Sustainability Report
Siemens | 2023
Sustainability report 2023
Our Purpose We create technology to transform the everyday, for everyone Key figures 320,000 €78 billion 15.4% €8.5 billion Employees Revenue Adjusted EBITA margin Net income for the Industrial Businesses We are connected to Siemens Healthineers (SHS) under the Siemens brand through shared values. Industry, Infrastructure, and Mobility Healthcare Siemens Siemens Healthineers1 SCOPE OF SUSTAINABILITY REPORT All indicators in the report include Siemens Healthineers (SHS), unless otherwise noted. For the sake of readability, the masculine form is used; it is representative of people of any gender. 1 Publicly listed subsidiary of Siemens; Siemens’ share in Siemens Healthineers: 75%. SIEMENS SUSTAINABILITY REPORT 2023 2
Contents Contents Contents 3 Foreword 4 1 5 Siemens at a glance 7 Social 81 1.1 Our DEGREE sus tainability framework 5.1 Working at Siemens 82 sets measurable ambitions 8 5.2 Div ersity, Equity & Inclusion 89 1.2 Company profile 10 5.3 Pr ofessional education and lifelong learning 93 1.3 Strategy 17 5.4 Occupational healt h and safety management 97 5.5 Corporate citizenship 102 2 Our sustainability management 20 6 2.1 Materiality assessment 21 Our sustainability indicators 106 2.2 Sustainability governance and organization 23 2.3 Partnerships and collaborations for sustainability 26 7 2.4 Sustainability ratings reflect our performance 29 Annex 124 3 7.1 Reporting methodology 125 7.2 Repor ting principles for Customer Governance 31 Avoided Emissions 128 3.1 Compliance and Ethics 32 7.3 Our contr ibution to sustainable development 3.2 Human rights 40 of societies 132 3.3 Sustainable supply chain practices 44 7.4 T ask Force on Climate-Related 3.4 Cybersecurity and data privacy 49 Financial Disclosure (TCFD) 136 7.5 GRI S tandards – key topics and boundaries 144 4 7.6 WEF IBC Metric 146 7.7 S ASB – Electrical Electronic Equipment Index 150 Environment 54 7.8 United Nations CEO Water Mandate 152 Holistic environmental protection 55 7.9 Independent audit or’s report on a limited assurance engagement 154 4.1 Climate action 58 7.10 Notes and forward-looking statements 156 4.2 Conserving resources 65 7.11 F urther information and 4.3 Product stewardship 71 information resources 157 4.4 EU taxonomy 76 SIEMENS SUSTAINABILITY REPORT 2023 3
Foreword Foreword Scaling sustainability impact Our purpose – which has guided us for 176 years – is to In a tumultuous year of record-shattering heatwaves, wild- create technology to transform the everyday, for everyone. fires and floods, and despite rising energy prices, inflation, This technology with purpose touches the lives of customers, supply chain challenges, labor shortages, plus the impact of partners, and consumers everywhere – improving the quality growing geopolitical tensions, we remain optimistic about of life for billions of people worldwide. Technology with technology as the answer to some of the world’s biggest purpose is about leveraging digitalization for optimized challenges. Our technology empowers our customers and resource usage and circularity readiness and accelerating the partners to scale their sustainability impact faster across the energy transition through renewable integration, energy backbone of our economies. As we approach a critical tipping efficiency, and electrification. It is about societal impact point for our planet, the demand to accelerate the digital by designing and operating the most efficient train and and sustainability transformations has never been greater. e-mobility solutions within sustainable communities, built upon decarbonized building technologies. And it is about As a leading technology company, Siemens supports cus- pioneering breakthroughs in healthcare to improve the lives tomers all over the world to become more competitive, of patients and their families. esilient, and, above all, more sustainable. Our portfolio r enables a positive impact on our planet and society at scale. Combining the real and digital worlds Today, it is about more than just managing negative foot- Our strategy is to combine the real and digital worlds – prints; it is about a company’s handprint and increasingly harnessing the power of hardware and software, or OT and xpanding businesses’ net-positive impact on the world. IT. More than 90% of Siemens AG’s business enables positive e That is why Siemens has integrated its sustainability strategy sustainability outcomes for our customers. Worth highlight- in our business activities, technology roadmap, investment ing is that our products sold to customers in fiscal 2023 will, decisions, own operations, and governance. We empower over the course of their lifetime, avoid around 190 million our customers to accelerate their sustainability goals along metric tons of CO equivalent emissions – a significant 2 three impact areas: decarbonization & energy efficiency, increase in avoided emissions over the prior year. This resource efficiency & circularity, people centricity & societal represents more than the equivalent emissions of the impact. Netherlands. In contrast, our own operations and supply chain accounted for around 12 million tons of greenhouse gas emissions. SIEMENS SUSTAINABILITY REPORT 2023 4
Foreword To help our customers and partners accelerate their transfor- We have a clear position on responsible business conduct. mation, we recently introduced Siemens Xcelerator, an open And our DEGREE commitments are based on that. Ethical digital business platform that makes digital transformation behavior, integrity and compliance are nonnegotiable. They easier, faster, and more scalable for companies of all sizes. A go beyond strict adherence to rules by firmly placing respon- key element of this platform is a growing ecosystem of sible action sustainably at the core of our culture and busi- partners. The sustainability impact we create is more powerful ness conduct. when all partners pool their strengths and work together toward a common goal. We are also focused on our own environmental footprint: In 2015, as one of the first global companies to do so, we We are able to empower our customers to scale sustainability committed to becoming carbon neutral by 2030. Today, we impact because we address challenges across the entire are on track, and we have already accelerated. We are proud value chain – with deep domain know-how across many to have reduced our CO footprint from our operations by 2 industries and across ecosystems of suppliers, partners, and 50% (without offsetting) since 2019 and are targeting 90% customers. in 2030. We reduced our energy consumption by 9% since fiscal 2021, meanwhile 96% of our locations have imple- An excellent example of the power of ecosystems is how mented a water strategy. software can track and manage carbon footprints throughout lifecycles and along supply chains. SiGREEN, an emissions- Applying our own technologies in our own operations is key tracking tool on our Siemens Xcelerator platform, enables to achieving these ambitions. In Nanjing, China, for example, companies to connect to all their suppliers, enabling data- we consolidated three production sites into one lean and driven decisions to reduce product carbon footprints and green digital native factory, which was first built as a digital decarbonize at scale. twin. This led to annual savings of 5,000,000 kWh of energy, 3,300 metric tons of CO , and 6,000 m3 of water. At the Our DEGREE sustainability framework 2 same time, productivity went up by 20%. For Siemens, And we do not stop at the sustainability impact of our port- rethinking scalable products and services for a sustainable folio. We define our environmental, social, and governance world should go hand in hand with savings, efficiency gains, (ESG) ambitions within our DEGREE sustainability framework – and customer value. a 360-degree approach reflecting our core sustainability values. We look at sustainability from every angle with clear ambitions in six fields of action – Decarbonization, Ethics, Governance, Resource efficiency, Equity, and Employability. SIEMENS SUSTAINABILITY REPORT 2023 5
Foreword Our sustainability ambitions are supported by 320,000 colleagues who bring our purpose to life every day – in an increasingly inclusive environment in 190 countries around the world. Within Siemens AG, women now hold 31% of top management roles, having achieved our 2025 ambition for 30% two years ahead of time. Our people are at the heart of this company. In fiscal 2023 we invested €416 million in our active learning culture, ensuring sustainable employability in rapidly changing markets. We have also made progress in the number of hours our people spent learning across the three strategic focus areas of digitalization, sustainability, and leadership: On average, our people have accrued 23 digital learning hours per person per year. And they are on track to increase that to our ambition of 25 digital learning hours by 2025. Easier, faster, and at scale We create technology to transform the everyday, for everyone. By combining the real and digital worlds we can accelerate digital and sustainability transformations easier, faster, and at scale. Together, by scaling across ecosystems, we will continue to leverage the power of the digital world to have a positive sustainability impact in our precious real world. At Siemens, what’s good for business and good for the planet and society go hand in hand. Dr. Roland Busch Judith Wiese SIEMENS SUSTAINABILITY REPORT 2023 6
Pages 7 – 19 Siemens at a glance SIEMENS SUSTAINABILITY REPORT 2023 7
1.1 Our DEGREE sustainability framework sets clear and measurable ambitions 1.1 Our DEGREE sustainability framework sets measurable ambitions D ecarbonization support the 1.5°C target to fight global warming E thics foster a culture of trust, adhere to ethical standards, and handle data with care G overnance apply state-of-the-art systems for effective and responsible business conduct R esource efficiency achieve circularity and dematerialization E quity foster diversity, inclusion, and community development to create a sense of belonging E mployability enable our people to stay resilient and relevant in a permanently changing environment A strong framework for sustainability Sustainability is an integral part of our business. We are The DEGREE sustainability framework is based on six fields of taking our ESG commitment to the next level with our action that drive sustainability and are dynamic and contin- DEGREE sustainability framework. The framework provides a uously evolving. We have set clear priorities and ambitions 360-degree approach to our core sustainability values. for key ESG issues, which we are driving towards. The DEGREE sustainability framework applies to all Siemens- By addressing the three aspects of ESG, we are building a affiliated companies, excluding Siemens Healthineers (SHS). better future that helps us to However, the sustainability approach at SHS follows the same basic principles, which reflects our expectations as its →Stay within the planetary boundaries; majority shareholder. →Foster a culture of trust, empowerment, and growth; →Support inclusive economic opportunities; →Ensure that our people and businesses remain resilient and relevant for the future. SIEMENS SUSTAINABILITY REPORT 2023 8
1.1 Our DEGREE sustainability framework sets clear and measurable ambitions What are our ESG ambitions and priorities, and what progress did we make by end of fiscal 2023? Progress Baseline at the end of FY 23 Ambitions 1. Net Zero operations by 2030, with 55% FY 19: 737 kt CO e – 50% – 55% by 2025 Decarboni 2 zation emissions reduction by 2025 and 90% by 2030 – 90% by 2030 2. Net Zero supply chain by 2050, 20% emissions FY 20: 8,098 kt CO e – 1% – 20% by 2030 2 reduction by 2030 – 100% by 2050 Ethics 3. Striving to train 100% of our people on Siemens’ From FY 23 69% 100% by 2025 Business Conduct Guidelines every three years Governance 4. ESG-secured supply chain based on supplier − − Suppliers committed − − commitment to the Supplier Code of Conduct 5. Long-term incentives based on ESG criteria 1 − − ESG criteria anchored − − Resource 6. Next-level Robust Eco Design for 100% of FY 21: 26% 51% 100% by 2030 efficiency relevant Siemens product families by 2030 7. Natural resource decoupling through increased − − Metals 35% − − purchase of secondary materials for metals and − − Resins
1.2 Company profile 1.2 Company profile – A leading technology company with a global By combining the real and digital worlds, Siemens helps its footprint customers accelerate their own digital transformations – We create technology to transform the everyday, (easier, faster and at scale) and achieve their sustainability for everyone targets. – Combining the real and digital worlds to benefit customers, planet, and society In addition to its core businesses (Digital Industries, Smart Infrastructure, and Siemens Mobility), Siemens is the majority shareholder of the exchange-listed company Siemens A leading technology company Healthineers AG (SHS), a leading global provider of medical Siemens AG (Berlin and Munich) is a technology company technology. Siemens also holds a minority interest in the focused on the fields of industry, infrastructure, mobility, exchange-listed company Siemens Energy AG, which oper- and healthcare. ates in the field of energy transmission and generation. Businesses and services Industrial businesses Digital Smart Mobility Siemens Portfolio Siemens Industries Infrastructure Healthineers1 Companies Advanta Services Siemens Siemens Global Financial Services Real Estate Business Services 1 Publicly listed subsidiary of Siemens; Siemens’ share in Siemens Healthineers is 75%. SIEMENS SUSTAINABILITY REPORT 2023 10
1.2 Company profile As a minority interest, Siemens Energy AG is not included in Siemens Healthineers this Sustainability Report. Siemens is a technology company Based on its foundation in in vitro diagnostics, image-guided that operates in nearly all countries of the world. Ever since therapy, in vivo diagnostics, and cancer care, Siemens it was founded in 1847, Siemens has provided solutions to Healthineers aims to fight the most dangerous non-commu- global challenges and stands for innovation, quality, and nicable diseases such as cancer, stroke, and coronary heart reliability. We are focused on leveraging the digital and sus- disease worldwide, enable efficient workflows in hospitals, tainability transformation to drive sustainable growth. and improve access to modern medical care. Today, more than three billion people around the world still lack access to Industrial businesses adequate medical care. Depending on where you live, this Digital Industries lack of access is even true in developed countries. It is the The industrial world faces tremendous challenges. As our privilege of Siemens Healthineers to provide innovative planet‘s resources are finite, we must decarbonize and do healthcare solutions and services which make healthcare more with less. Digital Industries’ offerings enable customers affordable and accessible for underserved communities to optimize entire value chains from product design and everywhere. development through production and post-sale services. With its advanced software solutions in particular, Digital Key figures Industries supports customers in their evolution towards the In fiscal 2023, which ended on September 30, 2023, Siemens “Digital Enterprise,” resulting in increased flexibility and generated revenues of €78 billion and profits after tax of efficiency of production processes and reduced time to €8.5 billion. As of September 30, 2023, the company had market for new products. approximately 320,000 employees worldwide. SIEMENS FINANCIAL REPORT FISCAL 2023, COMBINED MANAGEMENT Smart Infrastructure REPORT, CHAPTER 7, OVERALL ASSESSMENT OF THE ECONOMIC POSITION Siemens Smart Infrastructure drives the decarbonization, resource-efficiency, and people-centricity of energy systems, Customers buildings, and industries by connecting the real and digital Putting customers first is a longstanding tradition at 1 worlds. This helps to improve the way people live and work Siemens. When it comes to technology, sustainability, and by paving the way for the sustainability transition to an innovation, our customers are always at the heart of what all-electric world with decarbonized power supply and effi- we think and do: everything begins with them. That is why cient energy use. we have made “customer impact” a strategic priority. We listen to understand our customers’ needs as early as possible, and Siemens Mobility ideally, before our customers even become aware of them. Siemens Mobility drives the decarbonization and resource- efficiency of transportation by connecting the real and digital To meet our customers’ needs and the constantly changing worlds. Leveraging digital technologies enables lifecycle demands of the markets, Siemens draws on a global sales cost-optimized rail infrastructure and rolling stock, 100% force that takes its guidance from our regional companies. system availability, maximized network capacity, and opti- Key success factors include a strong customer focus, digital mized customer experience and processes to support a transformation, efficient processes, and collaboration with mobility shift in our society. external partners. 1 We call any current or potential purchaser of Siemens products or services, no matter what the sales channel, a “customer.” Some customers who are especially significant for Siemens are called “Key Customers”. SIEMENS SUSTAINABILITY REPORT 2023 11
1.2 Company profile Sustainable growth through digital Customer Impact transformation At Siemens we rely on a mature Key Account Management The COVID-19 pandemic has rapidly accelerated digitalization. approach to systematically structure and drive our Key Cus- New business models are emerging, and the importance of tomer relationships company-wide. While all our customers collaborative partnerships within ecosystems is increasing, are served by the general Sales organization, Key Customers especially in the context of sustainability challenges that are also managed through our Key Account Management cannot be solved unilaterally. We need to achieve more, and approach. we need to do it sustainably while consuming fewer resources. We can do this by increasing our efficiency with Over and above our basic sales approach, Siemens’ primary the help of new technologies and by working in ecosystems principles for successful Key Account Management are a with new business models to keep resources in circulation. special understanding of our customers’ technology and vertical markets along with the collaboration among all Combining the real and digital worlds represents a major customer-facing parties – across functional, organizational, leap forward for Siemens and our customers as well as for and regional boundaries (“go-to-market” approach). industries, planet, and society. This will help shape a world where intelligent manufacturing, smart energy systems, Our harmonized Key Account Management process enables smart buildings, and connected mobility can make our infra- us to act as one company and serve our customers in a structure more sustainable and our lives easier. global, sustainably coordinated approach. Technology is driving sustainability, and the digital transfor- mation is also essential to accelerating sustainability. To speed up our customers’ digital transformation and increase their value added, we have created Siemens Xcelerator, an open digital business platform. It is intended to accelerate Key Account Management – A holistic digital transformation (easier, faster, and at scale). It com- approach to meeting customer needs prises three fundamental elements: 1. A curated modular portfolio of IoT-enabled hardware, Systematically measuring and improving software, and digital services from Siemens and certified customer satisfaction partners based on standard application programming We use the Net Promoter Score (NPS) every year to measure interfaces (APIs) customer satisfaction, and by extension, the quality of our 2. An ever-growing open ecosystem of partners partnerships. Management compensation at Siemens also 3. An evolving marketplace that enables customers, partners, includes a component that is based on customer satisfaction. and developers to explore, teach, and exchange digital This component incorporates long-term performance incen- solutions. tives using ESG criteria and is defined under Governance in our DEGREE sustainability framework. The assessment is The platform is constantly growing and provides many market- based on the internal ESG/Sustainability index, which 2 3 tested solutions that enable customers to easily begin their includes the Net Promoter Score , among others. sustainability projects. These projects can include managing SUSTAINABILITY GOVERNANCE AND ORGANIZATION energy efficiency, integrating renewable energies, and saving resources. Siemens Xcelerator provides cybersecurity standards at every level to reduce risks for customers. 2 Assessment based on the Siemens internal ESG/sustainability index, which is based on customer satisfaction (Net Promoter Score), CO reduction, and digital learning hours. 2 3 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 12
1.2 Company profile Siemens’ systematic evaluation draws from customer satisfac- Innovation strengthens Siemens and its tion surveys conducted annually worldwide. The score itself customers is based on a single question: “How likely is it that you would Our Research and Development (R&D) activities are geared recommend Siemens to a colleague or business partner?” towards developing innovative and sustainable solutions for Siemens’ customers and businesses, while simultaneously The survey pursues a holistic approach to customer relations strengthening our competitive positioning. This is also how because it follows up by implementing processes and systems we contribute to society. 4 designed to help foster long-term customer loyalty. We focus on core technologies and innovation fields – Regardless of the score, we initiate a follow-up process after Siemens Company Core Technologies – that play an essential the survey, both internally and externally. When a score is role in the success of Siemens and its customers. The imple- low and considered critical, we take immediate action to mentation of our core technologies by our operating identify key issues and determine what measures are needed businesses and Technology – our central R&D department – to improve the relationship. ensures that research activities and business strategies are closely aligned, and that all businesses can profit equally and quickly from technological developments. For example: Our customers’ satisfaction → Data Analytics & AI: Industrial facilities and infrastruc- is our top priority tures are generating ever-growing amounts of data. Using methods of machine-based data analysis and artificial Despite the tense global situation (for example, with supply intelligence (AI), we help operators increase availability, bottlenecks for materials and goods), our customers have improve operational quality, and reduce the stress on recognized us for our customer support, reliable products, humans and the environment. At the same time, our and a wide range of offerings. By consistently addressing quality statement on industrial-grade AI expresses its their concerns, we have achieved a higher Net Promoter trustworthiness, reliability, and robustness according to Score than the previous year. the requirements suggested for the European Union’s upcoming AI Act. We are focusing on areas where we can make a difference. → Connectivity & Edge: The Industrial Internet of Things This means creating sustainable, long-term value for our (IIoT) is the result of the increasing networking of field customers, for the environment, for society, and for the devices. The IIoT enables field devices to be equipped people who work for Siemens. with additional software-based functions during ongoing operations and makes it possible for the data generated Research and Development by these devices to be evaluated in the field or in the At Siemens our purpose is to provide innovations that cloud. improve the quality of life and create added value for people → Simulation & Digital Twin: Digital twins are the result all over the world. of modeling and simulating systems and processes, including the development and manufacturing of products. Digital twins make it easier to accelerate the commissioning of manufacturing plants, speed up time-to-market, and improve the operation of infrastructures throughout their lifecycles. 4 In most cases, the survey questions are focused on the business unit level. However, the overall score can be aggregated up to the business level and to the level of the entire company. SIEMENS SUSTAINABILITY REPORT 2023 13
1.2 Company profile → Software Systems & Processes: Complex, distributed Siemens Healthineers’ focus also lies on other research prior- industrial software systems that integrate software from ities with the goal of shaping the healthcare of the future. different providers can only be developed using new These include medical technology, sensor systems, and methods and processes in software system development. robotics and any of the increasingly complex applications → Power Electronics: Power electronics for inverters have that can be automated. By using digitalization and AI respon- always played a major role in industry. As the amount of sibly, Siemens Healthineers is increasing the quality, efficiency, electricity generated by renewable energy sources grows, and effectiveness of care at all levels of the healthcare the stable operation of power grids will also depend on delivery system. advances in power electronics. → Additive Manufacturing & Materials (from fiscal 2024 Siemens supports research, founders, and students to help on: Advanced Manufacturing & Circularity): Because of drive the development of innovative solutions. We work the increasing importance of circularity for our customers closely with scientists at more than 500 leading universities and society, we will sharpen our focus on elements like and research institutions, not just through bilateral research recycling. Additive manufacturing technologies continue cooperation agreements but also in publicly funded collec- to play an essential role by facilitating flexible production: tive research projects. With the Siemens Research and Inno- for instance, component designs with optimized material vation Ecosystem program (RIE), we want to address today’s utilization and an optimized performance-weight ratio. challenges with technologies of the future in a collaborative → Future of Automation: We are shaping automation approach. In fiscal 2023 we collaborated in 16 local Siemens 3 technologies with the goal of cutting engineering Research and Innovation Ecosystems around the globe . expenses, increasing flexibility – by integrating autonomous manufacturing machines, for example – and improving Siemens’ global venture unit, Next47, provides capital to our customers’ productivity while also reducing energy help enterprise-focused start-ups expand and scale. It nurtures consumption. next-generation business for Siemens by partnering with → Cybersecurity & Trust: Industrial cybersecurity is a key global start-ups at the early and expansion stages of their technology for digitalization. The security of industrial development. Next47 seeks to anticipate the impact that facilities and the protection of data and intellectual prop- new technologies will have on our markets. This knowledge erty are important requirements for customers as well as enables Siemens and its customers to grow and thrive in the governments and societies. age of digitalization. → Sustainable Energy & Infrastructure: Energy generation is moving away from the paradigm of large, centralized Continued high investment in R&D power plants towards a network of smaller independent In fiscal 2023, we reported research and development generators. Sustainable infrastructure and energy sources expenses of €6.2 billion, compared with €5.6 billion in fiscal are essential to this transformation. 2022. The resulting R&D intensity, defined as the ratio of → Integrated Circuits & Electronics: Integrated Circuits & R&D expenses to revenue, was rated at 8.0%. Additions to Electronics bundles R&D activities in areas like optimized capitalized development expenses amounted to €0.3 billion. circuit design and resource-efficient manufacturing, the As of September 30, 2023, Siemens held approximately testing and operation of industrial electronics, and recy- 45,000 granted patents worldwide in its continuing opera- cling electronics-based products. tions. COMBINED MANAGEMENT REPORT → User Experience: Users expect intuitive operation in all our products. The purpose of the User Experience core technology is to find out how customers use Siemens products, what functions they need, what they expect, and what is unnecessary. 3 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 14
1.2 Company profile Our Siemens Company Core Technologies drive technology development to master key sustainability challenges Data Analytics & Connectivity & Simulation & Software AI Edge Digital Twin Systems & Trustworthy AI in Robust IoT wireless Data-based digital Processes critical IT/OT infrastructures connections and edge building twin and knowledge Siemens Water Apps (SIWA) to safeguard sustainability, solutions for efficient manage- graphs to optimize building for greater efficiency and transparency, safety, security, ment of energy consumption operation over the lifecycle security of the water supply and privacy in buildings and grids (e.g., Siemens headquarters) Future of Cybersecurity & Sustainable Advanced Automation Trust Energy & Manufacturing & Automation hard- SiGREEN for a trust- Infrastructure Circularity ware based on Supervisory worthy exchange of product Lifecycle Assessment and opti- Tools and procedures for design- Control and Data Acquisition carbon footprints in the value mization of production, supply ing products that optimize re- enables the reuse of waste- chain, with verifiable creden- chain, logistics, and trans- source use, including AM designs water in agriculture tials for transparency and portation for Environmental and strategies for 4R (reuse, control Product Declaration remanufacture, repair, recycle) Power User Integrated Electronics Experience Circuits & Tools for optimizing Serious gaming to Electronics energy efficiency, advanced increase awareness Reduce-reuse-recycle lifecycle services, and circular of the product carbon approaches through life- economy designs for power footprint cycle management for electronic systems electronics-based products Patent portfolio reflects sustainable innovation Siemens’ sustainable innovation is reflected in the compa- ny’s patent portfolio. Using the LexisNexis® PatentSight® patent information platform, we evaluate our sustainable innovations against the United Nations’ 17 defined Sustain- able Development Goals (SDGs) and the corresponding 169 targets. 46.8% of the active patent families in Siemens’ patent portfolio relate to at least one SDG, mainly in the categories of Good Health and Well-Being (SDG 3), Industry, Innovation, and Infrastructure (SDG 9), Affordable and Clean Energy (SDG 7), and Climate Action (SDG 13). SIEMENS SUSTAINABILITY REPORT 2023 15
1.2 Company profile SDG-related Siemens IP portfolio by SDG category Absolute figures represent patent families. Multiple assignments of patents possible. n S o D G e f i L 0 1 : : 5 1 N o G D P S o d v n e a rt L y w S o D l G e b 0 e H 2 f i u : L r Z n : e g e 4 t e r 1 a r o w G D S S D a G e t n 0 a d 3 : m W i G l n e o C l o o l : i - d 3 t B 1 c e H A i e G n a D 6,276 g l S 188 th 1,434 3027 288 C G D S y o n Portfolio lit Pr s 12 956 Size 323 a n o u : u io d m 10 t u p Re Q a c t s 57 : c t i p 794 4 u i o o 0 d o n n G E n a s D n i S d b l e 1,588 C S r i D e t G i d e n s 1 e 1 a : G n 5,207 y d S : t u 5 i l C s 0 a o t u m a G q i m n D E a S u b l n e i t i e s S r D e t G a W I 0 n 9 n n : a n o I e n l o I v d C i n a u t t s : a f i t 6 t r o ry 0 i a n , n s G D a t a S S r n u d c e d t S l n D b u G a a d r 0 o 7 ff : r A e a y n g d r e C n l E e a n SIEMENS SUSTAINABILITY REPORT 2023 16
