Through Light, We Care

THROUGH LIGHT, WE CARE.

Declaration of sustainability 2020/21 CONTENTS

RENEWABLE ENERGY FROM DOMESTIC HYDROPOWER Page 04 - 05

OUR RESPONSIBLE ACTIONS Page 06 - 21

KEY TOPIC CLUSTER ZUMTOBEL GROUP Page 22 - 67

SUSTAINABLE CORPORATE Page 22 - 25 MANAGEMENT

CORPORATE GOVERNANCE Page 26 - 29 AND COMPLIANCE

PRODUCT- Page 30 - 37 RESPONSIBILITY

RESPONSIBLE Page 38 - 49 EMPLOYER

SUSTAINABLE Page 50 - 55 PROCUREMENT

IN-HOUSE ENVIRONMENTAL Page 56 - 67 PROTECTION „SUSTAINABLE BUSINESS ENSURES A VIABLE FUTURE FOR HUMANITY.“

Dear Reader,

The Zumtobel Group is working intensively to further accelerate its sustainability activities. The focus here is on the topics of circular economy and CO₂ reduction.

The Zumtobel Group is as concerned with the responsible use of material resources as it is with minimizing waste, emissions and energy consumption.

By switching to the purchase of electricity from renewable sources, initially for our Austrian sites, the Zumtobel Group is taking another clear step toward climate neutrality.

In the 2020/21 edition of this Sustainability Statement, we would like to focus on the revision of the materiality matrix. Mario Wintschnig, MSc Corporate Responsibility Manager Group Sustainability In this report, we dedicate the generous „For me, sustainable business means images, each at the start of the six topic business that is fit for grandchildren. By clusters, with the associated material to- this I mean that ecological, economic pics described in detail, to the aspect of and social resources are consumed by „Electricity from renewable energies - use companies and society only to the ex- of domestic hydropower“, using the exam- tent that these resources will be avai- ple of Lake Lünersee in Vorarlberg, and the lable to future generations in the same view of its surrounding, wonderful moun- quality and quantity.“ tain world.

In this document, the terms employees, colleagues, customers, partners, employers, etc. include and are understood to include women, men and Divers equally. RENEWABLE ENERGY FROM DOMESTIC HYDROPOWER

Expansion of energy from renewable sources - hydropower Alfred Felder The Zumtobel Group and Illwerke VKW, both strongly rooted tra- CEO Zumtobel Group ditional companies in Vorarlberg, are united by a long-standing partnership and the common pursuit of a sustainable future - “We are working intensively on further accelerating our sustaina- through energy-efficient lighting and energy solutions. bility efforts. In this regard, our top priorities are promoting a circular economy and reducing our carbon footprint. The responsible Hydropower is THE mineral resource of Vorarlberg and at the use of material resources as well as the minimisation of waste, same time a guarantee for a secure and sustainable energy emissions and energy consumption are of vital importance to supply. The use of electricity from hydropower plays a key role us. The Zumtobel Group is clearly moving further ahead towards in achieving the Zumtobel Group‘s target of climate neutrality by climate-neutral business operations by converting to electricity 2025 as well as the goal of energy autonomy for Vorarlberg. from hydropower, at first for our Austrian facilities.”

4Austria, Lünersee with view of the Douglass Hut at an altitude of 1,979 m The Lünersee

Lake Lünersee, once the largest natural mountain lake in the Eas- Quido Salzmann tern Alps. It is fed by the Verabach, the Totalpbach, which rises Illwerkevkw south of the Schesaplana, and smaller tributaries.

„To date, Austria‘s electricity demand is not yet covered exclusi- Facts: vely by renewable energies. Around 20 % of electricity generation still comes from fossil power plants. However, the Zumtobel Location 1,970 m altitude, 76 million m³ usable reservoir space Group already purchases 100 % green electricity from Austrian 1.6 km² surface area at dam destination hydropower plants, thereby avoiding around 2,300 tons of CO₂ 13 km² catchment area (0.9 km² are glaciated) every year. This makes the Zumtobel Group one of the pioneers dam biggest heigt 28 m among industrial companies in Europe and actively contributes to 380 m damm crest length the energy transition.“ 410 million KWh standard capacity

Picture: © Mario Wintschnig5 OUR RESPONSIBLE ACTION

„FOR ME, ACTING RESPONSIBLY AND SUSTAINABLY MEANS CONSTANTLY WEIG- HING SOCIAL, ENVIRONMENTAL AND ECONOMIC CONCERNS AGAINST EACH OT- HER IN ORDER TO BRING THEM INTO A REASONABLE RELATIONSHIP - THUS SAFE- GUARDING THE SUSTAINABLE INTERESTS OF HUMANITY.“

Mario Wintschnig, Corporate Responsibility Manager, Group Sustainability

The Zumtobel Group is an international “The Zumtobel Group – an Overview“. Sus- includes a contribution to providing future lighting corporation and a leading supplier tainable and responsible actions are firmly generations with a stable economic, social of innovative lighting solutions, lighting anchored throughout the Zumtobel Group. and ecological environment. In reaching components and related services. A de- The Group accepts its responsibility to so- its economic goals, the Zumtobel Group tailed description of the business model is ciety and is committed to the principle of therefore also takes ecological, social and provided in this management report under sustainable corporate development. This ethical factors into consideration.

FRAMEWORK FOR THE NON-FINACIAL STATEMENT

This year’s group management report also by the Global Reporting Initiative (GRI) ment, the corporate governance report includes the consolidated non-financial were only used for orientation purposes. and the consolidated financial statements. statement required by § 267a of the Aus- Reporting was expanded to place a grea- The consolidated non-financial statement trian Commercial Code. The Zumtobel ter focus on the issues most important to was presented to the Supervisory Board Group meets its reporting requirements the Zumtobel Group and its stakeholders. and reviewed and released by PwC Öster- under the Austrian Sustainability and Di- In addition to this non-financial statement, reich GmbH Wirtschaftsprüfungsgesell- versity Improvement Act (“Nachhaltig- selected content is included in the current schaft for its correctness, regularity and keits- und Diversitätsverbesserungsge- group management report, risk manage- appropriateness. setz“, NaDiVeG) on environmental, social and employee issues, on the respect for human rights and the fight against corruption and bribery. All information included Conclusion PwC in the report refers equally to the Zumtobel Group and its subsidiaries, unless indica- Based on the audit procedures performed and the audit evidence ted otherwise. This non-financial state- obtained, nothing has come to our attention that causes us to believe that the ment applies to the 2020/21 financial year consolidated non-financial report 2020/21 has not been prepared, in all mate- and was not prepared in accordance with rial respects, in accordance with the requirements of Section 267a UGB. a valid framework. The standards issued

INFLUENCE OF THE COVID-19 PANDEMIC

The Covid-19 pandemic has had an im- tions and reduction in travel, while econo- that gives balanced priority to all aspects, pact on all aspects of corporate respon- mic factors like revenues were negatively combined with a lean administration, effi- sibility – economic, ecological and social affected by the pandemic. In the area of cient production network and far-sighted – and, consequently, has an influence on social responsibility, the pandemic had supplier management, made an important sustainable management. Key factors in a particular effect on employees through contribution to the sound results recorded the environmental area have improved sig- home office, short-time work and extensi- by the Zumtobel Group in a financial year nificantly, for example the decline in CO2 ve limitations on the accessibility of con- that was significantly influenced by the co- emissions due to the wide-ranging restric- tact partners. Sustainable management rona pandemic.

6 SUSTAINABILITY MANAGEMENT

Responsibilities for sustainability in the Zumtobel Group are clearly defined and Executive Board firmly anchored. The Sustainability Com- Corporate Strategy FOCUSED Recommendations of the Grup Sustainibility Team UN Global Compact Statement UN Global Compact Communication on Progress mittee (SC) decides on the strategic orien- Environmental Policy (COP) Health & Safety Policy Feedback from audit reports and assessments tation of sustainability in the Group. It con- Climate Neutrality 2025 by Raiting Agencies sists of the Zumtobel Group Management Stakeholder Sustainability Core Team Stakeholder Board, representatives of the brands, in- internationally Sustainability statement Committee Sustainability statement Local Annual report Annual report dividual departments such as Human Re- NFI report NFI report Investors Executive Board Contact of the Investors departments sources Management, Purchasing, Brand Analysts Group Sustainability Analysts Materiality, texts, Group Group Team NaDiVeG, & Portfolio Management and the Group Journalists Communication Group Sustainability Communication Journalists KPIs Team Representative of Sustainability Team. Together, they deve- Artists Artists Website/News central departments Local employee Website/News Designers Press relases representatives Press relases Designer lop the sustainability strategy and define SoMe (LinkedIn) SoMe (LinkedIn) Group Architects binding targets, deadlines and measures. Architectc Communication Lighting Lighting designers/ designers/ Planners Sustainability Program Controlling Planners The Group Sustainability staff unit coordi- Environmental and KPIs energy issues nates sustainability management. It is hea- Research Research Science Science ded by the Group Sustainability Director, Contact Local energy and environment teams (officers) Contact Energy officer Fire protection officer Neighbors who reports to the CEO of the Zumtobel Associations Environmental officer Energy, safety- and environmental meetings Company fire department Associations Group. Sustainability officers are in cons- Concerns Sustainability Program Internet Concerns Environmental and Presentations tant contact with the Group Sustainability interested energy issues Webinars interested Parties Parties Team in order to implement the sustaina- Contact person Contact person Porters Porters bility targets in the business units. Commercial manager Business units Works councils

ISustainability management information flow

ZUMTOBEL GROUP SUPPORTS THE UN GLOBAL COMPACT

In connection with its efforts on behalf of gress report is available for download on sustainability, the Zumtobel Group sup- the Zumtobel Group’s sustainability web- ports the principles of the world’s largest site. initiative for corporate social responsibility (CSR) and sustainable development and joined the United Nations Global Compact in 2020. The central element of the UN Global Compact is formed by 10 universal principles and support for the 17 sustainable development goals (SDGs).

The 10 principles cover, among others, labour standards, human rights, environmental protection and the fight against corruption.

We renewed our commitment to responsible management in 2020/21 with our first annual progress report (COP-Communica- tion on Progress) based on the UN Global Compact and want to inform all relevant stakeholders of our activities and progress in implementing these principles. This pro-

7 „KLIMAAKTIV PAKT 2030“ FOR AUSTRIA

A successful application to become an The Zumtobel Group‘s successful applica- Federal Ministry for Climate Action, Envi- associated klimaaktiv Pakt partner quali- tion in September 2020 included a general ronment and Energy. fies the Zumtobel Group, together with ten description of corporate goals as well as other major Austrian companies, to par- the related measures. This will form the The Zumtobel Group has also set a goal ticipate in the klimaaktiv Pakt 2030. With basis for the preparation of a detailed cli- to gradually increase the share of renewa- this klimaaktiv Pakt, the Austrian Federal mate protection concept with the profes- ble energy over the coming years. Based Ministry for Climate Action, Environment sional support of the klimaaktiv experts, on this goal, all locations in Austria were and Energy offers Austrian companies a which will be individually adapted for the converted to 100 % hydropower gene- voluntary, credible and transparent alli- Group and is scheduled for gradual imple- rated electricity as of March 2021. The ance for climate protection. The pact part- mentation at the operating level by 2030. Lemgo plant in Germany was converted ners develop individual climate protection Cooperation with the klimaaktiv experts to green electricity as of 1 May. Plans in- concepts with professional support from will continue during the 2021/22 financial clude the conversion of other locations to the klimaaktiv experts and implement year. green electricity to increase in the share of these concepts at the operating level. A renewable energy to at least 50 % in the structured process for evaluating target After this climate protection concept is 2021/22 financial year. attainment and continuously optimising reviewed and approved by the klimaaktiv measures creates maximum credibility Pakt office, the Zumtobel Group will con- and transparency, both internally and ex- clude a binding target agreement – which ternally. Through their participation in the is scheduled for autumn 2021 – and will klimaaktiv Pakt, sustainable companies then become a full klimaaktiv Pakt partner. set an ambitious goal to achieve a reducti- The attainment of the agreed goals will on of at least 50 % in their greenhouse gas be evaluated annually in the future by the emissions (basis: 2005) by 2030. This goes Austrian Energy Agency and the Austrian along with a clear commitment by the pact partners not only to support, but to exceed national climate protection goals and, in this way, to become a key supporter of the national energy and climate turnaround. The klimaaktiv pact relies on a comprehensive approach to meet this ambitious goal because greenhouse gas emissions can only be reduced with a broad bundle of measures. Support by the klimaaktiv experts and energy consultants in the Aus- trian provinces ensures the highest quality and innovative strength. The target attainment is measured by the Austrian Energy Agency and the Austrian Federal Ministry for Climate Action, Environment and Ener- gy. The Zumtobel Group has also set an individual goal to become climate neutral by 2025. Associated Klimaaktiv Pact Partners 2030

MATERIAL RISKS AND EFFEKTS

The Zumtobel Group has installed a 267a of the Austrian Commercial Code is non-financial aspects, the Zumtobel Group Group-wide internal risk management and based on a net view of risks, which means cannot identify any material risks connec- control system. This consolidated, non-fi- the evaluation of risks includes risk-mi- ted with its own business activities or busi- nancial statement in accordance with § nimising measures. In connection with ness relations, products or services which

8 could have serious negative effects. The cesses and daily business activities. The ble for the leadership and direction of the Zumtobel Group has listed environmental Zumtobel Group’s area of business crea- company. It is responsible for the conduct risks separately since the 2020/21 finan- tes a wide variety of economic, ecological of business and always acts in the compa- cial year in preparation for the upcoming and social opportunities and challenges. ny’s interests. The sustainability program- climate reporting. Accordingly, the Zumtobel Group has set mes as well as the related goals and mea- a goal to ensure that its business partners sures are approved and monitored by the The sustainable corporate culture of in- and suppliers meet the same high ethical Management Board, while the specialist tegrity and responsibility is fundamentally principles and standards. departments are in charge of the develop- based on the trust placed by customers, ment, operationalisation and supervision shareholders and business partners in the Corporate governance in the Zumtobel of sustainability activities. Zumtobel Group. Responsible manage- Group stands for responsible and transpa- ment also means supporting the guiding rent management and control that is orien- principle of sustainable development and ted on long-term success. As an executive integrating this principle in decision pro- body, the Management Board is responsi-

ZUMTOBEL GROUP PARTICIPATION IN ASSOCIATIONS

The Zumtobel Group is active in industry sociation (LIA, Great Britain), Association associations, standardisation commit- for the Electrical and Electronics Indus- tees, lighting organisations and individual tries (FEEI, Austria), European Committee consortia to develop the best framework for Standardisation (CEN), International conditions for optimal energy efficiency Standards Organisation (ISO), Internatio- and lighting quality for the lighting indus- nal Electronical Committee (IEC), Interna- try, its customers and users. In connection tional Commission on Illumination (CIE), with the certification of energy-efficient Lux Europe, various national lighting buildings, the company is also a member societies, German Sustainable Building of various initiatives for sustainable cons- Council (DGNB), Green Building Council truction. and the Consortium for international specifications of LED light sources interfaces The most important memberships at the (ZHAGA). present time are as follows: ZVEI (“Zentral- verband Elektrotechnik- und Elektroindus- trie e. V.”, Germany), Lighting Industry As-

