SPUR Sustainability Report 2019 WECHSEL WE ARE CHANGING LANES CONTENTS Foreword 3 Reporting 84 Sustainable corporate governance 85 Change Climate protection & air quality 94 Resource conservation 115 A changing world 5 Livable cities 127 A changing culture 13 Traffic safety 132 Partners for change 20 Data responsibility 140 Human rights 144 Integrity 149 Strategy People 159 Partnerships 183 Sustainable business strategy 28 Corporate citizenship 186 Climate protection & air quality 35 Resource conservation 44 Livable cities 50 Appendix Traffic safety 56 Data responsibility 62 About this report 191 Human rights 66 CO2 calculation 194 Integrity 70 Independent assurance report 195 People 75 GRI Index 197 Partnerships 80 UN Global Compact 198 Labeling 200 Glossary 201 Imprint 205 Navigation We want to offer you information that is as comprehensive and detailed as Reference to chapter/section of the report possible, and we therefore provide references to further information located both inside and outside this report. If you are reading this report in a PDF viewer (e.g. Additional information outside the report Adobe Acrobat Reader), you can call up the linked Table of Contents in order to navigate easily through the chapters. References to the glossary For technical notes regarding CO₂ labeling: see Appendix FOREWORD DAIMLER SUSTAINABILITY REPORT 2019 3 SPUR WECHSEL WE ARE CHANGING LANES GRI 102-14 Dear readers, We publish this report as people all around the world competition that produces the best solutions and fight against the COVID-19 pandemic. It is still too technologies. In 2019, we stated how this can be early to speculate about possible consequences and achieved in our sustainable business strategy. It learnings from this crisis. Already today, however, it shows how we link our economic goals directly to is clear that COVID-19 is shaking up many seemingly our social and environmental responsibility. well-established certainties: Our health, our free- dom, our wealth, large parts of our collective social One of our most important concerns is the reduction lives are being challenged. At the same time, we are of CO2 emissions. With “Ambition 2039,” we have set experiencing that crucial changes are possible if we ourselves challenging targets. For Mercedes-Benz, act decisively and with joint responsibility. for example, this means that we aim to have a CO2-neutral new passenger car fleet worldwide by This report also is about crucial changes. Its title 2039. With this, we are focusing on the entire lifecy- “SpurWechsel”, German for lane change, stands cle of our vehicles — from their development to the for kicking our transformation towards sustainable extraction of raw materials, to production and use, mobility into high gear. It is based on the convic- and to their disposal. tion that “business as usual” is not an option in times of climate change. At Daimler we are there- To achieve this, we are prioritizing the electrification fore pursuing our vision of a mobility that does not of our vehicles. The EQ family is growing with the require fossil fuels, consumes fewer resources, and market launch of the EQV (Electric power consump- does not cause accidents or traffic jams. And we tion combined: 26.4-26.3 kWh/100 km; CO2 emis- are convinced that tomorrow’s mobility cannot be sions combined: 0 g/km)1 and the world premiere shaped by prohibitions. What we need is fair, global of the EQA. By the end of 2020, our car portfolio will 1 see appendix: labeling FOREWORD DAIMLER SUSTAINABILITY REPORT 2019 4 therefore comprise a total of five all-electric models And, of course, our sustainable business strategy in- and more than 20 plug-in hybrids. We also intend to cludes continuing to work for greater traffic safety, offer battery-electric commercial vehicles in all core the responsible handling of data, better quality of life regions by 2022. We already have the eCascadia in cities, and more cooperation and collaboration – and eActros all-electric trucks in customer service, in private-sector and social partnerships. the eVito and eSprinter vans are on the market, and our eCitaro city bus is already in mass produc- We are convinced that we can only change lanes tion. We plan to produce more than 600,000 bat- with a diverse and motivated workforce. That is why teries for these vehicles in 2020 – in nine factories we aim to continue to be an attractive employer in at seven locations on three continents. At our pro- the future. To this end, we offer – besides fair wages duction facilities, we already achieved our long-term – a variety of flexible working models including part- CO2 reduction targets for 2020 in 2019. We are now time, mobile work, or jobsharing. And we are com- going one step further: Starting in 2022, production mitted to a modern leadership culture. at all of Daimler’s European plants will be completely CO2-neutral. Along the way, the