1.3 Strategy 1.3 Strategy – We combine the real and the digital worlds to scale Global megatrends sustainability impact Complexity in the industrial world has never been greater – Siemens’ business is focused on enabling customers than today. Several megatrends are driving us to rethink to achieve positive sustainability impact along established ways of doing things: three customer value propositions: decarbonization & energy efficiency, resource efficiency & circularity, → Environmental change and the associated climate change, people centricity & societal impact along with extreme weather conditions like increasing – The DEGREE sustainability framework defines clear flooding and drought, pose critical challenges. Current fields of action for our sustainability ambition legislation alone is insufficient to effectively combat environmental change. We are also facing challenges related to resource efficiency and material extraction, Siemens is a leading technology company with a portfolio water scarcity, and biodiversity loss. designed to drive the digital and sustainable transformation → In times of crisis, glocalization can create a greater balance of industry, infrastructure, mobility, and healthcare. We between the global and the local in our economy. For firmly believe that technology is the answer to creating a instance, by ensuring production of our products and sustainable future. As key pillars of our strategy, digitaliza- solutions near our customers, we can strengthen our tion and sustainability help future-proof our business and resilience to shocks while also reducing the environmental that of our customers. impact of our products. → Increasing urbanization, especially in less-developed Siemens offers technologies and solutions to advance regions, is a significant megatrend. In this context, the growth as societies transition toward a more sustainable demand for more sustainable and efficient products, future. We enable our customers to accelerate the energy technologies, and solutions – including passenger trans- transition, create more resource-efficient factories, smarter portation and access to renewable energy – continues to buildings, and cleaner transportation, and advance health- grow as more and more people move to cities. care. By combining the real and the digital worlds, we → As global population growth progresses at a slower pace, empower our customers to be more competitive and more our societies are aging, and an increasing number of resilient while simultaneously reducing their environmental people need medical care. This demographic change is impact. Managing data across complex value chains has also contributing to a shortage of workers across industries. become an important prerequisite for accelerating this → Lastly, digitalization continues to accelerate advancements transformation. Siemens’ industrial metaverse and digital in connectivity, the Internet of Things (IoT), automation, twin technologies integrate data from physical factories and and AI technologies. Digitalization is being rapidly products across entire lifecycles to optimize production adopted by multiple industries in the public and private design, increase production efficiency, and reduce CO2e sectors. By optimizing processes, it can play a decisive role emissions and the consumption of energy, water, and raw in reducing environmental impacts. materials. Our products, services, and solutions demonstrate how technology advances sustainability and is helping shape the world we want to live in. SIEMENS SUSTAINABILITY REPORT 2023 17
1.3 Strategy Scaling sustainability impact Supporting our customers in their sustainability These megatrends and their impacts are reshaping the needs transformation of our customers and markets. To create a holistic picture of Siemens’ business is focused on enabling customers to potential futures, we execute sustainability scenario analyses achieve a positive sustainability impact along the following that enable us to map impacts and risks, identify opportunities, value propositions: and find new ways to create value through pathways by 2030 and 2040. Strategic insights are derived from scientific Decarbonization & energy efficiency frameworks like the Intergovernmental Panel on Climate We support our customers with their efforts to decarbonize Change’s (IPCC) Representative Concentration Pathways their infrastructure and operations, drive energy-efficiency, (RCPs) and Shared Socioeconomic Pathways (SSPs) as well as and future-proof entire industries. We do this by offering market trends and expert knowledge. The sustainability products, systems, solutions, and services that are based on scenarios illustrate different possible development pathways our strategic focus on digitalization, electrification, and for the global economy and Siemens’ operating environment automation. For example, our energy-efficient products and across the focus topics climate, circularity, biodiversity, and solutions support the transition from fossil fuels to renew- society that take into account both an organized 1.5°C and a able energy sources, and our electrification solutions enable disorganized 3°C pathway. These scenarios guide the devel- renewable grid integration and the electrification of heat opment of our sustainability strategy. and hydrogen. Across industries, we offer energy optimiza- tion and carbon footprint management throughout our To further increase our positive impact, we believe that products’ lifecycles and supply chains. In buildings, we offer working in ecosystems is the best way to jointly create seam- energy efficiency and decarbonization solutions, such as less solutions for our customers and their specific challenges. smart buildings and smart energy management for a reduced This approach increases our own sustainable offerings and carbon footprint. Our rail systems offer low-carbon mobility solutions and facilitates our customers’ sustainability trans- and increased energy efficiency. formation. Our commitment to sustainability covers the entire value chain. Based on our strategic priority to produce Resource efficiency & circularity purpose-driven technology, we strive to create a positive Through their use of our digital technology, our customers long-term impact for our customers with our products across can achieve resource efficiency and profitability. For our operations and through connected ecosystems. instance, we harness digitalization to reduce the require- ments of physical assets and resources. We combine the real and the digital worlds with our digital twin technology, a virtual representation of a physical product or process that is used to simulate, predict, and optimize its physical counter- part. Digital twins enable users to do more with fewer resources and make current and future environmental foot- prints transparent. Our building solutions also contribute to optimized space utilization and ultimately increase resource efficiency. Our mobility solutions focus on enhanced network capacity and extended lifecycles. SIEMENS SUSTAINABILITY REPORT 2023 18
1.3 Strategy People centricity & societal impact Social: Equity, Employability We enable our partners and customers to improve people’s Equal treatment and respect are the core of our corporate lives today and transform the backbone of societies for a values. Our goal is to position Siemens as the inclusive better tomorrow. For instance, our technologies support the employer of choice in all our relevant talent markets. We well-being, productivity, safety, and security of building foster diversity, equity, inclusion, and community develop- tenants and operators. Similarly, in the field of mobility, ment in order to create a sense of belonging and a healthy passengers and operators benefit from greater safety and and safe environment where all our people can give their convenience thanks to our technologies. They also promote best. At Siemens, we invest in the education, development, the socioeconomic development of communities by enabling and individual growth of our people. We maintain a strong access to basic goods, resilient electric power, affordable real focus on digital learning, employee assistance programs, estate, food and water, healthcare, education, and public and occupational health and safety. transportation. Governance: Ethics, Governance DEGREE: High ambitions for sustainability At Siemens, we believe that the way we do business is as Sustainability is integral to our business and influences important as our business success. Our values and ethical everything we do. The DEGREE sustainability framework principles are embedded in our Business Conduct Guidelines, defines our comprehensive approach to sustainability. Across which are mandatory throughout the company. In addition six fields of action, the framework defines clear priorities for to embedding these principles in our own management us in key sustainability areas that we drive in our own oper- systems, we extend them to our suppliers who are required ations and in collaboration with our partners, suppliers, and to follow a comprehensive Code of Conduct. Beyond that, customers. We continuously develop these priorities and we have made sustainability criteria an integral part of our 1 ambitions while fully integrating the expectations of all our long-term variable compensation programs for both the 2 stakeholders. The fields of action are defined along the Managing Board and our senior management. dimensions of Environment, Social, and Governance: The DEGREE sustainability framework applies to Siemens AG Environment: Decarbonization, Resource efficiency apart from Siemens Healthineers (SHS), which is an indepen- As part of DEGREE, we have set high ambitions to signifi- dent stock-listed company. In its sustainability concept, SHS cantly reduce CO e emissions in Siemens’ operations and pursues the same values as Siemens AG, because they repre- 2 upstream supply chain. Our approach to resource efficiency sent our expectations as the majority shareholder. SHS’s own accelerates recycling and promotes a more circular business. sustainability approach is described in a dedicated report. Our software and simulations reduce the use of substances OUR DEGREE SUSTAINABILITY FRAMEWORK of concern and other resource usage and introduce recycled materials as early as the design and simulation phases of our products, factories, and solutions. In addition, we promote the decoupling of natural resource consumption from eco- nomic growth by increasing the amount of secondary materials that we purchase. 1 Assessment based on the Siemens internal ESG/sustainability index, which is based on customer satisfaction (Net Promoter Score), CO reduction, and digital learning hours. 2 2 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 19
Pages 20 – 30 Our sustainability management SIEMENS SUSTAINABILITY REPORT 2023 20
2.1 Materiality assessment 2.1 Materiality assessment – Materiality assessment based on GRI 2021 Identifying and prioritizing the topics – 15 material sustainability topics of the greatest In 2023, Siemens conducted internal workshops to help relevance to Siemens identify our material topics by assessing their impacts, risks, – Material impacts, risks, and opportunities as part and opportunities from two different perspectives: of our strategic considerations → Insideout perspective: Siemens took a closer look at its positive and negative Key topics as guiding principles impacts on the environment and society (inside-out) caused Our materiality assessment is based on external frameworks by the company’s business activities. like the UN Global Compact and the Standards of the Global Reporting Initiative (GRI 2021), which are the foundation for During the inside-out assessment, we identified actual and our reporting. The key topics covered in this report are struc- potential positive and negative impacts for 17 sustainability tured based on ESG. topics and evaluated them according to their likelihood and their severity. Based on evaluations of the individual impacts, Materiality assessment our material topics were derived. These topics are the foun- We updated our materiality assessment with an emphasis dation for determining the content of the GRI report. Including on our industrial businesses Digital Industries, Smart Infra- the outside-in perspective (see below) does not alter the structure, and Mobility in fiscal 2023 based on the GRI 2021 results. standards. Our aim was to identify our company’s key eco- nomic, ecological, and social impacts on the environment The material topics where Siemens can exert the greatest and society in accordance with the updated GRI Standards. influence on society and the environment are climate action, The resulting topics also align with Siemens Healthineers’ social and ecological standards in the supply chain, and (SHS) material topics, which were determined in an indepen- sustainable product design and lifecycle management. These dent materiality assessment. topics received the highest scores in this year’s analysis. The material topics form the framework for implementing → Outsidein perspective: sustainability in the company – at the central corporate The outside-in perspective refers to sustainability topics that level, in our business units, and in the countries. Siemens can be associated with opportunities and risks for the strives to continuously improve sustainability management company’s business activities or financial situation. This and understands the materiality assessment to be a prereq- - perspective was taken into account in the inside-out per uisite for identifying and managing potential opportunities spective in order to introduce the double materiality principle and risks. The Siemens business units derive their key action of future regulation. areas from the requirements and basic conditions of their local markets. The material sustainability topics with the highest degree of influence on our business activities and the generation of lasting value are climate protection and sustainable product design and lifecycle management. SIEMENS SUSTAINABILITY REPORT 2023 21
2.1 Materiality assessment Result of the materiality assessment and “Innovation and business model” were merged into one We identified 15 material sustainability topics of the greatest combined topic, “Innovation and business model.” relevance to Siemens from both perspectives. “Waste and hazardous substance management” and “Employee develop- The alignment of our material sustainability topics with the ment” were determined in fiscal 2023 to be two additional GRI framework and the SDGs can be found here: material topics. The two topics “Responsible governance” ANNEX GRI INDEX, ANNEX SUSTAINABLE DEVELOPMENT GOALS Siemens’ material sustainability topics are clearly linked to the United Nations’ Sustainability Development Goals (SDGs). They also serve as the basis for our considerations related to the DEGREE sustainability framework as well as our overall portfolio strategy and customer considerations. STRATEGY Sustainability topics SDGs DEGREE Climate action1 D ECARBONIZATION Innovation and business model D ECARBONIZATION R ESOURCE EFFICIENCY G OVERNANCE Cybersecurity and data management E THICS Social and ecological standards in the supply chain G OVERNANCE Corporate governance and sustainability leadership G OVERNANCE Partner management and collaboration G OVERNANCE D ECARBONIZATION ESG risk management G OVERNANCE E THICS Compliance management G OVERNANCE E THICS 1 Sustainable product design and lifecycle management R ESOURCE EFFICIENCY Waste and hazardous substance management R ESOURCE EFFICIENCY Sustainable handling of natural resources and R ESOURCE EFFICIENCY material efficiency Diversity, equity, and inclusion E QUITY Future of work E QUITY E MPLOYABILITY Employee development E QUITY E MPLOYABILITY Employee health and safety E MPLOYABILITY 1 Top 2 material sustainability topics. SIEMENS SUSTAINABILITY REPORT 2023 22
2.2 Sustainability governance and organization 2.2 Sustainability governance and organization – Responsibility for sustainability at Siemens lies Supervisory Board meets regularly to discuss business devel- with the Managing Board and Chief Sustainability opment, planning, strategy, and the implementation of that Officer, supported by the Siemens Sustainability strategy. Board – The Sustainability Executive Committee is our More detailed information on the structure and responsibilities guidance body for Siemens’ sustainability business of the Managing Board and Supervisory Board can be found with a focus on portfolios, market segments, and in the SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED gotomarket topics MANAGEMENT REPORT, CORPORATE GOVERNANCE STATEMENT – ESG criteria are included in the compensation system for members of the Managing Board and Clear organizational structure and senior managers responsibilities In 2023, we significantly strengthened our sustainability organization throughout the company by introducing the At Siemens, sustainability is rooted in all that we do, includ- Sustainability Executive Committee (EC SUS) and Heads of ing our business purpose and strategy, corporate culture, Sustainability in key businesses and business units, and we processes, and guidelines. The management of sustainability increased the responsibility of the Global Head of Sustain- matters is embedded across our Siemens businesses, Service ability (Global Head of SUS) and the Siemens Sustainability and Governance units, and countries. Sustainability has also department. been an integral component of management compensation since fiscal 2020. Put simply, we strive to make sustainability The Managing Board addresses sustainability-related risks everyone’s responsibility at Siemens. - and opportunities of strategic and company-wide impor tance and adopts appropriate measures. The Managing Foundation: Corporate governance Board also approves any changes to the DEGREE sustainability We believe that compliance with recognized principles of framework. corporate governance is the cornerstone of sustainability- based corporate management. Siemens AG is governed by The Siemens Sustainability Board (SSB) monitors and German corporate law, under which it has a two-tier board resolves Siemens’ sustainability topics, including tracking structure consisting of a Managing Board and a Supervisory the progress of our DEGREE ambition, providing input and Board. guidance on sustainability reporting, and acting as a catalyst for regional sustainability initiatives with the potential to As the top management body, the Managing Board is scale across Siemens. The SSB is composed of representa- responsible for serving the company’s best interests and for tives from Siemens’ businesses, countries, and Service and achieving sustainable growth in company value. The Managing Governance units. The SSB meets four times per year or Board members are responsible for the entire management more frequently as needed. The SSB provides updates and of the company and decide on key issues of business policy recommendations to the Managing Board. and corporate strategy. The Sustainability Executive Committee (EC SUS) acts as The Supervisory Board oversees and advises the Managing guidance body for Siemens sustainability business – the Board in its management of the company’s business. The Siemens portfolio that enables positive sustainability impact SIEMENS SUSTAINABILITY REPORT 2023 23
2.2 Sustainability governance and organization by addressing and financing (i) decarbonization and energy ations for the Siemens sustainability business in alignment efficiency, (ii) resource efficiency and circularity as well as with the Managing Board, EC SUS, and the CEOs. (iii) people centricity and social impact – with a focus on portfolio market segments and go-to-market topics, and it CEOs are ultimately responsible for all sustainability topics in meets on an ad hoc basis to discuss relevant subjects. their area of responsibility. This includes responsibility for Chaired by Siemens’ CEO, the EC SUS includes Siemens’ Chief the sustainability business, implementation of DEGREE, Sustainability Officer, the CEOs of key businesses, Chief sustainability reporting, the Sustainability Risk Due Diligence Strategy Officer, General Counsel, and Global Head of SUS. Process, and other related responsibilities. The Chief Sustainability Officer (CSO) oversees Siemens’ The CEOs of Digital Industries, Smart Infrastructure, Siemens sustainability topics. The CSO is a member of the Siemens Mobility, and Siemens Financial Services (SFS) are supported Managing Board, chairs the Siemens Sustainability Board by their respective Heads of SUS to achieve their sustainability (SSB), and is a member of the Sustainability Executive Com- mandates. The Heads of SUS also assist the Global Head of mittee (EC SUS). The CSO is also responsible for the Siemens SUS with their responsibilities in the Sustainability depart- Sustainability department. ment, as they pertain to their businesses. Heads of SUS have a governance reporting line to the Global Head of SUS in The Global Head of Sustainability (Global Head of SUS) leads addition to their reporting line to their respective CEOs. The the Siemens Sustainability department. In this capacity, the Heads of SUS are appointed by the respective CEOs, in align- Global Head of SUS reports to the CSO on all Siemens sus- ment with the Global Head of SUS. tainability topics excluding sustainability business and related strategy topics. For the latter topics, the Global Head In addition, the CEOs of the business units in Digital Indus- of SUS reports to Siemens’ CEO. The Global Head of SUS is a tries, Smart Infrastructure, Siemens Mobility, and SFS each regular member of the SSB. The Global Head of SUS regularly appoint Sustainability Managers who have a governance informs the Supervisory Board on sustainability matters. reporting line to the Heads of SUS and to their reporting line to their respective CEOs. The Siemens Sustainability department is responsible for developing our DEGREE sustainability framework in coordi- Lead Country SUS Managers support their respective Lead nation with the SSB, businesses, Service and Governance Country CEOs and their assigned countries. They also lead units, and countries and controlling the DEGREE target Siemens’ sustainability topics within the scope of responsi- achievements. Responsibility for sustainability reporting and bility of the Lead Country management. 1 the Net Zero Operations Program also lies with the Sustain- ability department. It also governs the purchase of carbon Our Service and Governance units are responsible for the offsets and the Sustainability Risk Due Diligence Process2. ongoing development of sustainability-related topics within The Sustainability department also supports sustainability their own mandate in line with the DEGREE sustainability initiatives with scalability across Siemens. This includes framework and regulatory and organizational requirements. developing the processes, training, and tools needed to address overarching sustainability topics for our countries, Lastly, Sustainability Risk Due Diligence Subject Matter businesses, and Service and Governance units in collaboration Experts are appointed by and support Digital Industries, with other Siemens organizations. Finally, the Sustainability Smart Infrastructure, Siemens Mobility, and SFS to responsibly department is responsible for developing strategic consider- conduct the Sustainability Risk Due Diligence Process. 1 Siemens has established the Net Zero Operations Program, which is comprised of a series of greenhouse gas (GHG) emission reduction initiatives targeting real estate, production, our vehicle fleet, and related topics to address our commitment to GHG reduction under the DEGREE ambition “Net Zero Operations by 2030.” For more details, see chapter 4.1 Climate action. 2 Siemens has established the Sustainability Risk Due Diligence Process to ensure that environmental, social, and associated human rights and reputational risks (Sustainability Risks) are appropriately assessed and mitigated. The Sustainability department, as the governance owner, has established minimum company-wide standards for the Sustainability Risk Due Diligence Process in our customer-related business that are applicable to the businesses and SFS. SIEMENS SUSTAINABILITY REPORT 2023 24
2.2 Sustainability governance and organization CEOs in businesses and lead countries are responsible for anchoring sustainability in their organizations Overview of roles and responsibilities Supervisory Board Managing Board incl. Chief Sustainability Officer Sustainability Executive Committee Siemens Sustainability Board Sustainability Organization incl. Global Head of Sustainability Business and SFS Service & Governance units Countries Sustainability reflected in management G overnance compensation The current compensation system for the members of the Progress on DEGREE ambition #5: Managing Board of Siemens AG has been in place since fiscal Long-term incentives based on ESG criteria 2020. It incorporates long-term performance incentives based on ESG criteria and is defined under the field of action Siemens grants long-term variable compensation in the Governance in our DEGREE sustainability framework. We form of Stock Awards. Long-term variable compensation assess the Managing Board’s performance against Siemens’ represents at least 30% and at most 42% of total target internal ESG/Sustainability index. Targets include CO2e compensation. Since fiscal 2020, allocated Stock Awards emissions, digital learning hours, and the Net Promoter depend on a comparison of total shareholder return Score (NPS) for measuring customer satisfaction. Additional (TSR) with an international sector index (the MSCI World sustainability matters are also defined as individual targets Industrials Index) and on an internal ESG/Sustainability for short-term variable compensation (bonuses). index, weighted at 20%, with three equally weighted SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT indicators. The ESG indicators reflect relevant strategic REPORT, COMPENSATION REPORT 2023 and socio-political topics. For the Stock Awards Tranche 2023, which was awarded in November 2022, these indicators include CO e emissions, digital learning 2 hours, and the Net Promoter Score (NPS) for measuring customer satisfaction. These criteria are applicable to Managing Board members of Siemens AG and all senior managers globally who are eligible for Stock Awards. Progress ESG criteria anchored Siemens without SHS SIEMENS SUSTAINABILITY REPORT 2023 25
2.3 Partnerships and collaborations for sustainability 2.3 Partnerships and collaborations for sustainability – Close collaborations with our stakeholders non-financial reporting legislation, trade policy, and con- – Partnerships are key to longterm sustainable nected and automated mobility for rail and road. business success – Siemens is an active member of numerous business Our political involvement is guided by strong principles: associations and organizations → We are politically neutral and take a zero-tolerance approach to corruption, violations of fair competition Siemens operates in nearly every country in the world. We principles, and other breaches of applicable law and work with our customers to find innovative solutions to internal regulations. some of the world’s most pressing issues. We believe that → Siemens does not make political donations or contributions close collaboration with our stakeholders enables us to make to politicians, political parties, or political organizations. serious progress on complex sustainability challenges. We → Any contributions that support purely political purposes maintain a consistent dialog with all our stakeholders, or the representation of political interests – for example, including customers, investors, suppliers, our people, election events for political campaigns – are prohibited by communities, policymakers, media, non-governmental our internal guidelines. organizations, business organizations, and academia. In addition, our DEGREE sustainability framework is also based Engagement in associations and organizations on a 360-degree stakeholder approach. Siemens is a member of numerous business associations and other organizations, some of which advocate for their mem- In dialog with politics and society bers’ interests in the political arena. Selected examples of Our Managing Board, CEOs, and governance departments in the most important memberships are: our business units oversee stakeholder engagement. The overall responsibility for Siemens’ dialog with policymakers → The International Chamber of Commerce (ICC) lies with our Managing Board, which has given the Govern- → The German Mechanical Engineering Industry Association ment Affairs department a mandate for company-wide (VDMA) coordination tasks and the corresponding governance → The German Electrical and Electronic Manufacturers’ responsibilities. Within the business units, the unit’s CEO is Association (ZVEI) responsible for a coordinated dialog with the policymakers. → The European Round Table for Industry (ERT) → The U.S. Chamber of Commerce The way that regulations and legislation are shaped has in → The European Chamber of Commerce in China (EUCCC) many cases impacted Siemens and our products and solu- tions. Therefore, we believe that maintaining an ongoing More information on political activities at Siemens can be dialog with political decision-makers is crucial for our found on our GOVERNMENT AFFAIRS website. company’s success and for our commitment to sustainability. We have joined forces with leading companies from around We prioritize our activities based on our business strategies the world to establish the Charter of Trust, which aims to and innovation fields. As a result, our advocacy activities make the digital world safer and more secure. focus on but are not limited to the following topics: cyber- WWW.CHARTEROFTRUST.COM security, digitalization, climate protection, energy, R&D, SIEMENS SUSTAINABILITY REPORT 2023 26