9 MATERIALITY UPDATE IN 2020/21

Our approach

The Zumtobel Group maintains an open management of long-term added value. principles of the GRI standards for the de- channel of communication with its interest finition of reporting content. groups. It uses this dialogue to exchange As announced in the sustainability state- information and opinions, and along the- ment for 2019/20, the materiality analysis se lines, understand the expectations and was updated and further developed in Materiality process demands of the various stakeholders and 2020/21. New findings were from the sta- integrate the results in its corporate acti- keholder survey and internal department The process for the determination of the vities. This dialogue also helps to identify workshops were also integrated. material, reportable sustainability issues risks and opportunities at an early time, covered four steps: creates trust and supports the sustainable Our materiality analysis was based on the

Identification of Identification of Materiality Prioritisation stakeholder groups relevant issues matrix

● Interest in the ● Global standards ● Stakeholder survey ● Consolidation company ● Benchmark (online/questionaire) ● Validation ● Influence on the ● Individual interviews ● Management survey ● Preparation of matrix company ● Issue clusters (workshop)

Materiality assessment process

Investors Politics Analysts Authorities

Conferences Manufacturers associations Roadshows Standardizations bodies Conference calls Employer associtions Identification of stakeholder groups Employees Customers The first process step involved the identi- Leasing employees Business partners

fication of the relevant stakeholder groups Emplovyee appraisals Personal vonversations Events Newsletter & Exhibitions for an analysis of the material issues. The Social media Trainings criteria included, in particular, interest in the company, the influence on the company plus a weighting based on the number Architects NGO´s of survey participants in stakeholder group Designer/Planners NPO´s

and the attitude towards the company. Cooperation in Joint projects product development in the area of and Projects Corporate Citizenship The following stakeholder groups were identified for the Zumtobel Group and in- Research Suppliers cluded in the following process: analysts, Science Manufacturer architects, associations, customers, desig- Cooperation with universities Supplier Audits of applied sciences Annual Meetings ners, employees, investors, media, neig- ans universities Continuous dialog hbouring residents, NGOs, research and science, suppliers and business partners. Stakeholder groups Zumtobel Group

10 Identification of relevant issues

In the second process step, the economic, oekom ecological and social issues were listed for • Peer group analysis potential sustainability issues was con- further prioritisation. Different information • Best in class companies densed into 50 issues based on internal sources were used to identify possible • Internal expert interviews expert interviews. sustainability issues: The list also includes the issues classi- The Zumtobel Group‘s issue clusters are • GRI standards fied as material by the Zumtobel Group in mapped in the following diagram. It inclu- • Sustainable development goals earlier procedures. Media and trend and des the issue categories queried in the on- • Austrian Sustainability and Diversity Im- benchmark analyses were also carried line questionnaire, based on the five core provement Act and its explanations out to identify potential materiality issues. issues defined by the Austrian Sustainabi- • Sustainability rating by EcoVadis and ISS- The summarised overview with over 150 lity and Diversity Improvement Act.

Clustering of issues based on the Austrian Sustainability and Diversity Improvement Act FIGHT AGAINST RESPECT FOR EMPLOYEE SOCIAL- ENVIRONMENT CORPORATE CORRUPTION HUMAN RIGHTS CONCERNS CONCERNS CONCERNS CONCERNS

SUSTAINABLE MANAGEMENT SUSTAINABLE EMPLOYEE- SUSTAINABLE ENVIRONMENT & 12 issues SUPPLY CHAIN CONCERNS SUPPLY CHAIN ENERGY 6 issues 10 issues 6 issues 15 issues CUSTOMER CONCERNS

Questionaire 7 issues

RESPONSIBLE PRODUCT SUSTAINABLE EMPLOYER RESPONSIBILITY MANAGEMENT 9 material issues 3 material issues 5 material issues

CORPORATE GOVERNANANCE SUSTAINABLE PRODUCT & COMPLIANCE PROCUREMENT RESPONSIBILITY 2 material issues 3 material issues 1 material issues

SUSTAINABLE OPERATIONAL PROCUREMENT ENVIRON. PROTECTION

Issues-Cluster Zumtobel Group Issues-Cluster Zumtobel 1 material issues 6 material issues

Assignment of issue categories in the Zumtobel Group´s issue clusters

The issue category “sustainable supply Prioritisation management and selected departments. chain“ includes economic, ecological and In the third process step, the influence on social topics. The stakeholders were able the evaluations and decisions of stakehol- to select these topics individually in the ders regarding the materiality of the 50 fi- Online survey survey, which ensured complete coverage nalised issues was examined. The priority The internal and external stakeholder of the value chain. of the identified aspects for the Y-axis was survey was conducted worldwide, with established by asking external and inter- participants given the option of using a As illustrated by the above diagram, the nal stakeholders to estimate the relevance German or an English version. In selecting issue categories were subsequently as- of the individual issues for the Zumtobel the stakeholders, the focus was placed signed to the issue clusters used for the Group in an online questionnaire. on a balance of interests. The stakeholder Zumtobel Group’s current non-financial groups were prioritised by a core team and statement. This procedure ensures retro- The importance of the economic, ecologi- defined according to the number of stake- active continuity and completes the repor- cal and social effects of the organisation holders to be contacted. ting history. was determined for the X-axis by evaluating the opportunities and risks in an up- 350 stakeholders were contacted to parti- front survey and a virtual workshop with cipate in the decision-making process of

11 the company. The response rate was 46%. It should be noted, however, that the res- FrequencyHäufigkeit derof category Kategorieauswahl selection ponse rate of the stakeholder group „cus- 23% 25% 22% tomers“ was rather underrepresented and 120 21% modest compared to other stakeholder 17% 18% 20% groups such as employees, suppliers, and 100 business partners, each with a response 105 110 80 rate of 100 %. It is envisaged to survey this 15% 80 86 101 stakeholder group again in the post-Co- 60 vid19 phase. 10% 40 The online survey contains mostly closed 5% questions where participants could choo- 20 se one answer option. Semi-open and 0 0% open-ended questions were also conside- ArbeitnehmerbelangeEmployee concerns CustomerKundenbelange concerns NachhaltigeSustainable Lieferkette NachhaltigesSustainable Wirtschaftenbusiness & EnvironmentUmwelt & Energie & Energy supply chain & corporateUnternehmensführung governance red so that respondents could add other relevant topics or comments.

In the case of the semi-open questions, the survey participants were given seve- Importance of sustainable operations ral answer options, just as in the case of Wichtigkeit von nachhaltig agieren the closed questions, but they were also 70 40% able to name their own significant topic or, 37% 60 35% if they could not fit into any of the prede- 20% 25% 30% fined stakeholder groups, they could list 50 their own category. The main purpose of 59 25% 40 the open-ended questions was to give re- 20% 12% 40 spondents the opportunity to make com- 30 33 15% ments and reveal their opinions, thereby 20 identifying new aspects that had not been 10% 1% 1 1% 1 2% 3 3% 5 19 considered. 10 5% 0% 0% 0 0% In summary, the topic cluster „Environ- 1 2 3 4 5 6 7 8 9 10 ment & Energy“ was selected and evalua- BewertungEvaluation 0-100-10 %% 0-10 0-10 ted most frequently by the stakeholders. However, in terms of weighting or prioritization, as well as in the perception of cur-

rently fulfilled sustainability performance, WahrgenommenePerceived performance Leistung Environment Umwelt und & EnergieEnergy it then ranked somewhat less highly, which 70 60% is reflected in the materiality matrix. 54% 60 50% 82 % of the stakeholders surveyed rate the 50 importance of sustainable action on the 40% 59 part of the Zumtobel Group as very import- 40 18% 18% 30% ant and rate this as 8-10 on a scale of 0 (as 30 not important) to 10 (as very important). 10% 20% 20 20 0% 0 When answering the questionnaire, the 10 20 10% 11 performance of the individual topic clus- 0 0% ters already perceived today was also VerySehr good gut goodGut EherRather schlecht poor SchlechtPoor Keinenot specified Angabe queried and evaluated. From this, it can be

AnzahlNumber Stakeholdere of stakeholder Anzahl Number in in% % deduced where there is potential for development in the communication of sustai-

12 PerceivedWahrgenommene performance Leistung sustainable Nachhaltiges management PerceivedWahrgenommene performance Leistung Sustainable Nachhaltige supplyLieferkette chain Wirtschaften 70 70% 59% 60 54% 60% 60 60% 50 50% 50 50% 57 60 40 40% 40 40% 20% 30 30% 30 30% 16% 16% 12% 20 20% 20 20% 1% 1 9% 1% 1 12% 10 17 21 10% 10 16 10% 9 12 12 0 0% 0 0% VerySehr good gut goodGut EherRather schlecht poor SchlechtPoor Keinenot specified Angabe VerySehr good gut goodGut EherRather schlecht poor SchlechtPoor Keinenot specified Angabe

AnzahlNumber Stakeholdere of stakeholder Anzahl Number in %in % NumberAnzahl Stakeholdere of stakeholder AnzahlNumber in %in %

PerceivedWahrgenommene performance Leistung Customer Kundenbelange concerns PerceivedWahrgenommene performance Leistung Employee Arbeitnehmerbelange concerns 70 80% 60 70% 71% 60% 70% 60 50 60% 60% 50 50% 40 61 50% 40 48 40% 40% 30 30 20% 30% 30% 20% 20 20 7% 20% 20% 11% 2 3% 5 6% 6 0% 0 2% 2 10 16 10 17 10% 10% 9 0 0% 0 0% VerySehr good gut goodGut EherRather schlecht poor SchlechtPoor Keinenot specified Angabe VerySehr good gut goodGut EherRather schlecht poor SchlechtPoor Keinenot specified Angabe

AnzahlNumber Stakeholdere of stakeholder AnzahlNumber in in% % NumberAnzahl Stakeholdere of stakeholder NumberAnzahl in in % %

nability performance. Internal expert group and workshop • Environment and energy: 8 von 15 Once the outside-in perspective had been When considering the currently perceived identified through the stakeholder survey, 24 issues were identified in the upstream sustainability performance, the stakehol- a group discussion was held for the inside- survey in preparation for the workshop. In ders surveyed perceive the topic cluster out perspective in the form of an internal preparation for the workshop, the main to- „Customer concerns“ best with 91 % of the materiality workshop. This allowed internal pics were described, supplemented by re- responses in the categories very good and experts and management to assess the lated impacts of the company (positive or good, followed by the topic cluster „Emp- impact of their own business activities on negative) and an assessment of what op- loyee concerns“ with 80 %, the topic clus- the environment, society and the econo- portunities and risks could arise. This over- ter „Sustainable supply chain“ with 75%, my. Prior to the workshop, all participants view was made available to all participants the topic cluster „Environment & energy“ were asked to select a certain number in order to obtain an overview in advance. with 72 % and, last but not least, the topic of issues per category that were relevant The internal workshop was conducted on- cluster „Sustainable management & cor- from the company‘s perspective from the line in view of the current Covid19 situa- porate governance“ with 70%. 50 issues identified, which also formed the tion and the tightened measures. basis for the stakeholder survey: This ranking opens up potential in the de- During the workshop, participants had the velopment and marketing of medium- and • Employee concerns: 5 von 10 opportunity to rate the topics based on the long-term goals in the area of a sustaina- • Customer concerns: 3 von 7 importance of the positive or negative im- ble orientation of the Zumtobel Group and • Sustainable supply chain: 3 von 6 pact of the company activity on each topic. its controlling as well as an actively pushed • Sustainable business & In doing so, they were able to rate the to- marketing of environment & energy topics. governance: 6 von 12 pics on a scale of 1 (hardly any significant

13 impact) to 10 (very significant impact). The The results were immediately available the company‘s key impacts on the environ- evaluation of each topic took the form of a and visible to all. mental conditions from the stakeholder live survey via ahaslides.com. Participants survey. In this way, prioritization was not were able to submit their ratings using QR In this third phase of the process, it was influenced by stakeholder expectations. codes. important to separate the identification of Issues that were considered material only

Materiality matrix

Human rights, child labour and forced labour

Sustainable products and applications Employee satisfaction (incl. working conditions) Compliance and ethics

Environmental Compliance Circular economy

Corporate culture Sustainable procurement and values Sustainable increase in the Occupational safety, value of the company health and well-being Digitalisation Energy and Emissions Sustainable financing renewable energy and investments Environmental and social standards in the supply chain

Diversity and equal Waste opportunity Training and continuing education Water and Transparency wastewater and reporting Bio- diversity

Materiality matrix with Sustainable Development Goals

14 from the external perspective were to be the corporate strategy. assessment process, the results from the the focus of sustainability reporting, and stakeholder survey and those from the in- issues that were considered important ternal workshop are combined in a mate- from the corporate perspective were to be Materiality matrix riality matrix. Aspects are material if they incorporated into the implementation of In the final step, step four in the materiality are significant from an internal company perspective and/or from a stakeholder perspective.

Materiality matrix The aim is to ensure that the report contains an appropriate and balanced presentation of the organization‘s sustainability performance and impacts. The positioning of the topics on the horizontal X-axis shows the degree to which the company‘s business activities have a positive or nega- Customer satisfaction tive impact on the topic in question, thus indicating the relevance of the company to this aspect.

The relevance of the topics according to Sustainable products the assessment of internal and external and applications stakeholders, in the response to and evaluation of the online questionnaire, is shown Innovation on the vertical Y axis. Environmental Compliance UN Sustainable Development Goals The Zumtobel Group proactively supports Product quality the UN‘s Sustainable Development Goals Sustainable procurement and safety as a global target framework for sustainable development. Based on the findings of the revision of the materiality matrix and an analysis for possible anchor points of the SDGs from the perspective of the Zumto- bel Group, the SDGs were assigned to the Environmental and social stan- material topics and thus prioritized. dards in the supply chain The assignment of the SDGs in the matrix shows to which SDGs the Zumtobel Group will specifically make its contribution to the 2030 Agenda.

