability ent on the international energy markets. Munich’s electricity supply is extremely reliable; we have one of the lowest outage rates in Germany: in 2020, the During the Covid-19 pandemic, we have intensified supply was interrupted for only 5.67 minutes per con- our efforts to ensure fair pricing even further. Whereas sumer (previous year: 6.54 minutes) in the grid operated many energy utilities raised their prices due to higher by SWM Infrastruktur GmbH & Co. KG, while the national pro­curement costs for energy and higher state-induced average was 15.14 minutes per consumer in 20191). Our levies, we kept our prices for residential customers stable, customers benefit from our excellent infrastructure, our thereby avoiding additional burdens in a situation in M-Sicherheitsservice security service, and our tried-and- which many households were already facing financial proven processes and communication structures. stress. It goes without saying that we also passed the full reduction in Germany’s value-added tax (VAT) on to our 2. Environmental suitability customers. We are increasingly relying on regenerative energy sources and, as a basic principle, take care to ensure economical, Detailed information on the composition of the electricity sustainable, efficient, and environmentally friendly use of price, state levies and taxes, price-relevant regulations, energy and resources. Our energy offerings are becoming and the currently applicable prices is available for inspec- more and more sustainable: with M-Ökostrom electricity tion at all times on our website, where we also explain the structure of our bills and the calculation of the ad- 1) At the time of writing, the 2020 national average outage rate for Germany was not yet available. vance instalments. 18 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Essential services and product responsibility

Germany’s largest geothermal plant will commence operations at the Munich “Süd” energy location in 2021.

In product development, e. g. in the area of decentralised energy solutions, we focus not only on durability and high performance, but also on participation. This means Two key strategic goals drive our actions in the that we want to give citizens access to ways in which Energy­ segment: they themselves can actively support the energy transi- tion — with solutions that are attractive from both an }}Our renewable energies expansion campaign: economic and environmental perspective. From 2025 onwards, we intend to generate sufficient green electricity in our own plants to cover all of With M-Solar, SWM offers photovoltaic solutions cover- ­Munich’s consumption. We expect volume demand to ing all stages from design to assembly to grid connection grow, not least due to electromobility, and will expand and service. An electricity storage device and a wallbox our renewable energies plants accordingly. In 2020, for charging electric cars with self-generated solar power we generated approximately 4.5 billion kilowatt-hours can be added to the package. Apart from solutions for of green electricity in our own plants. private homeowners, we also offer solutions for commer- cial and public buildings. As a basic principle, we attach }}Our district heating vision: By 2040 at the latest, we great importance to the quality and environmentally

intend to achieve CO2-neutral coverage of Munich’s benign manufacture of our products: our Trina Solar district heating requirements. In these efforts, we will module has received a twofold environmental certifica- mainly rely on deep geothermal energy. tion, which rated the lifecycle of the entire product as very sustainable. This approach has turned out to be future-proof: we sold nearly 400 photovoltaic plants We also see high growth potential for district cooling. between 2016 and 2020. These plants are generating Here, we use cold groundwater and Munich’s under- 4,250,000 kilowatt-hours of solar energy per annum ground streams in central cooling facilities. Detailed in Munich and the surrounding region (previous year: ­ex­planations about our approach to generating climate-­ 2,500,000 kilowatt-hours). This corresponds to the

friendly and CO2-neutral electricity, heating, and cooling ­consumption of 1,700 households and is leading to CO2 can be found in the chapter “Operational environmental reductions of 1,704 tonnes per annum — and the trend is protection”, page 33 of this report. pointing towards even more reductions in the future. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 19 Essential services and product responsibility

that soil and water are protected in the cultivation of the areas in the vicinity of our extraction plants. We cooperate as partners with the communities and inhabitants of the three water catchment areas. In addition, we invest in our extraction plants, overhead reservoirs, and pipework system.

Extreme weather events such as torrential rainfall or flooding may impact water quality in the three catchment areas. Even in such difficult situations, two plants using ultraviolet light guarantee impeccable drinking water. UV light has a much broader spectrum of effectiveness than chlorine; in addition, the use of this method avoids the formation of organochlorinated by-products. This purely physical process ensures secure and reliable drinking water disinfection. No foreign substances are dispensed into the water, and the taste remains unchanged, too. Via our Hanse Windkraft subsidiary, we are also working towards a sustainable energy transition. Through the Water extraction (in million cubic metres) acquisition of legacy wind parks and their continued oper- 2018 2019 2020 ation after expiry of subsidisation under the German Pipework system/ ­Renewable Energy Act (EEG), we ensure that renewable drinking water inflow 113.3 112.2 111.3 energies capacities remain in the market despite the pre- Pipework system/ vailing difficult environment. In 2020, Hanse Windkraft’s drinking water 2) portfolio generated 40,439 megawatt-hours of green outflow 100.0 100.2 – Thereof supply electricity, resulting in CO2 reductions of approximately to customers 97.9 98.0 – 2) 16,000 tonnes compared to Germany’s electricity mix. We intend to continue on this path by fostering consistent Water loss (3-year average)1), 3) 0.38 0.38 – 2) growth and the development of innovative approaches 1) Corrected figure for 2018 for long-term continued operation of wind energy 2) At the time of writing, the 2020 figures were not yet available because the volume turbines. supplied to customers is recorded on a rolling monthly basis until the end of 2021. 3) Loss calculation based on 3-year averages. This indicator has been calculated based on the guidelines issued by the German Technical and Scientific Association for Gas Water — the most important resource and Water (DVGW). The reported water losses are based on the requirements of We regard access to clean drinking water as a fundamen- the applicable standard, DVGW W 392. This loss score indicates the technical water losses between the inflow into the pipe system and building water meters. tal right. At present, we are covering the water needs of more than 1.5 million people. Three drinking water catchment areas supply the city of Munich: the Mangfall valley (75 %), the Loisach valley (20 %), and, to cover de- The Forstenrieder Park overhead reservoir collects mand peaks, an area of moraine deposits east of Munich drinking water from the catchment areas. known as the “Schotterebene” (5 %). Together, these areas supply one of Europe’s best drinking waters. Each individual litre comes to our customers fresh from the source; our supply path does not include the addition of water from treatment plants. Our M-Wasser thus satisfies top quality standards and boasts analytical results that are significantly below the limits permissible under the German Drinking Water Ordinance (TrinkwV) of 2001. In addition, M-Wasser is a low-cost and environmentally friendly refreshment.

The quality of M-Wasser is regularly tested all along the supply chain. We analyse more than 1,200 samples a month. To protect Munich’s future drinking water supply and sustainably safeguard its high quality, we encourage organic farming in the catchment areas and make sure 20 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Essential services and product responsibility

MVG has set itself the following goals:

}} By 2030, we will convert 75 % of SWM’s vehicle fleet (passenger cars, vans, and light commercial vehicles up to 3.5 tonnes) to electromobility. }}By 2035, we intend to electrify our entire operating bus fleet. }}Continually, we will expand our service offerings through higher service frequencies and new lines and connections to keep pace with the growth of Munich and the metropolitan region and proactively support the mobility transformation. }}Continually, we will improve barrier-free access in our vehicles and stops/stations.

life, plunging at times to lows undershooting the previ- ous year’s level by approximately 80 %. Nevertheless, MVG operated almost 100 % of its schedule and capacity at all times. Only individual extra vehicles used for service frequency enhancement were cancelled, e. g. for school transport, evening, and night operation. With these efforts, we have made an important contribution to Mobile in Munich essential public services, infection protection, and the continued functioning of public life. People’s mobility behaviour is subject to continuous dynamic change. More and more frequently, various MVG conducted its annual customer satisfaction survey in modes of transport are combined — this trend is called 2020, too, to find out how it scored during the pandemic. multimodal mobility. Our wholly owned subsidiary, Passengers continued to attach great importance to high Münchner Verkehrsgesellschaft (MVG), is responsible for levels of reliability and service frequency of the modes of mobility in Munich. It is Germany’s second-largest transport — they wanted to reach their destinations quick- ­municipal transport company and offers its passengers ly and not have to travel on crowded public transport state-of-the art, barrier-free, and environmentally vehicles. Eco-friendliness of the MVG modes of transport friendly vehicles, highly qualified employees, and exten- was (very) important to 87 % of MVG’s customers in 2020. sive information and services. In addition to the “tradi- tional” local public transport system with underground, Electric buses are one of the elements ranking high on bus, and tram service, its offerings also include individu- our list of priorities, the goal being to make fleet operation al mobility services such as the MVG Rad bike-rental service, digital services such as the “MVG Fahrinfo München“ app, as well as service on demand. We link our services at aptly named “mobility stations”, facilitat- ing smooth transition from public transport to individu- ally usable offers. The goal: individual mobility without a car of your own — ­reliable solutions that are available at any time and everywhere and fulfil our customers’ indi- vidual mobility needs.

Due to the Covid-19 pandemic, passenger numbers de- creased dramatically in 2020 compared to the previous years. In the course of the year, the numbers fluctuated in line with the severity of restrictions imposed on public SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 21 Essential services and product responsibility

independent of fossil fuels and, hence, even more eco-­ review, which will be delivered in the years 2022 to 2024. friendly. The 100 and 144 bus lines are already operated For Munich’s­ tram system, 73 new Avenio trams will be electrically today. In addition, we are modernising and delivered from late 2021 onwards. They will gradually expanding our underground train and tram fleets. In 2020, expand service capacities, facilitating both increases in the first eight of a total of 24 new underground trains service frequency within the existing network and cover- started their regular service. The remaining 16 are sched- age of planned new routes. uled to commence regular service no later than the Electric beginning of 2022. Some of the new trains will replace One of the new routes is the western tangential tram older vehicles, while the rest will expand our fleet. In addi- route, for which we submitted a zoning application in tion, we ordered a further 22 trains in the year under April 2020. The approximately 8.3-kilometre-long tram route, which will be newly constructed and connect Romanplatz square with the Aidenbachstrasse under- ground stop, is a key component of the municipal local public transport expansion campaign. We plan to start construction in 2023, and, if possible, the finished route will go into service in December 2026 when the new timetable comes into effect. Concurrently, we are ­planning two further tram tangential routes (the ­northern tangential and the Munich North tram routes) and the construction of a new “U9” underground route running from the Sendling neighbourhood to the Schwabing neighbourhood via Munich Main Station. 22 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Essential services and product responsibility

In the year under review, we reached a major milestone in the conversion of the Sendlinger Tor underground hub into a barrier-free station with expanded capacities for the future: we were able to open the first extension structure underneath Sendlinger Tor square in late April. An additional connection between the U1/U2 platforms and the mezzanine floor has thus been created. This, in turn, is the prerequisite for subsequent conversion and extension of the central area of the existing stop. The modernisation of the Sendlinger Tor underground hub is scheduled to be fully completed by 2023.

Numerous digitalisation projects are also contributing to making Munich’s local public transport fit for the chal- lenges of future decades. Among other things, we had set ourselves the goal of creating an intermodal and multimodal mobility platform that combines traditional and new mobility options. The new MVGO app has been available in the usual app stores since One of MVG’s largest projects: the modernisation of the February 2021. MVGO offers central Sendlinger Tor underground hub. access to a wide variety of mobility ser- vices. Vehicle returns and payment trans- offers not only real-time data on the local public trans- actions are also handled directly from port system, but also a selection of MVV tickets and the app. For its initial launch, MVGO direct booking of the MVG Rad bike-rental service, as well as e-scooters and e-mopeds from Voi, TIER, and Emmy. Further offers from additional mobility partners will grad- AFFORDABLE LOCAL PUBLIC TRANSPORT FOR ALL ually follow. Meanwhile, we have successfully completed test operations for another platform, which will unite Simpler and more clearly structured, with more afford­able nation-­wide local transport, long-distance service, and prices for most households and a broader travel range for third parties‘ sharing offers in Germany: Mobility inside. many tickets: in late 2019, the MVV fare reform defined MVG is one of the lead managers among the nine found- important parameters for tomorrow’s mobility in the ing companies from the public transport sector that also Munich growth region and made the use of the public include the German railroad operator, Deutsche Bahn. transport system even more attractive. In most instances, The actual app is being developed at present, and an monthly and annual tickets became cheaper for frequent initial product is to be unveiled in late 2021. travellers. The downtown fare zone was expanded to become “Zone M” — passengers thus need only a single We will invest an amount running into the triple-digit ticket for the entire Munich city area and many towns ­million euro range in the digitalisation of the control and in the surrounding region. Range extensions were also monitoring system of Munich’s underground train service. A introduced in many districts of the metropolitan region, CBTC system will be set up in the period until the 2030s. in particular for commuter tickets. Individual residential CBTC stands for “communication-based train control“. This areas are no longer partitioned by fare limits, and fares to system will replace what is known as “Linienzug­ many central places have become more affordable. Seven beeinflussung” (LZB), a system for continuous automatic fare zones now apply to (almost) all tickets — rather than train running controls in which cables installed parallel to the previously used 16 rings, four zones, or three areas, the tracks transmit motion tasks, top speeds, and braking ­depending on the type of ticket. This reform makes the distances to the vehicles. By contrast, CBTC will use wireless fare system easier to understand and more transparent. digital and IP-based data communications between trains and the infrastructure. The system thus requires little per- Since August 2020 and for an initial pilot period of three manently installed track technology, which will, for one years, the new MVV 365 Euro Ticket has made it ­possible for thing, reduce maintenance work in the network. For anoth- some 360,000 students and trainees to use the ­public trans- er, the new system will support shorter intervals­ between port services in the MVV transport area for only one euro trains than the current one. In regular operation, we will per day. With this offer, we support families and make local schedule 120-second intervals in the future. In combination public transport more attractive for young people. with platform doors, this will also make automated under- ground train operation possible over a long-term horizon. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 23 Essential services and product responsibility