2.3 Partnerships and collaborations for sustainability We also support the goal of achieving a carbon-neutral have also joined the World Bank’s Carbon Pricing Leadership Europe by 2050, which was announced as part of the Euro- Coalition (CPLC), and we advocate for the global introduction pean Green Deal. We will achieve this through a variety of of carbon pricing. We are likewise committed to the UNGC commitments, including our active memberships in the Women’s Empowerment Principles and have signed the EUROPEAN ALLIANCE TO SAVE ENERGY and the EUROPEAN GREEN Diversity Charter, an initiative by the German government. DIGITAL COALITION. For over ten years we have supported One Young World We work closely with the Organization for Economic Cooper- (OYW), a non-profit organization that supports young busi- ation and Development (OECD), the United Nations (UN), ness leaders around the globe to build a better world with the European Union, and the World Economic Forum (WEF). more responsible, more effective leadership. At the 2023 Siemens participates in a number of WEF initiatives, including OYW Summit in Belfast, we championed this event by send- the WEF CEO Climate Leaders Coalition. We also cooperate ing more than 45 of our Siemens colleagues to participate. with the United Nations, for instance, as part of our commit- ment to the Ten Principles of the United Nations Global Siemens collaborates with numerous partners globally Compact (UNGC). On several environmental issues, we support across the topics of decarbonization and energy efficiency, the United Nations Framework Convention on Climate resource efficiency and circularity, and people-centricity and Change (UNFCCC) and the UN Climate Change Conferences, societal impact. Our selected strategic sustainability partner- and we are actively involved in the CEO Water Mandate. We ships are listed below. Partnership organization Description Decarbonization and energy efficiency The Climate Group The EV100 initiative expedites the shift to electric vehicles (EVs). Siemens intends for EVs to account for → EV100 100% of its fleet by 2030. We are also investing in the establishment of charging infrastructure in the → EP100 same timeframe. → RE100 EP100 brings together over 125 ambitious businesses committed to improving energy efficiency. Siemens is committed to owning only assets that are Net Zero carbon in operation and occupying only assets that are Net Zero carbon in operation by 2030. RE100 unites hundreds of ambitious companies committed to 100% renewable electricity. Siemens is committed to reaching this target by 2030. United Nations The United Nations Conference of Parties (COP) is the world’s highest decision-making body on climate → Conference of the Parties (COP) issues. COP connects stakeholders from politics, society, and business for discussions about the global path → Global Compact (UNGC) Working to Net Zero. COP provides a unique opportunity to showcase Siemens as a multiplier of change that Group on Climate empowers customers and societies to drive their sustainability transformation. The 28th session of the COP was held in Dubai, UAE in 2023. The United Nations Global Compact (UNGC) is the world’s largest corporate sustainability initiative. It calls for companies to align their strategies and operations with universal principles on human rights, labor, environment, and anti-corruption. Siemens is active in the UNGC’s Working Group on Climate. U.S. Department of Energy (DOE) Better Buildings is an Initiative of the U.S. Department of Energy (DOE) that is designed to improve the Better Buildings initiative lives of the American people by driving leadership in energy innovation. Siemens is an active participant in the initiative’s Better Climate Challenge. The World Bank Carbon Pricing The Carbon Pricing Leadership Coalition (CPLC) brings together leaders from government, the private Leadership Coalition (CPLC) sector, academia, and civil society to expand the use of carbon pricing policies. Siemens is a member of the coalition and actively advocates for the global introduction of carbon pricing. The World Economic Forum (WEF) The World Economic Forum (WEF) is the international organization for public-private cooperation. Siemens → Alliance for Clean Air is a founding member of the WEF Alliance for Clean Air, which brings together business leaders to measure → Alliance of CEO Climate Leaders and reduce value chain air pollutant emissions, invest in innovation, and work with policymak ers and → ESG Practitioners peers to champion the social, economic, and climate benefits of tackling air pollution. The WEF Alliance of CEO Climate Leaders is a CEO-led community committed to defining bold climate goals and accelerating the Net Zero transition by setting science-based targets, disclosing emissions, and catalyzing decarbonization and partnerships across global value chains. The WEF ESG Practitioners help implement the recommendations from the WEF Stakeholder Capitalism Metrics in reports. SIEMENS SUSTAINABILITY REPORT 2023 27
2.3 Partnerships and collaborations for sustainability Partnership organization Description Resource efficiency and circularity The European Union (EU) Business The EU Business and Biodiversity Platform provides a unique forum for dialog and a policy interface for and Biodiversity Platform discussing the links between business and biodiversity at the EU level. Siemens is an active member of the Platform. The European Union (EU) Circular The EU Circular Plastics Alliance aims to boost the EU market for recycled plastics. The Alliance covers the Plastics Alliance Declaration full plastics value chain and includes over 330 organizations representing industry, academia, and public authorities. Siemens is an active member of the Alliance. The Federation of German Industries The BDI Circular Economy Initiative is a network of about 60 organizations across the entire industrial (BDI) Circular Economy Initiative spectrum. Siemens is a founding member of the Circular Economy Initiative. Responsible Minerals Initiative The Responsible Minerals Initiative (RMI) is one of the most utilized and respected resources used by (RMI) companies in a variety of industries for addressing responsible minerals sourcing issues in their supply chains. Siemens is an active member of RMI and is involved in advancing the topic of responsible minerals sourcing at Siemens. Peoplecentricity and societal impact The European Union (EU) Agency for EU-OSHA is the EU’s information agency overseeing occupational safety and health at work. Siemens is a Safety and Health at Work (OSHA) partner of the EU-OSHA Healthy Workplaces Campaign and is committed to championing safe and healthy work in the digital age. Global Business Initiative (GBI) on The Global Business Initiative (GBI) works to shape practices, inspire commitment, and build the capability Human Rights for implementing respect for human rights, in line with the UN Guiding Principles on Business and Human Rights. Siemens is an active member of the Initiative. The International Organisation of The IOE GOSH is a network of more than 150 member organizations focused on improving occupational Employers (IOE) Global Occupational health and safety, providing forums to identify and, discuss emerging trends and international best practices. and Health Network (GOSH) Siemens is an active member of the Network. One Young World (OYW) One Young World (OYW) is a non-profit organization that empowers and develops young leaders to build a fair, sustainable future for all. Siemens has been an active partner of OYW for over a decade, with over 500 Siemens delegates having participated the annual OYW Summits since they began. United Nations Global Compact The United Nations Global Compact (UNGC) is the world’s largest corporate sustainability initiative. It calls (UNGC) European Working Group on for companies to align their strategies and operations with universal principles on human rights, labor, Business and Human Rights environment, and anti-corruption. Siemens is a member of the European Working Group on Business and Human Rights. G7 and the International Labour The Vision Zero Fund is an initiative of the G7 countries aimed at preventing work-related deaths, injuries, Organization (ILO) Vision Zero Fund and disease in sectors operating in or aspiring to join global supply chains. The ILO administers and imple- ments the fund’s projects. Siemens was the first private sector donor to join the fund. The World Economic Forum (WEF) The World Economic Forum (WEF) is the international organization for public-private cooperation. Siemens Chief Health Officer Group is an active member of the WEF Chief Health Officer Group, which works to advance the overall well-being of the workforce. Support for nonprofit organizations So far we have allocated about US$120 million to 85 projects in more than 50 countries across all funding that promote business integrity rounds. Information is available on the INTEGRITY INITIATIVE WEBSITE and the SIEMENS INTEGRITY and the fight against corruption INITIATIVE REPORT 2022. worldwide Crosstopic partnerships The Conference Board (TCB) The Conference Board (TCB) is a non-profit corporate membership and research organization that organizes conferences and peer learning groups, conducts economic and business research, and publishes economic indicators. Siemens is active in multiple TCB Councils on topics like corporate sustainability, the environment, and well-being. econsense Econsense is a German economic sustainability network whose members’ objective is to actively shape the transition to a more sustainable economy. Siemens is a founding member of econsense, member of the Board of Trustees and the Executive Board, and an active participant in working groups on Environment, Climate, Disclosure and Reporting, Business and Human Rights, and Human Rights in the Supply Chain. The World Business Council for The World Business Council for Sustainable Development (WBCSD) is a community of over 200 leading Sustainable Development (WBCSD) organizations that are working together to take action to limit the climate crisis, restore nature, and tackle inequality. Siemens has actively participated in a number of workstreams, including those focused on carbon accounting and reduction and the sustainable built environment. SIEMENS SUSTAINABILITY REPORT 2023 28
2.4 Sustainability ratings reflect our performance 2.4 Sustainability ratings reflect our performance – Our engagement is recognized in a number of ratings status and a B rating, the best rating in our industry (Industrial – These ratings help us continuously improve our Conglomerates). Prime status recognizes companies for sustainability performance being one of the leaders in their respective industry. – They also strengthen the comparability and trans parency of our sustainability performance for our Sustainalytics customers and investors Sustainalytics’ ESG Risk Ratings measure a company’s expo- sure to industry-specific material ESG risks and how well a company is managing those risks. In 2023, we were once Our approach to ESG ratings again rated as one of the leading companies in our industry We are proud that our commitment to sustainability and our (Industrial Conglomerates) with a risk rating of 28.4 points efforts are reflected in our public assessments and ratings. (Medium Risk). Siemens actively participates in several sustainability ratings to provide our capital markets and our customers with robust S&P Global Corporate Sustainability Assessment (CSA)/ information and support the comparability and transparency Dow Jones Sustainability Index (DJSI) of our sustainability performance. Ratings also give us The S&P Global CSA is an annual evaluation of companies’ important insights that assist in our continuous improvement. sustainability practices. The CSA focuses on sustainability We focus primarily on the six ratings summarized below. criteria that are both industry-specific and financially material. In fiscal 2023, Siemens again ranks second among our Siemens continues to achieve strong results in external industry peers (Industrial Conglomerates) with a score of sustainability ratings in fiscal 2023, confirming our leading 81/100. Siemens has been listed in the Dow Jones Sustain- position in the industry. ability World Index (DJSI World) for over 20 years. ESG ratings in fiscal 2023 EcoVadis MSCI EcoVadis provides supplier sustainability ratings for global The MSCI ESG Rating scores global companies on a scale of supply chains. Siemens received 77 points on its scorecard in AAA (leader) to CCC (laggard) based on exposure to industry- 2023, placing it among the top 1% of all companies assessed specific ESG risks and the ability to manage those risks rela- by EcoVadis in our industry. Thanks to this rating, Siemens is tive to peers. In fiscal 2023, Siemens was given an overall being awarded the EcoVadis Gold medal. MSCI ESG rating score of AA. In addition, Siemens is a member of the MSCI World ESG Index. CDP CDP is a not-for-profit charity that runs a global disclosure ISS ESG system that helps investors, companies, cities, states, and The ISS ESG Corporate Rating evaluates companies’ ESG- regions manage their environmental impacts. In the most related risks, opportunities, and impacts along the corporate recent CDP Climate Change Rating, Siemens’ climate efforts value chain. Companies are rated from D- to A+ on their continue to be recognized with the rating score A-, which sustainability performance based on an absolute best-in- maintains its position at the Leadership Level of the CDP class standard. For ISS ESG, Siemens again received prime rating. SIEMENS SUSTAINABILITY REPORT 2023 29
2.4 Sustainability ratings reflect our performance Siemens’ sustainability performance has received high recognition in external ratings External sustainability ratings Latest Siemens AA B- 28.4 81/100 77 A- score Siemens Top in industry st industry rank Leader 1 in our industry Top 15% Top 1% Top 1% (industry average C-) Progress from Improvement previous Unchanged Unchanged of 1.7 points Unchanged +7 points Unchanged assessment Strong “Carbon – Over 10 years Highlights Leader (AAA/AA) Prime status Products and Over 20 years in Gold medal at leadership for 7 years Services” risk the World Index level (A/A-) for management Climate Change Siemens has also satisfied the requirements to be included in several additional ESG stock market indices Additional Included in the Included in the ESG indices FTSE4Good Index Series Euronext Vigeo Euro 120 Index SIEMENS SUSTAINABILITY REPORT 2023 30
Pages 31 – 53 Governance Responsible Business Practices Ethics Governance Foster a culture of trust, adhere to ethical standards, Apply state-of-the-art systems for effective and and handle data with care responsible business conduct 1 1 Our key ambitions Our key ambitions → Striving to train 100% of our people on Siemens’ → ESG-secured supply chain based on supplier Business Conduct Guidelines every three years commitment to the Supplier Code of Conduct → Long-term incentives based on ESG criteria2 Additional highlights: → Zero-tolerance approach to breaches of applicable Additional highlights laws and our own internal guidelines → Focus on human rights within supply chain: climate → A global, risk-based compliance system protection, occupational safety, and responsible → Aiming for a leading role in cybersecurity sourcing of minerals → Comprehensive environmental and social due diligence in customer business (ESG Radar) 1 Siemens without SHS. 2 Assessment based on the Siemens internal ESG/sustainability index, which is based on customer satisfaction (Net Promoter Score), CO reduction, and digital learning hours. 2 SIEMENS SUSTAINABILITY REPORT 2023 31
3.1 Compliance and ethics 3.1 Compliance and ethics – Zerotolerance approach to breaches of applicable Our Compliance governance and policies laws and our internal guidelines The Siemens Compliance organization oversees our compli- – A global, riskbased compliance system ance system and is chaired by our Chief Compliance Officer, – Ethics and integrity are the basis for sustainable who is responsible for all legal and operational aspects of business practices compliance. The Compliance organization is part of Siemens global Legal and Compliance department. It is led by the General Counsel, who reports directly to our President and Management approach CEO. Operating with integrity and in compliance with laws and regulation is fundamental to stakeholder trust and our com- Siemens Chief Compliance Officer reports directly to pany’s continued success. Siemens and its roughly 320,000 Siemens’ CEO on functional matters, in addition to reporting employees operate in multiple countries around the world. to the Managing Board and the Siemens AG Supervisory Our customers in both the private and public sectors serve a Board on a quarterly and ad-hoc basis. vast array of industries. Our global business operations are governed by numerous national legal systems and take place Compliance Officers in the business ensure that our Compli- in a variety of political, social, and cultural settings that are ance system is implemented worldwide. They work closely constantly changing. Therefore, Siemens’ business and with employees and managers, who assume personal compliance environment is correspondingly complex. responsibility for compliance in their respective business units. The way that Siemens and our partners do business impacts the markets and societies where we operate. Unethical and We believe that it is necessary for the entire management unlawful conduct like corruption, cartel arrangements, and team to act on our commitment to compliance and ensure money laundering can distort competition, hinder economic that all business decisions and transactions that fall within development, and threaten human rights and democracy. As their area of responsibility comply with both the relevant a global player, Siemens is responsible for setting an example legal requirements and our own values and company guide- in all its operations and in collaboration with all its stake- lines. holders. By building alliances against corruption and pro- moting fair competition together with stakeholders from At Siemens, we take a zero-tolerance approach to corruption politics, business, and society, Siemens can through Collec- and other breaches of applicable laws and of our Business tive Action help establish the conditions for fair competition Conduct Guidelines (BCGs). and thereby promote innovation. Our BCGs contain the behavioral principles and rules that - Under certain circumstances, Siemens can be held liable for guide our conduct, both within Siemens and in our stake the illegal activities of third parties: for example, business holder relationships. They also serve as an expression of our partners acting as suppliers, intermediaries, resellers, and values and lay the foundation for detailed internal regula- consortium partners. Transactions conducted by business tions. The BCGs are binding for all Siemens employees partners can be misused to gain undue advantages for the around the world. business partner or for Siemens. SIEMENS SUSTAINABILITY REPORT 2023 32
3.1 Compliance and ethics We also believe that acting on the basis of our Ethical Princi- The Siemens compliance system ples allows us to focus even more on responsible business The goal of compliance at Siemens is to ensure that our practices. We aspire to support the sustainable development worldwide business practices follow the applicable laws and of Siemens and the societies where we operate by adhering comply with the BCGs. Our Compliance organization covers to responsible business practices. the following activity fields: Worldwide commitment to fighting corruption → Anti-corruption In collaboration with other international and national orga- → Anti-money laundering nizations, we are committed to fighting corruption and → Anti-trust promoting fair competition in our markets and beyond. → Data privacy → Human rights This approach is also reflected in our Collective Action → Export control activities, which includes our commitment to: HUMAN RIGHTS CYBERSECURITY AND DATA PRIVACY → The United Nations Global Compact (UNGC) → The World Economic Forum and its Partnering Against To ensure compliance throughout the company, the Siemens Corruption Initiative (PACI) comprehensive compliance system is based on the three → The United Nations Convention Against Corruption and pillars of prevention, detection, and response. the Organization for Economic Cooperation and Develop- ment (OECD)’s Anti-Bribery Convention Preventive measures include compliance risk management, → The implementation of these conventions as part of preparing topic-specific guidelines and procedures, incorpo- Business 20 (B20) rating compliance requirements into business processes, our Collective Action activities, and providing comprehensive The Ten Principles of the UN Global Compact, the OECD training and advice to our people. Guidelines for Multinational Enterprises, and other key guidelines are embedded in our BCGs and provide a founda- In addition, protected channels for reporting compliance tion and direction for all our activities. BUSINESS CONDUCT violations like the “Tell Us” whistle-blower system, the GUIDELINES Ombudsperson, and professional and fair investigations are indispensable for identifying and resolving matters of indi- “We help our customers and vidual misconduct. Our reporting channels also allow our partners around the world drive people to submit reports anonymously. their digital and sustainable We believe that transparent communication and clear conse- transformation. Without excuses or quences help reduce and resolve incidents of individual exceptions, we always act ethically, misconduct. Our internal audit department also continuously legally, and with the highest performs compliance controls and audits to ensure that our integrity.” compliance system is put into action and meets our world- wide requirements. CEO Roland Busch SIEMENS SUSTAINABILITY REPORT 2023 33
3.1 Compliance and ethics The Siemens compliance system v e e r n P t Management R responsibility espo nd tect De Activity fields Anti-Corruption Anti-trust Export Control Anti-Money Laundering Data Privacy Human Rights Ethics management at Siemens We are committed to fulfilling these requirements in all our In our business activities, we are committed to going beyond actions and decisions. In the complex environment of the laws and regulations. Our BCGs define how we interpret our global economy, “doing the right thing” is not always easy. responsibility, what is expected of all employees, and how Our new Siemens BCG training helps us to better assess we act as a company. situations in our work environment and make the right decisions. We believe that by acting responsibly beyond laws Our ethical principles have been integrated in the updated and regulations, we can continue achieving Siemens’ success version of our BCGs. Responsible business conduct with all in collaboration with our business partners. stakeholders and consistent consideration of Ethical Principles are expected in our decisions and are becoming increasingly Ethical standards for artificial intelligence important in view of the many changes and challenges in the Siemens prioritizes ethical standards and responsible busi- world. Accordingly, we firmly anchored them in our BCGs: ness conduct in the digital world; specifically, by protecting data, mitigating biases, supporting data sovereignty, and → We are honest and truthful in our dealings ensuring trustworthy and responsible AI. We implement → We respect the dignity, privacy, and inherent rights of safeguards for transparency, accountability, technical individuals robustness, security, and safety while promoting fairness → We protect the health, occupational safety, and personal and accessibility. security of our people → We act in line with our responsibility for the environment → We engage with reputable and law-abiding partners → We explore ethical concerns SIEMENS SUSTAINABILITY REPORT 2023 34
3.1 Compliance and ethics Our commitment to ethical standards is demonstrated by Both business partners and suppliers are required to sign a integrating AI ethics into all our business processes, products, code of conduct. In addition, depending on their risk classi- and solutions. This includes: fication, audits can be conducted on the business partners’ premises by the Siemens audit function or external service → Applying generally accepted and trustworthy AI frameworks providers. SUSTAINABLE SUPPLY CHAIN PRACTICES to AI tools in anticipation of the upcoming AI regulation in the EU. To support the compliance experts on business partner topics, → Raising awareness and providing guidance to employees Siemens established the Business Partners Network. This and stakeholders on ethical implications in AI decision- network operates in different workstreams, some of which making. are connected with specific projects and others that are related to specific questions on the subject of collaboration Collaboration with business partners with business partners. Each Siemens department is responsible for its own business partners. They must be carefully selected by the responsible Preventing money laundering and terrorism operational department and must undergo a risk-based financing compliance due diligence process. Business partners have to Siemens strives to only maintain business relationships with be adequately monitored for the duration of the business reputable customers, suppliers, partners, and companies relationship. This means that we regularly assess the need whose business activities comply with legal requirements for the continued relationship and provision of services, and whose financial resources are of legitimate origin. We taking into account remuneration and other relevant circum- use a risk-based approach to verify the identity and economic stances. background of customers, suppliers, business partners, and other third parties and the origin of payments to ensure they We have established mandatory processes and the associ- come from legitimate sources. When necessary, Siemens ated tools for this purpose that are continuously refined to reports suspicious activities to law enforcement authorities. cover any risks that may arise. Handling of compliance cases Decisions about engaging a business partner are transparent At Siemens, compliance cases are handled in accordance and risk-oriented. They are also based on the most recent with a clearly structured process that includes key steps such compliance due diligence procedures. Appropriate remediation as reporting channels, internal investigations, and responses measures are initiated depending on the risk classification of to identified violations (see the diagram below). the business relationship and the risks identified. Company-wide process for handling compliance cases (simplified presentation) Compliance investigation Assessment carried out by examining or Research Preparation of Disciplinary Allegation received evaluating the Mandating and planning Investigation the investigation measures and allegation before report remediation mandating an investigation SIEMENS SUSTAINABILITY REPORT 2023 35
3.1 Compliance and ethics Siemens offers a range of reporting channels to enable all Compliance risk management employees and outside third parties to flag potential compli- To be effective, the Siemens compliance system needs to be ance violations to the company. For instance, complaints can continuously adjusted in order to meet business-specific be reported by way of the protected whistle-blower system risks and multiple local legal requirements. The findings “Tell Us” or to the independent Siemens Ombudsperson. from compliance risk assessments, along with compliance Reports received through these channels are forwarded to controls and audits, help us identify opportunities to further our Compliance organization. Complaints can also be develop the compliance system. reported directly to the Compliance Officers in our business units or to the senior management. Whistle-blowers at The goal of compliance risk management is to detect compli- Siemens are protected by national laws and also by internal ance risks early and take appropriate steps to prevent or company regulations that prohibit the punishment or other mitigate risks. Risk assessments and tool solutions that detrimental treatment of anyone who reports a suspicious support risk evaluations are also integrated into individual activity in good faith. business processes to support our employees in taking appropriate risk mitigation steps. Every complaint is taken seriously. If the allegations prove to be sufficiently plausible, the Compliance organization deter- Compliance risk management is an integral part of the mines whether there is sufficient information to justify an company-wide Siemens Enterprise Risk Management (ERM) internal investigation. Indications about other matters are program SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT REPORT, 8.3.1 STRATEGIC RISKS forwarded to the affected Siemens department or business , which provides a unit for further action. holistic view of all identified risks throughout the Group. Every entity and region assesses their business risks in rela- Internal investigations are conducted based on binding, tion to compliance risks. Current developments are also clearly defined standards to ensure the fair and respectful systematically evaluated. treatment of employees. These standards prohibit unlawful or disproportionate actions. However, if an internal investiga- As a core part of our risk management process, we collabo- tion leads to the finding that an employee has demonstrably rate closely with relevant business units to identify and violated any laws or internal regulations, they can expect assess compliance risks within new digital business models. appropriate disciplinary consequences. Continuous Compliance Risk Management implements a bottom-up evaluation of the local risk environment in each All circumstances within a compliance case, including the of Siemens’ entities on a worldwide basis in all activity fields locally applicable legal environment and any participation defined by Compliance. CEOs, business leaders, Compliance rights of the competent employee representative bodies, are Officers, and experts from every entity meet during the fiscal duly considered during the proceedings. year to identify and assess compliance risks.1 The risks iden- tified are then aggregated and presented during annual Affected Siemens entities are obligated to implement the Compliance Risk and Performance Reviews to the Compli- additional recommendations of the investigation reports, ance Management Council. The risks are documented in the including measures to effectively remedy the situation. Compliance Risk Tracking tool. Additional information from internal data sources is included to provide a holistic overview of compliance risks. Cross- functional knowledge exchanges take place at regular meetings, and an annual Corporate Compliance Risk Work- shop helps us identify and monitor emerging or changing risks. The results of the risk assessments are a key starting point for the ongoing development of our compliance system. 1 At SHS, formal Compliance Risk Assessments are conducted every three years, with the last being performed in fiscal 2023. SIEMENS SUSTAINABILITY REPORT 2023 36
3.1 Compliance and ethics Targets → We are transforming and modernizing the technology Our ethics approach is also embedded in our DEGREE that supports our compliance management system in sustainability framework within the field of action Ethics. order to keep pace with the digital transformation of our company. This includes our new cloud-based solutions, which we have leveraged to further streamline and auto- E Ethics mate our risk-based compliance processes and support data-driven holistic risk management and continuous Progress on DEGREE ambition #3: control activities. With these cloud-based solutions, we Striving to train 100% of our people on aim to improve assurance and efficiency of compliance the Siemens Business Conduct Guidelines activities at Siemens. every three years Compliance training As part of the DEGREE sustainability framework, To ensure that compliance and integrity are embedded Siemens has set itself the ambition of training all throughout the organization, Siemens employees and the employees on BCGs in a three-year cycle. The current Compliance organization receive targeted, group-oriented, cycle started in fiscal 2023. By end of this fiscal year the risk-based training on compliance topics. new BCG training “Doing the right thing!” has been rolled out to 71% of all active employees worldwide Our employees learn through mandatory web-based train- with a current KPI result of 69% newly trained employees ings and non-mandatory learning products about compli- in this cycle. Therefore, the DEGREE ambition for Ethics ance topics and on the content of our BCGs. We train all our is on track. employees (full-time and part-time) worldwide. Employers of external employees are contractually obligated to comply Progress with the Supplier Code of Conduct and must ensure compli- From FY 23 69% 100% by 2025 ance by external employees as part of the onboarding pro- cess Siemens without SHS We strive to train every employee worldwide on the BCGs in a recurring three-year cycle, according to the Ethics DEGREE target. The new three-year cycle started in fiscal 2023. In Actions and results July 2023, the rollout of an update to our BCG web-based training began, which now includes our Ethical Principles. Progress in fiscal 2023 Our learning management system SABA tracks the mandatory In fiscal 2023, we continued to make progress with our training courses. The completion of training requirements is Siemens compliance system, including: visible in our SABA dashboard, and detail reporting is available for the management on demand. → Enhancing our integrated risk management approach with updated technology to better continuously monitor In addition, materials are regularly offered through the and update risks. This enables us to rapidly adapt to Integrity Dialog initiative. With this initiative, managers have factors like emerging risks, business transformation, and an opportunity to discuss and raise awareness of current changing regulatory and geopolitical conditions. compliance topics with their teams. SIEMENS SUSTAINABILITY REPORT 2023 37