The prioritization of the SDGs has resulted from the following determination method:

• Allocation of possible anchor points - 17 SDGs based on impact descriptions. • Thematic allocation - allocating SDGs to the Zumtobel Group‘s key topics based on three-level prioritization. • Assessment of material impacts and risks - stakeholder and company perspective. • Transfer of the assessment to the matrix

15 In the following, the SDGs identified as described contents in the Sustainability of the SDGs and not on the actual priori- relevant for the Zumtobel Group are assig- Statement assigned to the SDGs. The ran- tization. ned to the material topics and refer to the king is based on the numerical sequence

Our Issue cluster SDG Material issue contribution

● Occupational safety, health and well-being Page 44 - 45

● Corporate culture and values Page 41

Responsible employer ● Training and continuing education Page 41 - 42

● Diversity and equal opportunity Page 46 - 47

● Water and wastewater Page 64 Operational environmental protection

● Energy and renewable energy Page 62

Responsible employer ● Employee satisfaction (incl. working conditions) Page 40 - 41

Product responsibility ● Sustainable products and applications Page 35 - 36

● Sustainable increase in the value of the company Page 22 - 23 Sustainable management ● Sustainable financing and investments Page 24 - 25

Product responsibility ● Innovation Page 32 - 35

● Sustainable prcurement and supplier management Page 53 Sustainable procurement ● Environmental and social standards in the supply chain Page 53 - 55

Sustainable management ● Digitalisation Page 23

Operational environmental protection ● Biodiversity Page 64

● Customer satisfaction Page 23 Sustainable management ● Product quality and safety Page 37 ● Transparency and reporting Page 23 - 24

Product responsibility ● Circular economy (recycling, resource consumption) Page 37

Operational environmental protection ● Waste Page 65- 66

Operational environmental protection ● Emissions Page 63

Corporate Governance and Compliance ● Compliance and ethics Page 28 - 29

Operational environmental protection ● Environmental complance Page 66

Responsible employer ● Human rights, child labour and forced labour Page 49

The new material issues which concern on of qualitative and quantitative goals as and measures are shown on the following the Zumtobel Group from a strategic well as the development and implementa- concept table: standpoint include, above all, the definiti- tion of concrete measures. These goals

16 CONTRIBUTION AND RESULTS ON THE SUSTAINABLE DEVELOPMENT GOALS (SDGs) 2020/21

● Publication of first progress report (COP) ● Implementation of Group-wide Covid-19 based on UN Global Compact preventive measures ● Expansion of technology partnerships, ● Preparation of employer branding strategy e. g. technical colleges, ● Accident recording tool includes GRI Elektroterminal (A), S-Tec (CH) standards ● Data collected on the severity of accidents ● Revision of the code of conduct ● Development of a skills model for emp- ● Observance of all environmental loyee development compliance rules ● 78.4 % of employees covered by assess- ● No serious violations reported in ment discussions (+2.4 %) whistle-blower system ● Preparation of a performance-potential ● Compliance training (95 % of all salaried landscape for all departments employees) ● Training per wage employee: 9h (+1h) ● Aim to achieve climate neutrality by 2025 ● Revision of the code of conduct ● GHG emissions reduced by 9.4 % ● Gender-neutral recruiting process ● Expansion of biogenic distance ● Share of women: 35.7 % heating in Dornbirn ● 151 women in management positions ● Conversion of major locations to ● Workforce includes employees from 75 CO₂-reduced electricity procurement nations ● Associated Klimaaktiv Pakt partner

● Optimisation of product development pro- ● Wastewater discharge meets municipal cess to reflect the circular economy requirements at all locations ● Development of circular design rules ● Regular external testing of compliance ● Waste reduced by 5 % with threshold values in water ● Recycling quota for internal waste: 86 % ● Locations in Dornbirn and Niš exceeded water consumption targets ● 100 % photovoltaic electricity for own use ● NightTune technology implemented in Dornbirn to protect ecosystems and ● Electricity from 100 % hydropower at all biodiversity and to contain light Austrian locations as of March 2021 pollution in exterior lighting ● Purchase of 100 % green electricity in Spennymoor as of December 2020 ● 49 patents in the Lighting Segment ● Positive development of the company‘s ● 72 patents in the Components Segment economic value (+8.3 %) ● 9,027 active industrial property rights ● Associate partner of Klimaaktiv Pakt ● R&D expenditures: EUR 64.8 million ● Energy efficiency of all sold products -im ● Initiative “sustainable procurement“ proved by 2 % on average ● 154 supplier audits ● Home office rules

17 Material issue Goals Status Measures Status of measures

1. Sustainable management

Revision of materiality Prepare materiality matrix ● Revise and update material issues ● Materiality matrix revised and matrix based on GRI standards ● ● Map material issues based on GRI prepared standards in materiality matrix

Prioritise and assign SDGs to ● Evaluate and prioritise SDGs by subject with ● SDG matrix prepared material issues ● impact descriptions ● Allocation table for material ● Prepare SDG matrix issues

Customer satisfaction Improve NPS (net promoter score) ● Conduct customer survey (BEM Brand ● Customer survey postponed to and consider2purchase percentage Equity Monitoring) with evaluation and 2021/22 due to Covid-19 pandemic rate ● definition ● Measures partly implemented ● Develop improvement measures

Digitalisation Digitalise all customer-related ● Prepare digitalisation project and prioritise ● Project prepared, anchored in processes end2end – from initial process steps budget and started contact to after sales ● ● Complete partial projects and work packages

Transparency and reporting Prepare sustainability communica- ● Prepare communication concept with ● Concept prepared tion concept ● corporate communications ● Available for download on ZG website

Sustainable increase Sustainable increase in the value of ● Implement FOCUS corporate strategy ● FOCUS strategy was expanded in the value of the company the company based on economic, ● Integrate sustainability in strategy to FOCUSED to reflect sustainabi- ecological and social aspects ● ● Concentrate on profitable core markets and lity and digitalisation applications

Sustainable financing and Incorporate requirements of EU ● Determine relevant criteria from Taxonomy ● Taxonomy Regulation investments Taxonomy Regulation ● Regulation for non-financial statement postponed; implementation in 2021/22

2. Corporate Governance and Compliance

Compliance and ethics Binding code of conduct for all ● Revise, expand and communicate ● Code of conduct revised and (fight against corruption, employees ● code of conduct implemented anticompetitive behaviour, ● Revise target group-oriented content for ● 95 % of all salaried employees antitrust law) ● compliance training; continue e-learning-ba- have successfully completed sed compliance training and on-site training compliance training

Further development of compliance ● Prepare and communicate specific ● Guideline and compliance management-system compliance guidelines on anticorruption, charter in preparation ● competition and antitrust law as well as money laundering

● Map responsibilities for compliance ● Rules currently integrated in issues code of conduct and linked to ● relevant policies through internal mapping

Comprehensive introduction of ● Whistle-blower system also implemented ● Whistle-blower system whistle-blower system in Austria and Germany implemented in all companies ● ● Prepare works agreement for whistle-blower ● No severe violations reported system in Austria and Germany or identified

Data protection and Global coordination of data ● Revise data protection guideline ● Current version reflects policy information security protection issues ●

● Roll-out e-learning programme for ● 100 % of all new hires trained ● salaried employees

18 Material issue Goals Status Measures Status of measures

3. Product responsibility

Innovation Expand competitive product ● Continuous product development ● Numerous product introducti- portfolio ● ons and product extensions

● Expand technology partnerships ● Joint development with NICHIA Japan ● ● Pre-development project with Elektroterminal (A) and S-Tec (CH)

Increase brand reputation through ● Participate in national and international ● Participation in H2020 project research projects ● research projects PHABULOUS

● Continue long-term research and ● Cooperation with Vorarlberg pre-development project Technical College – communica- ● tion process to realise swarm intelligence in floor luminaires

Sustainable products and Incorporate sustainability aspects ● Use of energy-efficient, intelligent ● Energy savings through the use applications throughout the entire product ● lighting controls of energy-efficient products lifecycle ● Reduce product-based resource ● Reduction in material usage for ● consumption new products, e.g. CRAFT 2

● Continuous increase in product ● Continuous upgrades of LED ● efficiency building blocks in module platforms

Expand innovative product and ● Increase share of revenue generated ● Phase-out products with service offering ● by LED products conventional lamp technology

● Substantial increase in revenues with ● Service revenues increase ● services & solutions despite Covid-19

● Develop innovative business models ● Contracting programme with ● CO₂ emissions expanded; first projects with digital service IoT

Circular economy Optimise product development ● Prepare for circular product design with ● Develop circular design rules process (PCP) with regard to ● external cooperation partners (CDR) circular economy ● Integrate CDR in PCP

Product quality and safety Comply with high safety standards ● Carry out internal measurements and tests ● Continuous implementation and through the use of regulatory and ● ● Cooperate with external testing institutes auditing of relevant areas at all voluntary test marks and implement external audits locations

4. Responsible employer

Employee satisfaction Employee survey ● Carry out employee survey, especially with ● Develop home office measures ● regard to Covid-19 aspects

Corporate culture Managers and employees live the ● Start employer branding project ● Employer branding strategy in corporate culture ● preparation

Training and continuing Support individualised and ● Expand training to include additional ● Decline in number of training education function-specific training ● e-learning offers hours for salaried employees

Expand individual development ● Organise annual employee assessments ● Further development for discussions ● and talent review meetings numerous employees

Work-life balance Support work-life balance ● Expand offering of flexible working time ● Individual offers for employees, ● models to reflect expectations of different e.g. part-time work, time-off generations options ● ● Prepare home office rules ● Implement home office rules

19 Material issue Goals Status Measures Status of measures

4. Resposible employer

Occupational safety, health Continuous improvement of health ● Integrate company health promotion ● Extensive prevention concept and well-being programme programmes in standard processes implemented to protect ● ● Prepare Covid-19 prevention concept to employees and prevent internal protect employees Covid-19 clusters

Record work accidents according ● Base indicator to record accidents and their ● Accident recording tool based to GRI in the future – convert from severity on GRI standards on GRI standards LTI to TRI over the medium-term ● ● Organise precautionary training to prevent ● Severity of accidents work accidents

Employee rights and Protection for employees‘ rights ● Standardised remuneration system ● 52 % of employees covered remuneration and fair remuneration ● Comply with collective agreement by a collective agreement ● standards ● Respect employees‘ legal co-determination rights

Diversity and equal Zumtobel Group is an Equal ● Zero tolerance strategy ● 151 women in management opportunity Opportunity Employer ● ● Support for women in management positions 2019/20: 163) positions

Human rights, child labour Comply with legal rules and social ● Annual commitment to comply with human ● First progress report (COP) and forced labour standards ● rights, prevention of child labour and forced based on the UN Global Compact labour

5. Sustainable procurement

Sustainable procurement Bundle suppliers to utilise ● Bundle procurement volumes from all ● No bundling of suppliers to and supplier management synergies producing plants retain flexibility in the event of ● shortages due to Covid-19 pandemic

Multi-sourcing strategy ● Approve at least two suppliers for each ● Improvement in sustainability ● merchandise group on the part of suppliers

Introduce and implement a ● Develop sustainable procurement criteria ● Procurement initiative Zumtobel Group procurement ● for existing and new suppliers introduced and implemented initiative

Evaluate sustainability of suppliers ● Prepare and release list of risk ● Process description for from risk countries ● procurement countries sustainable procurement initiative implemented

● Evaluate suppliers from risk countries ● Sustainability evaluation of at ● least 80 % of suppliers from risk countries

Environmental and social Further develop code of conduct ● Compliance in writing required by all new ● Signed by 100 % of all new standards in the for suppliers ● suppliers with respective code of conduct suppliers and 95 % of existing supply chain suppliers

Organise annual sustainability ● Require all suppliers to install an environ- ● Introduction of supplier audits for new and existing ● mental management-system sustainability self-assessment suppliers questionnaire

Conflict minerals Require suppliers to comply with ● Preparation and updating of CMRT reports ● CMRT report available for RoHS, REACh and conflict mineral ● outsourced to external service provider Lighting-Segment and regulations Components-Segment

20 Material issue Goals Status Measures Status of measures

6. Operational environmental protection

Environmental Key locations certified under ● Receive certification under the expanded ● Constant number of certified management ISO 14001 requirements of ISO 14001:2015 at the major locations ● locations

● Expand environmental certification for ● Certification postponed to ● services & solutions autumn 2021 due to Covid-19 pandemic

Expand environmental reporting & ● Expand environmental data collection to ● Environmental reporting covers monitoring tool ● include non-producing locations non-producing locations

Energy and renewable Key locations are certified under ● Organise follow-up energy audits at ● All 6 audits successfully energy ISO 50001 ● 6 certified locations completed

Careful and efficient use of ● Implement local energy efficiency ● Savings within target corridor resources ● measures

Close open points from last ● Appoint energy officer for Dornbirn ● Officer / successor appointed ISO audit ●

Emissions Reduce CO₂ emissions ● Photovoltaic equipment in Dornbirn ● Photovoltaic equipment supplies ● produces only for own consumption 100 % of electricity for own use since December

Convert locations to procurement ● Evaluate major locations with regard to ● All Austrian locations converted of renewable energies ● use of green electricity to 100 % electricity from hydropower

Water and wastewater Discharge clean process water ● Regular testing of discharged ● Municipal audit; criteria ● process water fulfilled

Waste Handle and use raw materials ● Minimisation of scarp and waste ● 5 % less waste (excl. the three economically ● new locations included in the report)

● ● Creation of single-origin valuables ● Recycling quota equals 86 %

Environmental Comply with internal and external ● Organise environmental compliance ● Environmental compliance compliance environmental protection ● audits within the framework of ISO 14001 confirmed at all locations guidelines

● Planned ● In progress; not yet completed ● Not implemented

21 SUSTAINABLE MANAGEMENT

„SUSTAINABILITY IS BECOMING INCREASINGLY IMPORTANT FOR ALL STAKEHOL- DERS AND THUS NATURALLY ALSO FOR CORPORATE STRATEGY AND MANAGE- MENT. I AM CONVINCED THAT ADDRESSING THIS ISSUE WILL BE THE BASIS FOR FUTURE DIFFERENTIATION BETWEEN COMPANIES IN COMPETITION.“

Klaus Vamberszky, Senior Director R&D Services

SUSTAINABLE MANAGEMENT

The Zumtobel Group has, in recent years, resulting economic reality led to a decisi- sed“ strategy, which has been expanded consistently implemented the corporate on by management to further develop the to include increasingly important aspects strategy that was introduced in 2018/19 “FOCUS“ strategy as a means of utilising like environmental issues (the letter “E”) with its stronger focus on customer orien- new opportunities for growth and streng- and digitalisation (the letter “D”). tation and reduction in process complexity thening the company’s position over the and costs. The Covid-19 pandemic and the long-term. The result is the new “Be focu-

FOCUS ON KEY MARKETS AND APPLI- mainly in Europe, while the Components- COMPETENCE IN EVERY DETAIL CATIONS Segment addresses the global market. The Zumtobel Group is, and will remain, The Zumtobel Group concentrates on its an innovation leader for components and target markets and on sustainable, pro- OPERATIONAL EXCELLENCE sensors and is systematically expanding fitable growth in core application areas its high expertise in miniaturisation and and precisely defined future fields. In the The Zumtobel Group works to continual- product integration. It believes in the se- indoor area, activities are based primarily ly improve the quality of its products and amless interaction between components on industry, office and education, retail processes and optimise cost structures and lighting as the driver for digitalisation and art and culture. In the outdoor area, along the entire value chain. With its own and wants to use its extensive technical the focus is on lighting for urban areas and production facilities and a competitive glo- expertise to offer an increasing range of streets as well as architecture and sport bal supplier network, the Zumtobel Group Internet-of-Things (IoT) solutions for the facilities. The Lighting Segment concen- stands for reliably deliveries and custo- world of light. trates on key markets and applications mer-oriented service.