We also create digital networks for Munich For more than 790,000 users, M-Login is already making life in Munich simpler and traveling through the city In 2020, the Covid-19 pandemic clearly illustrated the more sustainable. Via their M-Login important role played by high-performance data networks access data, users can securely and in keeping businesses and private life running. Together conveniently access the web and app with our M-net subsidiary, we began to roll out one of offers provided by many service part- Europe’s largest continuous fibre-optic networks begin- ners from the areas of mobility, supply, ning in 2010. The entire downtown area has already been leisure, and culture. Users can manage developed, and we are connecting additional neighbour- their personal data at a single loca- hoods to the network of the future on an ongoing basis. tion: their M-Login account.­ The By the end of 2021, more than 630,000 private house- most recent additions are the MVGO holds and commercial businesses in Munich will have mobility app and the iHaus Smart access to high-speed Internet solutions. Living app, which allows M-Login users to control smart appliances In addition, we are also banking on mobile Internet of- and devices at their homes. ferings: the city of Munich has commissioned us, M-net, and muenchen.de to set up free WLAN (WiFi) hot spots throughout the downtown area. In February 2021, as A NEW ERA IN DIGITAL INFORMATION many as 121 public access points were already available TRANSMISSION­ in downtown Munich, 48 thereof at tram shelters. In addition, many other hot spots have been and will be A new quantum network is M-net’s solution to the installed within the framework of cooperations, e. g. with massive requirements the 5G and Industry 4.0 era places schools, local administration offices, and municipal hos- on transmission bandwidth and latency. The fibre-optic pitals. In total, we have already created as many as 4,548 ring, which is unique throughout Europe, extends over access points with this approach. 1,200 kilometres and has been the new backbone of M-net’s telecommunications network since late 2020. For applications in the “Internet of Things” (IoT), in par- The special feature of the new network: all data are ticular, we are also installing a city-wide long-range radio transmitted by light — without conversion into electric network: LoRaWAN. Such a network will allow machines signals. The new core network is not only much faster, to communicate, e. g. in the use of sensor systems, smart more powerful, and more reliable than its predecessor, meters, or even household appliances. The cost-efficient but also sets new standards in terms of security and and energy-saving network is an important milestone on ­energy efficiency. M-net has thus proven that skillful use Munich’s path towards becoming a smart city. of state-of-the-art technologies can help achieve sus- tainability goals while reducing costs at the same time. 24 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Essential services and product responsibility

We transform Munich into a city of Gesellschaft für das Badewesen). To keep up with these swimming­ pools requirements, M-Bäder employees regularly attend training workshops. Munich’s public pools are good for people’s wellbeing. The municipal essential public services comprise In the year under review, the M-Bäder public pools were 18 ­modern indoor and outdoor pools, ten attractive hit particularly hard by the measures imposed due to the sauna ­facilities, the Prinzregenten ice stadium, and two Covid-19 pandemic. While the indoor pools and saunas modern fitness centres. These facilities enable many had to close from mid-March for the rest of the year — people to exercise, relax, and spend time with family and ­except for a one-month window in October — the summer friends at affordable prices. Every year, a large number of bathing season did take place from June until the end of children and adolescents learn how to swim in our classes. September, subject to stringent restrictions on the num- Public pool operation is cost-efficient, but not profit-­ ber of visitors. With a new online reservation system, we oriented. Financial losses incurred in this business seg- were able to organise visits to outdoor pools in compli- ment are borne by Stadtwerke München Group. ance with Covid-19 regulations. Visitors of indoor pools received digital and real-time information on current pool Many statutory regulations and guidelines must be fol- occupancy. As the hygiene concept required increased lowed in pool operation. They include the German Infec- fresh air supply, higher energy costs were incurred for the tion Protection Act (IfSG), the DIN 19632 standard for heating of the indoor pools. pool water treatment, technical regulations and guide- lines issued by the German Association for the Recrea- To drive forward the sustainability of our public pools tional and Medicinal Bath Industry (Deutsche beyond the statutory requirements, we have defined two climate-relevant goals:

}}The Georgenschwaige pool is to be transformed into

Munich’s first CO2-free swimming pool from 2023 onwards, reducing total emissions by approximately 100 tonnes. }}By 2040, we intend to switch all M-Bäder public pools

to CO2-neutral operation.

Within the framework of our sustainability strategy, we are moreover driving numerous other topics forward such as sustainable construction, sustainability in the supply chain, waste avoidance, and biodiversity.

For further information, please see the chapter “Opera- tional environmental protection” and our Public Well­ being Report at: www.swm.de/gemeinwohlbericht

34.6 % Personnel expenses

EUR 7.19 SWM contribution 27.4 % Other operating expenses EUR 12.97 per visitor price required to cover costs

16.4 % Depreciation EUR 5.78 15.3 % Bather contribution Energy, water, waste water

6.3 % Cleaning

Indoor and combination pools: cost components and contributions. Innovation safeguards continued high quality of life

The world is in a state of flux, and the population on earth continues to grow rapidly. Among the numerous Energy transition Metropolitanisation economic, technical, and social developments, five climate protection ­megatrends will have a particular impact on our future business. MEGA- TRENDS }}The energy transition is being driven by the need and willingness to protect the climate. We need alterna-

tives to fossil fuels, not least because energy demand Mobility Digitalisation continues to increase worldwide. Renewable energies transition are already omnipresent today — but the future of energy generation belongs solely to them.

Health }}Large cities are growing. According to the Bavarian State Office for Statistics, the Munich metropolitan region will have a population of around 3.24 million by 2035 — an increase of more than 300,000 inhabitants compared to 2017. }}Health is a top priority — especially in a society with a large number of elderly people. They must be able to }}People will not only want to get a reliable supply of maintain their physical fitness in order to ensure their essential services, but will also be mobile. For this, we participation in society and lead an active life. need a mobility transition trending to innovative and environmentally benign solutions. We believe these five megatrends offer opportunities for our company. Alongside our traditional businesses, we }}Everything is becoming more digital. The range of IT therefore intend to develop new service areas that help solutions is expanded every day, and digital tools are safeguard the high quality of life in the region and turn used in virtually all spheres of life. This is changing Munich into a sustainably smart city in every respect. customer relationships, business models, and workflows. 26 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Essential services and product responsibility

In our Group, we have therefore established a unit that the multiparking manufacturers KLAUS Multi­parking explicitly focuses on innovation. Our innovation process GmbH and WÖHR Autoparksysteme GmbH. Given the aims to minimise the associated business risks. We con- limited space in Munich and the surrounding region, tinuously validate our solutions and products and lead many underground parking garages are switching to them to profitability. In the innovation process, the multiparking (also known as duplex-parking) ­systems. By ­maturity of every business idea is evaluated based on five cooperating directly with the manufacturers, we can aspects. This assessment is the basis for budget and equip even more parking spaces and make charging ­resource allocation. If a business idea does not fulfil the solutions for electric vehicles available to all. criteria for long-term profitability, it is discarded during this process. Energy storage is a fundamental prerequisite of the energy transition as the ongoing decoupling of generation and In the development of innovations, we pursue a clear consumption will make gradual replacement of conven- financial goal: by 2025, new products and services shall tional energy sources possible. Within the framework of account for an EBIT share of at least 3 %. To optimise our the “Smarter Together” EU project, we have been using a portfolio and make processes more efficient, we are power storage unit with a capacity of 1,000 kilowatts in moreover driving SWM’s digital transformation forward. the Freiham neighbourhood since 2019. Electricity gen- erators in the project area can hook up to the storage Not only changes in the energy and transport sectors, unit via our virtual power station. The plans for the “Süd” but also digitalisation and interconnected networks, and energy location in Munich include the construction of a the desire for sustainable and local production processes large-scale heat storage reservoir. In addition, we have expressed by many customers provide us numerous op- commissioned a study on deep heat storage that is to portunities for new business models. provide us with important insights into ways to realise such systems from a technical, environmental, and eco- One case in point is M-Ladelösung: a comprehensive nomic perspective. carefree solution for charging electric vehicles with M-Ökostrom green electricity — for both business and More pronounced feed-in fluctuations from renewable residential customers. One of the services we provide energies plants have also made more frequent inter­ in this context is dynamic load management, which ventions in plant dispatch planning necessary to secure ­prevents overloading and subsequent removal of house grid stability — this is known as “redispatch measures”. connections. In M-Ladelösung, we are cooperating with To counter the fact that redispatch costs have gone up SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 27 Essential services and product responsibility

lectric storage every year, the new requirements of Redispatch 2.0 will Weather heating devices take effect on 1 October 2021. In this connection, SWM is lectricity developing technological solutions to support distribu- markets tion grid operators in the implementation of the new requirements. Our modular solution is based on existing data bases and algorithms of the virtual power plant and comprises individual plant forecasts, grid load forecasts, ITUAL INTLLIGNT PW PLANT HATING and the calculation and settlement of electricity genera- tion losses of renewable energies plants in bottleneck hillers management.

Photovoltaics Supraconductor cables are trail blazers for the power supply of the future: they transmit electrical power virtu- Wind energy Heat ums ally without any losses, are compact, and can be installed with comparatively little effort. This is efficient and re- Generation Consumption duces the burden on the environment. Together with partners, we want to realise a supraconductor cable in Munich. Over a period of two years, all necessary compo- STORING HEAT WITH POWER nents are to be developed and tested for six months in the SWM grid. The goal of the project is the installation In the “Intelligent Heat Munich” C/sells project, we test- of a 12-kilometre-long high-voltage transmission line ed the integration of power-to-heat plants, i. e. heating between the main substation in Menzing and the “Süd” ­storage systems or heat pumps, in the virtual power energy location in the form of a “high-temperature plant during the 2017 to 2020 period. Our aim was to supra­conductor”. This would make Munich the location explore the potential of a coupling of power and heat or of the world’s longest supraconductor connection. cold. Green electricity is thus stored as heat or cold. In C/sells, we were able to demonstrate that a decentral- We will implement all this and many more projects in the ised energy system is technically feasible. The results will coming years and decades. This will bring us closer to our be incorporated in the further development of smart vision: Munich as a shining example of a networked city meter gateways. And there will also be a follow-up pro- with a high quality of life. ject — this time in cooperation with car manufacturers.

Trail blazer: Together with partners, we want to realise the world’s longest supraconductor cable. Operational environmental protection SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 29 Operational environmental protection

Our environmental policy is based on the conviction that Representative, Environmental Protection is also we must protect soil, water, and air as natural resources ­assigned to this staff unit. He is appointed directly by the and conserve energy and water. We act responsibly to- Director, Technology and tasked to take actions aimed at wards the environment and society and keep an eye on preventive environmental protection. In addition, the needs of future generations. This is why we drive the ­environmental management representatives have been energy transition forward and are committed to invest- ­appointed in the individual business segments of SWM ing in business areas with long-term perspectives — as Group. Within the framework of the management outlined in our chapter on essential services. We align ­systems, they ensure timely preparation of documenta- internal processes and value chains with high-quality tion required by the regulatory standards, coordination ecological standards and continuously improve them. of internal and external audit programmes, collection of evidence of continuous improvements, and implementa- tion of high-level environmental processes and Environmental management procedures.

At SWM, the Management Board is responsible for envi- Waste, water protection, and emission control specialists ronmental protection and management. Its members have been appointed in all organisational units where appoint the designated corporate representatives re- such appointments are deemed necessary by the pre­ sponsible for waste, water protection, emission control, cautionary principle in environmental protection. They and hazardous substances required by law. Organisa- support the executives of the respective organisational tionally, these representatives and officers are assigned units in the implementation and execution of the re- to the Quality and Environmental Management staff quirements and regulations under environmental law unit. Radiation protection officers, by contrast, are within their area of responsibility and work closely with ­appointed by the specific organisational units impacted the Environmental Protection Officer of the core Group because optimum performance of their duties can only on technical issues. be ensured if they have the necessary connection to the operations in question. The Management Board is also responsible for SWM’s energy policy. Its members have appointed a high-level The Quality and Environmental Management staff unit Energy Management Representative who ensures the addresses issues pertaining to operational environmen- introduction, maintenance, and improvement of our tal protection in the core Group and is the central con- energy management system in accordance with DIN EN tact for the various specialists and managers from all ISO 50001. At the segment level, energy management SWM business segments. The Management specialists support the work of the Energy Manage­ment Representative.

Beauftragungen im Umwelt- und Energiemanagement Environmental and energy management representatives

INTERNALLY APPOINTED REQUIRED BY LAW (GROUP): INTERNALLY APPOINTED (GROUP): (DIVISION / BUSINESS SEGMENT):

Emission Control Officer1) Management Representative, Environmental Management Officer Environmental Protection2) Water Protection Officer1) Management System Specialists Energy Management Representative Waste Inspector1) Waste / Water Protection / Emission Control Specialists3) Hazardous Substances Officer Radiation Protection Officer

1) When the same person is responsible for various legally prescribed representative functions — as is the case at SWM — “environmental protection representative” is also used as a general term. 2) The Management Representative, Environmental Protection has similar duties and authorisations in business segments in which assignment of these tasks to an environmental­ protection officer is not required by law — adjusted to the environmental relevance of the respective segments. 3) At the engineer / foreman level in the individual organisational units 30 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Operational environmental protection

We operate a quality management system in accordance with DIN EN ISO 9001 as well as environmental manage- ment systems in accordance with DIN EN ISO 14001 and EMAS (Eco Management and Audit Scheme in accord- ance with the European Union’s EMAS III Eco-Audit Reg- ulation). In 2020, individual risky units were certified for the first time in accordance with ISO 45001 (occupational health and safety). To comply with the requirements of the German Act on Energy Services and Other Energy Efficiency Improvement Measures (EDL-G), we have im- plemented energy audits pursuant to DIN EN 16247-1 in those units that neither have EMAS nor an energy man- agement system in accordance with DIN EN ISO 50001.