3.1 Compliance and ethics Non-mandatory learning products in diverse formats are also Compliance indicators¹ presented in the form of learning paths in our global learning platform My Learning World. Fiscal year 2023 2022 The BCG training was rolled out to 190,000 employees Compliance cases reported 416 363 worldwide, and 129,000 of them (approximately 68%) had Disciplinary sanctions 166 212 successfully completed the training by the end of fiscal 2023. therein warnings 87 90 therein dismissals 43 74 therein other² 36 48 129,000 1 Continuing and discontinued operations. 2 Includes loss of variable and voluntary compensation components, transfer, and employees were trained on the content of suspension. our BCGs in fiscal 2023 We believe that the evidence demonstrates that our compliance system is well-designed and effectively implemented. Due to Siemens employees around the world also completed about the nature of our business operations, the environments 461,000 training programs for specific target groups in fiscal where we work, and our company’s geographic distribution, 2023.2 we do not regard the number of incidents as unusual. “Ethical corporate governance and More information on significant ongoing and future charges compliance are nonnegotiable. Our of corruption, antitrust violations, and other violations of the approach goes beyond strict law can be found in SIEMENS REPORT FOR FISCAL 2023, COMBINED compliance with laws and MANAGEMENT REPORT, CHAPTER 8.3.4 COMPLIANCE RISKS, AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, NOTE 22 LEGAL PROCEEDINGS regulations by placing integrity at the center of our corporate culture Stakeholder involvement in our compliance and business processes.” approach Compliance-related questions are included in the annual CEO Roland Busch Siemens Global Employee Survey in order to evaluate the effectiveness of the compliance system within the company. Compliance indicators and whistle-blowers We also use the survey to acquire a better understanding of Our employees use our reporting channels regularly. A total the degree to which ethical conduct is embedded in our of 416 compliance cases that required an inquiry or investi- corporate culture. The results of last year’s survey show an 3 gation were reported in fiscal 2023. We believe that the increase in the already high approval rates relative to the increase in compliance cases from the previous year falls perception and awareness of integrity, ethics, and responsible within the range of normal fluctuation. The total number of business conduct throughout the organization. disciplinary measures imposed for compliance violations was 166 in fiscal 2023. The number of disciplinary measures in a fiscal year does not necessarily reflect the number of compliance cases reported in the same period. This is because disciplinary action may not be taken in the same year as the case was reported or when the investigation was completed. Furthermore, one compliance case may result in multiple disciplinary actions or none at all. 2 This figure includes Siemens Healthineers employees. 3 At the same time, the overall response rates decreased from 167,900 in fiscal 2022 to 161,550 in fiscal 2023. SIEMENS SUSTAINABILITY REPORT 2023 38
3.1 Compliance and ethics Collective Action and the Siemens Integrity Initiative We believe that in order for substantial progress to be made in combating corruption and fostering fair competition, large numbers of stakeholders must act collectively. The Siemens global Integrity Initiative earmarks more than US$100 million to support organizations and projects that combat corruption and fraud through Collective Action, education, and training. The Siemens Integrity Initiative focuses on supporting proj- ects that have a clear impact on the business environment, can demonstrate objective and measurable results, and have the potential to be scaled up and replicated. So far, we have allocated approximately US$120 million for 85 projects in more than 50 countries across all funding rounds. Detailed information on this subject is provided in the Siemens Integrity Initiative’s annual reports. WWW.SIEMENS.COM/INTEGRITYINITIATIVE US$120 million in support for 85 projects in 50 countries The Siemens Integrity Initiative constitutes one element of a 2009 settlement between Siemens and the World Bank and another 2013 settlement between Siemens and the Euro- pean Investment Bank (EIB). SIEMENS SUSTAINABILITY REPORT 2023 39
3.2 Human rights 3.2 Human rights – Commitment to respect human rights in accordance The Chief Compliance Officer, also appointed to serve as the with international standards Siemens Human Rights Officer by the Managing Board of – Continuous assessment of actual and potential Siemens AG, reports to the Supervisory Board and Managing adverse impacts on people and environment Board on a regular and ad hoc basis on issues concerning throughout our value chain human rights: for example, the German Supply Chain Due – Regular dialogs with human rightsfocused external Diligence Act (LkSG), for which Legal Compliance is the business coalitions overarching coordination body. The SSB has assigned overall responsibility for human rights Management approach to the Siemens Sustainability and Compliance departments. As a global company, we are well aware of our responsibility Their primary task is to proactively and systematically ensure to society. We are unreservedly committed to safeguarding that respect for human rights is deeply embedded in our and respecting human rights in every stage of the value company-wide processes and decision-making. To achieve chain. We understand this to be a key element of acting with this, both departments regularly assess opportunities for integrity and responsible business conduct. improvement in accordance with international standards. The Supply Chain, People and Organization, Environment, The way we function in our own operations, in our supply Health and Safety, Corporate Security, and Siemens Real chain, and in our downstream value chain may affect the Estate departments are responsible for embedding and economic development and advancement of society. maintaining human rights-related due diligence require- Siemens takes a holistic approach to respecting human ments within their processes. This responsibility also includes rights. We strive to continuously assess actual and potential the conceptualization and delivery of training and continuous adverse impacts on people and the environment and inte- learning formats. grate our findings in our company’s policies, procedures, and due diligence practices. Therefore, our commitment to Commitment to human rights and international respecting human rights is an integral part of our manage- standards ment systems and is embedded across company functions The principle of respect for human rights is firmly grounded and business operations globally. in the United Nations 2030 Agenda for Sustainable Develop- ment. Siemens believes that the 17 Sustainability Develop- Management and responsibilities ment Goals (SDGs) can only be fully achieved if potentially The Siemens Managing Board and the Siemens Sustainability negative impacts within the value chains are examined in Board (SSB) monitor Siemens’ actions in relation to human detail and effective action is taken to counter them. In these rights and our commitment to implementing the United efforts, we are guided by international standards that help Nations Guiding Principles on Business and Human Rights. companies define their approaches to human rights and These bodies review our progress and our challenges and continuously optimize them. These standards include the identify opportunities for improvement. United Nations Guiding Principles on Business and Human Rights and the Guidelines for Multinational Enterprises published by the Organization for Economic Cooperation and Development (OECD). They highlight the importance of due diligence systems that proactively identify, assess, and mitigate potential adverse human rights impacts. SIEMENS SUSTAINABILITY REPORT 2023 40
3.2 Human rights The Business Conduct Guidelines them responsibly to the extent that they can be influenced Our commitment to respecting human rights is anchored in our by the company. Siemens Business Conduct Guidelines (BCGs) COMPLIANCE AND ETHICS. They set out the fundamental principles and rules Actions and results that apply to our actions relating to human rights in our company and with our customers, external partners, and the Human rights in our own workforce public. The BCGs are binding for all employees worldwide. In The BCGs are an integral element of all employment con- addition, the Siemens Group Code of Conduct for Suppliers tracts. BUSINESS CONDUCT GUIDELINES. Siemens does not tolerate and Third-Party Intermediaries (Supplier Code of Conduct), discrimination, sexual harassment, or any other form of which is mainly focused on rules of conduct relating to personal attack on individuals or groups. In addition, the human rights, applies to the company’s suppliers, third-party principles of equal opportunity and equal treatment apply intermediaries, and business partners. without restriction. We foster diversity, equal opportunity, and inclusion in the interest of creating an open and Beyond that, Siemens has reaffirmed its commitment to welcoming work environment. DIVERSITY, EQUITY & INCLUSION workers’ fundamental labor rights in an International Frame- work Agreement signed with trade unions and employee Human rights in the supply chain representatives in 2012. This specifically includes the right One of our guiding principles is to maintain sustainable to collective bargaining and freedom of association. supply chains. Siemens’ suppliers commit to upholding the Supplier Code of Conduct, which affirms the fundamental Targets human rights of our suppliers’ employees. In fiscal 2023, we Our DEGREE sustainability framework consists of a number modified the Supplier Code of Conduct to include additional of fields of actions that address the multifaceted issue of requirements from new regulations and prepared its rollout human rights in the areas of G (Governance), E (Ethics), readiness for fiscal 2024. E (Employability), and E (Equity).1 The Code encompasses but is not limited to the following Regarding our approach to respecting human rights, we have human rights topics: established measures that encompass our own operations, our supply chain, and customer-related business activities. → Fair work conditions (pay, work hours, vacations) → Right to freedom of association Continuous improvement measures → Responsibility for health and safety standards We view fulfilling our responsibility to human rights as a → Prohibition of discrimination continuous improvement journey. In fiscal 2023, Siemens → Prohibition of forced labor and child labor modified its policies, processes, and methods to align with → Provision of anonymous grievance mechanisms regulatory requirements like the LkSG. We have established a cross-functional Committee with the aim of ensuring gov- Siemens takes a risk-based approach to identifying potential ernance oversight and decision-making on future measures risks in its supply chain. This includes Corporate Responsibility related to the LkSG. Self-Assessments (CRSAs) by suppliers and external sustain- ability audits. When deviations from the Supplier Code of In consideration of future regulatory developments and Conduct and violations of the human rights principles are - increased stakeholder expectations, we strive to continu identified, we work with suppliers to clarify how lasting ously modify the company’s risk management programs and corrective actions can be taken within a reasonable time- procedures across our value chain. frame. SUSTAINABLE SUPPLY CHAIN PRACTICES We aim to systematically identify and assess the risk of In the case of severe violations, we reserve the right to human rights violations at an early stage and to mitigate terminate the supplier relationship. MATERIAL HUMAN RIGHTS RISK ISSUES IN OUR VALUE CHAIN 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 41
3.2 Human rights Siemens’ human rights framework I. Periodic human rights impact review process Periodic review How are the material human right aspects and human rights risk issues for Siemens periodically identified? II. Transactional human rights due diligence process Risk identification Risk assessment Risk management How are risks in projects How are risks (incl. monitoring) identified? assessed? What are effective mitigation measures? Grievance mechanism How are effective complaint channels provided? III. Overarching pillars Awareness How is awareness of human rights issues ensured at Siemens? Policy and circulars How is Siemens’ commitment to respecting human rights embedded in policies and circulars? Training and competence building How do you develop target group-specific human rights training for Siemens? Reporting and external communications How are human rights activities and issues disclosed? Stakeholder engagement How do you build an open dialog with external and internal stakeholders? Risk identification How are risks along the value chain identified? Risk management What are effective prevention and mitigation measures? Human rights in customer-related business We are strengthening our governance with regards to envi- Siemens is committed to operationalizing systematic and ronmental, social, and human rights due diligence in preventive human rights due diligence along its value chain. customer-related business through targeted capacity-building, This is also applicable to downstream due diligence with a continuous due diligence tool-related enhancements (in our focus on customer-related business. ESG Risk Due Diligence Tool, the ESG Radar), expanding relevant risk indicators for risk oversight creation, embedding environmental and social risk considerations in the company’s risk management processes, and strengthening risk mitigation pathways with the support of external human rights expertise. The early detection of environmental We are also enhancing our control mechanisms with a and social risks plays a key role primary focus on our business sales department and contin- in human rights due diligence. uously reassessing material areas of adverse impacts – for example, those resulting from certain business fields – so that they can be embedded in our due diligence systems. SIEMENS SUSTAINABILITY REPORT 2023 42
3.2 Human rights These initiatives have been incorporated into our internal Compliance, and Environment, Health, and Safety (EHS). In guidelines and policies. They have also led to the creation of fiscal 2023, we revised the mandatory BCG training for our customized roles and responsibilities within our key functions, people and included specifics on fundamental rights at work. our businesses, and our regions. As part of our commitment to responsible business conduct, we have piloted the process External and internal expert dialogs and regular knowledge- of environmental, social, and human rights deep-dive due sharing are also conducted in the area of environmental diligence that will be conducted annually for established key and social risks: for example, on responsible business due business partners and strategic partners. This process has diligence in conflict regions. been piloted in fiscal 2023 and will become mandatory beginning in fiscal 2024. Grievance mechanism and channels Siemens offers protected channels for reporting violations of Material human rights risks that we have identified in our external and internal rules to all our people and external value chain are summarized in the table below. third parties. The reports generated by these channels are forwarded to our Compliance organization and followed up. The same channels can also be used to report human rights Material human rights risk issues in violations to the company. COMPLIANCE AND ETHICS our value chain Networks and coalitions Human rights risk issues in the supply chain We maintain a regular dialog with our peers, and we aim to › Fair working conditions › Freedom of assembly establish mutual trust and drive a more in-depth discussion › Discrimination on human rights. This kind of dialog focuses on discussing › Forced labor › Child labor challenges and solutions, addressing areas of improvement › Health and safety with regard to responsible business conduct practices, and Human rights risk issues in own workforce identifying potential areas to join forces. We firmly believe › Fair working conditions that we can achieve faster, more impactful progress through › Freedom of association and collective bargaining › Discrimination collective action compared to acting alone. › Forced labor › Child labor › Health and safety Siemens is a member of the Global Business Initiative on Human rights risk issues in the case of Human Rights (GBI). This initiative is one of the leading business decisions by customers international network initiatives in the field of human rights. 1 › Business-specific environmental and social risks Siemens is also represented in the UN Global Compact Net- › Country-specific risks work’s European Business and Human Rights Peer Learning › Impacts on local communities (e.g., Indigenous population, 2 ethnic or religious minorities) Group. In Germany, Siemens is involved in econsense › Fair working conditions working groups in the areas of business and human rights › Modern slavery and human rights in the supply chain. › Discrimination › Occupied territories 1 Including in the areas of coal, oil, and gas and mining, for example. In addition to regular dialogs with peers and think tanks, we engage with external human rights advisors to derive responsible risk mitigation pathways, training and capacity- Training and skill building building methods, and ways to strengthen due diligence Our continuous skill building activities are geared toward practices. In addition, we engage with investors, sharehold- specific target groups. Siemens provides interactive training ers, customers, journalists, rating agencies, and NGOs. formats for employees, suppliers, and global and regional salespeople and for specific functions like Sustainability, 2 econsense is a forum for the sustainable development of German business. SIEMENS SUSTAINABILITY REPORT 2023 43
3.3 Sustainable supply chain practices 3.3 Sustainable supply chain practices – Based on a holistic “Prevent – Detect – Respond” Our governance and policies for strategic approach procurement – Evaluation of suppliers based on selfassessments The core objectives of the strategic procurement processes are and onsite audits to sustain the company’s success by making a consistently high – Focus on human rights: climate protection and contribution to our earnings from purchases of materials and responsible sourcing of minerals services, to assert high quality standards along the entire supply chain, to identify and exploit opportunities to create value through procurement competence, and to ensure Management approach compliance and sustainability. Sustainability is our guiding Siemens procures materials and services from all over the principle. The sustainability initiatives we take are an essential world. We work with approximately 67,700 suppliers in aspect of the successful implementation of our programs. Our around 140 countries. In fiscal 2023, Siemens purchased understanding of sustainability in the supply chain is based on goods and services valued at just under €37 billion, the our company values to be responsible, excellent and innova- equivalent of about half of our total revenue. Due to the tive. As a Support Function in the Service and Governance varying conditions in these countries, ensuring strict compli- units, Siemens Supply Chain Management has the process and ance with our globally applicable sustainability requirements regulation responsibilities for procurement principles. poses a significant challenge for our daily procurement practices. Our mandated purchasing units take general responsibility for implementing and complying with Siemens’ procurement Our purchasing activities have impacts on our suppliers, principles. Therefore, only mandated purchasing units are local communities, and the environment in our procurement authorized to conclude contracts with suppliers. markets. As such, we monitor and engage with our suppliers to drive and support their efforts to enhance sustainability We have developed policies that describe our standards for practices. Our supplier relationships provide us with the suppliers in terms of their social, environmental, and ethical opportunity to make contributions to securing jobs and performance. They lay the foundation for guiding supplier promoting adherence to both international work and envi- selection, evaluation, and ongoing engagement. ronmental standards. Using our holistic sustainable supply chain management approach, we work to prevent situations The Siemens Code of Conduct for Suppliers and Third-Party where suppliers may be tempted to compromise the well- Intermediaries (Supplier Code of Conduct) is designed to being of their workforce or violate environmental regulations. - cover our sustainability requirements. Among other princi ples, it is based on the principles outlined in the United Nations Global Compact (UNGC) and our Business Conduct Guidelines (BCGs), which sets out the basic principles of sustainability for our suppliers. Siemens purchased goods and services worth €37 billion from The Supplier Code of Conduct requires suppliers to adhere to about 140 countries standards on: → Fundamental rights of employees, including a protected grievance mechanism for employees → Health, safety, and environmental protection SIEMENS SUSTAINABILITY REPORT 2023 44
3.3 Sustainable supply chain practices → Zero-tolerance strategy to prevent corruption and bribery The Decarbonization field of action commits us to reducing → Preventing purchases of conflict minerals produced in upstream emissions in our supply chain. As part of this certain countries that yield profits for armed groups, in effort, Siemens has set a target to reduce CO e emissions 2 particular generated in our supply chain by 20% by 2030 compared to → Preventing money-laundering and terrorist financing 2020. We also aim to achieve Net Zero emissions in our → Export control and customs supply chain by 2050.1 → Data protection → Compelling their suppliers to comply with the principles of our Supplier Code of Conduct D Decarbonization Sustainable business practices are an integral part of our Progress on DEGREE ambition #2: Procurement Principles at Siemens. For instance, it requires Net Zero supply chain by 2050, the Supplier Code of Conduct to be incorporated into all 20% emissions reduction by 2030 new and extended procurement contracts. Procurement is responsible for ensuring that suppliers accept the Supplier In fiscal 2023, supply chain emissions decreased by Code of Conduct and do not depart from it. 1% compared to the baseline year 2020, reaching 8,029 kt CO e, with the carbon reduction measures 2 Targets implemented by our suppliers being reflected in this We expect all suppliers to commit to and follow our Supplier number. If the increase in purchasing volume of Code of Conduct. This is also reflected in our DEGREE around 33% is included, CO2e emissions were however sustainability framework as a part of the Governance field of reduced even further in relation to the purchasing action.1 volume. Progress FY 20: 8,098 kt CO e – 1% – 20% by 2030 G Governance 2 – 100% by 2050 Progress on DEGREE ambition #4: Siemens without SHS ESG-secured supply chain based on supplier commitment to our Supplier Code of Conduct Actions and results We expect our suppliers not only to contribute to the economic success of our company but also to ensure Supplier management follows clear criteria strict compliance with our sustainability require- At Siemens, supply chain sustainability is supported by a ments, which are summarized in the Siemens Supplier holistic Prevent – Detect – Respond approach with the aim of Code of Conduct. The obligation of suppliers to effectively mitigating risks. observe our Code of Conduct is an essential founda- tion for fulfilling our governance ambitions bundled Our aim is to raise supplier awareness of the importance of under “G” in our DEGREE sustainability framework. integrating our values and meeting sustainability require- ments. Siemens also provides web-based training on Progress sustainability and human rights in the supply chain for all Suppliers committed our suppliers. Siemens without SHS 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 45
3.3 Sustainable supply chain practices The supplier management process at Siemens incorporates Self-assessments and site audits as control strict criteria for supplier selection and qualification. When mechanisms engaging with new suppliers, we categorize and if necessary Based on the risk categories, we conduct appropriate evalu- proactively address potential sustainability risks based on ations of suppliers in accordance with our risk assessment. these criteria. This may apply to suppliers exhibiting the These reviews range from supplier self-assessments of their following risk characteristics: own sustainability practices to on-site sustainability audits conducted by external auditors. → Locations in high-risk countries → Products subject to the requirements for the responsible Corporate Responsibility SelfAssessments sourcing of minerals CRSAs are an integral part of our supplier qualification pro- → Products and services with large carbon footprints cess. They are subject to regular review and updates to align them with evolving standards and regulations. As part of this To identify these risk characteristics, we categorize our process, potential suppliers undergo a mandatory qualifica- suppliers as follows: tion procedure, while existing suppliers are re-assessed every three years. → Purchased material and service fields: We classify suppliers based on the specific types of materials and services they The number of completed CRSAs increased by about 4% from provide. This allows us to tailor our measures to individual 4,912 in fiscal 2022 to 5,096 in fiscal 2023. The number of suppliers: for example, incorporating specific contract agreed-upon improvement measures increased in fiscal 2023 clauses, requesting proof of compliance, or flagging them to 5,493, as compared to the 3,109 reported in fiscal 2022. for on-site audits. → Country risk levels: Suppliers are assigned to risk levels based on country-specific sustainability indicators in Corporate Responsibility Self-Assessments (CRSA)¹ areas like legal compliance, corruption and bribery, Fiscal year human rights in the workplace, and child labor. (Number) 2023 2022 Europe, Middle East, Africa, C.I.S.² 1,122 1,147 We centralize sustainability-related data about our suppliers Americas 767 654 on the SCM Sustainability Platform, which enables us to Asia, Australia 3,207 3,111 gather information from diverse internal and external sources. Total 5,096 4,912 This includes data on carbon reduction initiatives, corporate responsibility self-assessments (CRSA), on-site audit results, Agreed upon improvement³ 2023 2022 and risks associated with conflict minerals. All employees in Legal Compliance/prohibition of corruption Siemens’ purchasing departments can access this integrated and bribery 1,698 915 tool. Respect for the basic human rights of employees 1,194 564 Information is evaluated in the platform using a point system Prohibition of child labor 168 80 and is presented visually. This uniform assessment approach Health and safety of employees 1,103 879 enables sustainability to serve as a consistent evaluation Environmental protection 1,116 546 factor throughout Siemens. It supports and complements Supply chain 214 125 local purchasing decisions with globally available supplier Total 5,493 3,109 sustainability information. 1 Self-assessments completed mainly by suppliers from non-OECD countries with a purchasing volume of > €50,000 per year. Questionnaires that were initiated, completed, and concluded in the reporting period. 2 Commonwealth of Independent States. 3 Improvement measures agreed on with suppliers relate either to actual deviations from the Supplier Code of Conduct, structural improvements in management systems, or a lack of specific processes and guidelines implemented by the supplier. SIEMENS SUSTAINABILITY REPORT 2023 46
3.3 Sustainable supply chain practices External sustainability audits series of improvement measures with suppliers. In fiscal From our perspective, external sustainability audits are the 2023, improvement measures were agreed on to address a most effective means of evaluating our suppliers’ sustain- variety of potential social impacts. These impacts include ability performance. These audits are conducted by our human rights and the health and safety of employees as well external audit service provider and serve as a control as environmental impacts like a lack of certification and mechanism for suppliers identified as high-risk. failure to reduce CO e emissions. 2 During this process, we remain committed to our supplier External sustainability audits (ESA) partnerships, and we work to help them improve. However, Fiscal year if problems persist, or the supplier demonstrates a lack of (Number) 2023 2022 willingness to take the necessary corrective actions, we Europe, Middle East, Africa, C.I.S.¹ 97 113 remove them from our supplier list. Americas 51 50 Asia, Australia 333 263 Suppliers can also be blocked in local systems around the Total 2 481 426 world via our IT-based Global Master Data Management process for suppliers. Fiscal year Agreed upon improvement 3 2023 2022 Sustainability topics with a specific need for action Legal Compliance/prohibition of corruption Two focus topics play an important role in our sustainable and bribery 1,308 1,101 supply chain practices, given their strong connection to Respect for the basic human rights of other sustainability initiatives at Siemens. These include the employees 3,977 2,717 responsible sourcing of minerals and reducing CO e emis- Prohibition of child labor 106 82 2 Health and safety of employees 3,511 2,802 sions in our supply chain. Environmental protection 285 271 Responsible sourcing of minerals Supply chain 334 302 Siemens is working hard to prevent the use of minerals from Total 2 9,521 7,275 areas of conflict, and high-risk areas in the supply chain that 1 Commonwealth of Independent States. are covered by the risk definition set out in Annex 2 of the 2 Includes audits conducted virtually as well as audits carried out by third parties at our suppliers based on the same standards, which are accepted by Siemens. OECD’s Due Diligence Guidance for Responsible Supply 3 Improvement measures agreed on with suppliers are based on actual deviations from the Supplier Code of Conduct, structural improvements in management systems, or a Chains of Minerals from Conflict-Affected and High-Risk lack of specific processes and guidelines implemented by the supplier. Areas. To support the responsible sourcing of minerals, we We slightly increased the number of external sustainability developed the Responsible Minerals Sourcing Policy, which audits compared to fiscal 2022. In fiscal 2023, the figure is integrated into our purchasing process. This policy sets a rose by about 13% to 481 audits. This figure includes uniform standard for supply chain management across the 13 audits that we conducted virtually, where the auditor company. Our approach aligns with the risk-based require- inspected the suppliers’ facilities by remote video. Also ments of the OECD’s Due Diligence Guidance. included are four audits verified by our audit service provider that were conducted on behalf of third parties at companies To determine the use, sources, and origins of these minerals that also have supplier relationships with Siemens. These in our supply chains, we investigate the smelting plants audit reports fully comply with Siemens’ requirements and involved. Siemens is a member of the Responsible Minerals were provided to us with the approval of the audited companies. Initiative (RMI), an organization of more than 400 industrial companies that provide auditing programs for smelting. We We also may repeat audits or conduct follow-up audits use the Conflict Minerals Reporting Template (CMRT) published through our external audit service provider. Our responsible by the RMI to survey our more than 2,300 relevant suppliers purchasing departments at Siemens can also agree on a and elicit the information we need about smelters in our SIEMENS SUSTAINABILITY REPORT 2023 47