Integrity Code, our code of con- duct, which was updated in 2019 and effective world- The Science Based Targets Initiative scientifically wide, provides the legally and ethically binding verified our consistent path toward greater climate framework for all our activities. We also keep an eye protection in 2019. Our CO2 targets are thus in line on strategic future issues in this context. For exam- with the Paris Climate Agreement. And we are call- ple, we became the first automaker to publish our ing on our partners and suppliers to set themselves own principles for how we use artificial intelligence similarly ambitious targets. in September 2019. Additionally, the United Nations’ Sustainable Development Goals and the principles of In addition to CO2 reductions, sustainability has the UN Global Compact are important guidelines for many other facets. One of them is resource conser- our decisions. vation: We were able to reduce energy and water consumption as well as waste for disposal per vehi- We are changing lanes – our SpurWechsel is in full cle produced across all segments over the last few swing. In this report, you can read where we cur- years. In the long term, we want to evolve from the rently stand and what progress we made in 2019. We value chain to the value cycle. The protection of hu- hope you enjoy reading it and look forward to a criti- man rights along the entire supply chain is equally cal and constructive dialog with you! important. In order to meet our responsibilities, we conduct risk-based due diligence audits – for ex- Sincerely yours, ample at mines that extract raw materials such as cobalt. Ola Källenius Renata Jungo Brüngger Markus Schäfer Chairman of the Board of Management of Member of the Board of Management Daimler AG Member of the Board of Management Daimler AG Daimler AG and Mercedes-Benz AG Integrity and Legal Affairs Group Research & Mercedes-Benz Cars Co-Chair of the Group Sustainability Board Chief Operating Officer Co-Chair of the Group Sustainability Board CHANGE | A CHANGING WORLD DAIMLER SUSTAINABILITY REPORT 2019 5 A CHANGING WORLD CHANGE | A CHANGING WORLD DAIMLER SUSTAINABILITY REPORT 2019 6 THE NEW INDEPENDENCE The world is changing. And it is changing fast. Climate change, demo- graphic trends, digitalization — we are facing gigantic challenges, but also a wealth of opportunities. At Daimler we want to make a significant contri- bution to shaping a better future through innovations, because automobiles move the world. They transport people and goods. They make encounters and participation possible. Hardly any other product is so closely linked with social and economic progress. In 1970 there were about 3.7 billion people on our planet, and 48 percent of them lived in extreme poverty.1 By 2015 the global population had almost doubled, and ten percent of people lived in extreme poverty.2 That’s still ten percent too many, but it shows that it’s possible to do more with less: more people, less poverty. If this trend continues, extreme poverty could be eliminated by 2030.3 CHANGE | A CHANGING WORLD DAIMLER SUSTAINABILITY REPORT 2019 7 1.1 billion Between 1990 and 2015, almost 1.1 billion people escaped from extreme poverty.4 Here is another example: Since 1990 the In his bestseller Factfulness, the Swedish sci- economic output of the European Union entist Hans Rosling describes various examples has increased by about 50 percent. During of this kind of progress: more species protec- the same period, CO2 emissions decreased tion, more access to drinking water and elec- in the EU by 22 percent and in Germany by tricity, more literacy, more formal education, 28 percent. This reduction is far from enough, more mobile phones and internet access — and especially because during this period emis- at the same time, less child labor, less malnutri- sions have significantly increased worldwide.5 tion, fewer deaths due to natural catastrophes, All the same, this development in the EU also less ozone pollution, and less particulate mat- shows that it’s possible to do more with less. ter. Many of these developments run counter More prosperity, lower emissions. to popular belief: The world seems to be better than its reputation. Step by step, year by year, the world is improving. Not on every single measure every single year, but as a rule. Though the world faces huge challenges, we have made tremendous progress. This is the fact-based worldview. Hans Rosling Healthcare researcher, physician, and best-selling author Quotation from his 2018 book Factfulness CHANGE | A CHANGING WORLD DAIMLER SUSTAINABILITY REPORT 2019 8 Mobility is progress #covid19 #coronavirus So can everything stay the same? We publish this report as people all around the world are fighting against the COVID-19 pandemic. Contain- Absolutely not. That would overburden the ment of the virus is a challenge of historic proportions earth’s resources.