22 UNIQUE BRANDS UNDER ONE ROOF systems and services (including digital of- will continue to offer an environment in fers). They represent an integral part of its which employees can grow personally The Zumtobel Group’s strong brands co- distinguishing features and the driver for and professionally and, in this way, make ver nearly the entire value chain in the future growth. Services will be further ex- an important contribution to the compa- area of light – from components to integ- panded in the future as an important part ny’s success. rated solutions. The Lighting Segment of the offering, above all in the Lighting consequently follows a two-brand strategy Segment. (Thorn & Zumtobel) with a balanced pro- DIGITAL SOLUTIONS duct portfolio and a mix of projects, key accounts and the retail sector. The Com- ENVIRONMENT AND ENGAGED EMP- The Zumtobel Group is systematically im- ponents Segment relies entirely on the LOYEES plementing digitalised process workflows Tridonic brand, which will also stand out “end to end“, i.e. from the receipt of orders with a particular customer orientation in The Zumtobel Group has set a goal to to after-sales. In addition, the company the future. become climate-neutral by 2025 and to will increasingly offer digital products with implement the circular economy princi- expanded functions as well as digital ser- ple. That would also make the Zumtobel vices that create new customer experien- SMART SOLUTIONS AND SERVICES Group a pioneer in this area of the lighting ces, strengthen customer ties and support industry. Developing solutions to help cus- the development of new earnings models The Zumtobel Group relies on innovation tomers meet their sustainability targets is for the Group. and turnkey solutions that cover products, also part of this goal. The Zumtobel Group

CUSTOMER SATISFACTION

The Zumtobel Group conducts regular are carried out separately for the Tridonic, during the past financial year due to the standardised surveys on customer satis- Thorn and Zumtobel brands. The respon- Covid-19 pandemic, but we still regularly faction (BEM Brand Equity Monitoring) sible brand managers have goals that are collect data on our customers’ satisfaction which ultimately lead to indicators like connected with specific measures. A ge- and on corrective actions in the event of a NPS (net promotor score). These analyses neral customer survey was not carried out complaint.

DIGITALISATION

The Zumtobel Group sees digitalisation as and transaction costs and, on the other way, digitalisation leads to new customer an important factor for future, sustainable hand, a source of services based on digital experiences but requires a seamless pro- business activities. Digitalisation is, on the infrastructure. The customer to customer cess chain and new offerings from sup- one hand, a driver for reducing process process will be digitalised end2end. In this pliers.

TRANSPARENCY AND REPORTING

Transparent communications and repor- A lack of internal and external communi- fic projects or legal regulations. An internal ting by a company in connection with sus- cation can lead to significant information discussion and/or communication matrix tainability content and efforts (with equal deficits which slow or prevent the efficient has proven effective in clearly establishing attention to environmental issues under and coordinated implementation of com- the various communication processes and ISO 14001, energy issues under ISO 50001 mon sustainability goals. the respective participants. All key frame- and social issues) are important points in work parameters for the communication the management system. Different stan- In addition to the “normal“ communication processes are defined simply and clearly dards make it necessary for an organisa- processes for specific management issu- in a matrix. This communication concept tion to develop, realise and maintain the es, every corporate area/legal entity has is available for download on the sustaina- required processes for internal and exter- additional communication processes that bility website. nal communications as part of its systems. arise, in part, from the organisation, speci-

23 SUSTAINABLE INCREASE IN THE VALUE OF THE COMPANY

The Management Board extended and statements, the issues of sustainability launched. Details can be found in the ma- transformed the FOCUS strategy into FO- and digitalisation were added, clearly de- nagement report. CUSED during the 2020/21 financial year. scribed, anchored in the organisation and In addition to fine-tuning the previous projects with appropriate content were

FINANCIAL FLOWS TO STAKEHOLDERS

The Zumtobel Group generated economic value of EUR 1,061.9 million in the 2020/21 financial year. After the deduction of expenses and payments to providers of equity and debt and to governments, the residual economic value equals EUR 87.1 million. This presentation reflects the GRI definition and is based on financial flows derived from the income statement and cash flow statement.

Development of the residual economic value

Financial flows to stakeholders in EUR million 2016/17 2017/18 2018/19 2019/20 2020/21 Corporate revenues1 1,322.9 1,210.5 1,173.2 1,144.4 1,061.9 Operating expenses2 (777.7) (752.4) (723.1) (666.8) (594.3) Personnel expenses (446.6) (413.6) (399.2) (375.3) (357.4) Payment to shareholders (8.6) (9.9) (0.0) (0.0) (4.3) Payment to providers of borrowed capital (7.2) (6.7) (6.7) (7.2) (5.7) Payment to public bodies3 (9.1) (10.1) (9.0) (14.7) (13.1) Residual economic value 73.6 17.8 35.1 80.4 87.1

1 Revenues and other operating income, interest income and cash inflows from the sale of assets. 2 Cost of goods sold, selling expenses, administrative expenses and other operating expenses (excluding personnel expenses and depreciation/amortisation). 3 Excluding deferred taxes.

SUSTAINABLE FINANCING AND INVESTMENTS

The greening of the economy creates tainable financing and investments. This groups over greenwashing and increase significant opportunities for the stakehol- regulation is intended to provide an in- the trust in sustainability performance. der group of investors. The EU Taxonomy centive for making corporate capital flows The Zumtobel Group will implement the Regulation which took effect in July 2020 more sustainable. Greater transparency requirements of this regulation during the is an ambitious regulatory initiative that and standardisation will eventually elimi- coming financial year and report on the addresses the challenge of recording sus- nate the doubts of interested stakeholder results.

24 NUMBER OF PLANTS AND THEIR RELATION TO VOLUME

25 CORPORATE GOVERNANCE AND COMPLIANCE

Rossberg, 2,452m

Kirchlispitzen, 2,551m

KEY FIGURES IMPLEMENTATION 2020/21

100% compliance training for new ■ The Code of Conduct was revised employees and implemented Group-wide in the company

95% of all employees have ■ The whistleblower system has successfully completed now also been introduced in Austria compliance training and Germany

0 Serious violations reported ■ Revision of the data protection or identified guideline

26Austria, Lünersee with view to the mountains Kirchlispitzen, altitude 2,551m TARGETS 2021/22 TARGETS 2030

■ Implementation of the audit plan ■ A „living“ code of conduct for 21/22 approved by the Audit integrated into the corporate values Committee and detailed regulations

■ No Group Policy older than ■ An automated and verifiable 3 years process of risk-oriented compliance training for all employees

■ Data protection update Group-wide

Picture: © Mario Wintschnig27 CORPORATE GOVERNANCE AND COMPLIANCE

„IN MY UNDERSTANDING, CORPORATE GOVERNANCE IS THE LEGAL AND FACTUAL REGULATORY FRAMEWORK FOR RESPONSIBLE MANAGEMENT AND SUPERVISION OF THE COMPANY. COMPLIANCE IS ONE ELEMENT OF THIS FRAMEWORK, WITH THE OVERRIDING OBJECTIVE OF PROTECTING THE COMPANY AND ITS STAKEHOL- DERS FROM DAMAGE, IN PARTICULAR FROM LEGAL VIOLATIONS.“

Stephan Hempel, Senior Director Corporate Audit & Compliance

The Zumtobel Group has installed an ex- governance and compliance department, throughout the Group. tensive and responsible compliance ma- the Zumtobel Group organises the com- nagement system which is administered prehensive management and monitoring As a listed international company, the by the audit & compliance organisation. of all business activities. The framework Zumtobel Group is committed to trans- For the Zumtobel Group, responsibility for the design of the corporate governan- parent and conscientious management includes ethical actions, the disclosure ce system is the Austrian Corporate Gover- and contributes to the continuous impro- of necessary information, the transparent nance Code in its latest version. This code vement of systematic corporate controls. co-design of framework conditions, and has been implemented in the Zumtobel An ongoing dialogue with the chairman the acceptance of responsibility for our Group through the corporate values, the of the Audit Committee, a subcommittee actions. recently revised code of conduct, various of the Supervisory Board, ensures the ne- corporate guidelines and the whistle-blo- cessary independence of this area where Together with the responsible corporate wer system which has now been rolled out necessary.

INFLUENCE OF THE COVID-19-PANDEMIC

The Covid-19 pandemic had almost no contacts with the subsidiaries and asso- a well-founded training concept. On-site effect on structural work in the area of ciated companies of the Zumtobel Group. training was not possible in 2020/21. corporate governance and compliance. Compliance training took place online due Global travel restrictions limited personal to the corona measures and was based on

COMPLIANCE AND ETHICS

Compliance with legal regulations is the completed by 95 % of salaried employees. for the individual legal areas. This provides foundation of our entrepreneurial activities the basis for further specifying guidelines and an integral part of the code of conduct The code of conduct deals with and pro- to be drawn up by the responsible parties for all employees and management. New vides training on the subjects of anticor- in the future; these include the following employees confirm their compliance with ruption, competition and antitrust law and topics: the code as part of their internal training. money laundering. The compliance charter has reached the draft stage and will be The updated version of the code of con- approved at the coming meeting of the Au- duct was approved by the Management dit Committee in June 2021. ● Antikorruption Board of the Zumtobel Group on 18 No- Wettbewerbsrecht vember 2020. It was implemented through The Compliance Charter exists in draft ● comprehensive training beginning with form and is to be adopted at the upcoming ● Kartellrecht the third quarter of the 2020/21 finan- meeting of the Audit Committee in June ● Geldwäsche cial year and completed during the fourth 2021. The annex to the charter contains quarter. Participation was successfully a mapping listing the persons responsible

28 WHISTLE-BLOWER SYSTEM

The external whistle-blower system in- Continuous evaluation of risks incidents or proceedings related to violati- stalled by the Zumtobel Group is an ano- ons of human rights, discrimination, com- nymous data collection and reporting tool No serious violations of legal requirements petitive or antitrust behaviour, corruption which has been very well received. It was were reported or identified during the or environmental regulations. adapted during the past financial year to 2020/21 financial year. This also applies to meet the requirements of the EU Whistle- blower Directive which will take effect in December 2021. The company agreement concluded with the Works Council for whistle-blowers in Germany and Austria The whistle-blower system covers the following points: marked the final step of the roll-out in the Zumtobel Group. ● Health, safety and environmental regulations ● Fraud / breach of trust / embezzlement This whistle-blowing system allows em- ● Corruption ployees and third parties to anonymous- ● Capital market compliance / insider tradingl ly report possible compliance violations ● Data protection violations through a link to the company’s website. The protection of the whistle-blower’s ● Anticompetitive behaviour identity is guaranteed in accordance with ● Discrimination / harassment / mobbing the EU Whistle-blower Protection Direc- ● Other violations tive, which took effect on 16 December 2019.

PROTECTION OF HUMAN RIGHTS

As an international company, the Zumtobel The “slavery and human traffic statement“ annual progress report (COP-Communica- Group is fully committed to the protection for the UK is renewed annually. tion on Progress) based on the UN Global of human rights and compliance with high Compact and want to inform all relevant social standards and the legal regulations We renewed our commitment to responsi- stakeholders of our activities and progress applicable in Austria and other countries. ble management in 2020/21 with our first in implementing these 10 principles.

IMPLEMENTATION OF DATA PROTECTION MEASURES

The implementation of the defined data protection measures has been completed, and the goal to achieve data conformity in Data protection measures business processes has generally been met. The measures listed here on the right ● Updating of order processing contracts at the corporate level are particularly noteworthy: ● Inclusion of changes in the data protection toolbox ● Integration of new legal judgments ● Advising on technical issues A compliance training tool was purchased as further support for training activities and successfully used in implementing the code of conduct.

29 PRODUCT RESPONSIBILITY Südl. Schafgafall, 2,414m Nördl. Schafgafall, 2,393m Saulakopf, 2,517m Brandner Mittagsspitze, 2,557m

KEY FIGURES IMPLEMENTATION 2020/21

9,027 Total industrial property ■ 121 patents filed (of which 49 in rights, 4,820 Total patents the Lighting segment/72 patents in the Components segment

5.8 % is the share of R&D ■ 124.2 lm/W is the average energy of revenues efficiency of all luminaires sold

■ 7.6 % improvement in energy 565 employees (+2.2 %) are efficiency compared to 2018/19 employed in employed in R&D (2 % compared to 2020/21)

30Austria, Lünersee with view to the mountains Schafgafall, altitude 2,393m/2,414m PRODUCT RESPONSIBILITY Südl. Schafgafall, 2,414m

TARGETS 2021/22 TARGETS 2030

■ Adaptation of the product ■ Focus on the topic of circular development process with the economy with a view to responsible tool „Circular Design Rules“ use of material resources

■ Roll out and train in the use ■ Implementation of models for of Circular Design Rules at all value creation in the circular development sites economy - closing of cycles

Picture: © Mario Wintschnig31 PRODUCT RESPONSIBILITY

„WE WANT TO INSPIRE CUSTOMERS WITH OUR LIGHTING SOLUTIONS. SUSTAINA- BILITY INSPIRES US IN PRODUCT DESIGN AND IS AN INTEGRAL PART OF CONCEP- TION AND IMPLEMENTATION. THIS MEANS THAT ADDED VALUE FOR USERS AND THE ENVIRONMENT IS AT THE CENTER OF OUR ACTIONS.“

Bernd Walser, Head of R&D Luminaires, Dornbirn

MANAGEMENT APPROACH

Research and development (R&D) play achieved with research and development chitects and planners and their later suita- a very important role in the success and expenses that reflect industry levels, a bility as a standard product are assessed; economic sustainability of the Zumtobel wide-ranging patent portfolio, consequent and when complaints are registered on Group. This role is defined through con- product and systemin development and installations, the source of the errors are tinuous research in new technologies extensive cooperation with external re- identified and eliminated through a feed- which, when they reach the right stage of search partners. back loop. Regular “gates“ in the develop- maturity, support the development of new ment process ensure the attainment of products and systems. Research and development in the Zumto- project goals, and the economic feasibility bel Group are in no way an “ivory tower“ of the development project is recalculated The Zumtobel Group’s outstanding tech- activity: competitors‘ products are regu- at each gate. Well-equipped internal and nology position and innovation capability larly analysed; concepts are discussed external laboratories test the development must be continuously strengthened to with selected customers at an early stage; results and their compliance with stan- protect and expand the competitive pro- special projects (CPD – custom product dards and application requirements. duct portfolio over the long-term. This is development) are realised with leading ar-

INNOVATION

R&D plays an important role in the compa- opportunity to conclude cross-licensing wing importance of intelligent compo- ny’s innovative strength. For the Zumtobel agreements with key market players. nents. The number of active commercial Group, a wide-ranging patent portfolio – property rights – currently 9,027, including also in the area of new technologies – is In 2020/21, the Lighting Segment re- 4,820 patents – speak for the company’s essential for maintaining a competitive ad- gistered 49 patents (2019/20: 75) and exceptional innovative strength vantage and ensuring access to strategic the Components Segment 72 patents cooperation with other companies and the (2019/20: 70) which underscore the gro-

32 SYNERGY EFFECTS THROUGH PLATFORMS

Additional synergy effects were also reali- and variant management, the continued increased capitalisation of development sed during the past financial year through development of component platforms co- costs. R&D expenses totalled EUR 64.8 the increased use of product configuration vering multiple product families and the million in 2020/21.