3.3 Sustainable supply chain practices supply chain that are associated with the production of tin, Supplier+s is based on the following methodology: tantalum, tungsten, and gold (3TG). We share our findings on identified smelters with our RMI partners. The initiative → Suppliers are categorized into product or service categories then reviews the smelters’ certification. In this process, and country of origin and are then assigned an industry Siemens supports the smelters as they move toward the final average for CO2e emissions based on the calculation audit and certification stage. Individual results are model developed by our external partner. communicated on the RMI website WWW.RESPONSIBLE → We ask our suppliers to provide information via supplier+s MINERALSINITIATIVE.ORG. about their implemented CO e reduction measures and 2 their overall CO2e management. Based on their responses, Siemens extends its risk assessment system to evaluate we calculate the resulting emissions reduction and the minerals beyond the 3TG grouping using the risk definitions remaining carbon footprint of the supplier. provided by the European Commission for “armed conflict,” “areas witnessing weak or non-existent governance and Positive feedback on our Carbon Reduction@Suppliers pro- security,” and “[areas with] widespread and systematic vio- gram encouraged us to open the formerly internal tool (CWA lations of international law, including human rights abuses.” Carbon Web Assessment) to external use by other companies Cobalt and mica are two minerals that have been included in in the form of the supplier+s tool. Detailed information on Siemens’ due diligence process. This inclusion follows the supplier+s is provided at WWW.SIEMENS.COM/CARBONSUPPLIERS. RMI’s development of an auditing standard and reporting specifications – the Extended Minerals Reporting Template 4,324 suppliers – who stand for 43% of our Scope 3 upstream (EMRT), designed specifically for cobalt and mica – in addition (tier 1) footprint – have provided us with primary data by to the existing specifications for 3TG minerals. Siemens taking part in our Carbon Reduction@Suppliers program. conducts supplier audits for cobalt and mica, with a particular 2,038 of them have shared their decarbonization plans with focus on battery manufacturers. us by joining the supplier+s platform, which was launched in fiscal 2023. Based on the responses we received and calcu- More information and the text of our Responsible Minerals lated, there was an average reduction of 9% in the previously Sourcing Policy can be found at WWW.SIEMENS.COM/ calculated emissions for these suppliers, equivalent to a RESPONSIBLEMINERALS. decrease of 464,000 metric tons of CO2e. This indicates that our suppliers have been more supportive in reducing our Our Carbon Reduction@Suppliers program carbon footprint in the supply chain compared to the previous In our Carbon Reduction@Suppliers program, we collaborate year’s reduction of 359,000 metric tons of CO e. This effort 2 with an external partner to analyze the economic data and helped reduce our Siemens Scope 3 upstream footprint model the carbon footprint of each of our suppliers. To against our baseline year 2020 by 0.9% and against the 1 facilitate this process, we utilize a web-based tool called previous year 2022 by 3.3%. supplier+s that highlights the main sources of suppliers’ CO2e emissions and provides guidance on how to reduce them. Once suppliers have completed the learning phase, they provide us with their primary data through the tool. 1 Siemens without SHS SIEMENS SUSTAINABILITY REPORT 2023 48
3.4 Cybersecurity and data privacy 3.4 Cybersecurity and data privacy – Leading role in cybersecurity means that they can be more exposed to cyberthreats. – Global expertise and governance structures Regulatory- and customer-specific security requirements are increasing, and Siemens needs to address them. We believe that data protection is an integral part of respon- Siemens takes a holistic approach to addressing cybersecurity sible business conduct. Cybersecurity and data privacy are in the best interest of our customers. It is essential to the key success factors for Siemens, and for digitalization in comprehensive protection of both industry and society from general. While data privacy practices cover personal data internal and external cyberattacks. from a legal perspective, cybersecurity focuses on protecting products, solutions, and services, information technology Our cybersecurity governance and policies (IT), and operational technology (OT). Our primary objective The Cybersecurity Board (CSB), chaired by the Global Chief is to maintain strong data protection and a high level of Cybersecurity Officer, is responsible for the implementation cybersecurity for the company and all our stakeholders. and coordination of cybersecurity throughout Siemens. The member of the Siemens AG Managing Board responsible for cybersecurity is part of the CSB, as are the Chief Cybersecurity Cybersecurity Officers of each of Siemens’ businesses. Management approach Given the importance of cybersecurity for the senior man- agement, the Global Chief Cybersecurity Officer reports Cybersecurity is rapidly growing in importance directly to the responsible member of the Managing Board, Digital systems have become indispensable in many sectors quarterly to the entire Managing Board, and annually to the of the economy: for instance, in hospitals, factories, smart Supervisory Board. buildings, e-mobility, and connected mobility. Wherever sensitive data are stored, potential security threats are never The CSB provides a collaborative platform for advancing far away. As a result, cybersecurity is one of today’s most strategic initiatives that address security issues and establish relevant issues, not just for companies but for society as a cybersecurity requirements and recommendations through- whole. Its relevance is only expected to increase, with cyber- out Siemens and its affiliated companies. In addition, a security becoming crucial for helping businesses safeguard collaboration agreement enables the Chief Cybersecurity critical infrastructures, protect sensitive information, and Officer at Siemens Healthineers to participate in the CSB. ensure business continuity. Having recognized early on that cybersecurity is an integral As one of Siemens’ strategic goals, the digital transformation part of the digital revolution, Siemens built a cybersecurity will only succeed if Siemens can be certain that connected organization both at the corporate level and in the busi- systems and the data contained within them will remain nesses and countries. All information security rules and secure. That is why Siemens places the highest priority on regulations at Siemens are documented and detailed in the cybersecurity. Cybersecurity Policy Framework. The framework outlines the roles and responsibilities and the rules and practices that Siemens’ products, solutions, and services contain a signifi- offer a guide for how Siemens and its business units protect cant amount of software and IT-related components and are information and business processes. often used in the context of critical infrastructures – which SIEMENS SUSTAINABILITY REPORT 2023 49
3.4 Cybersecurity and data privacy The Information Security Policies define the mandatory high- Siemens is one of the industry leaders in cybersecurity. Our level requirements and general rules for information security. cybersecurity performance is highly regarded, as evidenced The policies serve as blueprints for establishing and managing by our sustainability ratings and rankings. For example, the information security at Siemens. The requirements are based Dow Jones Sustainability Index (DJSI) has ranked Siemens as on the domains defined in Annex A of the international a leading company in cybersecurity relative to our peers. standard ISO/IEC 27001. Siemens’ cybersecurity governance has been ISO 27001-certified since November 2017. Siemens products, solutions, and services Siemens is implementing a company-wide Product and Our commitment to cybersecurity is further reinforced by Solution Security (PSS) initiative. The objectives of the initia- Siemens’ participation in founding the “Charter of Trust”1 tive are to formulate PSS recommendations and binding initiative to protect data and promote cybersecurity in a requirements and to apply and continuously improve them trustworthy digital world. in all the businesses. Targets The PSS initiative is managed by the PSS Maturity model, a Our DEGREE sustainability framework addresses the topic of proprietary, standards-based model. It shows the extent to cybersecurity under “E” for Ethics. We are proactively working which the established business and design processes are toward safeguarding and promoting cybersecurity at being expanded and constantly improved in terms of their Siemens. To achieve this, Siemens employees need to - security activities and requirements. Evaluations are per complete a web-based training on cybersecurity on an formed annually at the organizational level, the results are annual basis. discussed with each unit’s management team, and corre- sponding improvement programs are initiated. Actions and results The Corporate Cybersecurity department and the cybersecurity To further strengthen Siemens’ cybersecurity business, our departments in our businesses manage the following issues businesses offer selected high-maturity security services to and activities: external customers in collaboration with the Corporate Cybersecurity department. → Developing and implementing proactive cybersecurity strategies adapted to the business Continuing education and young talent → Proactive and reactive measures for product and solution development security and to safeguard information technology and In fiscal 2023, 95% of our employees completed the manda- operational technology tory cybersecurity awareness training. The training cycle → Risk management framework as a part of the Enterprise began in January 2023 and ran until the end of September Risk Management system with clearly defined roles 2023. → Monitoring and reporting on the status and progress of cybersecurity measures and checks In addition, we offer the training “Driver’s License” to a target → Cybersecurity-readiness and second-line-of-defense2 group of approximately 8,000 employees who are trained to → Developing mandatory global cybersecurity awareness apply all of Siemens’ IT/OT security guidelines. All of our measures, annual IT cybersecurity global awareness train- employees also have access to continually updated training ings, and specific cybersecurity expertise courses and learning opportunities on product and solution security through My Learning World, the Siemens global learning platform. 1 https://www.charteroftrust.com/. 2 https://www.siemens.com/global/en/company/digital-transformation/cybersecurity/ governance.html#SecondLineofDefense. SIEMENS SUSTAINABILITY REPORT 2023 50
3.4 Cybersecurity and data privacy Due to the growing demand for cybersecurity experts, we Proactive approach to handling threats and launched the CyberMinds Academy in 2022. This is a world- vulnerabilities, reactive approach to incidents 3 wide one-year program that combines learning modules Siemens CERT and Siemens ProductCERT are dedicated with professional experience designed to develop young teams of experienced security experts who can provide an talents into cybersecurity specialists. immediate response to potential security threats and incidents affecting Siemens’ products, solutions, services, or Cybersecurity insurance and risk analysis infrastructure. To protect the company and reduce the potential financial impact of cyber incidents, we have explored risk transfer Siemens CERT secures our internal infrastructure, continu- options in detail. Following an international call for insurance ously monitors cyberthreats, and evaluates their potential bids, the currently insurable cyber risks were transferred to a impact on the company. When security incidents occur, our group of insurers in fiscal 2021. The coverage emphasizes experts analyze the causes and initiate countermeasures to losses caused by incidents such like as breaches of information minimize harmful impacts, and the appropriate stakeholder security and data privacy within Siemens or by third parties. groups (and the authorities, if required) are informed. The scope and limits of the risk transfer to the insurance market are reviewed annually. Under the Special Vulnerability Handling program, CERT also takes proactive steps to support a consistently high level of Siemens’ Cybersecurity department has also acted to mitigate protection by addressing potential vulnerabilities before any risk even more. For example: damage occurs. → As industrial environments become increasingly digi- The ProductCERT team addresses security issues that affect talized, the share of software grows significantly, as does Siemens products and solutions. It is the central point of the number of associated vulnerabilities. To mitigate contact for reports of security gaps in Siemens products. As these risks, Siemens is automating the collection and a key partner of the Siemens business units, the ProductCERT distribution of information about vulnerabilities with the team supports the entire process – from identification to goal of offering end-to-end security for our customers. resolution of vulnerabilities – and provides crucial informa- These efforts include our collaboration with the Common tion to customers. Updated Siemens Security Advisories are Security Advisory Framework (CSAF) 2.0 from the OASIS published on a monthly basis to ensure our level of transpar- Consortium ency. With the CSAF format, we are among the leading → Since 2022, Siemens has been working intensively to industrial manufacturers for the automated distribution of encrypt the most important data in the post-quantum vulnerability information. era. As part of this work, the previous crypto algorithms have had be completely replaced with new methods. In addition, our Vilocify Vulnerability Services4 continually Because it is our expectation that crypto algorithms will search for information about vulnerabilities in software and need to be updated much more frequently in the future, hardware components used in Siemens’ products and infra- the project also addresses the encryption lifecycle in the structures. As a final step, product security must be guaranteed form of an expiration date for the classification of docu- by means of verification tests. To this end, we have developed ments. the Siemens Extensible Security Testing Application (SiESTA5), → Our Zero Trust initiative, whose motto is “Never trust, which enables the dedicated identification of vulnerabilities always verify,” has been extended to fiscal 2024. The in infrastructures, products, and solutions. objective is to check every internal and external connection between IT/OT devices and products in real time and only permit trustworthy communications. 3 Computer Emergency Response Team. 4 https://www.siemens.com/global/en/products/services/digital-enterprise-services/ industrial-security-services/vilocify-vulnerability-services.html. 5 https://new.siemens.com/global/en/products/services/cybersecurity/siesta.html. SIEMENS SUSTAINABILITY REPORT 2023 51
3.4 Cybersecurity and data privacy Artificial intelligence in cybersecurity Our data privacy governance and policies Artificial intelligence (AI) serves a crucial function in Siemens has established a global Data Privacy organization Siemens’ cybersecurity endeavors. The Siemens AI-based that follows Siemens’ business structure with data privacy implementation dynamically identifies security threats by responsibility residing with each business unit and country. detecting anomalies in our network and systems. This action Overall responsibility lies with the Chief Data Privacy Officer taken against security breaches helps mitigate potential harm. who reports directly to the CEO of Siemens AG, on an annual and ad hoc basis. The Chief Data Privacy Officer also issues AI also boosts the effectiveness of our cybersecurity proce- the internal Siemens Data Privacy Policies. Our Corporate dures by automating day-to-day tasks. This automation data privacy team manages and oversees regulations, enables our security teams to concentrate on more intricate policies, and standards for data privacy in conjunction with and pressing issues. Data Privacy Managers in the business units and countries. Despite the advantages, it is important to note that AI can Our internal Compliance Policy requires every Siemens also be used as a tool of cyber attackers by enhancing the employee to collect and process personal data confidentially, complexity of their malicious actions. The attackers might only for legitimate and predetermined purposes, and in a harness AI to automate their attacks, evade conventional transparent manner. This requirement is also reflected in our security systems, or even simulate human behavior to escape BCGs, which contain a section on data privacy requiring detection. every employee to comply with the data protection require- ments of the laws and regulations within the legal systems To be well-prepared for these scenarios, we’ve established where they are operating, as well as with Siemens’ policies. stringent security protocols aimed at ensuring a safe and In addition, the Siemens Compliance Handbook contains responsible application of AI. Our approach helps maintain requirements for processing personal data, for documentation, the integrity of our systems and shields us from potential and for reporting incidents. risks. Transfers of personal data within the Group are covered by Through meticulous implementation and ongoing surveil- binding internal data protection regulations: the Siemens lance, we intend to minimize these risks and amplify the Binding Corporate Rules on Data Protection (BCR). With the benefits of AI. BCR, Siemens Group companies around the world have an obligation to process personal data from data subjects in the European Union in accordance with European data protection Data privacy standards, even when the recipient of the personal data is located outside the European Economic Area (EEA). Management approach Targets Protection of personal data in the era of Our DEGREE sustainability framework prioritizes the careful digitalization handling of data under “E” for Ethics. Our overarching goal is Siemens believes that protecting the personal data of our a zero-tolerance approach to breaches of applicable laws and stakeholders is our ethical responsibility. As digitalization our own internal guidelines. We are proactively working and new technologies like artificial intelligence advance, toward achieving this goal by implementing our data privacy data protection becomes increasingly important for our management system. stakeholders and for Siemens’ success. That is why processing personal data in compliance with applicable data protection laws, including the General Data Protection Regulation (GDPR), is of utmost importance to Siemens. SIEMENS SUSTAINABILITY REPORT 2023 52
3.4 Cybersecurity and data privacy Actions and results Assessing and fostering our privacy by design processes was a key focus area in fiscal 2023. Privacy by design at Siemens Siemens’ data privacy management system is supported by our Privacy by Design Toolkit, a software To put our data privacy measures into action throughout the solution that helps process owners incorporate data privacy Group, Siemens has made them an integral part of our com- in all the stages of product development. One of the Toolkit pliance system. Our data privacy management system was modules includes data privacy questions that must be established to ensure that all our business activities comply answered before the launch of a planned product or service. with data privacy requirements and the applicable laws. The The toolkit is intended to integrate data privacy from the system specifies policies, procedures, and controls required very beginning of a product’s development. We also rolled by the GDPR, including data subject rights, a privacy incident out a new privacy by design awareness training program for process, mandatory trainings, audits, and keeping a record product developers in a virtual classroom, learn about and of processing activities. discuss data privacy challenges drawn from real business examples. As part of our global audit plan, selected Siemens Transparency and rights of data subjects products were also included in our data privacy audits. Our websites, digital products, and solutions include data privacy policy statements that inform users about processing Data protection at our suppliers and partners steps and data subject rights. When we process personal Data protection requirements are consistently observed and data on behalf of customers, we do so under contractual implemented within the Group and by our external suppliers regulations that govern how the data is handled, including and partners. Suppliers and partners undergo a preliminary the transfer of customer data to third parties. data protection audit and are required by contract to adhere to data protection standards. We want our people to be committed to data protection and regular training Documentation Siemens’ employees receive regular training on how to Siemens documents the purpose, risk, and security standards handle personal data that is tailored to specific functions applied to all the Group’s processing activities in a central and target groups. For this purpose, we developed a web- database: the Register of Processing Activities. This register based data protection training program consisting of an allows us to evaluate whether data protection law permits a “Essentials” level that is mandatory for all employees who given processing activity and to document compliance with process personal data as part of their job and specialized the applicable laws. “Nuggets” designed for specific fields and target groups. Controls All data protection requirements and measures at Siemens are subject to regular controls. Siemens conducts risk-based data protection audits of its processing activities, products, Data privacy management system and services. to ensure compliance with data protection requirements in all business processes Treatment of data protection violations In the event of a potential data protection violation, a rapid Data protection in our products and solutions response is essential to ensuring that the violation is swiftly (privacy by design) stopped and corrected. To facilitate this, Siemens has estab- Siemens wants to ensure that its products and solutions can be lished a global Data Privacy Incident Process that uses central used in compliance with all relevant data protection rules. At reporting channels and aims to immediately inform all Siemens, privacy by design means that compliance with the internal and external stakeholders (including the data law, transparency, informational self-determination, data subjects and regulatory authorities). minimization, and data security are already applied when products and services are developed. Therefore, privacy by design is integrated into our product development processes. SIEMENS SUSTAINABILITY REPORT 2023 53
Pages 54 – 80 Environment Conservation of nature and resources Decarbonization Resource efficiency support the 1.5°C target to fight global warming achieve circularity and dematerialization 1 1 Our key ambitions Our key ambitions → Net Zero operations by 2030, with 55% reduction → Robust Eco Design approach to be implemented for by 2025 and 90% by 2030 100% of relevant Siemens product families by 2030 → Net Zero supply chain by 2050, 20% emissions → Natural resource decoupling through increased reduction by 2030 purchase of secondary materials for metals and resins Additional highlights → Circularity through waste-to-landfill reduction of 2 → Part of the EP100, EV100, and RE100 initiative 50% by 2025 and toward zero landfill waste by → Portfolio to support customers in climate protection 2030 → Disclosure of Taxonomy-eligible and Taxonomy- aligned revenues, capital expenditures, and operating Additional highlights expenditures → Assessment of our biodiversity footprint as founda- tion for further improvements → Improvements to energy efficiency as part of our Eco Efficiency @ Siemens target → Implementation of water strategy almost completed 1 Siemens without SHS. 2 Improving energy productivity (EP), use of electric vehicles (EV), and use of renewable energy (RE). SIEMENS SUSTAINABILITY REPORT 2023 54
Holistic environmental protection Holistic environmental protection Management approach Our internal sustainability network includes environmental Siemens is a global company with locations all over the officers at our sites and specialists in product-related envi- world and activities across a wide range of markets. With our ronmental protection. The Environmental Protection depart- global reach, we aim to minimize our negative impacts and ment is developing programs to support Siemens’ businesses maximize our positive impacts on the environment: from the in their efforts to reduce greenhouse gas (GHG) emissions production of raw materials for our products and in our in our operations and promote resource efficiency. The supply chain and our own production operations to the use, Sustainability department is responsible for the consolidated recycling, and disposal of those products. Siemens GHG reporting and our Net Zero Operations Program. The significance of environmental protection is continuously With the support of our EHS experts and sustainability officers, increasing. In a rapidly growing global economy characterized the operational managers in our global units oversee the by ongoing urbanization and rising population numbers, implementation of environmental guidelines and programs. Siemens supports a number of global green transformation initiatives. These initiatives include the European Green Siemens has also founded expert panels to ensure that Deal, which aims to transition to a circular economy, restore environmental considerations are integral to our decision- biodiversity, reduce pollutant emissions into the environ- making. The Global Board EHS is comprised of subject-matter ment, reduce net greenhouse gas emissions by at least 55% experts who develop environmental protection measures below 1990 levels by 2030, and achieve climate neutrality by and programs and provide advice to the Chief People and 2050. Sustainability Officer in consultation with the Siemens Sustainability Board. As part of the New Circular Economy Action Plan, the European Commission proposed the Ecodesign for Sustainable Products Siemens’ Environmental Council assesses Siemens’ environ- Regulation (ESPR) in March 2022. This regulation aims to mental risks, opportunities, and trends based on uniform address products’ most harmful environmental impacts and criteria and reports them to the Siemens Enterprise Risk to transition society from a linear approach to a circular Management. The council is composed of environmental approach to conducting business. experts from our business units and countries as well as experts in corporate governance, environmental protection, Our governance and policies on environmental supply chain, sustainability, finance, technology, real estate, protection and insurance. The Siemens’ Chief People and Sustainability Officer, a mem- ber of the Managing Board, works to ensure that we operate in compliance with our environmental guidelines. Our EHS Principles serve as internal binding guidelines for this purpose. SIEMENS SUSTAINABILITY REPORT 2023 55
Holistic environmental protection Siemens governs all relevant ecological considerations Siemens’ environmental objectives and ambitions are through our Environmental Protection Standards. These embedded in our Eco Efficiency @ Siemens environmental policies enable us to oversee and improve environmental program, the DEGREE sustainability framework, and other management at our sites and to involve our suppliers, service environmental initiatives. The respective targets are detailed providers, and contracting partners through the Siemens in the Environmental chapters that follow. Group Code of Conduct for Suppliers and Third-Party Inter- mediaries. With these policies and activities, we extend Actions and results environmental protection beyond our own business opera- tions. Our environmental policies also include a commitment Environmental management standards and to increasingly mitigate the environmental impact of our systems products, systems, solutions, and services. Our environmental management is based on the ISO 14001 WEBSITE ON ENVIRONMENTAL PROTECTION and 50001 standards for energy-intensive business units and on the IEC 62430 norm for the environmentally compatible Evaluating sustainability aspects is integral to our due diligence design of products, systems, solutions, and services. guidance. This means considering environmental protection in decisions about corporate mergers and acquisitions. Our own mandatory standard aims to ensure the implemen- tation of these norms, stating that all Siemens’ sites are Our environmental policies require our sites to avoid activities required to have an environmental management system in that have negative impacts on local biodiversity, conduct accordance with ISO 14001. Sites must also operate in com- water risk analyses, and implement water protection mea- pliance with existing local environmental regulations and sures. These factors are particularly important in vulnerable our internal environmental guidelines. Internal environmen- areas. The policies also include mandatory regulations for tal audits are conducted at least once per year to assess and handling and reducing CO2e emissions and waste, especially monitor environmental protection at our sites. landfill waste. As a result, all of our sites have an environmental manage- Lastly, we drive environmental awareness with our Business ment system in place. At least 182 of them, of which 180 Conduct Guidelines and Supplier Code of Conduct, which have been audited by external auditors, have environmental include environmental protection requirements. management systems that are certified according to the SUSTAINABLE SUPPLY CHAIN PRACTICES COMPLIANCE AND ETHICS ISO 14001 standard. This certification requires, among other things, that all employees whose work has an impact on the Targets environment at these sites be trained in personnel- and We strive to go beyond legal requirements by managing the location-specific environmental protection topics. environmental impact of our business activities throughout the value chain. We are also aiming to increase our align- Training on environmental protection ment with economic, ecological, and social requirements. We are continuously working to increase and improve the This helps us to increase our customers’ competitiveness, knowledge and awareness of our employees of environmental while simultaneously supporting the environmental compat- protection. To this end, Siemens has implemented mandatory ibility of our business. In collaboration with our business awareness trainings on environmental topics for all employees partners, we plan to steadily reduce the environmental as it is covered in the Siemens Business Conduct Guidelines. impact of our products, systems, solutions, and services. We do this by creating options for repair, reuse, recycling, and Our information campaigns on World Environment Day and refurbishment and by minimizing our own use or consumption Earth Overshoot Day aim to raise awareness of environmen- of energy, materials, and supplies – while also minimizing tal protection in a global context. As part of the “Thank You” emissions. campaign, we recognize employees who have made excep- tional contributions to environmental conservation, and we share their portraits and success stories on our Siemens World internal information platform. SIEMENS SUSTAINABILITY REPORT 2023 56
