Sustainability targets

The Schaeffler Group is also committed to reducing absolute Scope 1 and Scope 2 greenhouse gas emissions by 90% compared to the base year 2019 by 2030. In addition, the company has set itself the target of decreasing the absolute Scope 3 greenhouse gas emissions resulting from purchased goods and services, fuel- and energy-related activities, upstream transport, and distribution by 25% in the same period. Compensation measures to achieve the two targets are not an option in this context.Part of NFB Ende

The underlying greenhouse gas emissions for target validation are 1,043 thousand t CO₂e for Scope 1 and Scope 2 (market-based) and 6,138 thousand t CO₂e for Scope 3 for the base year of 2019. These values were determined in accordance with the required methods of the Science Based Targets initiative (SBTi) when target validation was submitted.

Part of NFBThe SBTi has categorized these targets as compliant with the criteria and recommendations of the SBTi and thus the latest climate science for fulfilling the Paris Agreement. Established in 2015 to help companies define emission reduction targets in compliance with climate science and the targets of the Paris Agreement, the SBTi is a joint initiative of global nonprofit environmental organization CDP, the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).

The company has also defined another target that combines the topics of decarbonization and energy security. The target stipulates that 10% of the energy demand worldwide will be fulfilled with self-generated renewable energy by 2025 and a total of 25% by 2030.Part of NFB Ende

Relevance of remuneration for Schaeffler ESG targets

Part of NFBSelected targets were incorporated into the remuneration system for Managing Directors, the top management and employees to further incentivize the achievement of the ESG targets set by the company.

The remuneration systems that took effect for Managing Directors, the two management levels directly below the Board of Managing Directors, and non-tariff employees as of 2022 were assessed and further developed with a focus on the significance of sustainability for the Schaeffler Group.

The Schaeffler AG Supervisory Board decided that both the short-term bonus (STB) and the long-term bonus (LTB) of the Managing Directors should have a stronger focus on ESG targets. Since 2022, the total weighting of non-financial targets (particularly ESG targets) in STB is 20%. The Supervisory Board defines up to two ESG targets based on Schaeffler’s ESG targets every year, ensuring that remuneration reflects different ESG dimensions and that sufficient continuity in remuneration-relevant targets is sustained.

A climate neutrality goal was incorporated into the LTB with a weighting of 25%. For every LTB grant, the Supervisory Board defines one or more targets that contribute to the achievement of carbon neutrality in the Schaeffler Group by 2040.

The Board of Managing Directors then adopted these changes in the STB and LTB structure for further management levels in the Schaeffler Group. The following Schaeffler ESG targets were relevant for the STB in 2022:

• Implementation of water-related measures in 2022 that will lead to an annual reduction in the freshwater withdrawal of 150,000 m³
• Reduction of the accident rate (LTIR²⁾) to 3.5 for 2022

In the reporting year, a target to reduce the Scope 1 and Scope 2 emissions³⁾ by 2025 was set for the LTB.

ESG targets were also incorporated into the STB below the first management level in 2022. In countries in which this was not possible due to collective and individual laws, non-tariff employees were given the opportunity to voluntarily incorporate the ESG targets into the STB. As of 2023, ESG targets will be permanently incorporated into the STB for all of the Schaeffler Group’s bonus-eligible employees worldwide.Part of NFB Ende

1) Source: UN Global Compact.

2) Measurement of Lost Time Injury Rate, LTIR = occupational accidents from one lost day per 1 million hours worked. Employees, including temporary staff, trainees in apprenticeship, and interns.

3) Scope 1 refers to the Schaeffler Group’s direct emissions resulting from fuel combustion (defined as natural gas, heating oil, propane, and menthol as primary emission sources) in stationary systems. Scope 2 refers to the Schaeffler Group’s indirect emissions resulting from the consumption of electricity and district heating.