Energy consumption within the organisation1) We are driving forward the energy transition with wind parks in Germany and Europe.

in GWh

1,200 Climate protection 1,006.8 1,025.2 1,000 946.7 Our business activities result in significant amounts of 800 CO2 emissions. Given the current state of the art and

600 existing economic restrictions, completely CO2-neutral

400 provision will not yet be possible for many of our offer- ings over a short to medium-term horizon, but we will 200 continue to improve the carbon footprint of our services. 0 For instance, in our corporate strategy we have set the 2018 2019 2020 goal of an 80 % reduction in CO2 emissions from our services by 2040 compared to the 2008 baseline year. 1) Energy consumption of the following companies: Stadtwerke München GmbH / SWM Services GmbH / SWM Infrastruktur GmbH & Co. KG / SWM Versorgungs Ambitious targets in the individual business segments GmbH / SWM Kundenservice GmbH / major SWM shareholdings in energy genera- serve the purpose of achieving this high-level goal. tion from regenerative sources; the lower consumption in the year under review in this report is due to the pandemic. Emissions Scope 1 and Scope 2 (in tonnes)1)

2018 2019 2020 All subsidiaries in which environmental, quality, and CO2 equivalents occupational safety management systems are applied (global warming set annual or multi-year targets for themselves. Within potential)2) 3,088,230 3,130,803 3,001,812 the framework of our energy management system, we Carbon ­monoxide perform energy efficiency evaluations at least once a ­(indirect GHG) 147 170 145 year. They provide us with important data for the com- Nitrogen oxides (acidification parison of past and current energy consumption levels, ­potential)3) 1,247 1,393 1,202 influencing factors, and early identification of deviations. Hydrogen ­chloride As a basic principle, all processes and activities­ involved (acidification are audited internally within the certification period. ­potential) 3 1 1 On-site inspections are performed at technical facilities, Sulphur dioxide with all aspects of the relevant management systems (acidification ­potential) 107 116 76 (environment, energy, quality, occupational health and Dust safety) being reviewed in this process. Compliance with (other emissions) 27 20 16 methodologies is reviewed and audited externally on Carbon a regular annual basis. (other emissions) 9 5.5 5 1) The following companies have been included: Stadtwerke München GmbH / SWM Services GmbH / SWM Infrastruktur GmbH & Co. KG / SWM Kundenservice GmbH / SWM Versorgungs GmbH. 2) Corrected figures for 2018 and 2019 3) Corrected figures for 2018 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 31 Operational environmental protection

Expansion of renewable energies We launched our renewable energies expansion ­campaign as far back as in 2008 — earlier than many other energy utilities — and set ourselves an ambitious goal: from 2025 onwards, we intend to generate suffi- SWDN cient green electricity in our own plants to cover all of FINLAND ­Munich’s requirements. This equates to a target of NWASWDN around 7 terawatt-hours (TWh) of electricity, which FINLAND remains unchanged and which we continue to pursue. NWA Given the prospect of a significant increase in electricity demand in the years after 2025 due to Munich’s growing number of inhabitants and the expansion of electro­ UNITD INGDM PLAND mobility, in 2020 we adjusted the time horizon and gen- UNITD GMAN INGDM eration target of our expansion campaign: by 2035, we BLGIUM PLAND GMAN intend to generate as much as 8.4 TWh of green electricity. BLGIUM Munich Munich To achieve this goal, we will tap the potential of a diverse FAN range of sustainable energy sources. Our priority is on FAN ATIA projects in the Munich region, especially in the area of ATIA photovoltaics. By 2035, we intend to cover 35 % of the electricity consumption of Munich’s households with SPAIN MUNIH AND GIN SPAIN regionally generated electricity from renewable ­energies. MUNIH AND GIN To satisfy the remaining demand while complying with Including shares; as of 02/2021 the need for economic efficiency, we make use of share- Including shares; as of 02/2021 holdings to engage in activities in Germany and Europe that go beyond the Munich metropolitan region. MUNICHMUNICH AND REGIONREGION Wind energy is still the most productive as well as the most profitable technology for the generation of green 14 hydropower plants plants 1 biogas1 biogas plant plant (biogas (biogas production:production: Eggertshofen, Eggertshofen, electricity from renewable sources. Accordingly, wind 2 wind powerpower plants plants biogasbiogas use: use: Michaelibad Michaelibad parks in Germany and Europe are a focal point of our (Frttmaning,(Frttmaning, Freimann) Freimann) CHPCHP plant plant investments. We have made pleasing progress in the 1 biomass1 biomass power power plant plant 6 geothermal power power plants plants (Taufkirchen)(Taufkirchen) ­expansion of our portfolio: the Jasna wind park in Poland (one(one underunder construction) construction) (SWM: 100 %) with a capacity of 132 megawatts and the district district cooling cooling systems systems 33 photovoltaic plants and from ground waterunder- 33 photovoltaic plants and from ground waterunder- Austri Kjølberget wind park in Norway (SWM stake: 60 %) solar thermal systems ground streams solar thermal systems ground streams with a capacity of approximately 55 megawatts com- menced trial operations in 2021. In the Norwegian GERMANY GERMANY

3 offshore wind parks (North Sea) 3 offshore wind parks (North Sea) EUROPE’S “POWER LAKE” Onshore wind parks (Brandenburg, North Rhine-Westphalia, OnshoreRhineland-Palatinate, wind parks and (Brandenburg, Saony-nhalt) North Rhine-Westphalia, Electricity is generated at many sites in Europe and fed Rhineland-Palatinate, and Saony-nhalt) 2 solar power plants (Bavaria and Saony) into what is known as the “integrated European electrical­ 2 solar power plants (Bavaria and Saony) grid”. From a physical point of view, this electricity is a EUROPE combination of the output from not only all nuclear, coal- EUROPE fired, and gas-fired power stations, but green electricity 1 offshore wind park (United Kingdom) generation plants as well and is thereby made available­ 1 offshore wind park (United Kingdom) to customers in this blended form. The integrated Euro­ Onshore wind parks (Belgium, Croatia, Finland, France, Norway, Poland, Sweden) pean electrical grid can be compared to a huge lake. Onshore wind parks (Belgium, Croatia, All electricity generators feed this “power lake”, and all Finland,1 parabolic France, trough Norway, power Poland,plant (Spain) Sweden) electricity consumers take something out of it. Every 1 parabolic trough power plant (Spain) kilowatt-hour of electricity generated from renewable energies makes this European lake cleaner. Participations in ­climate-friendly energy generation plants outside ­Munich thus make just as much sense as those in Munich. 32 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Operational environmental protection

MUNICH AND REGION Moosburg

hydroower lants and euity articiation Freising Isarwerke1, 2 and 3, Mawerk, Stadtbachstufe, Floriansmühle, Praterkraftwerk2) (Munich),(Munich), eitzachwerkeeitzachwerke 1,1, 22 andand 33 (Feldkirchen-Westerham), Uppenbornwerk 1 and 2, Sempt und Wang (near Moosburg), Hammer (near Fischbachau)

wind ower lants MUNIH Frttmaning, Freimann (Munich)

geothermal lants Riem, Freiham, Schftlarnstrae1) (heat);(heat); Dürrnhaar,Dürrnhaar, Kirchstockach (power); Sauerlach (heat and power cogeneration)

Biogas and biomass ower lants Biogas production: Eggertshofen (near Freising) Biogas use: Michaelibad biomethane CHP plant Biomass power plant BioEnergie Taufkirchen Taufkirchen irchstockach Drrnhaar hotovoltaic lants and solar thermal systems

Sauerlach Munich, Moosburg, Unterhaching, and Thalham

Feldkirchen- district cooling systems from ground waterunderground Westerham Thalham streams s of 02/2021 Odeonsplatz, Stachus, Herzogspitalstrae, SWM headquarters, Moosach, Dessauer Strae, Oberwiesenfeld, BMW FI, aim, Fischbachau Schftlarnstrae1),, Sendling-WestparkSendling-Westpark1),, BalanstraeBalanstrae1)

1)1) UnderUnder constructionconstruction 2)2) EquityEquity participationparticipation

Midgard Vind Holding AS onshore portfolio (SWM stake: Photovoltaic plants also contribute to emission avoid- 70 %), we were likewise able to commence operations at ance. However, 92 % of Munich’s inhabitants live in two wind parks with a total capacity of approximately multi-­family buildings and thus do not have their own 110 megawatts in late 2020 and early 2021, respectively. roof where they can install a solar plant. With our Two additional wind parks with a total capacity of ap- ­extremely popular M-Solar Sonnenbausteine (“solar proximately 220 megawatts are slated to follow in building blocks”), we have, since 2020, given them an late 2021. The capacity of the wind parks held by wpd opportunity to nevertheless make their own contribu- europe GmbH (SWM stake: 33 %) in its own portfolio tion to the energy transition. Interested parties select a stood at 580 megawatts at the end of the year under photovoltaic plant and the number of solar building review. In addition, we completed the “wind energy blocks with which they want to support the plant. Based gate“ with the commissioning of a second wind energy on a loan earmarked for a specific purpose, the project turbine in Munich’s northernmost district in early 2021. will then be realised by us. Among other things, custom- ers can buy solar power generated by the “Sonnen- baustein” plants and receive annual interest payments. Thanks to strong demand, we were able to install three photovol­taic plants in the first year of our programme,

leading to a cumulative CO2 reduction of approximately 112 tonnes per annum.

A second wind energy turbine is now turning in Munich. M-Solar Sonnenbausteine (solar building blocks) allow city-dwellers to make a contribution to the energy turnaround. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 33 Operational environmental protection

In 2020, we generated a total of approximately 4.5 TWh of green electricity, of which roughly 50 %, or slightly under 2.3 TWh, came from Germany. SWM is already generating much more green electricity than all of ­Munich’s private households and its tram and under- ground systems need. By way of comparison: the ­average Munich household consumes some 2,500 kilowatt-­hours of electricity per year. The new generation plants that are scheduled to join the grid in the course of 2021 will increase our generation capacity to approximately 6 TWh. We are thus well on track towards achieving the target of around 7 TWh we have set ourselves for 2025. transported from these stations to customers’ properties where it cools the buildings. Since district cooling is a

CO2-neutral generation of district heating closed system, there is no negative ecological impact on and cooling the natural water resources. Compared to individual As the heating transition is a key component of the energy cooling, the district cooling process reduces electricity transition, we set an additional goal in 2012: by 2040 at consumption by slightly more than 70 %. Demand for our the latest, we intend to achieve CO2-neutral coverage of M-Fernkälte district cooling service is steadily growing. all of Munich’s district heating requirements and largely At our “Süd” energy location, we are therefore construct- use geothermal energy for this purpose. Thereby, we can ing a large district cooling centre. Alongside cold water tap large natural hot-­water reserves located directly from the Isarwerkkanal conduit, we will also be able to underneath Munich’s surface. At present, we are already use the energy from the geothermal and combined heat operating five geothermal plants in ­Munich and nearby and power (CHP) plants located at this site for the opera- municipalities, and we are driving the expansion of this tion of the cooling facility in the future. The cooling very successful technology­ forward with investments ­facility will be connected to downtown Munich via a running in the high triple-digit million euro range. 6-kilometre-long pipe. After completion of the final ­Germany’s largest geothermal plant, for instance, which expansion stage (which is envisaged for 2029), the “Süd” we have been constructing on the site of our “Süd” energy energy location will have a cooling capacity of approxi- location since 2017, is slated to commence operations in mately 36 megawatts. This means that the plant will 2021. The plant will then supply green heating to more cover the district cooling customer demand that is than 80,000 Munich citizens. ­forecast for downtown Munich for the coming years.

Concurrently, we are also testing other sites in Munich for their geothermal suitability. One important focus is the development of geothermal energy at the Michaeli- DISTRICT COOLING: MULTIFACETED POTENTIAL bad site, which is required for the supply of Munich’s northern district heating grids. However, the achieve- An innovative project pursued by SWM in Munich’s ment of our ambitious goals also presupposes further Ramersdorf neighbourhood highlights the potential of projects in the region. In this context, we are striving to district cooling. We are installing the heating and cooling establish partnerships, e. g. with (IEP) Innovative Energie systems for newly constructed office buildings on Balan- ­Pullach and Erdwärme Grünwald. In addition, we are strasse, using the energy of the groundwater found there taking a close look at the question of how to enhance near the surface. Groundwater is taken from a dedicated cross-connections between our already existing geother- extraction well, transported to the user, heated or cooled mal plants and make the use of thermal water even more there, and then returned to the aquifer. The energy centres sustainable through implementation of a reservoir of the buildings will be equipped with low-temperature ­management system. heat pumps, chillers, and hybrid heat-pump/chillers. The energy of the groundwater can be used for three different A further component of our climate commitment is the purposes: for direct cooling of the buildings, as heat source expansion of district cooling as a more efficient and envi- for the heat pumps, and for chiller recooling. This efficient ronmentally benign alternative to conventional air condi- combination is a further step in SWM’s efforts to protect tioning systems. Here, we extract cold ground­water and the groundwater, the temperature of which will be impact- water from Munich’s underground streams for use in our ed less in this process than in mere cooling. central cooling facilities. This cold water is then 34 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Operational environmental protection

Gradual exit from coal-based power Further down the road, it will also be possible to operate Successful expansion of geothermal energy is one the GuD 3 plant with regenerative gases such as bio­ ­prerequisite for driving forward Munich’s exit from coal. methane or hydrogen. SWM also supports this goal with its coal exit strategy. Its focus is on the hard-coal-fired block of our “HKW Nord” Emission-free drive systems in local power station, which, like all SWM cogeneration plants, public transport is based on the principle of combined heat and power In 2020, Munich celebrated an anniversary: electro­ (CHP) generation. Under this strategy, the coal-fired mobility had been used in our city for as many as block of “HKW Nord” is primarily used for heat genera- 125 years. At that time, the first Munich tram route was tion. Its operation is to continue only as long as it is converted to electric operation. Today, MVG trams and