Research and development in EUR mittion 2016/17 2017/18 2018/19 2019/20 2020/21 Development costs 77.4 69.5 61.6 59.2 61.8 Research expenses 5.0 3.9 4.7 3.5 3.0 R&D expenses Total 82.4 73.4 66.2 62.7 64.8 In % of revenue 6.3 6.1 5.7 5.5 6.2 Employees (fujll-time equivalents) R&D 654 542 515 551 563

The Zumtobel Group protects its competitive product portfolio by increasingly rely- ing on technology partnerships. Its brand reputation and innovative strength is regularly demonstrated through participation in national and international research projects. For example: The international research project “Double Dynamic Lighting“ was concluded and the first results were published in 2020/21.

The focal points of R&D activities during the reporting year included, among others, new optical concepts for the direction of

light, new control gears and concepts for the operation of LEDs, new wire-guided and wireless information transfer with new data formats, sensors to compile relevant data and new approaches for the management of lighting systems. The efficiency increase in LEDs is slowing, but still requires platform concepts to manage material and process complexity as the basis for offering diversity as a resource-friendly customer benefit.

33 LUMINAIRES ARE BECOMING PART OF THE INTERNET OF THINGS (IOT)

R&D is still influenced by the further de- ing function. Cooperation with partners is performance. Moreover, the importance velopment of LED technology and issu- essential, above all when many different of software as a differentiation element is es related to the “quality of light“. This is fields are involved. The Zumtobel Group growing. Luminaires and, consequently, reflected in the Zumtobel Group’s active can rely on long-standing cooperation with their components are becoming part of participation in numerous national and research institutes like V-Research GmbH, the Internet of Things (IoT), but the requi- international standardisation commit- FH Joanneum Forschungsgesellschaft red interfaces have not yet been defined or tees along its value chain (IEC - Interna- mbH and Graz University of Technolo- are still incomplete and competing inter- tional Electrotechnical Commission, CIE gy (all in Austria) as well as cooperation faces have already entered the market. - Commission internationale de l’éclairage) with industrial partners like Nichia, Digital which are working to develop standards Elektronik (Salzburg, Austria), Bartenbach The Zumtobel Group contributes to this for security, electromagnetic compatibility GmbH, zactrack Lighting Technologies development through its membership in and lighting norms and applications. GmbH (Vienna), and many more. committees that are working to develop industry standards and is an active member The implementation of these standards on The interconnectedness of luminaires and of the DALI, Zhaga, ZigBee, Thread, and the market is supported by participation in the expansion of functionality beyond light Bluetooth alliances, which are all working in national associations like ZVEI (Zentral- are creating interfaces with other areas on IoT solutions. verband Elektrotechnik- und Elektronikin- which must be coordinated and standard- dustrie), the English Lighting Industry As- ised. This frequently leads to the optimisa- The Zumtobel Group is also a member sociation (LIA) and the European industry tion of materials and energy in the cons- of the Zhaga Alliance and DiiA (Digital Il- association Lighting Europe. truction sector. The Zumtobel Group also lumination Interface Alliance), which are actively supports the efforts in this area addressing the standardisation of light- Developments in the Zumtobel Group are through its participation. ing components and digital interfaces for increasingly focused on functions and ap- lighting equipment. plications that extend far beyond lighting Additional demands on our R&D staff are and use the lighting infrastructure for new created by the growing intelligence of sys- offerings outside the conventional light- tems and the need to increase interface

Lens PMMA Nightsight

34 PARTICIPATION IN EU-WIDE RESEARCH PROJECTS

Selected R&D projects were also suppor- is working on the H2020 project PHABU- faces. Other national research promotion ted by various national and international LOUS together with industrial partners projects (FFG) resulted from cooperation research funding institutions in 2020/21. and the Fraunhofer Institute for Applied with partners like V-Research and Virtual For example: An international consortium Research to develop production proces- Reality und Visualisierung Forschungs- that includes Zumtobel Lighting GmbH ses for microstructures on freeform sur- GmbH (VRVis).

SUSTAINABLE PRODUCTS AND APPLICATIONS

The Zumtobel Group‘s commitment to ming years. Artificial lighting is currently lighting lifecycle still occurs during the use sustainability is closely related to the core responsible for roughly 13 % of worldwide of the light, but other issues like resource business because of the important role electricity consumption and will continue consumption and the circular economy played by energy-efficient, intelligently to decline by 2030 due to the use of state- are also becoming more important be- managed lighting technology in reducing of-the-art lighting solutions. Commercial cause of the slower increase in efficiency. worldwide resource consumption. This buildings and outdoor lighting – which The Zumtobel Group has been working trend is supported by the continuous in- represents light in exactly those areas of for many years to steadily improve the crease in the efficiency (lumes/watt) of application that form the core expertise of energy efficiency of its products while, at LED luminaires and a parallel decline in the Zumtobel Group – are responsible for a the same time, integrating sustainability the cost of LED chips. However, the stea- good two-thirds of this consumption. aspects along the product life cycle. dy increase in efficiency will slow when the physical limits are reached in the co- Most of the energy consumption in the

GLOBAL WARMING POTENTIAL OF A LUMINAIRE OVER ITS LIFE CYCLE

= 25 kg CO₂ = 1 kg CO₂ = 1,200 kg CO2 = 5 kg CO₂

CO₂ Equivalent

Lifetime phases of + lighting Material Manufacturing { Producion Logistics Application Disposal

Example luminaire for calculation: industrial segement, connected loaf 35.5 W, weight 1.5 kg

35 CALCULATION OF THE IMPROVEMENT IN ENERGY EFFICIENCY

In order to illustrate the Zumtobel Group’s The new calculation method was used average energy efficiency of 124.2 lm/W; contribution to energy efficiency, previous for the second time in this report, and in the previous year, this value equalled annual financial reports included a hypo- the Zumtobel Group will again report on 121.8 lm/W. That represents an improve- thetical estimate of the savings potential the average year-on-year improvement in ment of 2 % in energy efficiency compared that would result from the replacement of energy efficiency. The total lighting output with the previous period. The year-on-ye- fictitious equipment based on older tech- marketed during the reporting period (i.e. ar reduction in the efficiency increase is nology (fluorescent lamps) with newer the number of luminaires multiplied by the attributable to two factors: the Covid-19 equipment, assuming average use. This rated luminous flux) was compared with crisis – which was reflected in the increa- theoretical calculation became increa- the total connected load (i.e. the number sed sale of simple, low-priced and not very singly unrealistic with the growing market of luminaires multiplied by the rated con- efficient lighting – and the fact that the popularity of LEDs and the related increa- nected load) to develop a ratio. energy efficiency potential of LEDs is ne- se in modern LED equipment in buildings, arly exhausted, and we are asymptotically and the calculation method was therefore In the 2020/21 financial year, the Zumto- approaching the physical maximum which adjusted during the past year. bel Group marketed luminaires with an is dependent on the lighting quality.

Nominal luminous flux

Number of 2 % X luminaires Energy 6,7 % efficiency = lm/W Number of X luminaires

Nominal connected load 6.7 % Improvement in energy efficiency in the last 2 years

FURTHER DEVELOPMENT OF PRODUCTS AND SERVICES

The transformation of the lighting indus- Clear goals have been defined to safegu- try has increased the importance of the ard the further development of an inno- LED business and led to a stronger focus vative product and service portfolio. The on intelligent and Internet-linked lighting. portfolio is now based almost entirely on The result has been a growing demand for LED technology, and there has been a innovative LED-based lighting solutions steady increase in the revenues from pro- with comprehensive controls and integra- ject- and software-oriented services. The- ted service offers. The development, pro- re is also a growing interest in networking duction and sale of innovative, sustainable with other trades as a means of generating products and services therefore represent added value and realising energy savings. fundamental building blocks for the sustai- This will also protect the Zumtobel Group‘s nable success of the Zumtobel Group over high contribution to energy savings in the the medium- and long-term. future.

36 CIRCULAR ECONOMY

The issue cluster “product responsibility“ circular economy criteria starting with the like scoring concept for the product de- and the circular economy as a key issue 2021/22 financial year. This will form the velopment process. The CDR include an represent the responsible handling of ma- basis for product development, whereby 11-dimensional scoring model with three terial resources and a sustainable change the Lighting Segment will use a circular- building blocks: in the product development process for the Zumtobel Group. Circular economy aspects will therefore represent a focal point of activities in the earliest part of the Circular Sourcing: product development process. ● Recycled Material Content A new tool – Circular Design Rules (CDR) ● Material Reutilization Score – was introduced to ensure the timely ad- ● Material Health aptation of production processes and place the Zumtobel Group in a position to de- Circular Systems: velop products for the upcoming circular economy. This also includes the system- ● Take Back Systems atic minimisation of waste and optimisation for circular processes. The guideline Circular Design: for the Lighting Segment was prepared in 2020/21 with the circular economy institu- ● Design for longer Lifetime te EPEA Switzerland and the Austrian de- ● Design for Maintenance sign firm EOOS Next and implemented in ● Design for Upgrades the product development process. ● Design for Reuse ● Design for Removal The specifications for all new products in ● Design for Disassembly the Lighting Segment will be defined ac- ● Design for Remanufacturing/Refurbishment cording to their ecological potential and

PRODUCT QUALITY AND SAFETY

Comparative measurements and proce- standard for quality management systems. the respective regions and countries. This dural validations are carried out internally The standardised, centrally defined selling applies, in particular, to directives for light and with international testing institutions processes are also certified. The primary quality and energy efficiency as well as la- to maintain and improve the high quality of goal is to continuously improve the quality belling requirements and health and safe- benchmarks and analysis standards. The of production and selling processes and, ty aspects. Many of the Zumtobel Group’s Zumtobel Group cooperates with national in this way, increase customer satisfaction products carry the voluntary European and international testing institutes that in- and confidence in the Group’s products. ENEC symbol (European Norms Electrical clude OVE (Österreichischer Verband für Certification), which stands for complian- Elektrotechnik), TÜV (Technischer Über- In this connection, the ISO 9001:2015 ance with the relevant safety norms and per- wachungsverein), and UL (Underwriters nual monitoring audit was successfully formance requirements that is confirmed Laboratories). All production facilities in completed without deviations in 2020/21. by independent testing institutes. the Zumtobel Group’s worldwide network, The Zumtobel Group guarantees, based with the exception of the two plants in the on internal audits and measurements, USA and New Zealand, have been certified that its entire product portfolio meets all according to the ISO 9001 international applicable standards and regulations in

37 RESPOSIBLE EMPLOYER

KEY FIGURES IMPLEMENTATION 2020/21

5,813 employees ■ Improvement in LTI rate from 6.3 to 5.9

4,507 employee appraisals ■ 78.4 % and 4,507 employee ap- conducted praisals conducted (+5 %)

10.9 years average ■ Employer branding strategy lenght of service (+0.6 years) Developed

38Austria, Lünersee with view from 120 m above lake level TARGETS 2021/22 TARGETS 2030

■ Increase the proportion of emp- ■ Zumtobel Group is „Employer of loyee appraisal and development Choice“ and preferred employer interviews conducted by 10 %, with among current and future target a target participation rate of 86 % groups

■ Number of internally filled ma- ■ Zumtobel Group promotes a nagement positions will be increa- Group-wide environment that sed. Target is - two-thirds of ma- enables all employees to develop nagement positions will be filled by personal and professional further internal employees development

Picture: Drone © Mario Wintschnig39 RESPONSIBLE EMPLOYER

„OUR SUSTAINABLY PRODUCED AND OPERATED PRODUCTS NOT ONLY INSPIRE OUR CUSTOMERS, BUT ALSO IGNITE A PASSION FOR LIGHT IN OUR EMPLOYEES. WITH OUR HR ACTIVITIES, WE WANT TO BECOME EMPLOYER OF CHOICE AND NOT ONLY DEVELOP OUR EMPLOYEES, BUT GROW TOGETHER WITH THEM.“

Stefan Rauth, SVP Global HR

The Zumtobel Group has a workforce of vel, training and continuing education, the pany‘s long-term orientation and limit the over 5,813 employees at numerous loca- work-life balance, occupational safety and realisation of opportunities for growth. tions throughout the world. These men health protection were identified as the and women are the foundation of our suc- most important sustainability issues in this In order to establish and safeguard the ne- cess and a key factor for the successful area. cessary expertise, the Group places high development of our company. The global priority on training and education – both human resources department defines its Annual employee reviews and human re- internally and through external training mission as the creation of the necessary sources development processes like the programmes. The most important issues fundamentals and framework conditions talent review meetings and development in the personnel area are performance- to protect the safety, health and well-being conferences form the basis for targeted, based remuneration, a positive working of our employees. This corporate depart- individual advancement measures for our climate, international career opportunities ment works closely with the Management employees. and measures to support the work-life ba- Board to establish the strategic focal lance. points for human resources policies based The lack of suitable specialists, above all in on the corporate strategy. At the Group le- R&D, sales and IT, can endanger our com-

INFLUENCE OF THE COVID-19 PAMDEMIC

The 2020/21 financial year was influenced stakeholders. Short-time work in Austria offices and cafeterias, increased cleaning by the corona pandemic and its conse- was terminated prematurely in January intervals and access checks via question- quences, both in the private and profes- instead of March due to the positive de- naire for entering Group locations. sional environments. The Zumtobel Group velopment of business. utilised and implemented the short-time The positive experience with home office, work models offered by various govern- At the start of the pandemic, hygiene virtual meetings and online customer con- ments. In Austria, the decision was taken concepts and further organisational mea- tacts will sustainably transform the way we to implement short-time work from April sures were implemented at all company work and move the “future of work“ a large 2020 to January 2021. This programme locations to protect employees. These step forward. The working world will also involved a reduction in working hours, but measures included, among others, mobile be changed by subjects like long-distance all areas remained accessible for external disinfection equipment, disinfectants for management and virtual teams. stakeholders (e.g. customers) and internal meeting rooms, distancing rules for open

EMPLOYEE SATISFACTION

Satisfied employees are motivated and Zumtobel Group sees employee satis- employer. want to move the company forward. They faction as an important building block to represent the company and are its face to strengthen employees‘ ties with the com- The Zumtobel Group creates opportunities customers and other stakeholders. The pany and increase its attractiveness as an for its employees to improve their work-li-

40 fe balance, among others through flexible Internal and external training programmes offered. working hours, home office or sabbaticals. and internal career opportunities are also

CORPORATE CULTURE

Our three core values “Partnership - Pas- initiative, commitment, entrepreneurship honesty, as well as a positive approach to sion – Performance“ form the basis for our and an interest in making new discover- change are also key elements of the cor- thoughts and actions. Our employees pilo- ies. Reliability, team spirit, solidarity, and porate culture. ted the company with a great deal of passion and strong performance during the past financial year in spite of the Covid-19 pandemic..

A strategic employer branding project with a specific focus on the corporate culture and values was also started. A validation is currently in progress to determine how the company is perceived by its customers and employees and to determine which issues require additional work for the Zum- tobel Group to become the “employer of choice“. The objective is to create a corporate culture that aligns the company’s core DNA with future challenges.