Holistic environmental protection Our Eco Efficiency @ Siemens program Our Eco Efficiency @ Siemens program addresses environ- DEGREE, Eco Efficiency @ Siemens, mental factors specific to our products, systems, solutions, and our environmental initiatives and services and our production. It also defines objectives give Siemens a broad range of for improving our environmental management: for example, instruments to guide our objectives by encouraging a circular economy and generally demateri- in environmental protection alizing our business processes. The program has three components. At the center of the Green Deal Responsible Product Development program component is We continue to pursue the Green Deals @ Siemens project our Robust Eco Design approach. The program intends to with the goal of evaluating the European Union’s Green introduce methods and rules for dematerialization along the Deal policy and similar developments around the world and entire value chain. The second component of the program, a implementing the associated requirements. Specialized Clean Supply Chain, aims to increase the percentage of sec- project groups are working to ensure that the legal require- ondary materials we use and to reduce regulated substances ments are implemented efficiently. by 2030. The third component, Efficient Own Operations, aims to reduce environmental impacts at our own sites. Eco Efficiency @ Siemens Responsible Product Clean Supply Chain Efficient Own Operations Development Products and solutions are at the core of A clean supply chain is central to the journey At the heart of our environmental approach our business. Evaluating our portfolio and of decoupling natural resource use. That is is our ability to efficiently manage our applying an Ecodesign approach to rele- why we will increasingly source secondary production sites and offices – especially by vant product families supports us in selling materials and take action to replace regu- enhancing waste management practices eco-efficient products and solutions. lated substances according to IEC 62474. and using clean energy. SIEMENS SUSTAINABILITY REPORT 2023 57
4.1 Climate action 4.1 Climate action – Our pledge: We are making a contribution to limiting With global temperatures rising, we are committed to help global warming to 1.5°C mitigate climate change. At the same time, Siemens is – Our targets: To reduce emissions from business assessing climate-related risks and opportunities and poten- operations at Siemens without SHS by 55% by 2025 tial measures for adapting to climate change in order to and by 90% by 2030 ensure business continuity and functioning supply chains. – Net Zero operations by 2030 and in our supply chain by 2050 Our climate-protection governance and policies – Our path: Continuous reduction of emissions from Climate-related issues are managed as part of our environmen- business operations, collaboration with suppliers, tal protection management. HOLISTIC ENVIRONMENTAL PROTECTION and a portfolio that helps our customers protect the environment For climate protection, the Environmental Protection depart- ment supports our businesses in their efforts to reduce CO2e emissions in their operations. The Supply Chain Management Management approach department helps our business units promote decarboniza- At Siemens, we recognize the urgency of climate protection. tion in the supply chain at our suppliers and through our It is our top priority to contribute to the objectives set out in material purchases. Our business units are responsible for the Paris Agreement, which includes the goal of limiting reducing their respective emissions. The Sustainability global warming to 1.5°C above preindustrial levels. As a department is responsible for the consolidated Siemens GHG global technology company, we acknowledge that our reporting and our Net Zero Operations Program and defines activities along the value chain – including procurement, the necessary management and GHG reporting approaches. product design, production, and the use of our products and services – generate greenhouse gas (GHG) emissions (here- For our approach to and governance for managing climate- after CO2e emissions). This is contributing to a global tem- related risks and opportunities, please see our reporting on perature increase and other irreversible changes to our TASK FORCE ON CLIMATERELATED FINANCIAL DISCLOSURES (TCFD). planet and ecosystems. We have pledged to aim to make an important contribution The Siemens portfolio is simultaneously supporting the to the decarbonization of the global economy. We aim to transition to a low-carbon economy. We are doing this by reach this goal with the assistance of an appropriate gover- focusing on automation and digitalization, smart infrastruc- nance structure, including strategy and risk management, ture for buildings with decentralized energy systems and and by acting in accordance with the recommendations of charging solutions, and intelligent transportation solutions. the Task Force on Climate-Related Financial Disclosures For instance, our energy-efficient products and solutions can (TCFD). Our commitment to the initiatives RE100 (COMPLETE support the transition from fossil fuels to renewable energy CONVERSION TO RENEWABLE ELECTRICITY), EV100 (CONVERSION OF THE sources, and our electrification solutions enable renewable VEHICLE FLEET TO ELECTRIC VEHICLES), and EP100 (NET ZERO EMISSION grid integration and the electrification of heat and hydrogen. BUILDINGS) further supports us in our efforts to achieve our This also creates more business opportunities for Siemens. decarbonization targets. SIEMENS SUSTAINABILITY REPORT 2023 58
4.1 Climate action Targets Our commitment to climate protection is also reflected in the D Decarbonization field of action Decarbonization in our DEGREE sustainability Progress on DEGREE ambition #1: framework. Net Zero operations by 2030, Our 1.5°C Science-Based Target with 55% emissions reduction by 2025 By joining the Science-Based Targets initiative (SBTi), and 90% by 2030 Siemens has pledged to reduce emissions from its own Compared to fiscal 2022, we reduced our Scope 1 and operations (Scope 1 and 2) by 50% and its value chain Scope 2 emissions in 2023 by 32 thousand metric (Scope 3) by 15% by 2030 compared to 2019. Our commit- tons of CO2e or 8%. We reduced our Scope 1 and ment to the SBTi is aimed at aligning our business activities Scope 2 emissions by a total of 50% since fiscal 2019. with the 1.5°C decarbonization pathway under the terms of This reduction is primarily due to the rigorous imple- recognized climate models to ensure that our greenhouse mentation of a number of measures and initiatives, gas emissions will be consistent with the Paris Climate which are briefly described below. Agreement’s 1.5°C target. RE100: 80% renewable electricity for Siemens Decarbonization targets for our own operations EV100: 11% electric vehicles at Siemens Our Net Zero 2030 pledge EP100: There are currently 33 Siemens sites with no We have expanded our ambitions beyond the scope of our net CO e emissions during regular operations 2 validated Science-Based Target and shortened our timeline Progress for decarbonization: As part of our DEGREE sustainability FY 19: 737 kt CO e – 50% – 55% by 2025 framework (without Siemens Healthineers), we set a goal for 2 – 90% by 2030 all Siemens production facilities and buildings worldwide and our vehicle fleet to achieve a Net Zero1 carbon footprint Emissions reduction as part of the by 2030. In effect, this means reducing CO e Scope 1 and 2 Net Zero 2030 program 2 (in 1,000 metric tons of CO e for Siemens without SHS) emissions in Siemens’ business operations for Siemens without 2 Siemens Healthineers (SHS) by 90% by 2030, compared to 2019. To achieve this target, Siemens has pledged to invest an additional €650 million in its own decarbonization efforts to by 2030. Any residual emissions will then be balanced with 2019 to – 50% 2019 high-quality carbon offsets that meet established standards. 737 – 55% to 2019 402 – 90% To drive additional transparency on our journey to 2030, we 370 332 set an ambitious interim reduction target for our business - 75 operations at Siemens without SHS of 55% by 2025 com pared to 2019. –75 FY FY FY FY FY By joining the RE100 initiative in 2021, we reinforced our 2019 2022 2023 2025 2030 commitment to a transition to 100% renewable energy by Emissions Carbon offsets 2030 at the latest. As part of our commitment to EV100, we are striving to completely convert our motor vehicle fleet to Siemens without SHS electric vehicles by 2030. Our EP100 pledge strengthens our commitment to only own or lease buildings that have no net CO2e emissions by 2030. 1 Siemens defines Net Zero as reducing CO e emissions by 90% and compensating any 2 residual emissions in the Net Zero target year and any CO e emissions thereafter with high-quality carbon offsets. 2 SIEMENS SUSTAINABILITY REPORT 2023 59
4.1 Climate action Decarbonization targets for our upstream and 1 downstream value chain Greenhouse gas emissions Regarding Scope 3 emissions, we are focused in particular Fiscal year (In 1,000 metric tons of CO equivalents) 2023 2022 on reducing emissions in our supply chain and in the use 2 phase of our products. Scope 1 387 393 Scope 22 163 189 Therefore, we set the target for Siemens without SHS to Sum Scopes 1 and 2 550 582 reduce the CO e emissions generated in our supply chain by Scope 3 2 Purchases goods & services 9,276 9,557 20% by 2030 compared to 2020, and over the long term to Capital goods 416 458 achieve Net Zero emissions in the supply chain by 2050. This Fuel and energy-related activities 111 137 ambition is also part of our DEGREE sustainability framework. Waste in operations 29 25 More details on our decarbonization targets for the supply Transportation upstream 884 1,118 chain and DEGREE KPI can be found in SUSTAINABLE SUPPLY Business travel 227 122 CHAIN PRACTICES. Employee commuting3 105 98 As part of our Science-Based Targets, we pledged to reduce Sum of Scope 3 upstream 11,048 11,515 our entire Scope 3 emissions, upstream and downstream, by Use of sold products 469,180 442,175 15% by 2030 compared to 2019. This target also includes the Investments 2,960 3,915 use phase of our products (Scope 3.11 Use of sold products). Sum of Scope 3 downstream 472,140 446,090 Total Scope 3 483,188 457,606 Decarbonization targets in management 1 Siemens including SHS. 2 We calculate our emissions from electricity consumption on the basis of the CO compensation emission factors of local sites according to the market-based approach. 2 As a key element of our management approach, the reduc- 3 Not part of supply chain emissions reduction. tion of CO e emissions in our operations is embedded in the 2 Long-term Incentive (LTI) compensation component for the The actions we take within our business processes along Siemens senior management (without SHS). Management with focused actions in our supply chain and expanded value - chain are key to achieving our targets. compensation incorporates long-term performance incen tives based on ESG criteria and is defined under Governance in our DEGREE sustainability framework. The assessment is Using renewable energy based on the internal ESG/Sustainability index, which Even before Siemens joined the RE100 initiative, we worked includes, among other goals, the reduction of CO e emis- continuously to increase the share of electricity we obtain 2 sions.2 SUSTAINABILITY GOVERNANCE AND ORGANIZATION from renewable sources. Our goal is to use 100% renewable electricity by 2030. In fiscal 2023, more than 79% of the Actions and results electricity we purchased consisted of electricity from renew- able sources. As a result, we reduced emissions by a total of Transparency on greenhouse gas emissions 454 thousand metric tons of CO e per year compared to the 2 We report our greenhouse gas emissions based on the average electricity mix. A complete conversion to renewable Greenhouse Gas (GHG) Protocol corporate standard. Direct electricity is not possible yet due to regulatory restrictions in greenhouse gas emissions from our own operations (Scope 1) some countries. Through our membership in RE100, we are and indirect emissions from purchased electricity and district working toward the amendment of these regulations to heating (Scope 2) are calculated for all sites. We also report make complete conversion a reality. In purchasing renewable our emissions in our upstream and downstream value chain (Scope 3), including emissions originating in our supply chains and the use of our products. 2 Assessment based on the Siemens internal ESG/sustainability index, which is based on customer satisfaction (Net Promoter Score), CO reduction, and digital learning hours. 2 SIEMENS SUSTAINABILITY REPORT 2023 60
4.1 Climate action electricity, we follow the purchasing guidelines of the WWF’s additional boost, with BEVs comprising 69% of all new orders Next Generation Green Electricity initiative. from May to the end of September of 2023. Siemens has also entered power purchasing agreements Reducing building emissions (PPA) to support our supply with renewable electricity. For Regarding building emissions, we are committed to only instance, in Kalwa, India, we joined a joint venture that owning and occupying assets that are net zero carbon in produces renewable electricity using photovoltaic systems. operation by the year 2030 as part of our EP100 pledge. We Another PPA with Enovos Energie Deutschland in Germany’s plan to achieve this goal through various measures, includ- South Eifel region will consist of a total of 11 photovoltaic ing building new CO -neutral buildings, modernizing existing 2 systems (currently under construction) with a total capacity buildings, and leasing office space that produces the lowest of about 200 GWh a year. Südeifel GmbH & Co KG is respon- possible emissions. Once we have exhausted all possible sible for the planning, construction, and operation of the measures, we plan to purchase high-quality carbon offsets to systems and for marketing the renewable electricity. Siemens compensate for the remaining emissions. Today 37 of our will purchase 39.1 GWh of electricity per year beginning in locations have no net CO e emissions during regular operation. 2 January of 2024. We issued a guideline that defines the criteria for the The use of biogas is another component of our decarboni- CO2-neutral operation of new buildings and sets maximum zation strategy. This has reduced our annual emissions by permissible emissions in the supply chain and in construction 3 13 thousand metric tons of CO2e compared to the use of activities. In fiscal 2023, we launched our new SRE Green conventional natural gas. Lease Guideline to improve the ESG performance of all new leases. Following the guideline, the renovation and expansion In the U.S. we’ve conducted pilot purchases of over 3.6 mil- of our Texas facility is planned to reduce 90% of emissions. lion liters of sustainable aviation fuel. In California, a relocation led to using 58% less space and reducing CO e emissions by 68 metric tons. Reducing motor fleet emissions 2 We are working to reduce the emissions from our motor With our New-Normal Working Model, emissions from the vehicle fleet, which comprises around 44,000 vehicles, and use of our buildings and commuting will be reduced, while are striving to electrify it completely by 2030 as part of our emissions from working from home increase. In total, we EV100 commitment. In fiscal 2023, these emissions totaled calculated emissions from category 3.7, Employee Commut- about 210 thousand metric tons of CO e. ing, at 105 thousand metric tons of CO e, while emissions 2 2 created by working from home amounted to 24 thousand We increased the number of electric vehicles to around metric tons of CO2e, largely due to using IT equipment. For 4,100 and charging points to around 2,750 in fiscal 2023. more details, see WORKING AT SIEMENS. In the UK, we have already made a lot of progress in creating Using an internal CO e price 2 an exclusively electric vehicle fleet. As a result, 23% of the In the UK and Brazil, we are currently using an internal CO2e company fleet is now all-electric, and electric vehicles price to manage our decarbonization activities. In the UK, we accounted for 44% of all new car orders at the end of fiscal raised the price per ton of CO2e in fiscal 2023 to GBP50 from 2023. GBP40 to create a clear pathway to increasing CO2e costs. A major portion of the proceeds is being used to expand the In Germany, our commitment to electrification has seen charging infrastructure for electric vehicles at our new office progress. Of our fleet, over 1,700 vehicles are battery electric location in Farnborough, UK. In Brazil, a so-called shadow vehicles (BEVs). In fiscal 2023, BEVs comprised 37% of all our price of US$240 per ton of CO e was established to support 2 vehicle orders – a significant increase from the past aver- energy efficiency in buildings and factories and, for example, ages. Initiatives to accelerate electrification, combined with to support electrification of the motor vehicle fleet. the rollout of special-edition electric models, have led to an 3 Siemens Real Estate. SIEMENS SUSTAINABILITY REPORT 2023 61
4.1 Climate action Upstream emissions Our Blue GIS portfolio is a prime example of our efforts to Our upstream emissions total roughly 11 million metric tons reduce emissions. The portfolio combines the advantages of of CO e and are therefore considerably higher than the gas-insulated switchgear with climate-friendly technologies. 2 emissions from our own business operations. This is because Using a fluorine-gas-free, non-toxic insulating gas reduces our supply chain operations are typically more energy- the CO e emissions of medium-voltage switchgear through- 2 intensive than our own operations – primarily because our out their entire lifespan. supply chain processes raw materials. Our contribution to climate protection for our A detailed description of our efforts to reduce CO e emis- customers (customer avoided emissions) 2 sions in our supply chain is available in SUSTAINABLE SUPPLY To make our portfolio’s contribution to decarbonization CHAIN PRACTICES. more transparent, we report the amount of CO e emissions 2 that our products and solutions avoid compared to reference CO2e emissions in the use phase of our products solutions. Customer avoided emissions represent the differ- During the use phase of our products, the main source of ence between the CO e emissions of a Siemens offering and 2 CO e emissions is electricity consumption. This means that the CO e emissions of a baseline or reference scenario. 2 2 the key strategies for reducing emissions during the product use phase aim at increasing energy efficiency and promoting automation and digitalization. Emissions from the value chain and avoided CO e emissions at customers 2 (in million t CO -equivalent) Our strategic focus on energy efficiency, automation, and 2 digitalization in industry, electrification, buildings, and 472.1 transportation allows us to offer our customers products that are highly efficient, high-quality, and long-lasting. Our efficient electric motors are also an important factor in use- phase emissions. ~41× Emissions produced in the use phase of our products will 189.9 continuously decrease over time due to new product gener- ations and to the ongoing transition to renewable energies 0.6 11.6 in our users’ markets. 11.0 The use of our products sold in fiscal 2023 will generate Upstream Own operations Cradle to gate Use phase and Avoided 469 million metric tons of CO e over the entire expected emissions investments emissions at 2 customers product use phase (Scope 3.11 Use of sold products). We are using a constant emission factor over the anticipated prod- uct use phase. Our scope 3 emissions increased due to an Customer avoided CO e emissions are widely reported in the 2 expansion of the reported portfolio as well as increased sales market; however, there is currently no universally accepted volumes. We use the final product calculation method. If we standard for their calculation. Therefore, approaches and applied the intermediate approach instead, emissions from results are often not comparable due to different definitions the use of our products sold in fiscal 2023 would be consid- and product portfolios. Siemens is actively involved in a erably lower. These emissions are primarily created by the number of working groups and associations that are working electricity used and the product’s lifespan. to support the standardization of calculations and reporting of customer-related CO2e emissions: for example, we are involved with the WBCSD and the EU Green Digital Coalition. SIEMENS SUSTAINABILITY REPORT 2023 62
4.1 Climate action At Siemens we have developed our own method that meets indirect decarbonization impacts, we refrain from including our standards for high-quality and transparent metrics. We the avoided emissions from enabling technologies in our calculate the avoided emissions for all products and services overall customer avoided emissions total of 190 million sold and investments made by Siemens in each fiscal year metric tons of CO2e emissions. over the course of their entire use phase at our customers. This approach aligns with the accounting principles defined Investment-related emissions for calculating Scope 3 emissions (Scope 3.11 Use of sold The financing solutions provided by Siemens Financial Ser- products) in the GHG Protocol. For a detailed description of vices (SFS) fund infrastructure projects and technologies our methodology for calculating customer avoided emis- that make a contribution to decarbonization. Specifically, sions, please see REPORTING PRINCIPLES FOR CUSTOMER AVOIDED SFS provides equity and debt financing solutions to support EMISSIONS. projects with a total installed capacity of 27,500 MW of wind energy, 14,900 MW of solar energy, and 2,400 MW of other In fiscal 2023, we helped our customers avoid 190 million renewable energy production technologies (including battery metric tons of CO e emissions. The Siemens technologies storage) worldwide. In fiscal 2023, SFS Equity Finance also 2 that make the largest contribution to the avoidance of CO2e invested in carbon removal companies to support innovative emissions at our customers are frequency converters, rail- solutions and technologies that actively remove CO2e from bound passenger and freight transportation, and building the atmosphere. systems. Where SFS agreed to finance fossil power generation projects in fiscal 2023, its financial contributions corresponded to Avoided emissions at our customers about 3 million metric tons of CO e over the expected 2 Fiscal Year duration of the financing of these projects (Scope 3.15 (in million t CO -equivalent) 2023 2022 investments). 2 Siemens 190 153 Carbon offsets Our internal offsetting policy has established binding guide- When applied alone, this metric does not reflect all of our lines for procuring carbon offsets. This policy aims to ensure portfolio’s positive impacts on our partners and customers. consistency and quality in offset programs. The carbon off- Software, electrification, and automation technology and sets derived from projects for removing or avoiding CO e 2 other “enabling technologies” play a crucial role in achieving emissions must meet minimum quality criteria, including global environmental goals by providing systems that sup- external certification, selection based on the Oxford Offset- port the transition to a low-carbon economy. For example, ting Principles, and internal quality controls. Despite our solutions from Smart Infrastructure can facilitate the trans- high standard for all offsetting, physically reducing emissions formation to an electrification of the global energy system. remains Siemens’ top priority. We also do not deduct carbon Even though they do not show a direct decarbonization offsets from our CO2e footprint in order to maintain transpar- impact on the product level, the electrification and automa- ency regarding our emissions. tion products sold by Smart Infrastructure in fiscal 2023 contributed to the decarbonization of power generation Shaping the climate debate and policy systems by avoiding 4.6 million metric tons of CO e emis- Siemens is part of a number of platforms and initiatives that 2 sions. The description of our methodology for calculating allow us to participate in the debate on climate-related issues. these “enabling” customer avoided emissions can be found For example, as part of the UN Global Compact Peer-Learning in our REPORTING PRINCIPLES FOR CUSTOMER AVOIDED EMISSIONS. Group, we are sharing knowledge and lessons learned on However, because there is no recognized market standard various climate-related topics with other companies. for a calculation methodology to quantify these enabling or SIEMENS SUSTAINABILITY REPORT 2023 63
4.1 Climate action Beyond our various measures and activities, Siemens also participates in committees and associations where it advo- cates for more changes in climate policy frameworks in order to support the following activities: → Accelerating decarbonization in all sectors through efficient energy use and electrification and by increasing the share of energy from renewable sources → Redesigning energy markets to ensure that adequate investments are made in sustainable, secure, and efficient energy systems → Driving the development of local energy production from renewable sources, local energy markets, and sector coupling → Accelerating the digitalization of the energy system to enable the integration of renewable energies, continuous grid optimization, and the integration of prosumers, while guaranteeing grid stability → Implementing a CO e price that enables actual emissions- 2 related costs to be integrated into business decision- making. The price should be high enough to trigger a shift to low-carbon technologies in line with the pledges made in the Paris Agreement (COP 21). SIEMENS SUSTAINABILITY REPORT 2023 64
4.2 Conserving resources 4.2 Conserving resources – Assessment of our biodiversity footprint as Water use in water-stressed areas can exacerbate water foundation for further improvements scarcity, degrade water quality, and harm aquatic habitats – Accomplished energy reduction as part of our and biodiversity. energy efficiency ambition – Implementation of water strategy almost completed Lastly, biodiversity loss is comparable to the threat of climate change, because it can disrupt the functioning of ecosystems, creating far-reaching impacts on people’s health and liveli- Management approach hoods. As a company producing a diverse array of products, systems, solutions, and services, and with office locations around the Our governance and policies for conserving world, we strive to reduce the environmental impacts of our resources sites through the limited use of resources. To mitigate these impacts, we made the responsible use of limited resources an integral part of environmental protection Energy is an important resource in production, and its usage at Siemens. Information on our holistic environmental pro- reduction is a key strategy for decarbonization. While we aim tection governance and policies can be found in HOLISTIC to obtain all our electricity from renewable sources, we ENVIRONMENTAL PROTECTION. recognize that even the generation of renewable electricity, for example, through wind turbines or photovoltaics, can Targets have negative impacts on the environment because these Our commitment to conserving resources is also reflected in systems must be manufactured, they change the local the field of action Resource efficiency in our DEGREE sustain- landscape when in operation, and they must be disposed of ability framework. at the end of their lifecycle. The component Efficient Own Operations of our Eco Effi- The emission of air pollutants like volatile organic com- ciency @ Siemens program aims to reduce the environmental pounds (VOCs) and ozone-depleting substances (ODSs) can impact of our sites through dematerialization and circular lead to ground-level ozone and have adverse health effects, economy principles. We focus on improving our energy effi- and some are potent greenhouse gases. ciency and reducing the environmental impact of the waste we generate. When it comes to environmentally responsible While many types of waste can be recycled or reprocessed in energy use, we focus on reducing emissions from power a functioning circular economy, the production of landfill generation in addition to minimizing energy consumption waste contributes to land use and greenhouse gas emissions, itself. As part of our commitment, we aim to improve our 1 and it influences local biodiversity and can cause health overall energy efficiency by 10% by 2030 compared to 2021. problems for people and ecosystems. By fostering recycling, Siemens can also reduce potential impacts in the down- Building on the success of previous reduction initiatives, our stream value chain like marine plastics pollution and in the target is to achieve a 50% reduction in landfill waste by 2025 upstream value chain from sourcing primary raw materials. compared to fiscal 2021 as we progress toward zero landfill waste by 2030. Additionally, we want to continuously increase our material recycling rate by 2030.1 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 65
4.2 Conserving resources In addition to our Eco Efficiency @ Siemens program, we Actions and results actively pursue resource conservation through other initia- tives. We have implemented initiatives to manage our envi- Energy management and energy efficiency ronmental impact in areas like water, air pollutants, and For energy-intensive units, we adhere to the ISO 50001 biodiversity. Currently, we have specific targets for water and standard, which aims to ensure the effective management of air pollutants at some of our sites. energy consumption in our operations. Currently, 45 Siemens sites have implemented energy management systems com- The global goals of the Eco Efficiency @ Siemens program pliant with ISO 50001. This also requires our sites to conduct are converted into local targets and measures implemented regular internal and external energy and carbon audits. by our sites’ environmental and energy management systems. To calculate energy efficiency, we analyze our energy con- sumption in relation to sales development. Due to reduced R Resource efficiency energy usage by 9.1% and a growth in sales, we increased 1 our energy efficiency by 39% in fiscal 2023 compared to Progress on DEGREE ambition #8: fiscal 2021. Circularity through waste-to-landfill reduction of 50% by 2025 and toward zero landfill waste by 2030 Landfill waste is the type of waste with the greatest 39%¹ environmental impact. That’s why we want to reduce improvement of efficiency in primary & both our hazardous and our non-hazardous landfill secondary energy use compared to 2021 waste by 50% by fiscal 2025 compared to fiscal 2021 and have included these ambitions in our DEGREE When looking at Siemens’ total energy consumption, we sustainability framework as well as the Eco Efficiency differentiate between primary and secondary energy. Our @ Siemens program. With the aid of worldwide work- primary energy consumption declined 16.5% in fiscal 2023. shops, we have developed and implemented measures Our consumption of natural gas and liquid petroleum gas to improve our waste management. Compared to the declined 22.2% compared to the previous fiscal year. With base year 2021, we reduced our landfill waste by 15%. continuing gas shortages, this was a special focus for Siemens in fiscal 2023. To determine energy consumption by Progress our company vehicles, we calculated the consumption of all FY 21: 0% – 15% – 50% by 2025 cars used by employees and for services and our trucks. In ~ –100% by 2030 fiscal 2023, the company fleet consumed about 2,894 thou- Siemens without SHS sand gigajoules of fuel, which is a 1% decrease from the previous fiscal year. Secondary energy consumption means the purchase of electricity and district heating at our sites worldwide. Over- all, the consumption of secondary energy decreased by 2.8% compared to the previous year. Our electricity consumption now stands at 5,586 thousand gigajoules. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 66