­systemically important, i. e., presumably until 2028. We underground trains already run completely CO2-free are striving to discontinue its use even earlier. thanks to the use of green electricity. As a third key pillar of local public transport, we intend to also largely electrify In the year under review, we not only reduced the use of bus traffic in Munich within the next ten years. By the coal significantly, as promised in last year’s Sustainability end of 2021, at least 26 electrically driven vehicles are to Report. In mid-2020, we already implemented the deci- be out and about on Munich’s streets. The 100 and sion to run the hard-coal-fired block only under ­minimum 144 bus lines have already been switched to fully electric load. Compared to unrestricted operation until 2028, this operation. In addition, 47 new hybrid buses will help load limit will result in avoiding approximately 4.2 million reduce fuel consumption and emissions.

tonnes of CO2. However, CO2-optimised operation led to particle ejections from the stack, so measures were im- MVG and the city of Munich are also cooperating in the

plemented in order to keep avoiding as much CO2 as roll-out of environmentally friendly and interlinked possible, while ensuring continued safe operation of the shared-mobility offers throughout the city. In the “Smarter coal-fired block at the same time. Together” and “City2Share” sponsorship projects, we have done a great deal of pioneering work and gained To be able to shut off the coal-fired block, additional valuable insights. The focus of these projects was on heating capacities will have to be developed by 2028. innovative mobility stations in the Neuaubing-Westkreuz/ We have examined the replacement options: the future-­ Freiham and Untersendling/Isarvorstadt project districts. proof, most cost-effective, and environmentally reasona- These stations combine various offers, ranging from the ble alternative is a gas-fired combined heat and power popular MVG Rad rental bike to electrically powered plant (GuD 3). This is the only way to generate both power car-sharing vehicles, and permit easy access to our tradi- and heat in a climate-friendly, efficient, and reliable pro- tional modes of transport. After the conceptual and struc- cess. Overall, the impact of the GuD 3 plant on the envi- tural implementation in the previous years, the evaluation ronment is thus considered to be as low as possible. of the measures in ongoing operation started in 2020. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 35 Operational environmental protection

Beyond local public transport, we are also committed to promoting electromobility. In the Munich metropolitan charging area, MVG and SWM are now operating more than points 600 charging stations powered by green electricity with 1,200 over 1,200 charging points — making Munich a trail More than 1,200 charging points make Munich a trail blazer blazer in Germany. in the set-up of a public charging infrastructure in Germany.

Realisation of further energy saving and when the entire city is equipped with fibre-optic cables, ­emission reduction potentials conventional mobile communications rooftop antennas We have defined emission limits for our other business with high radiation output could be replaced by thou- activities, too: for our fleet of company cars, for example, sands of tiny 5G antennas with an output of less than we select only models emitting less than 160 grams of 20 watts — which would also significantly reduce local

CO2 per kilometre. What is more, we intend to convert residents’ radiation exposure. 75 % of our entire vehicle fleet to electromobility by 2030. For vehicles used for company purposes, we will We involve our employees in our efforts to enhance presumably reach an electrification rate of 80 % as early ­energy efficiency and reduce emissions. Among other as 2025. The electri­city supplied to our real estate prop- things, we publish our Technology division’s Environmen- erties is largely generated from renewable energies. For tal Statement, prepare intranet messages, and regularly business trips, we check whether the use of local and address the issue of energy in divisional meetings and long-distance public transport is cost-effective before we training workshops. In addition, we offer financial incen- consider flights as an alternative. In addition, e-bikes and tives for the submission of energy saving ideas. All em- electric vehicles are increasingly used for work-related ployees, as well as SWM’s external service providers, can trips between technical facilities where possible and make suggestions for improvements and submit ideas compliant with occupational safety regulations. through the established company suggestion scheme. In 2020, we spotlighted the topic with our “Enhance We intend to switch all our public pools to completely sustainability — reduce material consumption” idea

CO2-neutral operation by 2040. In the year under review, gathering campaign. Its goal was to find solutions aimed we calculated the carbon footprint of our pools and at reducing our consumption of raw materials and developed a decarbonisation strategy on that basis. This ­supplies as well as consumables. Among other things, we strategy relies not only on step-by-step modernisation of received fresh input with respect to the promotion of the structures, but also on changes in the energy supply, environmentally benign construction, material consump- including the use of geothermal energy. At our Georgen- tion of high-pressure gas pipelines, and office space schwaige pool, we are piloting an important exploratory reduction through enhanced remote working (home project covering numerous processes. An innovative office) support. heating approach ensures that we can warm our bathing and service water to the desired temperature with a heat pump. The power supply of the Georgenschwaige pool — and, for that matter, all M-Bäder public pools — is based on green electricity and local power generation in photo­voltaic plants. In addition, we plan to use electric vehicles for groundskeeping.

We have also ushered in the energy transition in our fibre-­ optic network: the expansion strategy of our M-net tele- communications subsidiary provides for routing fibre-­ optic lines directly into users’ living rooms in the future, making electricity-intensive components such as ampli­ fiers and converters unnecessary. The carbon footprint of end-to-end fibre-optic infrastructure is about 90 % better than that of conventional DSL technology used in copper networks. The equivalent for Munich as a whole would be a CO2 reduction potential of approximately 330,000 tonnes per annum. A further positive effect: 36 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Operational environmental protection

Environmental protection

Protection of water as a valuable resource Munich’s drinking water, which we extract from our three catchment areas — the Mangfall valley, the Loisach valley, and an area of moraine deposits east of Munich known as the “Schotterebene” — is left in its natural state and already has such a high quality that no complex treatment is necessary. Our “ecoFarmer” initiative, which was launched in 1992, has been making an extraordinary contribution here: 175 farmers in the Mangfall valley and five farmers in the “Schotterebene” area have converted their farms to agricultural methods that protect soil and water as well as organic livestock husbandry. This has allowed us to reliably reach our self-imposed quality target of an average of less than 10 milligrams of nitrate per litre, which is significantly stricter than the statutory limits laid down in the German Drinking Water Ordinance (TrinkwV). Together, the organic farmers are cultivating an area of nearly 4,450 hectares. The Mangfall valley is one of the largest contiguous organically farmed regions in Germany.

Another element ensuring high-quality drinking water is the water protection forest totalling more than 1,800 hec- tares, which is owned by SWM. This structurally rich mixed forest helps regulate the water balance: its humus-­ creating soil provides a particularly good filtration func- tion for precipitated air pollutants, with active organisms in the soil decomposing organic contaminants. Thanks to this natural rejuvenation, the soil remains moist and is an ideal water reservoir. The forest manager is a member of Naturland-Verband and complies with this organic association’s ecological guidelines. In addition, the water protection forest has already held a Forest Stewardship Council (FSC) certification since 2001.

Because the foothills of the Bavarian Alps are a region Water consumption (SWM headquarters)1) with above-average rainfall, drought periods have not yet had any noteworthy effect on drinking water extrac- in cubic metres tion. Irrespective thereof, we continuously monitor the 35,000 32,778 30,235 30,499 water levels at numerous groundwater monitoring wells. 30,000 The data collected has not indicated any changes in 25,000 groundwater levels. 20,000

15,000 We also devote great attention to minimising pipe-­ 10,000 induced water losses. For this purpose, we use intelligent

5,000 solutions that enable us to quickly identify and repair

0 leaks in the pipe system. For example, the use of LoRa 2018 2019 2020 transmitters (long-range radio transmitters) in the water supply system facilitates early detection of water losses. 1) Water consumption of the following companies: Stadtwerke München GmbH / SWM Infrastruktur GmbH & Co. KG / SWM Versorgungs GmbH / SWM Services GmbH / SWM Kundenservice GmbH. Corrected figure for 2019. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 37 Operational environmental protection

Preservation of biodiversity 30,000 BEES FIND A NEW HOME In all business segments, we consider the potential ­impact of our business activities on biodiversity. In many The honeybee is the third most important farm animal instances, our activities even have positive effects. For in Germany — not because of its honey production, but instance, our water protection areas are important re- because it pollinates the majority of agricultural and wild treats for numerous endangered animal species such as plants. This was reason enough for M-net to offer two bats. Relatively large photovoltaic plants also offer good bee colonies a home on the grounds of the company’s habitats, e. g. for birds. When we plan new plants, we headquarters at Frankfurter Ring in Munich. The vast use the requirements referenced in the “Good practices number of flowers and shrubs in the surrounding parks, in the planning of ground-mounted photovoltaic plants” gardens, and balconies offer ideal conditions for bees, guidelines as our yardstick. In the greenspace of our as it is even easier for them to find food in the city than public pools, we can also help promote biodiversity. In in the wild. The beehives are lovingly cared for by M-net the year under review alone, we converted more than employees who have undergone special training in this 21,000 square metres into flower meadows. Over a me- area and by two beekeepers. dium-term horizon, we will pursue the goal of converting 20 % of the greenspace of our public pools — corre- sponding to approximately 80,000 square metres — into flower meadows. In addition, we have a targeted strategy for planting more trees on our grounds. 80,000 m2 of flower meadows

The greenspace area in our public pools we want to convert into flower meadows.

Use of environmentally benign supplies We have also set our sights on protecting the environ- ment in the use of operating supplies and building materials. For example, a project launched in 2020 focuses on the substitution of sulphur hexafluoride, an insulating gas that is extremely harmful to the climate, with climate-neutral gases in electric distributions systems. Use of the latter gases at the high-voltage level is scheduled to become already feasible from 2021 onwards. Through modernisation efforts, we have already noticeably reduced the consumption of ­resources and the usage of environmentally problem- atic substances in our public pools. For example, we have analysed the environmental impact of the sub- stances used for bathing water treatment in a life cycle assessment. For cleaning, we use environmentally benign procedures and cleaning agents as much as possible. In drinking water extraction, the completion of two plants using ultraviolet light for disinfection will help us avoid the use of chlorine gas to an even greater extent in the future. Employees SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 39 Employees

For our more than 9,0001) employees, we are a sustain­ attractive employer in this environment, we have put able, reliable, and socially oriented employer with a together a comprehensive package for employees and forward-­looking strategy, diverse and ambitious tasks, applicants. It comprises: and a value-based corporate culture. In a nutshell: an employer worth working for. }}Ambitious tasks in a successful company }}Meaningful work content and value orientation }}Opportunities for further development and Stadtwerke München as an attractive performance­ enhancement employer }}A pleasant work environment }}Work/life balance Most of our employees work in Munich. We are in keen }}Demanding and encouraging leadership competition for the best minds in this labour market: }}Flexible work options DAX-listed corporations, innovative medium-sized enter- }}Attractive remuneration and employee benefits prises, start-ups, and other entities also offer enticing }} Reliability and security jobs. To position ourselves visibly and credibly as an

1) Comprises all employees in the core Group including temporary workers. ­Trainees, interns, and seasonal workers are excluded.

SWM’s core identity as an employer

A PARTNERSHIP-ORIENTED APPROACH Job security Socially oriented employer Work/life balance Fair treatment of employees Good working climate

SUSTAINABILITY Economic sustainability Environmental sustainability Social sustainability Value-oriented human resources work We stand for making the world in which we live and work more secure, successful, and sustainable for our employees and customers. TRAINING DEVELOPMENT First-rate training Good further education Personalised development opportunities Diverse areas of deployment/responsibility

PERFORMANCE TO ENHANCE THE QUALITY OF LIFE mbitious goals Mutual performance Efficiency & effectiveness Citizen value Munich 40 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Employees

Four units work jointly on the implementation of the human resources strategy that has been rolled out throughout the Group: Personnel Divisional Manage- ment, HR Management and Service, HR Recruitment and Development, and Health. Our human resources strategy includes the aspiration to become one of the five most attractive employers in Munich by 2025.