The Dr Walter Zumtobel Value Award, which carries the name of the Group’s founder, was also presented in 2020/21. It is given to persons who demonstrate the corporate values in their everyday actions and, in this way, keep the founder’s values alive. The Zumtobel Group values personal Dr. Walter Zumtobel Award presented to Nenad Jordanov (Serbia plant)

EXTENSIVE TRAINING AND CONTINUING EDUCATION

The limited number of competent spe- vancement) and the search and selection ned. These requirements are based on the cialists also creates major challenges for process is provided by a company-specific competency model LIGHT developed by the international Zumtobel Group to at- “competency model” which is based on HR – L (Level of knowledge, skills & expe- tract qualified applicants and recruit the the corporate strategy and includes five rience), I (Innovation & transformation), G right people for the right jobs. Employee generic ambition levels for desired con- (Getting things done), H (Habit to develop), development and systematic professional duct and the level of technical expertise. T (Together we shine). advancement therefore represent a key element for sustainable business success. Together with the functional description established and documented during the The framework for human resources de- employee review, specific qualification re- velopment (employee reviews and ad- quirements can also be derived and defi-

41 Average trainings hours per employee 2016/17 2017/18 2018/19 2019/20 2020/21 White-collar workers 11 15 16 15 5 Blue-collar workers n/a 8 8 8 9 Total employees n/a 12 13 12 6

EMPLOYEE REVIEWS

The annual employee reviews are an im- define potential and performance at all le- The participants in the talent review mee- portant building block in the interaction vels of the Group and helps to identify and tings include the respective manager, the between employees and their supervisors develop top performers. This process sup- human resources department and, ideally, and form the basis for the identification of ports structured and standardised succes- a co-evaluator to ensure the transparency targeted, individualised training and con- sion planning. of the discussion. The performance and tinuing education measures as part of human resources development. In this structured discussion, managers and their staff define goals and develop a common understanding for the values, behaviour and importance of the corporate strategy for the specific job responsibilities. Mu- tual expectations are coordinated, and development opportunities are systematically identified. Training measures are also defined according to the employee’s individual needs.

Annual reviews were held with 4,507 employees in 2020/21 (78.4 %; 2019/20: 4,416 or 76.1 %).

The global establishment of a human resources development process with annual talent review meetings and development conferences provides an opportunity to Development of employee reviews in terms of number of employees

42 potential of each employee is evaluated tablishes a basis for the implementation of In addition to external training opportuni- in these meetings and recorded in a per- the defined measures. Peer rounds were ties, the Zumtobel Group offers an exten- formance-potential grid. The exit risk is conducted between the Management sive range of internal training programmes evaluated and recommendations for de- Board and the second management level for specialised and personal development velopment and retention measures are for the first time in 2020/21, where the main line with the skills, know-how and needs defined and documented. The result is a nagers introduced their staff and the eva- of the respective persons. performance-potential landscape for each luation took place on a broader basis. department with all employees, which es-

myTALK Talent Review People Development Conference

Three steps of the personnel development process

Activities in 2020/21 were influenced by also introduced as a new approach for the The training offering is supported by the restrictions on in-class events, and the e- transfer of knowledge on new products. extensive use of „myCAMPUS“, a modern learning training and continuing education learning management system. It provides offering was therefore expanded. The training offering is supported by the all employees in the Zumtobel Group with extensive use of „myCAMPUS“, a modern easy access to on-line training content at The average number of training hours per learning management system. It provides any time. employee fell to six hours due to the can- all employees in the Zumtobel Group with cellation of on-site programmes (2019/20: easy access to on-line training content at The focal points in 2020/21 involved com- 12 hours). Despite these hurdles, emp- any time. The focal points in 2020/21 invol- pliance, product know-how, applications loyees were able to utilise the online trai- ved compliance, product know-how, appli- and sales skills. ning offering. The „webinar“ concept was cations and sales skills.

WORK-LIFE BALANCE

An effective work-life balance for emp- the offering of flexible working time mo- Employees in Austria can also take ad- loyees is an important factor for strengthe- dels. Part-time employment, educational vantage of a free-time option provided by ning the Zumtobel Group’s position as an leave, sabbaticals, parental leave for fat- a works agreement. It permits a reduction attractive employer. The key points in this hers, home office options or other models in working hours for personal reasons in context are the fundamentally changing are arranged where needed and permitted exchange for waiving a salary or wage demands of new generations on the la- by the respective position. increase and results in paid time-off (for bour market and measures to support the example, for age-based work, educational reconciliation of career and family life for The number of part-time employees decli- programmes or to accumulate longer free- working parents. ned from 8.3 % of the total full-time equiva- time periods over several years). lent workforce in the previous year to 7.6 % The Zumtobel Group helps to improve the in 2020/21. This free-time option has been selected by work-life balance by continually increasing 367 employees. At the end of 2020/21, 58

43 employees in Austria were on parental leave (2019/20: 66).

Mothers and fathers who return to work after maternity and parental leave are actively supported in their reintegration.

OCCUPATIONAL SAFETY, HEALTH AND WELL-BEING

Accident prevention and health protec- tees. Local officers monitor compliance clude employee training, improvements to tion for employees have high priority for with specific environmental, health and protective clothing and the replacement of the member companies of the Zumtobel safety guidelines at all locations. Mea- machinery. Group and are the subject of regularly di- sures are implemented on a continuous scussions in employer-employee commit- basis to increase workplace safety and in-

Occupational safety (1.000.000) 2016/17 2017/18 2018/19 2019/20 2020/21 Total recorded injuries Lighting Plants (LTI rate) 13.1 12.0 7.3 10.1 9.2 Total recorded injuries Components Plants (LTI rate) 4.1 1.2 2.7 2.3 1.7 Total recorded injuries Zumtobel Group 10.0 7.7 5.2 6.3 5.9 Number of fatal accidents 0 0 0 0 0 Total accident severity Zumtobel Group 88 88 88 58 69

44 The LTI rate (Lost Time Injury: number of priority and are the responsibility of the employees on long-term sick leave an work accidents with lost time >8 hours x human resources department. The fol- opportunity to return to their previous job 1,000,000 / Total hours worked) is calcu- lowing areas of activity represent the key or to an alternative function, subject to he- lated monthly at all plants. In the Zumto- elements of the Zumtobel Group’s health alth-related constraints (e.g. daily working bel Group, the LTI-rate declined to 5.9 in management programme: worker protec- time, job content, etc.). An internal integra- 2020/21 (2019/20: 6.3). The LTI rate fell tion legislation, presence management, tion team accompanies this process. to 1.7 in the components plants (2019/20: workplace health promotion, leadership 2.3) and to 9.2 in the lighting plants and management behaviour, integration (2019/20: 10.1). management and generation management. The accident severity indicator (number of day lost x 1,000,000 / Total hours worked) Various programmes have been imple- rose slightly from 58 in the previous year mented in these areas by the local Group to 69 in 2020/21. There were no fatal accompanies to meet the specific needs of cidents in 2020/21 or in earlier years. The their employees. The Zumtobel Group’s company’s goal is to continuously reduce efforts to protect and promote health, to the LTI rate over the coming years and to support age-appropriate workplaces and develop a pronounced safety culture, for the maintenance of work fitness were re- example through an increase in training on cognised in March 2019 with the two-ye- the prevention of work accidents. ar “Salvus” quality seal from the province of Vorarlberg (Austria) for the third time in The annual evaluation of the age structure succession. The two-year cycle was exten- and age trends in the Zumtobel Group and ded by one year due to the corona pande- a statistical comparison of the generations mic. in different areas of the business confirm the demographic shift in our society. He- As part of the retention offensive and the althcare and prevention measures, combi- goal not to lose any employees through ned with the maintenance and promotion illness, the Zumtobel Group has imple- of employees‘ fitness for work, have high mented a reintegration process. It gives

EMPLOYEE RIGHTS AND REMUNERATION

As an employer with a strong corporate culture that has grown over many decades, the Zumtobel Group is well aware of its social responsibility for the employees in its many companies throughout the world and remains focused on the further development of responsible working conditions. The Zumtobel Group believes in and promotes the open and regular exchange of information between the Ma- nagement Board, employees and the Em- ployees’ Council.

Compliance with the legal participation rights of employees and the principles and standards defined by the International Labour Organisation (ILO) represent an in-

45 tegral part of the code of conduct, which Job descriptions and functional evaluati- nagement Board and top management is mandatory for all companies in the Zum- ons guarantee competitive remuneration. consists of a short-term component and tobel Group. Collective agreements cover This ensures that the salary or wage ref- a long-term component. The short-term roughly 52 % of the worldwide workforce. lects the employee’s qualifications and is component is paid out directly during the also fair and appropriate. A focus on the bonus year. The Zumtobel Group follows a uniform re- functional content also eliminates any muneration scheme that promotes high gender-specific irregularities. The distribution of the long-term compo- transparency and ensures performan- nent is spread over the following three ce-based compensation. Remuneration The performance benchmark for all emp- to five years, whereby the tranche in the normally exceeds the level required by loyees eligible for bonuses – who do not respective payment year is weighted by legal regulations or collective bargaining participate directly in a sales bonus sche- the target achievement of the total share- agreements. Internal and external com- me – is based on a combination of two fi- holder return of Zumtobel Group AG comparisons are used to confirm that wages nancial indicators (adjusted EBIT and free pared with a defined peer group as the and salaries reflect the market level whe- cash flow) with different weightings. An performance indicator. This structure is rever possible. In countries with low-wage individual bonus component will also be intended to support sustainable decisions standards, the Zumtobel Group also pays introduced beginning in 2021/22. by management. compensation that generally exceeds the legal minimum. The variable remuneration for the Ma-

DIVERSITY AND EQUAL OPPORTUNITY

Diversity among the workforce is an im- lity, religious conviction or sexual orien- men to management positions, but inter- portant factor for creating an innovati- tation. Every person is unique, valuable nal and external recruiting and personnel ve working climate and protecting the and has individual capabilities. This belief development measures are increasingly Group’s competitive ability. The men and is also reflected in the Zumtobel Group’s aimed in this direction. women employed by the Zumtobel Group code of conduct, which prohibits all forms come from 75 different nations, whereby of discrimination. Experience, qualificati- The Zumtobel Group recognises that the the staff at the corporate headquarters in ons and performance form the basis for continuation of existing initiatives and an Dornbirn, Austria, represent roughly 50 personnel decisions in all corporate areas open approach to new initiatives requires nations. and at all management levels. a greater share of women in higher qualified positions. In order to safeguard its The Zumtobel Group believes in equal op- The share of women in the Zumtobel competitive ability and benefit from a wide portunity and rejects any form of discrimi- Group’s workforce equalled 35.7 % in range of different viewpoints, the Zumtobel nation based on ethnic origin, nationality, 2020/21 (2019/20: 35.8 %). There is no Group has set a goal to increase the share gender, cultural background, age, disabi- specific target for the appointment of wo- of women and, accordingly, their represen-

46 tation in the Group each year. The Zumto- bel Group works to increase its attractiveness as an employer and implements measures to support the work-life balance. Part-time employment, educational leave, sabbaticals, parental leave for fathers, home office options or other models are arranged where needed.

Mothers and fathers who return to work after maternity and parental leave are actively supported in their reintegration.

WORKFORCE DEVELOPMENT

The number of employees declined year- on-year to 5,813 full-time employees as of 30 April 2021 (including contract workers). The following graph shows the distribution and development of the workforce by activity and region:

Labour productivity – calculated as adjusted EBIT in relation to personnel expenses – fell from 14.4 % in the previous year to 12.7 % in 2020/21 due to the decrease in operating results.

Average revenues per employee (including contract workers) declined year-on- year to EUR 179,674 in 2020/21 (2019/20: EUR 187,342).

47 The average length of service with the by gender, age group, type of employment in the following table (excluding contract Zumtobel Group equalled 10.9 years in and employment relationship is shown workers): 2020/21. The classification of employees

Employees in % 2016/17 2017/18 2018/19 2019/20 2020/21 Gender Men 64.3 64.2 64.3 64.2 64.3 Woman 35.7 35.8 35.7 35.8 35.7 Total 100 100 100 100 100 Age structure < 30 years old 16.4 16.2 16.5 16.5 14.5 30 - 44 years 41.8 45.8 45.4 45.9 45.1 45 - 55 years 27.9 25.9 25.0 24.1 25.5 > 55 years old 13.9 12.1 13.1 15.3 14.9 Total 100 100 100 100 100 Corporate status

White-collar workers 58.8 60.6 62.5 62.6 62.7 Blue-collar workers 35.2 34.2 33.1 34.6 34.2 Contract workers 6.0 5.2 4.4 2.8 3.1 Total 100 100 100 100 100 Employment Full-time 93.4 93.1 31.5 91.7 92.4 Part-time 6.6 6.9 8.5 8.3 7.6 Total 100 100 100 100 100

48 HUMAN RIGHTS, CHILD LABOUR AND FORCED LABOUR

The success of the Zumtobel Group is ba- high priority to compliance with human munication on Progress) in 2020/21 which sed on our qualified, dedicated and moti- rights and the prevention of child labour informs stakeholders of our activities and vated employees. This belief is reflected and forced labour. These principles are re- progress in implementing these 10 princi- in the Group’s commitment to compliance gulated in a separate, mandatory code of ples. with human rights and the fundamental conduct for business partners. principles of labour law, occupational sa- As an employer with a corporate culture fety and the protection of health all over As an international company, the Zumtobel that has grown over many decades, the the world. Respect for human rights repre- Group is fully committed to the protection Zumtobel Group accepts social respon- sents an integral part of the corporate cul- of human rights and compliance with high sibility for its employees throughout the ture and management. Compliance with social standards and the legal regulations world. Compliance with the legal participa- human rights and the prevention of child applicable in Austria and other countries. tion rights of employees and the principles labour and forced labour is audited an- and standards defined by the International nually at all producing locations, together The Zumtobel Group documented its Labour Organisation (ILO) represent an in- with management and on site, to elimina- commitment to responsible management, tegral part of the code of conduct. te the possible risk of the employment of compliance with human rights and the minors. prevention of child labour and forced labour by joining the UN Global Compact. In its cooperation with business partners This commitment was renewed with the (e.g. suppliers), the Zumtobel Group gives first annual progress report (COP-Com-

49 SUSTAINABLE PROCUREMENT

Kanzelköpfe, 2,437m

Totalpköpfe, 2,587m

KEY FIGURES IMPLEMENTATION 2020/21

96.5 % of suppliers support the ■ Code of Conduct for Suppliers Code of Conduct for suppliers updated (expansion in the areas of environment and IT security)

154 supplier audits were ■ Introduction of a Supplier Sustai- conducted (48 sustainability) nability Questionnaire for suppliers

59 % (Components segment) 8 % ■ 80 top suppliers evaluated in (Lighting segment) Procurement terms of their sustainability volume share from Asia performance

50Austria, Lünersee with view of the Douglass Hut and behind it the Seekopf mountain, altitude 2,698 m Totalpköpfe, 2,587m

TARGETS 2021/22 TARGETS 2030

■ 100 % of energy purchased at ■ Optimize company vehicle fleet key sites comes from renewable and car policy with regard to energy sources sustainability aspects

■ All suppliers from risk countries ■ Establish supplier program for are systematically assessed for CO₂ reduction in the supply chain sustainability performance with performance measurement

■ 70 sustainability audits with ■ Procurement of environmentally focus on risk countries friendly materials and technologies over the entire life cycle (e.g. C2C)

„FOR ME, SUSTAINABLE PROCUREMENT MEANS ENSURING COMPLIANCE WITH MINIMUM SOCIAL AND ENVIRONMENTAL REQUIREMENTS THROUGHOUT THE SUPPLY CHAIN ON THE BASIS OF ECONOMIC SUSTAINABILITY - SUSTAINABILITY ASPECTS ARE AN INTEGRAL PART OF PROCUREMENT AND AWARD CRITERIA.“

Miro Ardan, SVP Global Purchasing

Sustainable procurement plays an import- fairness for many years. The foundation is dits of selected suppliers. An obligation ant role for the Zumtobel Group as a pro- formed by a systematic, internal suppler for business partners to comply with the ducing company. Global procurement, the assessment and release process which Group‘s code of conduct underscores the responsible department, is centrally orga- starts with a self-evaluation questionnaire long-term, sustainable partnerships with nised, globally positioned and located in and continues with annual evaluations of our suppliers. Dornbirn. The procurement volumes for all all existing suppliers and focal point au- plants are bundled under designated com- modity managers. The Zumtobel Group works with 674 suppliers from roughly 30 countries.