4.2 Conserving resources Primary energy Secondary energy (1,000 gigajoules) (1,000 gigajoules) Natural gas / Fuel oil, Electricity District heating liquid petroleum gas gasoline / diesel 2,927 2,277 63 232 5,629 5,586 1,163 1,016 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 Total Total 3,010 2,513 6,792 6,602 FY 2022 FY 2023 FY 2022 FY 2023 Emission of air pollutants Atmospheric pollutant emissions We take a comprehensive approach to air pollution by analyzing Fiscal year local emissions at our various office and production facilities (in metric tons) 2023 2022 around the world. We also pay close attention to emissions Volatile organic compounds 250 274 from volatile organic compounds (VOC), pollutants from Ozone-depleting substances combustion processes, and where they are still present, of R11 equivalent1 0.044 0.036 ozone-depleting substances (ODS) at our environmentally 1 The R11 equivalent is a measure of ozone depletion potential relevant sites. Based on our internal environmental standards, these principles and procedures are implemented on a man- We reduced our VOC emissions by another 9% from the datory basis. previous year to 250 metric tons in fiscal 2023. Total ODS emissions increased slightly, amounting to 0.044 metric tons The mandatory environmental management system for our in fiscal 2023. sites includes the requirement to establish targets and measures for reducing air pollutants, and where applicable, We determined the quantity of nitrogen oxides in our relevant to address and mitigate their impact. thermal processes with the aid of computational procedures, assuming typical combustion conditions. For fiscal 2023, Our Environmental Protection Standards include a commit- this yielded a figure of 53 metric tons for our environmen- ment to phase out ODSs. In fiscal 2023, we held VOC and tally relevant sites compared to 58 metric tons the year ODS training workshops to increase awareness of the harmful before. This figure includes nitrogen oxides that are released effects of air pollutants, improve the data quality at sites, by burning the fuels listed under primary energy. and provide recommendations for the reduction and phase- out of VOCs and ODSs. SIEMENS SUSTAINABILITY REPORT 2023 67
4.2 Conserving resources Efficient waste management In fiscal 2023, the share of material recycling in our total The environmental relevance of waste depends on the type waste stream (excluding construction waste) remained at of waste and the method used for its disposal. To reduce 81%. hazardous waste, we work on increasing our material recy- cling rate and reducing our landfill waste. To enhance - Material Recycling material efficiency in our production processes, we imple ment practices like regrinding sprue parts at plastic molding (in %) sites. To support resource efficiency in production, our sites track FY 2022 FY 2023 waste data using a standard process that undergoes regular 81 81 audits that aim to ensure accuracy and compliance. In addi- Total Total tion, we distinguish between hazardous and non-hazardous waste. The treatment of hazardous and non-hazardous Share of material recycling in total waste1 waste is further subdivided into material recycling, thermal recovery, thermal disposal, and landfill. Waste flows from 1 Excluding construction waste. construction or demolition work are reported separately, because these waste categories are created independent of Water use and risk analysis production. We then go beyond the monitoring of our own Water is one of humanity’s most important resources. For activities to analyze the waste generated throughout our this reason, Siemens has been analyzing water scarcity, upstream supply chain. water pollution, local fire risks, climate change, and flooding and precipitation patterns at our sites for several years. We The volume of non-hazardous waste generated by Siemens’ consider these analyses in our business decisions: for exam- own operations declined by 4% compared to the previous ple, when we select the location for a new site or implement fiscal year, whereas the volume of hazardous waste precautionary measures. decreased in the same period by 8%. Construction waste increased by 88% in fiscal 2023, mainly driven by the con- We establish water targets at multiple sites to account for the struction site at our Campus in Erlangen. Compared to fiscal specific local environment and to drive effective mitigation 2022, the total waste volume increased by 2% in fiscal 2023. measures. At the corporate level, we have implemented a defined water strategy, and have conducted risk assessments to shape local water targets. Waste (in 1,000 metric tons) Our individual sites then implement their own water initia- tives in alignment with these targets. For instance, by 34 greening the roofs of our Siemens Campus in Erlangen, we Construction waste 215 return rainwater back into the natural water cycle through FY 2023 Non-hazardous evaporation, rather than disposing of it in the sewer system. 13 261 waste Hazardous total waste The aim of our water strategy is to minimize the adverse local effects of our water consumption and use. In fiscal 2022, we expanded the analysis of our water-related risks to include our supply chain. Based on this analysis, we derived further measures for sustainable water use. Siemens India as an example achieved sustainable water management by driving various measures, including utilizing water-efficient SIEMENS SUSTAINABILITY REPORT 2023 68
4.2 Conserving resources appliances, installing rainwater harvesting systems at four Water discharge 3 major factory locations, and building water reclamation (in million m) facilities (zero liquid discharge facilities). These measures enable us to reduce fresh water consumption by, among 1.03 other things, utilizing treated water for landscaping and Surface water toilet flushing. FY 2023 9.20 13.56 Groundwater 3.33 total Our water risk analysis begins with an assessment of our 3rd-party water environmentally relevant sites using the Aqueduct Water Risk Atlas from the World Resources Institute (WRI). With the aid of an internal analytical tool, Siemens assesses local-level risks resulting from our sites’ activities, and then assesses them in relation to regional water risks. Sites with a high-risk Initiatives for greater biodiversity assessment need to define targets to reduce the level of risk. The aim of Siemens’ environmental management system is In fiscal 2023, 96% of our sites implemented this water to work to preserve a diverse natural environment. Biodiversity strategy. and conservation are defined in our environmental policies as environmental aspects at the company level that need to be assessed locally. The objective is to ensure that the business activities at our factories and offices do not reduce species diversity beyond an unavoidable minimum. This approach is part of our location planning, which also includes initiatives 96% to foster biodiversity by creating habitats that provide both of our sites have implemented shelter and food. Examples range from planting native vegeta- a water strategy tion, creating homes for insects, birds, mammals, reptiles, and amphibians to taking inventories of the local biodiversity Our water strategy provides foundational support to our at our sites. Two locations in Germany are using sheep as compliance with the Do No Significant Harm (DNSH) criteria “lawn-mowers” to reduce our impact on flora and fauna by for sustainable use and protection of water and marine maintaining green spaces. Siemens employees are actively resources in the EU Taxonomy. engaged in protecting and increasing biodiversity at their locations: for example, by volunteering for tree-planting In fiscal 2023, our total water withdrawal was 14.26 million m³. campaigns and participating in cleanup events. The largest share of our water use is for cooling processes. These processes leave the water’s chemical quality largely For our Siemens Campus in Erlangen, we have developed a unchanged, so that the water can be returned directly to the comprehensive biodiversity concept that enables us to receiving water body or groundwater. In fiscal 2023, our preserve existing trees, plant native fruit trees, and create water discharge was 13.56 million m3. suitable nesting habitats for many species, among other initiatives. Water consumption is a water substream with a major envi- ronmental impact, because the water is no longer available To further develop our approach to biodiversity, we have for the ecosystem’s use. Siemens’ water consumption is entered a strategic partnership with The Biodiversity Consul- mostly linked to evaporation and is comparably small, with tancy to help Siemens scientifically assess our biodiversity 3 just 0.51 million m of total water consumption. Of this footprint. This assessment was conducted in fiscal 2023 and 3 are accounted for by water con- amount, 0.07 million m covered the biodiversity impacts of our own operations and sumption in water stress areas. those of our upstream value chain: for instance, impacts of the raw materials we purchase. The assessment and the transparency we acquired on our biodiversity footprint are an important step toward developing our biodiversity strategy. SIEMENS SUSTAINABILITY REPORT 2023 69
4.2 Conserving resources Incidents relevant to the environment and fines Siemens uses a worldwide reporting system to document environmental incidents. In fiscal 2023, we recorded no significant incidents resulting in fines over US$10,000. We recorded 14 minor environmental spills or gas losses with low impacts. They involved spills of chemicals, diesel, hydraulic oils, or resins and losses of coolant gases. Stakeholder involvement in conserving resources Stakeholder engagement is a crucial aspect of our environ- mental protection efforts, and we utilize various channels to engage in regular stakeholder dialogs, including with local communities. One of the communications channels used is our internal Environmental Protection Newsletter, where we share updates, achievements, and upcoming initiatives related to environmental protection. We also promote the use of best practices and knowledge transfers within Siemens through global workshops in order to facilitate our efforts in this regard. For more information about the methods used, environmental reporting, and environmental data collection, see REPORTING METHODOLOGY. SIEMENS SUSTAINABILITY REPORT 2023 70
4.3 Product stewardship 4.3 Product stewardship – Increase relevant product families for Robust Eco Design – Increase coverage rate of Robust Eco Design approach across relevant product families. We focus on resource efficiency – Significant increase of lifecycle assessment (LCAs) over a product’s entire lifecycle Management approach Our governance and policies for product At Siemens, we are aware that product design has far-reaching stewardship effects on nature and our environment. As a market leader The Environmental Protection department is responsible for and technology pioneer in many fields, we take a keen interest planning, preparing, organizing, and implementing rules in the long-term impacts of our portfolio. Ensuring the and regulations for product stewardship. It aims to ensure environmental compatibility of our products, systems, consistency, transparency, implementation, and compliance solutions, and services is a key priority. with regulatory frameworks within its areas of responsibility and reviews their effectiveness. Extracting and processing finite resources contribute to as much as 90% of global biodiversity loss and approximately With our Ecodesign approach, we aim to contribute to climate 1 50% of global CO e emissions . Both of these consequences protection at our customer sites and increase dematerialization 2 can impact the composition, resilience, productivity, and through our circularity approach and our digital portfolio carrying capacity of natural and managed ecosystems as elements. CLIMATE ACTION COMPANY PROFILE well as people’s livelihoods. In 2023, the global economy was only 7.2% circular, meaning that just 7.2% of all material Fundamental Ecodesign approaches at Siemens include inputs into the economy were secondary materials.2 increased resource efficiency and decarbonization during production, higher productivity and efficiency during use, As such, we aim to reduce the environmental impact of our and product designs that support circularity. In accordance products, systems, solutions, and services as early as the with the international standards IEC 62430 Environmentally design phase and minimize the need for raw material Conscious Design for Electrical and Electronic Products, extraction. Our Ecodesign approach considers relevant eco- ISO 14006, and ISO 14009, Siemens applies the Robust Eco logical factors during product planning and design, because Design (RED) approach. The Ecodesign Appendix, which is a this phase determines up to 80% of a product’s lifecycle mandatory component of Siemens’ Environmental Protection 3 We also address these challenges Standard, provides a framework for assessing and determining environmental impact. through various initiatives: for instance, our Tech for Sus- a product’s environmental impact throughout all phases of tainability Bootcamp 2023, Ecodesign learning programs, its lifecycle. It also provides a framework for the environmen- and our Sustainability Business portfolio. tally compatible design of products, systems, solutions, and 1 IRP (2019). Global Resources Outlook 2019: Natural Resources for the Future We Want. (Global Resources Outlook | Resource Panel). 2 https://www.circularity-gap.world/2023. 3 Ecodesign your future: How Ecodesign can help the environment by making products smarter. Publications Office of the European Union (https://op.europa.eu/en/ publication-detail/-/publication/4d42d597-4f92-4498-8e1d-857cc157e6db). SIEMENS SUSTAINABILITY REPORT 2023 71
4.3 Product stewardship services. The implementation of this standard is the respon- products, systems, solutions, and services by 2030. In fiscal sibility of the heads of Siemens’ operating units and is an 2023, 65% of our third-party revenue was defined as rele- integral part of the company’s annual environmental review vant for our RED approach, compared to 57% in fiscal 2022. according to ISO 14001. In addition, our goal is to increase the number of LCAs and EPDs available. As a result, we are continuously expanding Targets our database for monitoring and communicating the envi- Our Ecodesign approach is also embedded in the field of ronmental performance of our products, systems, solutions, action Resource efficiency in our DEGREE sustainability and services. framework. The main objective is to introduce methods and rules for circularity and dematerialization along the entire value chain. R Resource efficiency Progress on DEGREE ambition #7: R Resource efficiency Natural resource decoupling through increased purchase of secondary Progress on DEGREE ambition #6: materials for metals and resins Next-level Robust Eco Design for 100% of relevant Siemens product families We want to increase the procurement of secondary by 2030 materials for metals and resins and implement a circular economy. In fiscal 2023, we purchased 35% The quota of Robust Eco Design implementation for of the metals – primarily iron, copper and aluminum the relevant portfolio elements currently stands at used in the manufacture of our products – from 51% compared to 35% in the year 2022. Only when recycled sources. This percentage is the weighted the rate of implementation reaches 100% can it be average of the secondary material proportions of the assumed that all relevant product families have com- three metals based on average regional or global - pleted each individual phase for Robust Eco Design. values from literature values and supplier informa tion. Last year this share was 34%. Moreover, in fiscal Progress 2023 we sourced < 1% of the resins used to make our FY 21: 26% 51% 100% by 2030 products from recycled sources. We continue to work Siemens without SHS with the recycling chains for technical plastics currently being established, and on further developing product specifications as well as material standards in this context. Applying RED in all relevant product families Progress Our aim has been to intensify the use of lifecycle assess- Metals 35% ments (LCAs) and environmental product declarations Resins
4.3 Product stewardship Expanding our use of secondary materials → Extend the lifespan of our products, systems, solutions, We want to proportionately increase our procurement of and services through proper maintenance, repairability, secondary metal and resins by 2030. To achieve this, we are and upgradability concentrating on suppliers of raw materials and semifinished → Maximize the value and benefit from our products, systems, products that can be directly influenced by our purchasing solutions, and service by implementing efficient return specifications. logistics systems, promoting take-back initiatives, and adopting As-a-Service business models. Limiting declarable substances At the same time, we want to continuously reduce declarable RED phases substances in all our products. Measurements and more The RED approach involves three phases: details can be found in the section “Actions and results.” → Phase 1 – Application perspective Actions and results The goal and scope of requirements for relevant product Our program Eco Efficiency @ Siemens has defined special families are defined, and relevant product families are environmental protection priorities in the categories Robust analyzed in terms of the environmental parameters Eco Design and Clean Supply Chain. required by markets and customers. They are then catego- rized based on their underlying technology and design Robust Eco Design for future-fit product families specifications so they will meet the needs and demands RED focuses on the systematic application of Eco design to all of stakeholders. lifecycle phases. The aim is to identify strategies that make a product’s life as environmentally compatible as possible and → Phase 2 – Solid foundation that allow all materials to be recycled. At the same time, The environmental impacts of product families are quan- material and energy flows and losses will be reduced to the tified using LCAs based on ISO standards. EPDs are used necessary minimum. to communicate a product’s environmental impact and other environmental indicators that measure circularity. RED measures This phase provides the basis for the determination of The RED approach is designed to identify potential measures environmental footprint improvement measures. For for improving the environmental impacts of our products, details, see our LCA EPD BROCHURE systems, solutions, and services, for example, to: → Phase 3 – Dematerialization → Improve product resource efficiency by reducing material The preceding assessments are conducted to identify inputs or replacing physical components and functions - environmental design alternatives, the results are inter with digital solutions, otherwise known as dematerialization preted, and where feasible they are incorporated into → Optimize product energy efficiency by minimizing energy environmentally optimized design specifications. Typical consumption during use and designing environmentally Ecodesign strategies applied in this phase include increas- sound operation modes ing the use of secondary materials (recyclates), product → Enhance product durability and reliability by selecting repairability, upgradeability, or suitability for refurbishment, materials that help extend a product’s lifespan and main- remanufacturing, and recycling, and the evaluation of tain its functionality new business models that enable take-backs after a product’s use. SIEMENS SUSTAINABILITY REPORT 2023 73
4.3 Product stewardship Siemens’ vision of an almost completely closed lifecycle when applying our RED approach Production Re r fu em rb Use an ishm u fa en c tu t r a gni dn Ecodesign e s eu r Manufacturing and ir a p e R Raw material R e g c lin y extraction c Waste recovery Implementation rate of our RED approach the implementation rate KPI for RED is calculated as the ratio In line with our DEGREE ambition, we consistently monitor of the total RED-conformant revenue share to the total reve- our progress with implementing the Siemens RED approach nues of the relevant product families. across the relevant product families in our business units, excluding Siemens Healthineers (SHS), and supporting busi- The RED approach allows us to use good practice results to nesses such as Real Estate. identify practical Ecodesign measures in a product family that can then be used in other product families. Scheduled To do this, we classify products, systems, solutions, and ser- community meetings of product-related environmental vices into groups that share similar technical characteristics, protection practitioners facilitate this good practice and we evaluate them based on RED criteria. The rate of knowledge-sharing across our business units. We also host implementation of the individual RED phases is then assessed Ecodesign case studies on an internal wiki to facilitate in each of the relevant product families. If a criterion in a RED knowledge-sharing between our business units. phase has been met, all the revenue generated by the product is considered RED-conformant. If a criterion is only partially Focus in fiscal 2023 met, 25% of the revenue is considered RED-conformant. If a As a critical precondition for implementing our RED criterion is not met, the corresponding revenue is disregarded. approach, we worked on developing automated solutions to calculate LCAs and generate EPDs in fiscal 2023. This aims to The RED implementation rate for each product family is then facilitate Ecodesign comparisons and the systematic use of determined by averaging the fulfillment levels of the individual LCAs and EPDs at Siemens. We also published an INTERNAL RED criteria. We calculate the revenue share of our RED-con- ON ECODESIGN to ensure alignment, increase transparency, and formant portfolio by multiplying the RED implementation accelerate knowledge generation on Ecodesign. rate with the revenues of the given product families. Lastly, SIEMENS SUSTAINABILITY REPORT 2023 74
4.3 Product stewardship Clean Supply Chain: Using secondary materials Currently, up to 50% of our revenue (Siemens without SHS) to decouple natural resource use comes from products, systems, solutions, and services that Building on the RED phase dematerialization, the Clean contain substances or groups of substances regulated by Supply Chain category in the Eco Efficiency @ Siemens IEC 62474. We are continuously seeking ways to replace program maps our path to decoupling natural resource use these substances whenever technically possible and reason- from our economic growth. able. In fiscal 2023, we emphasized making a continuous material By systematically applying our approaches to environmen- change from plastics made from fossil fuels to sustainable tally compatible product, system, solution, and service and secondary thermoplastics. For example, we introduced design and closely collaborating with our business partners, a sustainable polyamide 6 composite with a recycling con- we intend to comprehensively support the replacement of tent of 25% to 75% that engineers can apply in their designs. declarable substances and decouple economic development This can lead to a reduction of the product carbon footprint from resource consumption. of 10% to 35%, depending on the application. We also devel- oped an internal standard for sustainable plastics and using Training and stakeholder involvement in product of biobased resins made from waste. stewardship We actively involve our customers in our Ecodesign Risk-aware handling of declarable substances approaches. Our business units reach out to customers to Another essential aspect of product stewardship is the discover their specific requirements for Ecodesign measures responsible handling of substances that are potentially haz- and to get feedback on measures already implemented. ardous for the environment or health, like those regulated by Regular workshops with selected customers like wholesalers the EU REACH regulation. We modify internal IT procedures are conducted to poll their opinions on required or performed and material compliance processes with the aim of making Ecodesign measures. the use of these substances safer. We are also working pro- actively to substitute and reduce them wherever we can. We Since fiscal 2022, the two-part Circular Design learning pro- work to continuously increase the utilization of the digital gram has been available online to all Siemens employees. industrial substance database BOMcheck by our suppliers. In addition, we developed the Leading in Sustainability as We comply fully with the declaration requirements of inter- part of the Top Management Leadership Program, a learning national legislation and IEC 62474, and we are constantly program for our leaders with also a focus on the circular optimizing our interfaces and automated workflows. economy. We maintain internal stakeholder engagement and raise awareness with measures like environmental protection newsletters and environmental information campaigns. SIEMENS SUSTAINABILITY REPORT 2023 75
4.4 EU taxonomy 4.4 EU Taxonomy The information for Siemens’ EU Taxonomy reporting accord- For each environmental objective, a catalog of relevant ing to article 8 of the EU regulation (EU) 2020/852 and economic activities has been defined. When a business associated delegated acts is disclosed in its Combined Man- activity meets the definition of an economic activity, it is agement Report – the following chapter provides further referred to as Taxonomy-eligible. EU Taxonomy alignment information. then requires the fulfillment of both the criteria for Substan- tial Contribution (SC) and the criteria for Do No Significant The EU Taxonomy regulation was introduced to propose a Harm (DNSH), together called Technical Screening Criteria framework to facilitate sustainable investment as part of (TSC). Moreover, the company involved must observe Mini- EU’s efforts to implement the European Green Deal. It is a mum Safeguards (MS), e.g., compliance with human rights key element of the European Commission’s action plan to principles. achieve the EU’s ambitious goal of carbon neutrality by 2050 by redirecting capital flows towards sustainable activities The EU Taxonomy’s catalog of economic activities includes and help navigate transition to a low carbon economy. business activities with the most potential for contributing to the six defined environmental objectives. If a business activ- The Taxonomy is a classification system which aims to identify ity does not fall within the scope of the EU Taxonomy, it does if a company’s activities are considered as environmentally not give an indication that such businesses could not be sustainable. sustainable. For the reporting year 2023, EU Taxonomy reporting is limited to the first two environmental objectives Siemens supports the EU agenda’s general objectives of (climate change mitigation and climate change adaptation). carbon neutrality by 2050 and the direction of capital flows towards sustainable activities. Siemens also supports the EU With expansion of the criteria on all six environmental objec- Taxonomy by improving transparency helping scale up tives for fiscal 2024, we expect an increased EU Taxonomy sustainable investment and achieving the Union’s decarbon- coverage for our portfolio in the next year. ization and environmental objectives. EU Taxonomy in the context of our Industrial EU Taxonomy at a glance Business The EU Taxonomy’s classification system defines economic Siemens’ Industrial Business, which includes Digital Indus- activities as environmentally sustainable based on their rele- tries, Smart Infrastructure, Siemens Mobility, and Siemens vance to one of the following six environmental objectives Healthineers, is developing a wide range of solutions for a and their fulfilment of predetermined criteria: path to a sustainable future. I. Climate change mitigation Digital Industries (DI) offers a comprehensive portfolio of - II. Climate change adaptation products, services and solutions for automation and soft Sustainable use and protection of water and marine ware for the discrete and process industries. It enables III. resources customers to optimize their entire value chain from product IV. Transition to a circular economy design, development, and production facility modeling to V. Pollution prevention and control production operation and after-sales service. The Digital VI. Protection and restoration of biodiversity and ecosystems Industry portfolio enhances efficiency, conserves resources, and reduces greenhouse gas emissions. SIEMENS SUSTAINABILITY REPORT 2023 76