The strategic HR topics include:

}}Excellent leadership: Talent management, ­mandatory leadership development }}The “Fortbildung 4.0” professional development initiative: Efficiency and sustainability, a new culture of learning, mobility/learning on demand, ­qualification Training and professional development offerings We are one of the largest workplace training organisa- }}Attractiveness as an employer: Employer branding tions in Munich. In 2020, 149 (previous year: 132) young and ­strategic recruiting, attractive benefits, equal people started their professional career in our organisa- ­opportunities, healthy organisation tion, of which 34 were women and 115 were men. We }}Digital transformation: Digitalisation and auto­ are continuously expanding the range of vocational mation of routine processes, role definitions and professions for which we offer traineeships. We now ­position management, strategic personnel planning offer 15 vocational professions, with IT specialist training }}Knowledge and networking: Promotion of focusing on application development being added in ­knowledge exchange and networking 2020. It goes without saying that the Covid-19 pandemic has been a unique challenge for our traineeships, too. An employee survey conducted in 2020/2021 confirmed Our hygiene concept provided for pronounced separa- that our employees are not only in favour, but even de- tion of trainee groups. Starting with the first lockdown in mand modernisation and change — this especially holds March 2020, we began to alternate between practical true for prospective employees as well. At the same time, training in the training centre and theoretical training we must also bring on board those segments of the work- through remote channels. In order to be able to also force that find it more difficult to embrace new processes support our trainees with the full functionality of the and ways of working. We therefore verify on an ongoing SWM IT environment at their homes, we equipped them basis that we address the correct long-term issues, account all with laptops and tablets. Vocational school lessons for shifting business environments, and align our processes took place only when absolutely necessary. accordingly. Our “Azubis machen Schule” format, in which our ­trainees take over one lesson at a school to give pupils an basic Employees understanding of our training activities, was offered in (breakdown by gender) the digital space in 2020. However, the number of schools responding to the offer of this format was lower 10,000 9,335 9,000 8,897 than for on-site visits. Due to the contact restrictions 8,049 8,060 8,226 8,000 79 % imposed, we were unfortunately not able to carry out 79 % 7,000 80 % 79 % 80 % student internships in the usual way either. As a small 6,000 consolation, we made it possible for interested pupils to 5,000 4,000 attend virtual “trial sessions”. 3,000 21 % 21% 2,000 21 % 20 % 20 % Alongside on-the-job training, we also offer opportuni- 1,000 0 ties for dual study programmes combining academic 2016 2017 2018 2019 2020 studies with vocational training in a company setting. At SWM, a total of eleven male and four female dual study SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 41 Employees

Total number of employees, subdivided by age and gender

2018 2019 2020

Female Male Female Male Female Male Total number of employees 1,661 6,565 1,856 7,041 1,958 7,377 Thereof under 30 in % 18.7 13.2 21.0 13.7 22.6 14.6 Thereof 30 to 50 in % 45.5 44.9 45.2 45.4 44.6 45.2 Thereof over 50 in % 35.8 41.9 33.8 41.0 32.7 40.2

Employees by type of contract

2018 2019 2020 Total Total Total (number of Female Male (number of Female Male (number of Female Male employees) (in %) (in %) employees) (in %) (in %) employees) (in %) (in %) Full-time1) 7,353 16.5 83.5 7,911 16.9 83.1 8,313 17.3 82.7 Part-time 873 51.4 48.6 986 52.4 47.6 1,022 51.2 48.8 Permanent 8,035 20.0 80.0 8,634 20.5 79.5 9,020 20.5 79.5 Temporary 191 28.3 71.7 263 33.1 66.9 315 34.0 66.0 1) Full-time employment contracts are defined as all those providing for a number of working hours that corresponds to at least 80 % of the total number of hours per week laid down in the collective agreement.

students (previous year: eleven students) were enrolled we were still able to host the first IT@SWM in early in degree programmes for electrical engineering and March 2020 — a job fair day for IT professionals that information technology, as well as energy and building proved to be very successful. Special features of this technology at the end of 2020, with five of them starting event included personalised skill set matching and their dual study programmes in the year under review. get-acquainted interviews on site as well as a fast and easy application process via QR code. Once the code had Universities play an important role in our personnel been scanned, interested applicants were already includ- ­recruitment strategy. We cooperate with universities from ed in our IT candidate pool, and the first job interviews all parts of Germany, including the Munich University of took place only a few days later. The impressive outcome: Applied Sciences, the Technical University of Munich, and 14 new hires in the fiercely contested Munich labour RWTH Aachen University. We also promote the recruit- market for IT specialists. ment of talent through other cooperations such as the one we have established with the German Association By contrast, our job application tram that is normally for Personnel Management (Deutsche Gesellschaft für regularly out and about on Munich’s streets unfortunately Personalführung — DGFP). Through lectures, excursions, had to stay in the depot. People interested in a job at and recruiting days, we establish direct contacts to SWM can simply board it without prior appointment, get ­graduates to make them aware of SWM as an employer. information on our company while on board, sit for a job Given the situation prevailing in 2020, these contact interview right there in the tram if they are interested channels remained largely closed to us. We are therefore in a job, and — if the outcome is positive — get hired on all the more pleased to report that we were able to main- the spot. For this unconventional recruiting approach, tain our offers in the areas of internships, written theses, we received the HR Excellence Award in 2020. and work opportunities for students, with many stu- dents being deployed virtually. We also virtualised the modules of our network and retention programmes for students (SWM Talents and SWM Talents+). 93.9 % Digitalisation was also the order of the day in recruiting. hiring rate For example, we switched our recruiting process to The percentage of our trainees we offered employment Skype within a few days and tested new formats such as after completion of their training programme in 2020 virtual career fairs. Shortly before the first lockdown, (previous year: 88.2 %). 42 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Employees

With our “Fortbildung 4.0” professional development initiative, new learning formats, and wide range of networking offers, we are creating a future-proof learning culture.

In our personnel recruitment, we also assume our social technical and methodological training, development responsibility. For example, since 2017 we have pursued counselling, coaching and training workshops to a joint venture with the Munich JobCenter agency and strengthen personal and social competencies. The focus the Training and Development Centres of the Bavarian is on sustainability, which means that we hone employ- Employers’ Association (Berufliche Fortbildungszentren ees’ ability to learn, strengthen their willingness to learn der Bayerischen Wirtschaft) aimed at training refugees (lifelong learning), and ensure the knowledge transfer and applicants with a migration background for employ- to our daily business. At the same time, we encourage ment as bus or underground train drivers. Through this mutual networking through various forums, events, or project, we have already hired a total of 18 bus drivers learning workshops. In 2020, our employees attended a and twelve underground drivers for the MVG team. Due total of 6,922 professional development days (previous to the Covid-19 pandemic, we were unfortunately not year: 15,450 days). able to continue the project as planned in the year ­under review. In addition, we have been engaged in In leadership development, too, we greatly value the “Stadtwerkeprojekt” for more than 30 years. This project importance of a high level of practical relevance for makes it possible for young adults who find it difficult to SWM. Alongside technical and methodological content, get their careers off the ground to go through profes- the focus is on reflexion and feedback. In addition, the sional training including associated off-the-job support programmes also provide managers with an opportunity and assistance by qualified social education workers. In to build networks across business segments. Managers 2020, a total of 22 individuals were in training, and five who have been newly appointed to their first leadership successfully completed their final exams. role attend our Management Development Programme (MEP). This programme teaches them, among other That said, we want to open up exciting prospects not things, leadership in critical situations, the overall impact only for our new colleagues, but for all SWM employees. of leadership, critical discussion techniques, conflict In particular, digitalisation and technological change ­management, and change management. Specific qualifi- require them to develop an understanding of the emerg- cation programmes are offered to executives managing ing new possibilities and use them to the best of their other managers and executives without disciplinary abilities. In our annual “SWM Dialogue”, employees can management. In 2020, our managers completed discuss and agree to development opportunities with 1,156 professional development days (previous year: their managers. Options we promote include leadership, 1,615 days). SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 43 Employees

Number of different seminars by type of training and organisation. Following an evaluation process, ideas number of participants in 2020 deemed eligible are selected for financial rewards de- Number of pending on their benefit for SWM. At an annual celebra- seminars (type Participants tion of ideas, the company moreover thanks all people of training) (heads) who have submitted suggestions. The goal is to encour- Classroom trainings 150 2,737 age employees to always cast unbiased and critical eyes Virtual trainings 120 1,613 on their own work environment and play an active role in E-learnings 62 15,069 its continuous improvement. In 2020, 248 ideas were Total 332 19,419 submitted. Topics spanned the gamut from simplified assembly in the maintenance of our trams to improved feed water supply of the gas and steam turbine at our In the year under review, the Covid-19 pandemic had a “Süd” combined heat and power station to digitalisation major impact on the way in which we designed profes- of inspection reports. Including the overhang from sional development measures at SWM. Among other the previous year, we evaluated a total of 284 ideas and things, the number of virtual trainings skyrocketed from realised 94 of them. They resulted in an economic 32 to 265, while the number of classroom trainings ­benefit of more than EUR 1 million. ­decreased by about 50 %, from 1,042 to 546. The ­Covid-­19-induced conversions and restrictions also ­explain the decrease in the absolute number of profes- sional development days, as many already organised More than trainings had to be cancelled and new formats had to be designed and tested. Our “Fortbildung 4.0” strategic programme, which we had initiated in 2019, helped us address this fundamental change with its areas of action: € 1 million learning culture, mobility/learning on demand, effective- The savings created by our idea management programme. ness (efficiency) and sustainability, and enhancing ­employee qualifications. Both our employees and their trainers acquired and enhanced IT skills on a broad basis. Demand for already existing digital offers increased, especially for trainings revolving around IT tools and potential networking offers. Obstacles in the areas of technology and data and information security were gradually removed. On the other hand, we also gained experience with ­respect to the limits of virtual profes- sional development formats. For instance, both trainers and participants agreed that virtual leadership training made sense only to a certain degree. With more people working remotely from home, new formats became necessary — among other things, we offered networking opportunities for managers in so-called Coffee Breaks and introduced “Remote Leadership” as a new training category. With our “Fortbildung 4.0” initiative, new learning formats, and additional networking offers, we want to create the framework for more self-organised learning and establish a future-­proof learning culture at SWM.

More than ever before, the year 2020 showed us that a fresh look at long-established processes reveals ideas and new solutions and may lead to innovation. SWM encourages this approach with its SWM.ISI idea manage- ment programme which allows all employees to suggest improvements for the processes and procedures in the 44 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Employees

Responsibility as an employer Aspects covered by this survey also include leadership As an employer, we stand for a partnership-oriented and corporate culture. Since SWM attaches particular approach, sustainability, education and development, importance to its employees’ feedback, the company as well as performance to enhance the quality of life, also relies on dedicated surveys. In the year under re- see also the chart on page 39. Our employees’ working view, two short surveys gave our employees opportuni- ­conditions must also reflect these values. ties to express their opinions on the switch to remote working and their expectations regarding the work Even before the Covid-19 pandemic, we offered our em- formats of the future. Their feedback was positive and ployees approximately 400 different variations of work- valuable. The expectations expressed will be incorporat- ing time arrangements, including flexible time accounts, ed in a revision of the existing group works agreement. various part-time models, personalised deployment and This means that we will integrate remote working from work scheduling, and the option to work from home. home as well as mobile working to an even greater After the outbreak of the pandemic, we made maximum ­degree into our daily business. use of our leeway to design work models, especially with respect to combinations of working time and work loca- Every three years, our

Zur tion. Mobile working from home was used to a much employees give Befragung greater extent than before. As this work arrangement anonymous­ feedback was already customary at SWM in many areas and our regarding their respec- employees moreover had excellent technical equipment tive managers. The at their disposal, the transition to comprehensive remote results of this survey working went practically without a hitch. Various digital are discussed­ in a joint support offers such as online consultation hours, webi- workshop and specific nars on digital leadership, or tips for mobile working also agreements are made. DEINE MEINUNG contributed to a smooth switch. Even those managers As an alternative to such ZÄHLT. and employees who used to have certain reservations “single-track”­ feedback ALSO MACH MIT. towards these kinds of work arrangements are now in the direction of man- convinced of their effectiveness. In areas in which remote agers, 360° feedback Mitarbeiterbefragung und working from home and mobile working are not possi- exercises are also possi- Gefährdungsbeurteilung psychischer Belastungen 9. – 20. November 2020 ble, we are also striving for maximum flexibility, especial- ble. In addition, various ly with respect to working time arrangements. In the colleagues are available year under review, MVG thus introduced flexibilisation as contacts to address options in additional areas in which this approach tends specific topics, e. g. the to be rather difficult due to the underlying shift models. Equal Opportunities­ Approximately 200 employees of the M-Bäder public ­Officers for all questions revolving pools were put on short-time work schemes (Kurzarbeit). around diversity. Identified multipliers and networks document employees’ sentiments, opinions, and atti- To ensure that our offerings address our employees’ tudes and play a liaison role between staff members and needs, we conduct a pertinent survey every two years. management.

Hires and exits

2018 2019 2020

Hires Exits Hires Exits Hires Exits Total (number of employees) 558 397 1,061 482 874 455 Thereof female 113 106 239 391 209 95 Thereof male 445 291 822 91 665 360

Thereof under 30 209 115 349 113 314 80 Thereof 30 to 50 281 148 565 145 450 150 Thereof over 50 68 134 147 224 110 225 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 45 Employees

We are continuously striving to further improve working portal, we help our employees find solutions for care-­ conditions and the numbers show that we are making dependent relatives. Since 2008, we have been a perma- good progress. The average employee tenure is 15 years, nent awardee of the “berufundfamilie” (work and family) and in 2020 alone, we welcomed 874 new employees certificate awarded by the non-profit Hertie Foundation. (previous year: 1,061). At 1.8 % of total staff, the share of employees handing in their own resignations in 2020 Use of parental leave by gender was significantly below the previous year’s level (2.4 %), 2018 2019 2020 while employee turnover likewise decreased noticeably, Total to 5.1 % (previous year: 5.8 %). (number of employees) 339 362 400 Thereof female 149 144 166 Balancing private and working life Thereof male 190 218 234 Enabling our employees to balance their professional career with their private life is very important to us. We therefore offer a variety of working time models and With remote working from home, childcare, and home-­ time accounts, enable personalised work and deployment schooling, the Covid-19 pandemic has placed multiple scheduling, promote mobile and remote working, and burdens on working parents. To be able to support and support our employees in finding childcare options. assist the employees affected in the best possible way, Among other things, we offer holiday care, parent/child we have established exchange forums. In the final analysis, offices, and the “SWM Kindervilla” crèche with space for further working time flexibilisation and unbureaucratic 36 children. In cooperation with the “awo lifebalance” processes are key contributors to lessening these organisation, we moreover help our employees find burdens. au pairs, etc. In addition, we subsidise childcare during school holidays and on the Day of Prayer and Repentance when schools are closed. Together with awo lifebalance München, an organisation of the Munich Workers’ ­Welfare Association, and the Amiravita online care 46 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Employees

With our company-flats, we are creating affordable housing for our employees.