The Zumtobel Group focuses not only on economic aspects, but also on compliance with high environmental and social standards along the entire supply chain. A Group-wide procurement initiative was launched in 2020/21 to ensure compliance by existing and potential business partners. It includes increased protection for employees and the environment and guarantees the responsible handling of resources and materials.

Business relations between the Zumtobel Group and its suppliers have been defined by a long-term orientation, mutual trust and

INFLUENCE OF THE COVID-19 PANDEMIC

Good, long-standing partnerships with One success factor during the pandemic rement process in spite of the pandemic. A suppliers created advantages for the Zum- was the policy of positioning the supply change in planning at the plant in Dornbirn tobel Group in the prioritisation of deli- chain as local as possible and as global as led to the easy generation of forecasts for veries and led to few or no serious bottle- necessary. Regular coordination with local suppliers. necks in the production of products and plants and their suppliers as well as the services. Any unavoidable shortages in increased approval and use of local sup- Proactive and early clarification with our procurement were handled through short- pliers, e.g. in Serbia through the local pur- suppliers concerning risks in their upstre- term approval processes for alternative chasing team at the plant in Niš, provided am supply chain processes shortened re- suppliers. for the smooth continuation of the procu- action times and helped to develop the ne-

52 cessary risk minimisation measures. The pleted without problems and limitations. were impossible due to travel restrictions. changeover from personal meetings with On site supplier audits were converted to suppliers to virtual meetings was com- remote audits in the countries where visits

SUSTAINABLE PROCUREMENT AND SUPPLIER MANAGEMENT

The Zumtobel Group attempts to purchase most of the raw materials, merchandise and services in the regions where its plants are located. Key raw materials like steel, copper, aluminium and plastic gra- nulate are purchased in Central Europe. Electronic and LED components are sour- ced primarily in Asia, where the most competitive suppliers are located. In 2020/21, the share of the procurement volume from Asia amounted to over 59.8 % (2019/20: 63%) in the Components Segment and nearly 8.2 % (2019/20: 9 %) in the Lighting Segment.

At least two suppliers are always approved and available for high-revenue procurement articles (multi-sourcing strategy) to eliminate any supply risks. This approach protects supply security and strengthens the Group’s negotiating position towards A supplier sustainability self-assessment tes. This sustainability assessment was in- suppliers which, in turn, creates greater questionnaire (SSAQ) was implemented tegrated in the standardised supplier eva- synergy effects (bundling of volumes, stan- in 2020/21 to give suppliers a regular and luations and represents an integral part of dardisation and expansion of supplier rela- recurring benchmark to evaluate their the regularly adjusted merchandise group tionships). It also creates the basis for hel- sustainability performance. Follow-up pro- procurement strategy. ping preferred suppliers strengthen their grammes and training courses will then be focus on sustainability and continuity. introduced based on the suppliers‘ estima-

ENVIRONMENTAL AND SOCIAL STANDARDS IN THE SUPPLY CHAIN

All new suppliers undergo a Group-wide The supplier approval process was expan- mental index. Suppliers from risk countries qualification process and, among others, ded in 2015/16 to include explicit questi- are analysed and evaluated, above all with must confirm compliance with the Zumto- ons on the avoidance of conflict minerals. regard to sustainability issues. bel Group’s code of conduct in writing. A In order to reduce transport costs and the release audit is also carried out to review related environmental pollution, an increa- A recently introduced supplier sustainabi- and document the availability of a verifi- sed number of local suppliers for the new lity questionnaire and an additional sup- able quality management system, com- plant in Serbia were audited and approved. plier sustainability audit serve as the basis pliance with environmental and energy This helps to avoid longer supply routes for this assessment. As a pilot project, 80 management standards and the fulfilment from other EU states and Asia. strategic suppliers were rated on work, of legal requirements that include RoHS ethics, health, safety and environmental (Restriction of Hazardous Substances) Procurement risk countries were also defi- issues in 2020/21. and REACH (EU directive on chemicals). ned in line with the corruption and environ-

53 The current supplier approval process was The audits were converted to remote pro- requested. If these measures are not im- expanded to include the supplier sustaina- cedures, where possible, due to the tra- plemented within an appropriate period, bility questionnaire and is mandatory for vel restrictions resulting from the corona the business relationship is terminated. inclusion in the Zumtobel Group’s supplier pandemic. Any violations of the code of Recommendations are also made which network. conduct or environmental standards by allow the Zumtobel Group to encourage all business partners are documented and its suppliers to implement an environmen- An important instrument for the joint de- immediate optimisation measures are tal management system. velopment of suppliers is the standardised process for the regular, annual assessment of all existing suppliers. In addition to the recognised success factors of supplier reliability, quality, costs and service, ecological and social responsibility aspects are also evaluated.

Based on the “partners4excellence“ international supplier day in 2018, various initiatives were launched to strengthen the partnerships with regional and global suppliers.

Sustainability audits with various focal points are also scheduled for selected suppliers each year. In 2020/21, 154 audits (2019/20: 136) were carried out – including 48 audits with a special focus on sustainability in the areas of occupational safety and environmental management.

Contents of the sustainability audit

ETHICS WORK HEALTH & SAFETY ENVIRONMENT 7 Questions 10 Questions 9 Questions 7 Questions

CODE OF CONDUCT FOR SUPPLIERS

The Zumtobel Group also works to imple- expanded, where necessary, to include The code of conduct for suppliers com- ment its high ecological, social and ethical new relevant topics – for example: the up- bines major international standards and standards in its business relations with dates in 2020/21 covered issues like IT conventions, like compliance with the core suppliers. The most important instrument security. Acceptance of the code is man- norms of the International Labour Orga- in this respect is the code of conduct for datory for all new suppliers. nisation (ILO), and addresses important suppliers, which is regularly revised and issues like compliance, the environment,

54 Topic content in the Code of Conduct for Suppliers

● General principles of conduct ● Corruption and criminal acts ● Human rights, forced labor and child labor ● Health protection ● Discrimination and fair working conditions ● Environment and sustainability ● IT security ● Intellectual property and confidential information ● Data protection ● Monitoring and partnership

health protection and human rights. All key The Zumtobel Group renewed its commit- Compact. This report includes information suppliers with which the Zumtobel Group ment to a responsible and sustainable pro- for stakeholders of the company’s activi- operates are required to observe the revi- curement process in 2020/21 with its first ties and progress in implementing the 10 sed code of conduct. That covers 96.5 % annual progress report (COP-Communica- principles. of the current suppliers based on procure- tion on Progress) based on the UN Global ment volumes.

CONFLICT MINERALS

Companies headquartered in the EU have OECD guideline “Due Diligence Guidance been legally required to carry out a due for Responsible Supply Chains from Con- diligence audit in connection with the pro- flicted-Affected and High-Risk Areas“ is curement of conflict materials since the the most important reference benchmark beginning of 2021. The European Com- for the current RMAP standards. It requi- mission has called on all companies cove- res upstream companies to publish annual red by this directive to meet the due dili- reports. Smelters and refineries are consi- gence requirements in their supply chains dered upstream companies in the sense for tin, tantalum, wolfram and gold. of the OECD guidelines and must meet the OECD Level 5 reporting requirements for As part of the conflict minerals program- upstream companies in order to conform me, the Zumtobel Group has implemented to RMAP standards. measures in its supply chain to ensure that these products do not directly or indirectly The reports were prepared and updated finance transactions with the Democratic externally by ValueStream Europe GmbH, Republic of the Congo (DRC). which contributes its expertise in material compliance. The Zumtobel Group documents its due diligence based on the report template The current version of the conflict mine- issued by the Responsible Minerals Initia- rals reporting template (CMRT) is available tive (RMI) and discloses its due diligence for download on the Zumtobel Group’s in the supply chain for smelting works und website for the Lighting Segment and the refineries as required by the Responsible Component Segment. Minerals Assurance Process (RMAP). The

55 OPERATIONAL ENVIRONMENTAL PROTECTION

i KEY FIGURES IMPLEMENTATION 2020/21

2,009 tons of CO₂ saved ■ Introduction of quarterly reporting (despite the reintegration of of the sustainability performance the Les-Andelys) achieved

104 tons less residual waste ■ Establishment of a global produced (18.3 %) environmental as well as health and safety policy.

86 % recycling rate within ■ ISO 14001 certification of the rein- operational waste tegrated site Les-Andelys

■ CO₂ reduction of 5 % achieved

56Austria, Lünersee with view of the dam and Douglass Hut TARGETS 2021/22 TARGETS 2030

■ Reduction of CO₂ emissions by ■ The Zumtobel Group aims to 50 % compared to the reference achieve climate neutrality by 2025 value in financial year 2015/16

■ Share of renewable energy ■ The recycling rate is 95 % to be at least 50 %

■ Reduction in waste volume by ■ The circular economy has been 15 % compared to the previous year implemented in the Zumtobel Group and is being implemented in stages ■ Increase in recycling rate to 90 %

„FOR ME, ENVIRONMENTAL PROTECTION MEANS CAREFUL AND EFFICIENT USE OF RESOURCES AS WELL AS AVOIDANCE AND REDUCTION OF EMISSIONS AND WASTE ALONG THE LIFE CYCLE OF OUR PRODUCTS AND SERVICES. THE SUSTAI- NABLE SAFEGUARDING OF OUR HABITAT AND OUR CORPORATE GOALS ARE OF EQUAL IMPORTANCE.“

Philipp Magritsch, Senior Global Quality Manager, Global Quality Management

Environmental protection is of great im- but also in connection with efforts to make efficient use of raw materials as well as the portance for the Zumtobel Group, not only procurement, production and logistics minimisation of emissions and waste over with respect to the development of energy- more environmentally compatible. This the entire product lifecycle and the entire efficient, environmentally friendly products conviction is reflected in the careful and value chain of products and services.

MANAGEMENT APPROACH

Environmental protection is an essential of an effective environmental manage- development of products and services co- element of our integrated management ment system. The most important goals vers the entire lifecycle from the selection system. Environmental management in the of this system are to improve the Group’s of materials to the required technologies, Zumtobel Group is based on three suppor- environmental performance, to meet envi- production, transportation, use and recy- ting elements: environmental and energy ronmental goals for the reduction and pre- cling. All major production plants in the management systems that are certified vention of negative effects on the environ- Zumtobel Group are currently certified according to international standards (ISO ment and to ensure compliance with legal, under ISO 14001, and plans call for the 14001 and ISO 50001), strict compliance and government and voluntary obligations. expansion of certification to cover the Ser- with internal and external environmental The development of environmental goals vices & Solutions administrative location protection guidelines and efforts to conti- is monitored with transparent and periodi- at Dornbirn in autumn 2021. nuously improve the company’s environ- cal global reporting. mental and energy-related performance. In addition to quality and lean manage- The most important indicators for this ment, important elements of the Zumto- Under ISO 14001 certification, an exter- global environmental reporting are ener- bel Group’s global production network nal organisation confirms the Zumtobel gy consumption, CO2 emissions, water also include the environmental, energy Group’s use and continuous improvement consumption, waste and the recycling and occupational safety. The continuous rate. Absolute values as well as the output-based values are provided because the volume of the produced products has a major influence on the Zumtobel Group’s environmental and energy-related performance. The effectiveness and further development of the system is guaranteed by regular internal audits, management reviews and continuous improvement activities.

Clearly defined operations and processes as well as established methods help to ensure that the best available materials and techniques are used where appropriate and economically feasible. Moreover, the

58 improvement process in the production Continuous improvement covers the tinuous improvement of all its business network (Global Operations) defines clear optimisation of production and support processes, products and services. For this standards which support the effective and processes and the responsible use of re- purpose, the company has implemented efficient use of available resources by the sources and raw materials, including ener- procedures to identify and evaluate oppor- Zumtobel Group and help to meet custo- gy, as well as the protection of employees’ tunities for improvement which are then mers’ high expectations and demands. health and the prevention of processes’ combined into action programmes and The environment is becoming an increa- negative influence on the environment. documented and dealt with in structured singly important issue for customers and form. part of their product selection process. The Zumtobel Group stands for the con-

ENVIRONMENTAL TRAINING

The awareness of employees for environ- in the break-time areas as well as Intra- their specific responsibilities. In addition, mental protection is supported by nume- net websites that are available to all em- employees are informed of planned and rous communication channels. A wide ployees. Supervisors and environmental implemented environmental protection range of information is provided in intro- protection officers regularly train and -in projects. ductory folders and multiple-day training struct employees on the environmental courses for new staff and info screens effects and issues which are relevant for