Remuneration and financial benefits To thank our employees for their high commitment Collective work agreements cover 89.8 % of our employees ­under sometimes difficult conditions, the Management (previous year: 89.7 %). As a Group committed to such Board and the Works Council together decided to pay agreements, we use a number of collective agreements a one-time Covid-19 special bonus to all employees that fit the framework conditions of our various business for 2020. The bonus was paid out with the December segments as guideposts for employee remuneration: remuneration and ranged between EUR 225 and TV-V (utilities), TV-N (local public transport), and our EUR 700 for our employees covered by collective agree- in-house collective agreement TV-MVG (Münchner Ver- ments and our trainees, depending on their pay grade. kehrsgesellschaft). In addition, we have a bonus system­ Employees not covered by collective agreements, senior for both employees covered and not covered by collec- executives, and civil servants on leave received EUR 300. tive agreements, which gives them a share in the compa- ny’s profit; this system highlights their collective perfor- Munich’s high cost of living is a challenge for employees mance. Part-time employees receive the same additional in the lower pay brackets. Consequently, it has made it remuneration, fringe benefits, etc., as their full-time harder for us as a company to recruit new skilled employ- colleagues, with the relevant percentage being prorated ees, e. g. drivers for MVG. Since 1 January 2020, we have based on their part-time factor. given our employees some additional financial relief by paying a dedicated “Munich allowance”. This supplemen- We offer various financial benefits. They include a com- tary payment has been introduced for the low and medi- pany pension scheme, a collectively agreed semi-retire- um pay grades at SWM and ranges between EUR 180 ment scheme, and the possibility to take additional and EUR 270 a month, depending on the specific pay ­vacation days against a pay reduction. Individual employ- bracket. These amounts are offset against collective-­ ees not covered by collective agreements as well as bargaining and performance bonuses. ­senior executives have agreed monetary bonuses within the framework of their goal setting reviews. Our remu- In addition, Munich is a city where housing is particularly neration packages also include benefits in kind: at the scarce. This is the reason why we launched our company-­ MVG Rad bike-rental service, all SWM employees have flat expansion campaign. To date, we have already made free use of standard bikes and e-bikes for 30 and 15 slightly under 1,000 company-flats available to our em- minutes per day, respectively. After this time slot, they ployees. In the next stage (construction of 500 new com- are eligible for a reduced price per minute. Those who pany-flats), we will invest at least EUR 120 million in prefer to ride a bike geared to their individual wishes can ­affordable and attractive housing in the period through lease an ­employee bike through our cooperation with 2022. We also intend to continue to make sizeable invest- the JobRad bike-leasing company. Meanwhile, our train- ments and increase the portfolio to approximately 3,000 ees and dual study students can enjoy low-cost mobility flats, located throughout the city, by 2030. In the construc- thanks to our newly introduced MVV 365 Euro Ticket, tion of flats for our employees, we pay a great deal of see the chapter “Essential services and product responsibility”, attention to the energy efficiency of the buildings and page 22. connections to ­various mobility offers, from public sector transport to the MVG Rad rental-bike service to carsharing. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 47 Employees

Diversity and equal opportunities Our diversity management operates at two levels. At the personal level, it is important that we identify, ­appreciate, and benefit from the different potentials of each individ- ee age ruure an gener ual. At the organisational level, our focus is on consciously achieving employee diversity through human resources 6.9 % 11.5 % processes and, more generally, as part of our corporate 4.7 % culture. Our strategic approach comprises six core und er 0 dimensions:

0

r e 31.8 % v o }}Sexual orientation and identity }}Equal opportunities for all genders

0 35.7 %

d }} n Age and generational diversity a 0 n }} ee Ethnic background and nationality bet }}People with disabilities 9.4 %

}}Religion and worldview

Male Female By adopting a holistic approach, we develop and imple- ment suitable activities, measures, and instruments. All employees are to be apprised of the six core dimensions. As a company with employees from nearly 80 nations, To achieve this, we already present the topic of diversity we are virtually as diverse as the urban society of the city and the internal networks within the framework of our of Munich. And this diversity is the very source of our onboarding programme for new employees. Our Man- strength. We signed the Diversity Charter as far back as agement Development Programme (MEP) likewise in 2007. We want to offer a working environment in ­addresses not only topics such as “work/life balance”, which all employees are equally appreciated, accepted, but also diversity, sensitising executives to this issue. and integrated, irrespective of their gender, nationality, ethnic background, religion or worldview, disability, age, What is more, each director has established the function sexual orientation, and identity. Among other things, of an equal opportunity officer for the respective business we contribute to this with a Group-wide LGBTI*network, segment for which they are responsible. In addition to “Proud@SWM”, and the in-house women’s network, their original task, the equal opportunity officers perform “Die Expertisen”. this function and report directly to the respective director.

Diversity unites: We held our first internal Diversity Action Day in 2021 — a contribution to enhancing mutual understanding. 48 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Employees

In accordance with the “Partnership-Oriented Conduct” group works agreement, which protects employees against discrimination and unequal treatment at the workplace, the equal opportunity officers are contacts for all questions revolving around equal treatment as well as any complaints. In addition, our equality policy expert is available for any questions about this issue. She also manages SWM’s internal complaint process, which has been aligned with the recommendations of the German­ Federal Anti-Discrimination Agency.

We are committed to the advancement of women. One of the ways in which we demonstrate this commitment is the fact that we have signed the Munich “Frauen in Führung” (Women in Leadership) memorandum. Specifi- cally, we have set ourselves the goal of increasing the share of women in our workforce to 25 % by 2025. In the year under review, this percentage increased only mar- ginally, to 21.0 % (previous year: 20.9 %). In leadership positions, the share of women is also to increase to 25 % by 2025. However, this percentage edged down some- what in 2020, to 19.3 % (previous year: 20.0 %). We see this development as an incentive to further expand our measures aimed at targeted advancement of women, such as cross-mentoring for female managers or the “Female Empowerment” seminar series, and at the same time further evolve our offers to enable our employees to balance their professional and family lives in the best possible way and communicate the diverse opportunities they have at SWM even better to our female employees. In this context, we are very pleased to report that the the participating companies, inter alia, document their most recent Management Development Programme activities in the areas of new leadership, diversity, and (MEP) was the first to count more women than men digital transformation. In our first try in 2019, we already among its participants (five women, four men). reached a pleasing 7th place in a group of 42 participat- ing companies ranging from DAX corporations to family-­ Total number of employees by hierarchical level owned businesses. At SWM, we intend to act upon the

Female Male stimuli received from the FKi and seek to participate in further award rounds. Management Board 0 4 Executives 9 25 In 2020, 644 employees with physical disabilities worked Managerial staff 92 394 at SWM (previous year: 668). We make manifold efforts Employees 1,857 6,954 to ensure that the work environment at SWM is as barrier-­ free as possible. For instance, we equipped all our deaf employees with tablets in 2020 to ensure improved func- Participation in the Women Career Index (Frauen-Karriere-­ tionality of the online sign language interpreting service. Index — FKi) is also helpful for our goal to make women‘s advancement quantifiable. Under the auspices of the In our view, diversity is not only relevant to our staff, but German Federal Ministry for Family Affairs, Senior Citizens, also to our customers, business partners, and the general Women, and Youth, companies promoting the advance- public as well. This is why we are committed to promoting ment of women and a culture of change and innovation equal opportunities and raising awareness of any form of receive annual awards. Based on an elaborate process, exclusion and intolerance outside our organisation, too. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 49 Employees

Occupational safety and health present relevant issues to the Chief Safety Officer or the OSC. The OSC meetings of the respective senior or- Our employees’ safety and health are relevant to our ganisational unit usually take place quarterly and are success. We make every effort to already strengthen their chaired by the top executive responsible. health through preventive measures. In addition, we regularly raise all employees’ and managers’ awareness Risk assessment is the basis for identifying and implement­ of the issue of occupational safety. It goes without saying ing requisite measures. Only when the necessary safety that our top priority is prevention of (work) accidents. measures have been taken may the safety officer give the green light for an activity, permit the use of tools and The Management Board has the overall responsibility equipment, or release a hazardous substance for use. for occupational safety and health. In many areas, it has For special dangers to life and limb or the environment, delegated this responsibility to subordinate executives the organisational units responsible draw up specific by means of transfer of duties. In each organisational emergency preparedness plans and communicate them unit, responsibility for occupational safety and health to the employees in the operational units. To explore the within the framework of operational activities has been potential risks resulting from the global spread of the assigned to the top-ranking executive but may also SARS-CoV-2 pathogen, in 2020 we enlarged the inter­ be delegated to lower levels and functions. All our four disciplinary “Operational Pandemic Planning” working directors are counselled by dedicated occupational safety group, which we had set up in early 2019, to create a specialists. central task force for the pandemic (“Pandemic Task Force”). This allowed us to identify existing hazards with The regulatory framework for occupational safety and a structured approach and define suitable measures health issued by the German government and the corre- even before the outbreak of the pandemic was officially sponding rules and regulations of the German Social announced in Germany. Accident Insurance (Deutsche Gesetzliche Unfallver- sicherung — DGUV) are only the minimum thresholds for Safety instructions and training us. In some organisational units of the Technology divi- The executives heading the individual organisational sion, we have additionally introduced the safety man- units have prepared instruction schedules for their agement framework of the utilities sector or ISO 45001. ­respective areas of responsibility. These schedules show Alongside the Occupational Safety Committee (OSC) the topics in which employees must be instructed and that is required by law, SWM has also established further the intervals required for such instructions. These safety contact points for employees who have questions about instructions are presented in formalised face-to-face occupational safety and health — the professional training sessions or on site by the relevant manager, or ­employees of the Occupational Safety and Health staff work supervisor, if applicable. Managers are aided in this units and the safety officers in the respective organisa- task by approximately 100 E-Learning sessions on the tional units. The various safety officers, for their part, topic of occupational safety. Additionally, these sessions can be used for personalised instructions. They are allo- cated directly to the respective employees and tracked via the LearningManagementSystem.

In addition, our training programme offers a wide range of safety training courses: a total of 441 participants were trained in 79 courses in 2020 (previous year: 23 courses with 244 participants), ranging from fire protection assis- tance to occupational safety for managers. Most occupa- tional safety trainings take place on site in areas specifi- cally geared to the necessary requirements. For the large number of first aid training courses, we can rely on the support of external providers such as the Bavarian Red Cross (BRK), the German Workers’ Samaritan Federation (ASB), or the Workers’ Welfare Association (AWO). 50 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Employees

If an accident happens at SWM despite all precautionary Accident statistics for Mobility and MVG

measures, it will be reported and analysed centrally Work accidents 2018 2019 2020 based on a specific flow chart. Total 233 189 166 Thereof subject Accident statistics for the core Group, to ­reporting excluding Mobility and MVG1) obligations 173 132 120

Work accidents 2018 2019 Thereof not subject to reporting­ Total 80 83 obligations 60 57 46 Thereof subject to Thereof fatal 0 0 0 ­reporting ­obligations 51 54 Subsequent Thereof not subject to ­ ­absence days 6,170 4,390 3,780 reporting obligations 29 29 Accident frequency Thereof fatal 0 0 in % 4.39 3.38 2.65 Subsequent absence days 1,137 1,328 Accident frequency in % 1.15 1.13 Commuting accidents 2018 2019 2020 Total 48 40 46 Commuting accidents 2018 2019 Thereof subject Total 50 41 to ­reporting obligations 43 31 33 Thereof subject to ­reporting ­obligations 32 24 Thereof not subject to reporting­ Thereof not subject to ­ obligations 5 9 13 reporting obligations 18 17 Thereof fatal 0 0 0 Thereof fatal 0 0 Subsequent Subsequent absence days 1,104 543 ­absence days 2,024 1,022 962 Accident frequency in % 0.72 0.50 Accident frequency 1) At the time of writing, the recording of the accident statistics of the core in % 1.05 1.05 0.73 Group had not yet been finalised, so these figures could not be taken into account in the 2020 Sustainability Report. Our company doctors are responsible for counselling SWM across all segments in all issues of occupational safety and health and accident prevention. They are not subject to any instructions, and the Chief Medical Officer reports directly to the Director, Personnel and Social Affairs. Avail- able occupational healthcare resources and examinations are presented and explained to our employees on the intranet.

Health protection: focus on prevention The Health staff unit comprises the following depart- ments: Occupational Healthcare, Corporate Health Man- agement, and Integration Management and Rehabilita- tion. Our Chief Medical Officer heads the staff unit; she reports directly to the Management Board. Occupational Healthcare is responsible for traditional corporate medi- cal services and tasks stipulated by occupational safety and health legislation and also offers preventive medical services such as nutritional counselling, flu vaccination, or Health Days. In addition, department representatives are involved in the advisory committee for the staff res- taurant, the goal being to support healthy staff meals. Corporate Health Management offers a broad range of workplace health promotion services, including the SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 51 Employees

“SWM aktiv” corporate sports programme, and operates our in-house gym. In the area of mental health, the focus is on individual and collective psychosocial counselling and a support policy for the Mobility division, in some instances in cooperation with external trauma therapists. Integration Management and Rehabilitation supports the company in the execution of operational integration management pursuant to Section 167 of the German Social Code IX (Sozialgesetzbuch — SGB). To ensure our continued ability to provide interesting health services, our employees in the Health staff unit are continuously given opportunities to attend professional development workshops and qualification courses.