Certificates lighting plants ISO 14001:2015 ISO 50001:2011 ISO 9000:2015

Headquaters in Dornbirn, AT

Service & Solution Dornbirn, AT

Lighting plant Dornbirn, AT

Lighting plant Lemgo, DE

Lighting plant Spennymoor, UK

Lighting plant Niš, RS

Lighting plant Sydney, AU

Lighting plant Barrowford, UK

Lighting plant Highland, US

Lighting plant Auckland, NZ

Lighting plant Les Andelys, FR

59 Certificates Components plants ISO 14001:2015 ISO 50001:2011 ISO 9000:2015

Component plant Dornbirn, AT

Component plant Niš, RS

Component plant Spennymoor, UK

Component plant Shenzhen, CN

Development location in Jennersdorf, AT

REALISATION OF ENVIRONMENTAL GOALS

The goal was reached to receive certifica- tegic focus on sustainability. The plant in the Zumtobel Group level excludes these tion under ISO 14001:2015 at the major lo- Les Andelys, which was sold in 2017 and three locations to permit comparisons cations. The Zumtobel Group successfully repurchased in 2020, was successfully in- with earlier years. passed all external audits without any vari- tegrated in the Zumtobel Group’s produc- ances. The certification of the Services & tion network and, accordingly, in the ISO The goal to cut CO₂ emissions by 5 % was Solutions location was postponed to 2021 14001 matrix certification for the lighting clearly reached with a reduction of 9.4 %, due to the Covid-19 pandemic. The current brands. The external auditors from QUA- and the volume-based reduction in CO₂ environmental reporting was analysed to- LITY AUSTRIA confirmed this integration emissions fell by 6.2 %. Energy consump- gether with the involved departments, and with a successfully completed review in tion was reduced by 3.1 % and exceeded improvements were prepared for the next December 2020. the target of 2.5 %. The recycling quo- financial year. Together with the Manage- ta met the 86 % goal with an increase to ment Board, environmental reporting will Three additional locations were included 86.3%. Water consumption was 4 % higher be reviewed quarterly to evaluate the com- in the environmental reporting: the plant and failed to meet the goal for a reduction pany’s environmental and energy-related in Les Andelys, France, which was re-in- of 3 %. A detailed analysis of the individual performance. tegrated in the Zumtobel Group and the indicators is provided under the respective Services & Solutions and “Schmelzhüt- issues. The annual environmental workshop terstrasse“ locations in Dornbirn, Austria. with the departments was held online in The absolute values for the 2020/21 indi- 2020/21 due to the Covid-19 situation. A cators include the data from these three global environmental policy was also pre- locations. The analysis of the year-on-ye- pared which reflects the company’s stra- ar improvement in individual indicators at

ENERGY AND RENEWABLE ENERGY

Energy management in the Zumtobel which is consistently pursued at all pro- and, in this way, reduce greenhouse gas Group represents an integral part of the ducing locations. The largest locations in emissions, energy costs and other relevant environmental management concept. Pro- the Zumtobel Group also operate with cer- effects on the environment. duction is responsible for the highest ener- tified energy management systems. The gy consumption in the Zumtobel Group. goal of an energy management systems Energy-related performance is defined as Therefore, energy consumption and the under ISO 50001 is to continuously impro- the result of efficient energy use, appro- use of renewable energy is a key issue ve a company‘s energetic performance priate energy use and energy consump-

60 tion. The Zumtobel Group carries out re- develop measures for improvement. The sure the efficient use of energy. gular energy audits at selected locations continuous implementation of these ener- to identify opportunities for savings and gy efficiency measures is intended to en-

ENERGY CONSUMPTION INDICATORS

The Zumtobel Group is working to mini- a focal point of analyses to identify savings lacquering processes and in the Compo- mise energy consumption at all its produc- opportunities in the coming financial year. nents Segment‘s soldering and hardening tion locations. Total energy consumption processes. Most of the energy in produc- equalled 82,195 MWh in 2020/21 (72,541 An analysis by process shows the hig- tion is used in Europe (92 %). The various MWh excluding the three new locations hest energy consumption in the Lighting energy sources and consumption in pro- added to the reporting system). In com- Segment‘s plastic injection moulding and duction are shown in the following table: parison with the previous year (74,859 MWh), this represents a reduction of 3.1% and means the target for a reduction of 2.5 % was reached. Energy consumption based on production output remained un- changed. The lighting brands locations in Dornbirn, Niš and Spennymoor and the components brand location in Niš recorded an increase in production output and, as a result, a sound improvement in energy consumption per unit; the locations with production declines reported a deteriora- tion in the energy consumption per unit. The Covid-19 pandemic and the related effects like short-time work and home office had no significant influence on energy consumption in the Zumtobel Group. In other words, the base load energy consumption by machines, equipment, lighting and heating is relatively high and will represent

Energy Consumption in MWh 2016/17 2017/18 2018/19 2019/20 2020/21 Prozess Energy 72,251 64,301 64,377 59,951 65,335 Electricity 53,686 48,630 48,421 48,260 50,151 Gas 18,275 15,377 15,147 10,316 14,013 Local Heating (Biomasse) 0 0 405 616 692 District Heating 291 293 288 399 478 Oil 0 0 116 0 0 Heating Energy 15,453 10,953 11,912 15,268 16,860 Gas 13,352 7,496 7,850 9,597 10,490 Local Heating (Biomasse) 0 1,356 2,019 3,610 3,947 District Heating 2,101 2,102 2,043 2,061 2,423 Total Energy 87,704 75,254 76,289 74,859 82,195

61 OPTIMISATION OF ENERGY CONSUMPTION

The appointment of a new energy officer reduced by 7 % and energy consumption database and their use will be planned ba- for the lighting brands production location based on output by 19 %. sed on energy consumption. In addition, in Dornbirn marked the successful conver- the lighting in the offices was converted to sion of the energy management system to The lighting brands production location state-of-the-art LED technology with intel- the new ISO 50001/2018 standard, set im- in in Spennymoor successfully completed ligent controls. portant impulses for substantial improve- its annual external audit of the energy ma- ments in the energy management system, nagement system under ISO 50001/2018 The installation of intelligent lighting con- and led to the introduction of measures to without variances. Targeted improvements trols also brought significant energy sa- reduce energy consumption. in the production areas, which are respon- vings at the location in Niš. At the Tridonic sible for most of the energy consumption, plant in Dornbirn, new energy-efficient -ma The first results of the activities to optimi- reduced the energy consumption per pro- chines were installed and an ultrasound se energy consumption are already visible duced luminaire by 7 %. The energy con- measurement system was purchased to in the location’s indicators. Despite an in- sumption of all plastic injection moulding record pressurised air leaks. crease in the production output of lumi- machines was analysed; the machines naires, absolute energy consumption was were flagged with an energy label in the

RENEWABLE ENERGY CONSUMPTION

The connection to a local district heating moor was also converted to green energy Beginning with the 2021/22 financial year, network in Dornbirn now substitutes bio- in December 2020. our environmental reporting will also pro- genic-generated heat for most of the na- vide information on energy consumption tural gas required for heating. The photo- The production location in Lemgo will with renewable energy. It will show the voltaic equipment (approx. 7,300 m²) has change over to 100 % renewable energy at respective share of total energy consump- been fully operational since December the start of the new financial year. At the tion and include a comparison with the 2020 and generates the electricity for the plant in Niš, Serbia, we signed a new con- goal to achieve a 50 % component of rene- plant’s requirements. All plants in Dorn- tract for electricity supplies which covers wable energy. birn have converted to 100 % hydropower the delivery of electricity form 100 % hyd- since March 2021. The location in Spenny- ropower beginning in June 2021.

62 GREENHOUSE GAS EMISSIONS

The development of greenhouse gas emis- the share of renewable energy. A strong in Spennymoor following the conversion sions results from both energy consump- improvement in the CO₂-equivalent was to 100 % green electricity beginning in De- tion and the particular energy sources. also registered by the lighting brand plant cember 2020. CO₂-equivalents for the various energy sources used by the Zumtobel Group are evaluated, verified and documented at regular intervals.

The absolute reduction in CO₂ emissions equalled 9.4 % and reflected the reduction in total energy consumption as well as the use of more environmentally friendly energy. The relative decline in CO₂ emissions based on output equalled 6.2 %, which means the 5 % goal was clearly reached. The lighting plant in Dornbirn made an important contribution to reducing CO₂ emissions:

Total energy consumption declined despite an increase in production, and the use of biogenic district heating and the conversion to 100 % hydropower raised

CO₂-Emissions in tonnes 2016/17 2017/18 2018/19 2019/20 2020/21 SCOPE 1 7,190 7,297 6,518 4,248 5,099 Oil CO₂-Equivalent 0 0 32 0 0 Gas CO₂-Equivalent 7,190 7,297 6,486 4,248 5,099 SCOPE 2 14,234 13,509 16,879 17,486 14,626 Electricity CO₂-Equivalent 13,651 12,919 16,272 17,066 14,139 Electricity CO₂-Equivalent PV Anlage Netzeinspeisung -41 Local Heating CO₂-Equivalent (Biomasse) 0 27 48 85 93 Distirct Heating CO₂-Equivalent 583 563 558 335 395 Total CO₂-Equivalent 21,425 20,805 23,397 21,734 19,725

63 WATER AND WASTEWATER

Water is required in only limited volumes reduction was not reached. Several pro- ror in the previous year and higher water and hardly polluted in the production production locations, e.g. Dornbirn and Niš, consumption due to a substantial increase cesses used by the Zumtobel Group. Ho- exceeded the reduction target. However, in the production of lacquered OUTDOOR wever, the responsible and economical the overall goal was not reached due to a products at the lighting brands production use of water is a primary concern. Proce- measurement/measurement software er- location in Spennymoor. dures ensure that wastewater meets municipal requirements before it is discharged into local treatment plants and hold the related indicators clearly below the permissible limits wherever possible.

These indicators are monitored and confirmed internally and externally on a regular basis. The Zumtobel Group used approxi- mately 67,083 cubic metres of water at its production locations in 2020/21 (64,805 cubic metres excluding the three new locations added to the reporting system), compared with 61,976 cubic metres in the previous year.

This represents an increase of 4.6 % in water consumption by the Zumtobel Group and means the goal for a 3 % year-on-year

Water consumption in m³ 2016/17 2017/18 2018/19 2019/20 2020/21 Water consumption 107,451 103,151 90,398 62,058 67,083 Waste water 103,166 98,473 103,257 62,726 64,652

BIODIVERSITY

For the Zumtobel Group, biodiversity me- bel Group has set a goal to become clima- ne technology. This technology optimises ans preserving the diversity of life and te neutral by 2025, to continuously increa- night lighting and reduces its impact on supports for three major areas: diversity se the share of renewable energy and to the illuminated area and its ecosystem in ecosystems, diversity of species and make a proactive contribution each year to – which makes an active contribution to genetic diversity – all of which are closely reducing greenhouse gas emissions. preserving biodiversity while limiting light connected. pollution and making the night sky visible. People moving about in the dark feel safer The advancing climate change, for exam- and prefer bright, well-lit streets and areas. ple, represents an increasing threat for Lighting is therefore good for people but biodiversity because entire ecosystems impairs biodiversity. The Zumtobel Group are changing at a speed which makes strives to minimise its effects on the ani- it very difficult for plants and animals to mal world, above all on insects, and relies adapt to the new conditions. The Zumto- on optimised planning as well as NightTu-

64 WASTE

The Zumtobel Group places special emp- Valuable materials are recycled to conser- generated per tonne classified by recyc- hasis on the economical use of resources ve resources. Every production location ling waste, residual waste and hazardous and the recycling of materials. Key factors has a designated waste officer, relevant waste. The recycling quota is another im- include the efficient and economical use documented processes and detailed re- portant indicator for material recycling. of materials as well as the minimisation of corded on all generated waste. The indi- production scrap and unnecessary waste. cators for waste are the volume of waste

Waste Disposal in tonnes 2016/17 2017/18 2018/19 2019/20 2020/21 Recyclable Waste 7,460 6,149 5,633 5,686 5,838 Residual Waste 1,424 1,037 948 567 463 Hazardous Waste 368 387 384 460 499 Total Waste 9,253 7,573 6,965 6,714 6,800

Recycling rate in % 81 81 81 85 86

WASTE INDICATORS

The Zumtobel Group recorded roughly and a further contribution to conserving as well as the Tridonic production loca- 6,800 tonnes of waste from its production important raw materials. The overall target tion in Dornbirn with 87.6 %. The focus for processes in 2020/21 (6,383 tonnes exclu- for a recycling quota of 86 % was therefore 2021/22 calls for an improvement in the ding the three new locations added to the reached. This goal was clearly exceeded recycling quota at the other locations. reporting system). Compared with the pre- by the lighting brands production location vious year (6,714 tonnes), this represents in Dornbirn with 92.9 % and Niš with 99% a reduction of 5 %. A total of 499 tonnes were classified as hazardous.

The production processes result, above all, in the following hazardous waste: waste oil, cooling materials and lubricants from metal processing, residual adhesives and waste from the lacquering processes, above all from the lacquering of outdoor products. The outdoor production in Les Andelys and the high volume of outdoor products in Spennymoor led to an increase in the share of hazardous waste to 12%. The reduction of production activities, especially for expiring product types in the outdoor area in Les Andelys, reduced the use of solvent-based lacquers.

Material recycling was slightly optimised in 2020/21. The result was an increase in the recycling quota from 85 % to 86.3 %

65 ENVIRONMENTAL COMPLIANCE

Environmental compliance is an integral sesses and monitors the relevant obliga- compliance annually. Internal audits also part of the ISO 14001 requirements. The tions. New obligations and any changes monitor compliance with these obligati- determination, observance and evaluation in obligations are recorded and analysed ons. Environmental compliance is evalua- of all binding obligations, i.e. all legal and and the necessary compliance measures ted and confirmed by the local managing voluntary obligations, are based on the are defined and implemented. External directors each year and by the Zumtobel processes defined by our integrated ma- legal consultants assist the production Group’s Management Board in its management system. All production locations locations in establishing and interpreting nagement review. have a legal database that documents, as- the relevant legal obligations and evaluate

EVALUATION OF ENVIRONMENTAL COMPLIANCE

Internal and external audits on environ- obligations are documented and analysed; environmental compliance. Two internal mental compliance are carried out at all the necessary compliance measures are audits were carried out with CNPP, an ex- relevant locations, and no variances were defined, implemented and have gene- perienced external partner. A risk assess- identified. Furthermore, there were no in- rally been completed. The integration of ment covered the identified legal issues; ternal or external complaints concerning the plant at Les Andelys in the lighting immediate measures were planned and a violation of legal obligations. All new le- brands’ ISO 14001 matrix certification in- implemented to minimise or eliminate gal obligations and any changes in legal volved a particular focus on the issue of these issues; and longer term activities

66 were planned. This procedure was then the best of their knowledge, all production management reviews. confirmed in an external audit by QUALITY locations and central functions have con- AUSTRIA. Based on these finding and to firmed their environmental compliance in

ENVIRONMENTAL GOALS

The Zumtobel Group has set the following environmental goals for the 2021/22 finan- Environmental goals 2021/22 cial year, arranged on the right, based on its strategic orientation of becoming a cli- ● Reduction of 50% in der CO2 emissions below the reference value mate-neutral company by 2025: from 2015/16 ● Increase in the share of renewable energies to 50% compared with Further plans by the Zumtobel Group 2020/21 include certification for the Services & ● Reduction of the total volume of waste by 15% compared with the Solutions location under ISO 14001, the previous year continued introduction of GRI standards ● Increase in the recycling quota from 86% to 90% for environmental protection, support for ● Receipt of certification under ISO 140001 and 50001 local projects on energy and waste, and a ● Compliance with internal and external guidelines on environmental comprehensive approach to integrate eco- protection logical aspects along the product lifecycle.

67 For further information:

Mario Wintschnig, MSc. Betr. oec. Corporate Responsibility Manager Group Sustainability

Zumtobel Group AG Schweizerstrasse 30 6850 Dornbirn

Mail: [email protected] Web: http://www.z.lighting

EN 07/2021