As was to be expected, the work of the Health staff unit in the year under review was massively dominated by the A DAY DEDICATED TO HEALTH Covid-19 pandemic. The Occupational Healthcare depart- ment contacted the local and regional health authorities Unrelated to the Covid-19 pandemic, SWM held its early on. Even before the publication of legally binding inaugural digital Health Day in January 2021. From early regulations, SARS-CoV-2 risk assessments were prepared morning to the end of the workday, employees had in the individual divisions, business segments, and special- opportunities to join interactive Skype meetings or view ist departments. These assessments formed the basis of video clips recorded in advance — many of which also in- stringent hygiene concepts and precautionary measures cluded participatory elements — on three health-relevant for our employees, which were geared to the require- topic areas (exercise, nutrition, and stress management). ments of their respective activities. With more than 10,000 viewings across the entire range of offers, this action day was a success. Given the high One key infection protection measure was a switch to demand, we have made the videos permanently accessible remote working (home office) and mobile working. on the intranet. Thanks to the IT department’s fast and competent sup- port, this was made possible in a timely fashion for all employees performing activities suitable for this mode of An internal reporting system that complied with data working. We also moved elements of corporate health protection regulations enabled us to quickly identify management and psychosocial counselling to digital infection clusters in specific units and immediately initi- formats at short notice, which was well accepted. We are ate suitable countermeasures. dealing with the specific psychosocial effects of the pan- demic in a newly established interdisciplinary working Our intensive internal communications played a key role group. The latter has set itself the goal of identifying in making employees aware of the precautionary meas- individual potential risk factors and presenting suitable ures and ensuring a high acceptance level. In this process, offers to the individuals concerned. They include a parent we also established new information formats such as an counselling group for home-schooling, digital leadership internal corporate Covid-19 podcast and a Covid-19 support offers, or the organisation of digital “Coffee newsletter specifically geared to managers. Breaks” that aim to counter loneliness experienced by people working remotely from home. In addition, we At times, the short-term procurement and logistics of conducted the first employee survey addressing ques- certain equipment for both pandemic-related and general tions on the psychological risks associated with work at occupational safety and health proved challenging. Dur- SWM. To ensure meal provision to those of our employees ing the peak of the first wave of the pandemic in spring still working on site, we adjusted the offers of our staff 2020, for example, the quantities of protective masks restaurant to the respective infection incidence levels available on the purchasing side in some instances fell and the prevailing risk situation. short of the numbers requested by the units that needed them. In those situations, we resorted to a central release When employees tested positively for the SARS-CoV-2 process in order to ensure the fairest or most reasonable virus, the Health staff unit supported the departments distribution possible. affected in contact tracing and the resultant measures. Corporate governance SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 53 Corporate governance

Good corporate governance is also reflected in respon­ In the core Group, the Group Governance, Compliance sible behaviour. As a company providing important infra- and Group Internal Audit staff unit — hereinafter also structure services and owned by the city of Munich — called “Compliance function” — addresses the topic of and thus ultimately by Munich’s citizens — corporate corporate governance. The Management Board’s corpo- governance is an important topic for us. This is embed- rate office supports them in this task. Furthermore, ded in the mission statement of our organisation. ­systems exist for risk management, compliance manage- ment, and information security management. The guide- line on the Compliance Management System (CMS) at Mission statement SWM Group defines the organisation and operation of the CMS. SWM’s CMS has been aligned with the Principles of 1. We are committed to the citizens of Munich. Proper Audit of Compliance Management Systems prom- 2. We work towards enhancing the quality of life in ulgated by the Institute of Public Auditors in Germany Munich and the region (IDW-PS-980) and covers three levels of action: prevent, 3. We engage in sound and long-term relationships identify, and react. Compliance and data protection audits with our customers. are carried out approximately once or twice per year. In 4. We act in a responsible manner towards the addition, Group Internal Audit regularly performs audits. ­environment and society. 5. Our business success is the basis of everything. While the topic of corporate governance has been organi- 6. We demand and encourage performance and sationally centralised in the core Group, decentralised reliability. management has been implemented in most of our share- 7. Our actions are based on cooperation and partnership. holdings. Centralised policies also exist for relevant units that serve the purpose of shareholding support, manage- We attach importance to clear responsibilities, transpar- ment, and controlling by SWM. ent delegation of tasks, an operational chain of com- mand, effective control mechanisms and functional de- SWM’s Business Partner Code of Conduct, which took lineation, and compliance with the business judgement effect in 2020, contains the most important principles for rule, which stipulates that all decisions must be taken legally correct, responsible, and ethical behaviour that we with due diligence. According to our Code of Conduct, require of business partners and see as an essential basis this above all means that decisions must be prepared of our cooperation as partners. In addition, we conduct properly, taking account of all relevant decision-making risk-oriented, software-based business partner compli- options and their implications. They may not be deter- ance audits. mined by inappropriate influences and special interests. Another principle that applies is that key decisions re- quire the approval of senior management. It goes with- Fairness and compliance at out saying that we adhere to the legal requirements in all ­Stadtwerke München corporate governance issues, especially those arising from corporate law. It goes without saying that we comply with all legal reg- ulations. The entire Group and especially the SWM Man- At SWM, internal policies provide guideposts for action. agement Board see this as their responsibility vis-à-vis The major elements are our corporate policy, the regula- customers, employees, the city of Munich in its capacity tions on decision-making authorities, our delegation of our shareholder, and the expert authorities. guidelines, the articles of association and by-laws, the business distribution plan, the guideline for the organisa- When it comes to responsibilities, we pursue a top-down tion of management board resolutions, and our policies approach. The responsibility for compliance has been for financial transactions and the management of assigned to the Management Board of Stadtwerke shareholdings. München GmbH/Management Board of SWM Group. 54 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN Corporate governance

According to the business distribution plan, the Chief cooperative and partnership-oriented approach, take Executive Officer holds the departmental responsibility decisions with due diligence, and acknowledge our for compliance. On his behalf, the senior executives ­responsibility for the environment and society. This in- heading the Group Governance, Compliance, and Group cludes a clear commitment to the energy transition as Internal Audit staff unit are responsible for the CMS. The well as respecting human rights. Moreover, the Code of Compliance Officer compiles annual activity reports to Conduct regulates confidentiality obligations, the han- inform the Management Board of Stadtwerke München dling of conflicts of interest, and dealing with customers, GmbH/Management Board of SWM Group and the business partners, and other third parties. Employees ­supervisory board bodies of SWM. noticing compliance violations in their environment can report them through various channels. Apart from In our organisation, compliance covers the following speaking to their manager, the Group Gover­nance and areas of activity: data protection law, anti-trust law, Compliance staff unit is available to them as an internal ­prohibition of insider trading and market manipulation, whistle-blower contact. Alternatively, an attorney who prevention of money laundering and terrorist financing, has been appointed as an external ombuds­person can be prevention of corruption and property offences, and contacted. prevention of collusive tendering. We do not tolerate corruption or other unfair competitive practices, we Not only are the members of our organisation expected pursue a transparent approach to donations­ and spon- to adhere to all applicable laws, but the same holds true soring, and we are careful in our handling of personal for our business partners. In our Code of Conduct, of data. In 2019, we performed a risk analysis in the areas of which major business partners must make themselves business partners’ compliance and money-laundering aware at our request, we outline the consequences of prevention measures. Based on the results of this analy- non-observance — we avoid business relations with sis, risk categories have been developed for SWM‘s busi- companies publicly known to disregard the principles ness partners, which form the basis of the business part- underlying our Code of Conduct and not taking any ner audits we now conduct. In addition, we performed suitable rectification measures. In addition, we put a an anti-money-laundering ­compliance risk analysis in Business Partner Code of Conduct into effect in 2020, Energy Trading in 2019. This analysis examined the prod- which has been published on SWM’s website in German uct-, business-partner-, transaction-, and country-specific and English. This document contains the most important risk profile with respect to money laundering and terror- principles for legally correct, responsible, and ethical ism financing within the framework of transactions car- behaviour that we require of business partners and see ried out by this unit. The result was that the money laun- as an essential basis of our cooperation as partners. The dering risk of the Energy Trading unit can be categorised Business Partner Code of Conduct contains principles on as “low“. In late 2020, we started a Group-wide fraud human rights, child and forced labour, employee rights, compliance risk analysis. Apart from the identification of environmental protection, raw material procurement, traditional fraud risks (corruption, fraud, breach of trust, anti-corruption, money laundering and terrorist financ- embezzlement), this analysis also includes risks in the ing, export and import controls, sanctions, conduct in areas of money laundering and terrorism financing. competition, and business ethics, as well as data protec- Based on the results of this analysis, recommendations tion and handling of information. In the event of viola- for the optimisation of our CMS will be submitted. There tions of these principles by business partners, we reserve were no corruption incidents in 2020. the right to review the business relationship. The same applies when negative press coverage alerts us of viola- The focus of our compliance activities is on preventative tions of ESG (environmental, social, governance) princi- measures aimed to ensure that violations do not occur in ples. Depending on the severity of the violation, we may the first place. For example, training workshops or e-learn- terminate the business relationship and enforce claims ing sessions are conducted to increase all employees’ for damages. awareness of compliance issues. Face-to-face workshops focus on employees who may typically come into contact Because changes may occur in the legal environment, with compliance issues in the performance of their tasks case law, and authorities‘ specific decisions as well as (e. g. those dealing with external contractors). We publish SWM’s risk position and performance, we set annual all relevant policies, duties, and requirements on our goals for the Compliance function and update these intranet. Our Code of Conduct makes it clear to all em- goals continuously. Our agenda for 2021 includes the ployees that we respect the law, draw attention to viola- introduction of a new e-learning session on compliance tions of laws and rules, and assume responsibility for and data protection and the improvement of our compliance with rules and regulations. In addition, we ­business partner audit through further automation act in the interest and for the benefit of SWM, adopt a of interfaces. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 55 Corporate governance

Competition communicate developments in the Group and prepare We also rely on preventive measures with respect to ourselves for changes early on. anti-trust legislation. Specific requirements in our Code of Conduct, compliance training workshops, and contin- Data protection and information security uous legal counsel — e. g. for contract design — aim at possibly avoiding violations even before they occur. Even Our business activities regularly involve personal data. though we ourselves do not violate anti-trust legislation, We handle these data responsibly and in compliance collusion by third parties may cause us harm. In tight with the EU General Data Protection Regulation. We markets, in particular, the risk of collusion among third attach high priority to data protection and therefore also parties exists in tendering. In the event of anti-trust-­ address this topic in our Code of Conduct. Similarly, induced damage, we carefully examine whether we data protection is the topic of an e-learning session for should file damage claims. our employees that is used throughout the Group.

Political engagement The topic of data protection is organisationally integrat- Our business is subject to strong regulatory influences. ed in our Compliance function. In addition, there are EU legislation (or its transposition at the national level) is decentralised contacts in the form of data protection relevant here, as are laws and measures adopted at the coordinators and data protection specialists, who support national, Bavarian, and local levels. Among the numer- the central Compliance function. Data protection coordi- ous political initiatives that might impact our Group, we nators process and coordinate inquiries by affected parties are focusing on the issue of decarbonisation, the expan- from the various business segments. Data protection sion of renewable energies (including heating) and the specialists update the processing register, report any traffic transition (especially with a view to the role of data protection incidents, and are the first responders local public transport). In addition, we assume that the for the business units when it comes to initial data pro- “Green Deal” proposed by the European Commission tection reviews. with its ambitious climate goals will have significant implications for the energy and transport sectors. The Our Data Protection unit prioritises the support of internal “Climate Protection Programme 2030” that aims to projects in which data protection plays a major role. One achieve the German climate protection targets by 2030 is recent example is the development of digital business also of major significance for SWM Group. Key elements models such as M-Login. In addition, Data Protection of the programme are the first German federal climate addresses the implementation of data protection require- protection act and a new CO2 pricing approach for the ments in our organisation, e. g. the project implementing transport and heating sectors from 2021 onwards. In the EU General Data Protection Regulation, the project addition, there will be subsidisation programmes and aimed at developing Group-wide data deletion and block- incentives for CO2 reduction and, over time, regulatory ing strategies, or the purchase of data protection manage- measures that will have a more pronounced effect from ment software. In this context, the large number of Group 2030 onwards. projects with data protection relevance is a challenge; and this also applies to documentation requirements under Given the crucial importance of legislation for our busi- the EU General Data Protection Regulation. ness, we engage in a supporting role in the political discussions on planned legislation at the European as Various audits regularly verify whether data protection well as the German federal and state levels. Our positions regulations have been implemented properly in the and approaches in this dialogue are solely based on company. The Information Security Officer carries out principles that are sound from an energy-sector and security audits, while the Compliance function is respon- macroeconomic perspective. Proprietary fundamental sible for data protection audits. In addition, the Manage- models for the energy sector provide an objective data ment Board of Stadtwerke München GmbH tasks Group basis for our reasoning. Of course, we adhere to all Internal Audit with data protection and IT security audits ­requirements of our Code of Conduct and all applicable in its annual internal audit plan. We handle data protec- compliance rules in the political sphere, too. With our tion violations as stipulated in the regulations and have political engagement, we intend to generate greater reported any violations that were subject to reporting awareness of our interests and concerns, especially with obligations to the competent data protection agency. a view to the implementation of our ­renewable energies expansion campaign, geothermal energy, and the impor- tance of local public transport for the traffic transition. In addition, our political engagement enables us to 56 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN About this report

About this report

This is the second Sustainability Report published by The reporting period matches the financial year, which Stadtwerke München (SWM). It is built on the inter­ ran from 1 January 2020 to 31 December 2020. The edi- nationally accepted reporting framework defined by the torial deadline for this report was 8 July 2021. The report “Global Reporting Initiative Standards”, which we used is updated annually. As a basic principle, all information as a guideline for the materiality analysis we conducted, refers to SWM in its entirety with all its business segments. the description of the management approaches, and the Individual chapters deviate from this reporting period in underlying classification of information into general or the sections indicated. Any information and presentations specific. In addition, we adhered to general reporting of strategies and approaches in the individual chapters principles: accuracy, balance, clarity, comparability, reli­ that refer to different units are moreover indicated ability, and timeliness. This report has been prepared in accordingly. compliance with the “Core” option of the GRI Standards.

Impact inside/outside the organisation

Key topic Relevance Relevant GRI standard Inside the Outside the organisation­ organisation­

Society

Social responsibility x GRI 201 2016 — Economic Performance GRI 203 2016 — Indirect Economic Impacts GRI 413 2016 — Local Communities

Products and Services

Provision of x GRI 203 2016 — Indirect Economic Impacts essential services GRI 301 2016 — Materials GRI 302 2016 — Energy GRI 303 2018 — Water and Effluents GRI 305 2016 — Emissions

Product responsibility x GRI 203 2016 — Indirect Economic Impacts GRI 301 2016 — Materials GRI 302 2016 — Energy GRI 305 2016 — Emissions GRI 416 2016 — Customer Health and Safety

Environment

Energy x x GRI 302 2016 — Energy

Emissions x x GRI 305 2016 — Emissions

Raw materials and supplies x GRI 301 2016 — Materials

Water x x GRI 303 2018 — Water and Effluents

Employees

Working conditions x GRI 401 2016 — Employment GRI 402 2016 — Labor/Management Relations GRI 405 2016 — Diversity and Equal Opportunity GRI 406 2016 — Non-discrimination GRI 407 2016 — Freedom of Association and ­Collective ­Bargaining SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 57 About this report

Key topic Relevance Relevant GRI standard Inside the Outside the organisation­ organisation­

Employees

Training and education x x GRI 404 2016 — Training and Education

Occupational health and safety x GRI 403 2018 — Occupational Health and Safety Diversity and equal opportunity x x GRI 202 2016 — Market Presence GRI 405 2016 — Diversity and Equal Opportunity

Corporate Governance

Value creation x x GRI 201 2016 — Economic Performance

Compliance x x GRI 205 2016 — Anti-corruption GRI 307 2016 — Environmental Compliance GRI 419 2016 — Socioeconomic Compliance

Data protection x x GRI 418 2016 — Customer Privacy

Competition x GRI 206 2016 — Anti-competitive Behaviour

Data collection and compilation In addition, reference is made to shareholdings as appli- Unless otherwise indicated, the following principles cable The collection period for the data published is apply to all key performance indicators and data points 1 January 2020 to 31 December 2020. Accordingly, the throughout the entire report. This Sustainability Report basis of the previous year’s data is shifted by one year covers all companies that are part of the core each. The content is based on a materiality analysis SWM Group: Stadtwerke München GmbH, Münchner ­performed within the context of initial report prepara- ­Verkehrsgesellschaft mbH, SWM Versorgungs GmbH, tion in 2019. The material topics identified are presented SWM ­Services GmbH, SWM Kundenservice GmbH, SWM extensively in the report. All data has been collected Infrastruktur GmbH & Co. KG, and LHM Services GmbH. carefully, but transmission errors cannot be ruled out.

Münchner Verkehrs- gesellschaft SWM mbH (MVG) SWM Gas- Kundenservice beteiligungs GmbH GmbH

HM SWM Services Services GmbH GmbH

SWM SWM Infrastruktur STADTWERKE MÜNCHEN GMBH Versorgungs GmbH & GmbH Co. KG 58 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN GRI Content Index

GRI Content Index The persons covered by the term “employees” in this figures. Forward-looking statements made in this report ­report do not include trainees, interns, seasonal workers, are based on internal assessments of future develop- and staff members whose contracts are dormant. Infor- ments, which are subject to uncertainties and may not mation on the workforce is provided on a per capita basis. be under the control of Stadtwerke München. This ­report is published in German and English. In the event Rounding of amounts or percentages to the nearest of deviations, the German version prevails. whole number may lead to differences from the actual

GRI Content Index

GRI 101 — Foundation 2016

Page GRI Standard Disclosure number(s) Comments/references

GRI 102 — General Disclosures 2016

Organisational profile

GRI 102-1 Name of the organisation Stadtwerke München GmbH GRI 102-2 Activities, brands, products, and services p. 4 et seq., pp. 15–24 See Annual Report, p. 22 et seq. GRI 102-3 Location of headquarters Emmy-Noether-Strasse 2 80992 Munich GRI 102-4 Location of operations p. 31 et seq. See Annual Report, pp. 68–70 GRI 102-5 Ownership and legal form pp. 6 and 56 et seq. See Annual Report, pp. 68–70 GRI 102-6 Markets served p. 4 et seq. See Annual Report, p. 22 et seq. GRI 102-7 Scale of the organisation p. 6 See Annual Report, pp. 31–34 GRI 102-8 Information on employees and other workers pp. 39–48 GRI 102-9 Supply chain pp. 11, 19 and 24 GRI 102-10 Significant changes to the organisation and There were no significant changes to the its supply chain ­organisation and its supply chain in 2020. GRI 102-11 Precautionary principle or approach p. 53 et seq. See Annual Report, pp. 35–37 GRI 102-12 External initiatives p. 11 GRI 102-13 Membership of associations – Arbeitsgemeinschaft Offshore- Windenergie e. V. – Bundesverband der Energie- und ­Wasserwirtschaft e. V. – Bundesverband Geothermie e. V. – Bundesverband Glasfaseranschluss e. V. – Verband Deutscher Verkehrs­ unternehmen – Verband kommunaler Unternehmen e. V. – Wirtschaftsbeirat der Union e. V. – Wirtschaftsforum der SPD e. V.

Strategy

GRI 102-14 Statement from senior decision-maker p. 2 et seq.

Ethics and integrity

GRI 102-16 Values, principles, standards, and norms pp. 6 et seq., 15, 29, 47 of behaviour and 53 et seq. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 59 GRI Content Index

Page GRI Standard Disclosure number(s) Comments/references

Governance

GRI 102-18 Governance structure pp. 2–5, 29 and 57 See Annual Report, p. 64 et seq. GRI 102-20 Executive-level responsibility for economic, p. 2 et seq. and 9 environmental, and social topics

Stakeholder engagement

GRI 102-40 List of stakeholder groups p. 11 GRI 102-41 Collective bargaining agreements p. 46 GRI 102-42 Identifying and selecting stakeholders p. 10 et seq. GRI 102-43 Approach to stakeholder engagement p. 10 et seq. GRI 102-44 Key topics and concerns raised pp. 9 et seq., 17 and 29

Reporting practice

GRI 102-45 Entities included in the consolidated pp. 4 et seq. and 57 ­financial statements GRI 102-46 Defining report content and topic pp. 9 et seq. and boundaries 56 et seq. GRI 102-47 List of material topics p. 9 et seq. GRI 102-48 Restatements of information p. 56 et seq. GRI 102-49 Changes in reporting p. 56 et seq. GRI 102-50 Reporting period p. 56 et seq. GRI 102-51 Date of most recent report p. 56 The most recent Sustainability Report was published in July 2020. GRI 102-52 Reporting cycle p. 56 Reports are prepared annually. GRI 102-53 Contact point for questions regarding the p. 63 Andreas Brunner, Head of Marketing report and Communication GRI 102-54 Claims of reporting in accordance with the p. 56 et seq. GRI Standards GRI 102-55 GRI content index pp. 58–62 GRI 102-56 External assurance No external review has been performed.

GRI 201 — Economic Performance 2016

GRI 103 Management approach pp. 15–27 and See Annual Report, pp. 23–34 (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 201-1 Direct economic value generated and See Annual Report, p. 31 et seq. ­distributed GRI 201-3 Defined benefit plan obligations and See Annual Report, p. 49 other retirement plans

GRI 202 — Market Presence 2016

GRI 103 Management approach pp. 45 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 202-1 Ratios of standard entry level wage by p. 45 We pay our employees in accordance ­gender compared to local minimum wage with ­various collective bargaining ­agreements — and they receive at least the statutory minimum wage.

GRI 203 — Indirect Economic Impacts 2016

GRI 103 Management approach pp. 15 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 203-1 Infrastructure investments and services pp. 6, 17–27, 31 et seq., supported 34 et seq. and 36 et seq. 60 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN GRI Content Index

Page GRI Standard Disclosure number(s) Comments/references

GRI 205 — Anti-corruption 2016

GRI 103 Management approach pp. 53 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 205-2 Communication and training about p. 54 ­anti-­corruption policies and procedures GRI 205-3 Confirmed incidents of corruption and p. 54 No incidents of corruption were reported actions taken at SWM in 2020.

GRI 206 — Anti-competitive Behaviour 2016

GRI 103 Management approach pp. 54 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 206-1 Legal actions for anti-competitive behaviour, p. 54 et seq. SWM was not involved as a party in any anti-trust, and monopoly practices legal actions for anti-competitive behav- iour, anti-trust, and monopoly practices.

GRI 301 — Materials 2016

GRI 103 Management approach pp. 15 et seq., 19, 34, 37 (including GRI 103-1, 103-2, 103-3) and 56 et seq. GRI 301-1 Materials used by weight or volume For information on this matter, please see the 2020 Consolidated Environmental Statement of the Technology division of Stadtwerke München.

GRI 302 — Energy 2016

GRI 103 Management approach pp. 29 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 302-1 Energy consumption within the organisation p. 30 GRI 302-2 Energy consumption outside of the p. 17 organisation­

GRI 303 — Water and Effuents 2018

GRI 103 Management approach pp. 19, 29 et seq., 36 (including GRI 103-1, 103-2, 103-3) and 56 et seq. GRI 303-1 Interactions with water as a shared resource GRI 303-2 Management of water discharge-related Sewage management is not handled by impacts SWM, but by Münchner Stadtentwäs- serung, another public-sector company owned by the city of Munich. GRI 303-4 Water discharge p. 19 GRI 303-5 Water consumption p. 36

GRI 305 — Emissions 2016

GRI 103 Management approach pp. 19, 29 et seq., 35 (including GRI 103-1, 103-2, 103-3) and 56 et seq. GRI 305-1 Direct (Scope 1) GHG emissions p. 30 GRI 305-2 Energy indirect (Scope 2) GHG emissions p. 30

GRI 305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), p. 30 and other significant air emissions

GRI 307 — Environmental Compliance 2016

GRI 103 Management approach pp. 15–19, 29 et seq. (including GRI 103-1, 103-2, 103-3) and 56 et seq. GRI 307-1 Non-compliance with environmental laws There have been no incidents of and regulations ­non-­compliance with environmental laws and/or regulations. SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN 61 GRI Content Index

Page GRI Standard Disclosure number(s) Comments/references

GRI 401 — Employment 2016

GRI 103 Management approach pp. 39–48 and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 401-1 New employee hires and employee turnover p. 44 GRI 401-2 Benefits provided to full-time employees p. 46 Company benefits are provided to all that are not provided to temporary or part- employees of SWM—including tempo- time employees rary employees to the extent to which Articles 12 and 8 of the German Tem- porary Employment Act (Arbeitnehmer­ überlassungsgesetz, AÜG) are applicable and implemented by the labour leasing company. GRI 401-3 Parental leave p. 45

GRI 402 — Labor/Management Relations 2016

GRI 103 Management approach pp. 39, 44 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 402-1 Minimum notice periods regarding We inform our employees as timely as pos- ­operational changes sible regarding organisational changes.

GRI 403 — Occupational Health and Safety 2018

GRI 103 Management approach pp. 49 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 403-1 Occupational health and safety manage- p. 49 ment system GRI 403-2 Hazard identification, risk assessment, and p. 49 et seq. incident investigation GRI 403-3 Occupational health services p. 50 GRI 403-4 Worker participation, consultation, and p. 49 et seq. communication on occupational health and safety GRI 403-5 Worker training on occupational health and p. 49 safety GRI 403-6 Promotion of worker health p. 50 et seq. GRI 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships GRI 403-9 Work-related injuries p. 50 At the time of writing, the recording of the accident statistics of the core Group had not yet been finalised, so these figures could not be taken into account in the 2020 Sustainability Report.

GRI 404 — Training and Education 2016

GRI 103 Management approach pp. 39 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 404-1 Average hours of training per year per p. 43 employee­ GRI 404-2 Programmes for upgrading employee skills p. 42 et seq. and transition assistance programs

GRI 405 — Diversity and Equal Opportunity 2016

GRI 103 Management approach pp. 47 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. 62 SUSTAINABILITY REPORT 2020 STADTWERKE MÜNCHEN GRI Content Index

Page GRI Standard Disclosure number(s) Comments/references GRI 405-1 Diversity of governance bodies and employees pp. 40 et seq. and 48 GRI 405-2 Ratio of basic salary and remuneration of We pay our employees in accordance with women to men ­various collective bargaining agreements — and they receive at least the statutory ­minimum wage. No distinction between men and women is made in this respect.

GRI 406 — Non-discrimination 2016

GRI 103 Management approach pp. 47 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 406-1 Incidents of discrimination and corrective Equal opportunity officers responsible actions taken for this issue have been appointed in all divisions. Isolated discrimination incidents were reported in the year under review. They were reviewed, and the necessary measures were implemented.

GRI 407 — Freedom of Association and Collective Bargaining 2016 GRI 103 Management approach pp. 44 and 56 et seq. (including GRI 103-1, 103-2, 103-3) GRI 407-1 Operations and suppliers in which the right We are not aware of any operations and to freedom of association and collective suppliers in which the right to freedom of ­bargaining may be at risk association and collective bargaining may be at risk.

GRI 413 — Local Communities 2016

GRI 103 Management approach pp. 10 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 413-1 Operations with local community pp. 5 and 11 ­engagement, impact assessments, and development programmes

GRI 415 — Public Policy 2016

GRI 103 Management approach p. 55 et seq. (including GRI 103-1, 103-2, 103-3) GRI 415-1 Political contributions Political parties do not receive any ­contributions from SWM.

GRI 416 — Customer Health and Safety 2016

GRI 103 Management approach pp. 15 and 25 et seq. (including GRI 103-1, 103-2, 103-3) GRI 416-1 Assessment of the health and safety impacts pp. 25 et seq. and 55 of product and service categories

GRI 418 — Customer Privacy 2016

GRI 103 Management approach p. 55 et seq. (including GRI 103-1, 103-2, 103-3) GRI 418-1 Substantiated complaints concerning p. 55 ­breaches of customer privacy and losses of customer data

GRI 419 — Socioeconomic Compliance 2016

GRI 103 Management approach pp. 53 et seq. and (including GRI 103-1, 103-2, 103-3) 56 et seq. GRI 419-1 Non-compliance with laws and regulations p. 53 et seq. There have been no incidents of in the social and economic area ­non-­compliance with laws and regula- tions in the social and economic area. Contact and imprint

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