4.4 EU taxonomy The EU Taxonomy’s current eligibility rules for reporting on Siemens Mobility enables transportation operators around climate change mitigation and adaption cover the Digital the world to make their trains and infrastructure smart and Industries portfolio to a limited extent only. With the appli- electrified, and contributes to efficient, low-carbon transpor- cation of the four new environmental objectives for fiscal tation. Leveraging the advantages of digitalization, it helps 2024 and amendments to existing objectives, an increased increase sustainable value creation throughout the entire coverage of business activities is expected. lifecycle, improve passenger comfort, deliver 100% system availability, and maximize network capacity. The Smart Infrastructure (SI) portfolio includes a wide range of products, services, solutions, and software for all aspects The Siemens Mobility portfolio is almost fully eligible, of grid management, electrical products, building automation, contributing to climate change mitigation through manufac- fire protection and security, e-mobility charging infrastructure, turing of low-carbon technologies for transportation, and and energy efficiency. It offers smart connections for energy - providing infrastructure for rail transportation and infra systems, buildings, and industries. structure enabling public transport. An important portion of this portfolio is devoted to integrating Siemens Healthineers (SHS) is a global provider of healthcare renewable energy into the power grid, increasing electromo- products, solutions, and services with holistic system com- bility, enhancing energy efficiency in buildings, and making petence. The portfolio serves clinical decision-making and the measurement of infrastructure more transparent using treatment pathways definition – from in vitro and in vivo digital tools and data management solutions. Smart Infra- diagnostics to image-guided therapy and innovative cancer structure contributes to electrification with a broad portfolio treatment. The comprehensive portfolio supports customers of low- and medium-voltage power distribution and electrical along the entire care continuum, from prevention and early installation equipment. The Smart Infrastructure portfolio detection through to diagnosis, treatment, and follow-up supports driving decarbonization, resource efficiency, and care. the people-centricity of energy systems, buildings, and industries by connecting the real and digital worlds. Siemens Healthineers concluded in its analysis of contributing activities, that the current climate-related objectives are not A material portion of the Smart Infrastructure portfolio is applicable to manufacturing of medical products, which is eligible for climate objective-related EU Taxonomy reporting, Siemens Healthineers’ primary activity. Taxonomy-relevant especially energy-efficient equipment for buildings and ser- capital expenditures are for the most part reported under vices for energy performance of buildings. With the addition selected economic activities referring to construction and of more activities for climate change mitigation and for the real estate. With the release of the four new environmental other environmental objectives, we expect an increased objectives, Siemens Healthineers expects an increased coverage of our business activities for fiscal 2024. coverage of its economic activities. Siemens Mobility (SMO) combines all Siemens businesses in Eligibility assessment at Siemens the area of rail passenger and freight transportation. The The purpose of the eligibility assessment is to determine if portfolio includes products and solutions related to rolling Siemens’ business activities fit the description of one of the stock (like trains and locomotives), rail infrastructure (includ- economic activities specified by the EU Taxonomy. If a ing rail automation and electrification), and the service Siemens business activity matches, it is then classified as business, e.g., maintenance and digital services. Its offerings “eligible”. A business activity that is “non-eligible” is not comprise software solutions, like train planning systems, within the scope of the EU Taxonomy reporting. The eligibility Mobility-as-a-Service (Maas), reservation management and assessments were conducted decentrally in the businesses in ticketing, and a turnkey business that bundles consulting, an interdisciplinary manner involving experts, for instance planning, financing, constructing, servicing, and operating from technical, strategy, or sustainability departments. of complete mobility systems. SIEMENS SUSTAINABILITY REPORT 2023 77
4.4 EU taxonomy For fiscal 2023, Siemens’ Industrial Business reported its outlined in the Delegated Acts, the assessment was con- Taxonomy-eligible revenue shares under the following EU ducted by technical experts on the product, site, project and/ Taxonomy activities of climate change mitigation: or supplier levels. Industrial Economic Activity Business Minimum Safeguards (MS): An additional requirement for EU 3.1 Manufacture of renewable energy technologies SI Taxonomy alignment is compliance with MS as outlined in 3.3 Manufacture of low carbon technologies for Article 18 of the EU Taxonomy Regulation. The MS criteria transport SMO require business activities to be compliant with the following 3.5 Manufacture of energy efficiency equipment for regulations: buildings SI 3.6 Manufacture of other low-carbon technologies DI, SI → OECD Guidelines for Multinational Enterprises; 4.9 Transmission and distribution of electricity SI → UN Guiding Principles on Business and Human Rights, 6.14 Infrastructure for rail transport SMO including the principles and rights set out in the eight 6.15 Infrastructure enabling low-carbon road transport and public transport SMO, SI core conventions identified in the International Labor 6.16 Infrastructure enabling low-carbon water transport SI Organization’s (ILO) Declaration on Fundamental Rights 7.3 Installation, maintenance and repair of energy and Principles at Work, efficiency equipment SI → The International Bill of Human Rights. 7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) SI Based on its implemented group-wide structures on risk 7.5 Installation, maintenance and repair of instruments analysis, corporate guidelines and due diligence processes and devices for measuring, regulation and controlling and mechanisms, Siemens is fulfilling the MS requirements. energy performance of buildings SI 7.6 Installation, maintenance and repair of renewable energy technologies SI For fiscal 2023, Siemens’ Industrial Business reported 8.2 Data-driven solutions for GHG emissions reductions DI, SI Taxonomy- aligned revenue shares under the following EU 9.3 Professional services related to energy performance Taxonomy activities of Climate change mitigation: of buildings SI Industrial Economic Activity Business Alignment assessment at Siemens 3.1 Manufacture of renewable energy technologies SI In the next step, Siemens’ Taxonomy-eligible activities were 3.3 Manufacture of low-carbon technologies for evaluated against the technical screening criteria for Sub- transport SMO stantial Contribution (SC) and Do No Significant Harm 3.5 Manufacture of energy efficiency equipment for buildings SI (DNSH) according to the Delegated Acts. Siemens also 3.6 Manufacture of other low-carbon technologies DI needed to prove its compliance with Minimum Safeguards: 4.9 Transmission and distribution of electricity SI namely, on human rights and good business conduct rules. 6.14 Infrastructure for rail transport SMO 6.15 Infrastructure enabling low-carbon road transport Substantial Contribution (SC): Following the eligibility and public transport SMO, SI assessment, the alignment of all eligible business activities 6.16 Infrastructure enabling low carbon water transport SI with the SC criteria outlined in the respective Delegated Acts 7.3 Installation, maintenance and repair of energy was assessed. This was conducted and documented at the efficiency equipment SI highest appropriate reporting hierarchy level, such as business 7.5 Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling segment, product family or project level – depending on the energy performance of buildings SI relevant SC criteria and the respective business activity. 7.6 Installation, maintenance and repair of renewable energy technologies SI Do No Significant Harm (DNSH): Once a business activity 8.2 Data-driven solutions for GHG emissions reductions DI, SI demonstrated a SC, its compliance with the DNSH criteria 9.3 Professional services related to energy performance was assessed. Based on the specific regulatory requirements of buildings SI SIEMENS SUSTAINABILITY REPORT 2023 78
4.4 EU taxonomy KPI results for the reporting year Capital expenditures KPI The key performance indicators in this section were deter- The CapEx KPI shows the ratio of CapEx from Taxonomy- mined based on Commission Delegated Regulation (EU) eligible and/or aligned economic activities to the total CapEx, 2021/2178 in conjunction with the International Financial reflecting additions (including additions from business Reporting Standards applicable to the Consolidated Financial combinations) to other intangible assets and property, plant Statements. Based on the eligibility and alignment assess- and equipment in accordance with Note 13 to the Consoli- ments described above, the baseline values for revenue, dated Financial Statements. In the reporting year, 34.5% capital expenditures (CapEx), and operating expenditures (€1.3 billion) of Siemens’ CapEx were eligible, and 12.2% (OpEx) were analyzed and, if applicable, mapped to the (€0.5 billion) were aligned. The aligned CapEx is composed respective EU Taxonomy activities. Allocations were also as follows: a majority of €0.4 billion is related to additions to applied based on eligible and/or aligned revenue in order to property, plant and equipment, the remainder pertains to link capital expenditures and operating expenditures to the internally generated intangible assets and capitalized right- respective activities. Siemens implemented a supporting IT of-use assets. tool for the EU Taxonomy technical eligibility and alignment assessments and associated documentation. To avoid double This aligned CapEx includes €116 million related to a CapEx counting, the mapping was consistently made to only one plan, associated with building projects to be finalized by economic activity. fiscal 2028, summing up to a planned total volume of €1.4 billion (capitalizable and non-capitalizable costs). The Revenue KPI buildings are designed to minimize energy use and carbon The revenue KPI shows the ratio of revenue from Taxonomy- emissions (CCM 7.7). eligible and/or aligned economic activities to the total revenue in the Consolidated Statements of Income for the reporting Acquisition and ownership of buildings (CCM 7.7) related to year. Based on an assessment of the Siemens business port- Siemens’ real estate portfolio represents the largest portion folio, Taxonomy-eligible revenue accounted for 20.3% and in overall CapEx eligibility. The difference between Taxonomy- Taxonomy-aligned revenue for 16.5% of total revenue. This eligible CapEx and Taxonomy-aligned CapEx is impacted by translates into €15.7 billion in Taxonomy-eligible revenue (i) only partial availability of information on energy perfor- and €12.8 billion in aligned revenue. mance certificates for our global portfolio and (ii) energy certificates below the required threshold defined in the Taxonomy-eligible and aligned economic activities were Substantial Contribution criteria for the energy efficiency of primarily driven by the (i) Manufacture of low-carbon tech- buildings. nologies for transport (Climate Change Mitigation, CCM 3.3), (ii) rail transportation infrastructure (CCM 6.14), (iii) Operating expenditures KPI Infrastructure enabling low-carbon road transport and public The OpEx KPI shows the ratio of OpEx from Taxonomy- transport (CCM 6.15), all associated with Mobility busi- eligible and/or aligned economic activities to total OpEx. The nesses, as well as (iv) energy-efficient building technologies total OpEx comprises direct non-capitalized costs related to (CCM 3.5) and (v) services for energy-efficient building research and development, building renovation measures, technologies (CCM 7.5), both related to Smart Infrastructure short-term leases, maintenance and repairs, and any other businesses. direct expenditures relating to the day-to-day servicing of assets of property, plant, and equipment per Annex I of the The difference between Taxonomy-eligible revenue and Commission Delegated Regulation (EU) 2021/2178. 12.4% Taxonomy-aligned revenue is mainly due to DNSH criteria (€0.9 billion) of Siemens’ OpEx were eligible and 8.2% related to pollution prevention as part of Appendix C, which (€0.6 billion) were aligned. go beyond existing national regulation. This is mainly - because additionally required documentation is not com pletely available yet. SIEMENS SUSTAINABILITY REPORT 2023 79
4.4 EU taxonomy The majority of eligible and/or aligned expenditures relate to processes and assets associated with the economic activities described for the revenue KPI: (i) Manufacture of low-carbon technologies for transport (CCM 3.3) and (ii) rail transportation infrastructure (CCM 6.14). These two activities account for half of eligible OpEx and the majority of aligned OpEx. This aligned OpEx includes €3 million related to a CapEx plan, associated with building projects to be finalized by fiscal 2028, summing up to a planned total volume of €1.4 billion (capitalizable and non-capitalizable costs). The buildings are designed to minimize energy use and carbon emissions (CCM 7.7). Corresponding to revenue, the difference between Taxonomy- eligible OpEx and Taxonomy-aligned OpEx relates mainly to the documentation of DNSH criteria for pollution prevention (Appendix C). SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT REPORT SIEMENS SUSTAINABILITY REPORT 2023 80
Pages 81 – 105 Social Contribution to people and society Equity Employability Foster diversity, inclusion, and community develop- Enable our people to stay resilient and relevant in a ment to create a sense of belonging permanently changing environment 1 1 Our key ambitions Our key ambitions 4 → 30% female share in top management by 2025 → Increase digital learning hours to “25 by 25” → Access to employee share plans: maintain high level → Access to Employee Assistance Program: maintain 2 and expand globally to up to 100% by 2025 high level and expand globally to 100% by 2025 → Global commitment to the New Normal Working → 30% improvement in Siemens’ globally aggregated 3 5 Model LTIFR by 2025 Additional highlights Additional highlights → WIN talents, GROW, and BOND our people → “MyGrowth” program to foster individual growth → Greater equity of opportunities continues through and performance at scale 1 our global Gender Equity Program → Broad portfolio for vocational education and training → Social engagement with three strategic priorities (VET) and lifelong learning → Continued rollout of the Healthy and Safe @ Siemens program 1 Siemens without SHS. 2 Where legally possible and reasonable. 3 For employees with job profiles that make this possible and reasonable. 4 Digital learning hours per headcount. 5 LTIFR: Lost Time Injury Frequency Rate (of Siemens employees and temporary workers) baseline FY 20. SIEMENS SUSTAINABILITY REPORT 2023 81
5.1 Working at Siemens 5.1 Working at Siemens – WIN talents, GROW, and BOND our people Talent markets continue to be highly dynamic and com- – 320,0001 employees worldwide petitive. It is becoming harder to win and bond the highly – Global values and global corporate culture sought-after talents that are key to driving the Siemens - transformation. Candidates are clear about their expecta tions of an attractive employer: Management approach Structural factors such as demographic change, which con- (a) empowerment and personal choice tinue to widen the talent gap in key talent markets (including (b) skill development digital talents), management of unstable geopolitical condi- (c) a sense of belonging and contributing to a larger purpose. tions, and the decreasing half-life of knowledge are the principal challenges that we are addressing at Siemens. All Growing our people is a vital answer in tight talent markets. of them are driving significant workforce transformations Gaining the trust of our people and bonding with them across our people and organizations. builds a competitive advantage that is regularly measured and reflected in our Siemens Global Engagement Survey As the COVID-19 pandemic recedes, the past year has seen (SGES)2. new global challenges that few had anticipated. In this ever-changing environment, our people and organization Our People & Organization governance and need to strengthen their resilience in order to stay relevant. policies More than ever, people are a determining factor for our The People & Organization (P&O) unit, headed by our Chief growth. People and Sustainability Officer (CPSO), is responsible for regulations and standards for our people that establish Empowering people and fostering a growth an integrating, empowering culture of growth and transfor- mindset mation, that aims to support both a sustainable business Our aim is to establish an integrating, empowering culture success and our people’s employability. All Governance units of growth and transformation that ensures both sustainable are working with our country and local business P&O func- business success and our people’s employability. An ambition tions to align them with local labor laws, support them to that we are also pursuing with our four strategic priorities, drive transformation and digitalization, and attract and STRATEGY two of which are especially relevant to People & retain talents. Organization (P&O): Empowered People and a Growth Mind- set are reflected in our people strategy with a further focus → Our global and local P&O Governance are responsible for on WIN, GROW, and BOND so we can attract and retain the (global) policies, standards, and top strategic initiatives in right talents.2 P&O-related areas. → Our global and local P&O Business Partners (BPs) are working with our managers to focus on strategic P&O topics and implementation that will support the business and functional needs. → Our Siemens internal Global Shared Service centers man- age people operations. 1 All employee figures in this chapter refer to headcount and our own workforce. 2 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 82
5.1 Working at Siemens Establishing a culture of trust → Ethics: We foster a culture of trust, adherence to ethical Siemens’ values and ethical standards for doing business are standards, and handling data with care. Our values and anchored in our Business Conduct Guidelines (BCGs). The ethical principles are embedded in our BCGs, on which all BCGs define the basic principles and rules for our conduct our people are trained regularly. COMPLIANCE AND ETHICS both inside and outside the company. The BCGs are binding → Equity: Equal treatment and respect are at the core of our for our employees, managers, and top management globally. corporate values. We aim to be the employer of choice The principles of human rights, non-discrimination and and to foster diversity, inclusion, and community. In non-intimidation, free choice of employment, prohibition of addition to fostering a culture of trust and empowerment, child labor, prohibition of forced labor and all forms of we want to create a sense of belonging and a safe envi- slavery, fair employment (including adequate compensation ronment where our people can give their best. DIVERSITY, and appropriate working hours), freedom of association and EQUITY & INCLUSION collective bargaining, health, occupational safety, personal → Employability: We continually invest in all levels of train- security, and protection and privacy of personal data are ing for our people. We support their resilience as people embedded in Siemens’ BCGs, International Framework and relevance as skilled workers. We strive to enable our Agreement (IFA), Human Rights policy, and Compliance people to manage change effectively and to surpass their system. COMPLIANCE AND ETHICS previous performance levels. We focus on digital learning, employee assistance programs, and occupational health We place fair treatment and respect at the heart of our value and safety measures for them. PROFESSIONAL EDUCATION system. Our aim is to respect the personal dignity, privacy, AND LIFELONG LEARNING, OCCUPATIONAL HEALTH AND SAFETY and rights of each individual. We believe that diversity MANAGEMENT enriches our workplace. We work together without regard to ethnic origin, culture, religion, age, disability, skin color, In addition, the P&O unit supports the DEGREE Governance gender, sexual identity and orientation, or worldview. We do ambition by integrating ESG criteria into the long-term not tolerate discrimination, sexual or any other form of 3 for the Managing Board variable compensation programs harassment, or inappropriate behavior towards individuals and senior management. SUSTAINABILITY GOVERNANCE AND or groups. HUMAN RIGHTS ORGANIZATION Targets We have adopted ambitious, specific goals in our DEGREE sustainability framework. The three fields of action – Ethics, Equity, and Employability – are key priority areas for the P&O 2 unit at Siemens. OUR DEGREE SUSTAINABILITY FRAMEWORK 2 Siemens without SHS. 3 Assessment based on the Siemens internal ESG/sustainability index, which is based on customer satisfaction (Net Promoter Score), CO reduction, and digital learning hours. 2 SIEMENS SUSTAINABILITY REPORT 2023 83
5.1 Working at Siemens Actions and results E Equity Progress on DEGREE ambition #10: Launch of our Siemens Employer Branding campaign to attract and retain talents2 Access to employee share plans – In 2023 we launched our new employer branding campaign maintain high level and expand globally Create a better #TomorrowWithUs to win and retain talents to up to 100% by 2025 for Siemens as the inclusive employer of choice. Siemens is Siemens employee share program strengthens currently undergoing the most significant transformation in identification with the company the company’s history: transitioning from a mechanical Employee share ownership is an integral part of the engineering company to a technology company that drives Siemens DEGREE sustainability framework: We aim to sustainability. Our goal is to position Siemens as the inclusive maintain access to our employee share program at employer of choice in all our relevant talent markets. This has the 98% level and expand it globally to up to 100% by also received external recognition, as Siemens has been listed 1 Owning a stake in the company is intended to among the “World’s Most Attractive Employers 2023” by Forbes 2025. motivate our people to take personal responsibility and Universum, as well as in national rankings like LinkedIn for their own actions. This ownership culture has a “Top Company 2023” in Germany. long tradition at Siemens: Our first profit-sharing program was introduced back in 1858. Today the Fair and equitable talent process global Siemens share program, which has been We are committed to transparent and equitable access to offered annually since 2008, is one of the largest career opportunities and equal pay for equal work for our employee share programs in the world. More than people. With access to our open and transparent Job Market 102,000 employees invested in their company in fis- and by leveraging new technologies to improve our skill- - cal 2023, which means that almost 44% of all eligible based recruiting, we foster cross-organizational develop employees participated.2 In addition, Siemens AG ment. Our Siemens MyGrowth development program and distributed around 573,000 free bonus shares to talent programs are designed to help develop our people’s employees in the past fiscal year as part of the global full potential. PROFESSIONAL EDUCATION AND LIFELONG LEARNING share program. OUR DEGREE SUSTAINABILITY FRAMEWORK Right to collective bargaining and freedom of Siemens Healthineers has its own share program that association it offers to its employees. The principles of fair pay, the right to collective bargaining, and freedom of association are embedded in Siemens’ BCGs Progress and International Framework Agreement (IFA) COMPLIANCE FY 21: 98% 99.9% ~ 100% by 2025 AND ETHICS. Siemens AG reaffirmed its commitment to workers’ fundamental rights in an International Framework Agreement 1 Where legally possible and reasonable. (IFA) signed with trade unions and our employee represen- 2 Participation is open to all employees who were employee by a participating Siemens subsidiary on October 1 of the previous calendar year and continue tatives in 2012. HUMAN RIGHTS to be employed at a participating Siemens subsidiary until at least the last day of the applicable offer period. Members of the Managing Board are excluded. Siemens without SHS 2 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 84
5.1 Working at Siemens According to the collective bargaining agreements in Ger- testimony of our unwavering commitment to fair pay for our many, the pay system at Siemens is determined by collective people. In fiscal 2023 we reviewed our 19 largest companies 2 bargaining negotiations between the trade union “IG Metall” in different countries (selected by revenue) on the basis of our and employers’ associations. 79% of our employees in Ger- defined, market-based pay parity methodology. We are many are covered by collective bargaining agreements, an working with these companies to establish a long-term additional 19% of our employees in Germany are covered by cultural change that supports our pay parity ambitions. collective agreements subject to codetermination by the Works Council, and our senior managers (2% of employees Employee benefits and opportunities for today in Germany) are represented by the “Executive staff committee.” and tomorrow In an ever-changing world, we continuously review and Social dialog and relationship management modernize employee benefits. We offer flexible benefits Enabling a safe dialog between Siemens and our employee programs that support our people’s physical, mental, finan- representatives is important for building trust with our peo- cial, career, and social well-being throughout their work-life ple. The following employee representative bodies are journey. With equity and inclusion in mind, the Siemens established at Siemens: benefits programs2 aim to empower our people to realize their full potential and strengthen their resilience through a → The Siemens Group Works Council, Central Works Council, variety of benefits programs, insurance policies, retirement local Works Councils, and other employee representative arrangements, and elective coverage. With an eye on sus- bodies represent all employees at Siemens in Germany – tainability as well as the diverse and evolving needs of our also disabled people and young workers. global team and their families, the external market is closely → Our Siemens Europe Committee (SEC) comprises 37 rep- monitored for the latest industry trends and innovations. resentatives from 23 countries. The SEC represents all our SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT people in the EU countries and the UK, Switzerland, and REPORT, PENSIONS Norway. In addition to three regional meetings, the annual SEC meeting with all SEC members, representatives of the Eligibility for Siemens sponsored benefits such as share company, and our CPSO took place in fiscal 2023. plans, company pension scheme, the employee benefits → In fiscal 2023, Siemens also held meetings with employee programs, and parental/family leave regulations varies by representatives and unions in non-EU countries. country. Country-specific plans generally follow local regula- tions and market practices. Commitment to fair pay We want to guarantee fair pay (coverage of basic needs) that Work-life balance at least conforms to the national statutory minimum wage. To provide our people with even more flexibility and individ- Subject to national regulations, Siemens adheres to the ual solutions, we offer flexible working models. These models principle of “equal pay for equal work”: for instance, equity are structured according to local requirements and in ways in wages for women and men with the same job profile or role. that are compatible with the employees’ roles. For instance, Siemens offers mobile working, part-time hours, sabbaticals, We also review pay parity at regular intervals in order to time-outs, parental/family leave, and partial early retirement. eliminate unjustified differences (given the same job profile, Parental leave for first and second care enables our people to role, competencies, experience, performance, etc.) as further manage their unique work-life needs. 2 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 85
5.1 Working at Siemens Mobile working has been established as a core element of There are other options that our people in Germany can the “New Normal” in order to promote a sustainable work benefit from; for example, approximately 1,3002 childcare culture and environment. places, a summer vacation childcare program, and parent- child health retreats. E Equity The FutureOfWork@SIEMENS initiative The Siemens #FutureOfWork initiative tackles structural Progress on DEGREE ambition #11: changes in the working environment by asking two essential Global commitment to the New Normal questions: 1 Working Model → HOW will we work in the future? (#NewWork) At Siemens, mobile working and flexibility of work → WHAT will we work on in the future? (#NextWork) location in the established hybrid New Normal Work- ing Model (2–3 days of mobile work per week as a #NewWork focuses on helping organizations and individuals standard offering for our people worldwide) also become more flexible and adaptable. For instance, exploring strengthen our ability to attract and retain the best new forms of agile organization, collaboration, leadership, talent. Our DEGREE ambition of a global commitment and flexible working conditions. to the New Normal Working Model supports this aim worldwide. OUR DEGREE SUSTAINABILITY FRAMEWORK In 2020, Siemens introduced #NextWork, which is a method- ology we use to proactively tackle the changing environment Progress by preparing the organization and our people to stay relevant Rollout continued and employable. With #NextWork, we’re addressing the key question of what our future jobs will look like. This includes 1 For employees with job profiles that make this possible and reasonable. identifying the roles, skills, and tasks of tomorrow and pro- Siemens without SHS viding specific and actionable workforce transformation roadmaps through our WIN, GROW, and BOND measures. PROFESSIONAL EDUCATION AND LIFELONG LEARNING We also encourage our people to achieve a balance between Engagement with stakeholders work and caring for relatives. As this topic continues to grow To highlight our culture of trust and empowerment, we are in importance, we will support our people in Germany who pursuing two initiatives that concentrate on understanding provide care for close family members. We offer a variety of and taking account of our people’s experiences and recog- support options through the Elder Care program. This pro- nizing their achievements: gram is based on four pillars: time off work and flexible working, communication, counseling, and training on health We use the results of our Siemens Global Engagement matters. 2 at regular intervals to assess the efficiency Survey (SGES) and success of our actions and to derive any necessary steps Childcare at Siemens for improvement. In January 2023, we had a response rate In fiscal 2023, as part of its family-friendly corporate policy, for the SGES of 65% (decrease of 4 percentage points from Siemens AG supported its people in Germany with a general the year before). Our People Net Promoter Score (pNPS) was tax-free childcare allowance of up to €100 per calendar 39 (+3 points from the prior year). month per child for the care of preschool-age children at a day-care center or similar facility. Siemens AG also grants its part-time employees in Germany a tax-free childcare allow- ance during parental leave for children up to 14 months of age. 2 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 86
5.1 Working at Siemens In addition, the Werner von Siemens Awards2 are given in Hires and exits seven different categories to honor achievements that have The number of new hires decreased by approximately 14% had a positive impact on Siemens and beyond. Sustainability compared to fiscal 2022, and the number of exits decreased is an integral focus of the Werner von Siemens Awards. In by about 15%. All other differences result from changes in 2023, the trophies were presented to the strongest Business the basis of consolidation and other changes. Unit, country and five project teams that enabled our cus- tomers to transform their industries, accelerated digitaliza- tion, contributed to technological innovation, empowered Employees hired Siemens’ people, and positively impacted society and the Fiscal year environment. Approximately 7,600 employees participated (in thousands) 2023 2022 in this competition in 2023 and submitted 395 entries. Siemens 40.7 47.3 Europe, C.I.S.¹, Middle East, Africa 17.3 19.3 Employee structure and change Americas 12.0 13.8 As of September 30, 2023, Siemens employed 320,000 Asia, Australia 11.4 14.3 people around the world. This amounts to an increase of 1 Commonwealth of Independent States. about 9,000 employees from September 30, 2022. 55% of our employees were based in Europe, the Commonwealth of Independent States (C.I.S.), the Middle East, and Africa, 24% Women hired in Asia and Australia, and 21% in North America, Central Fiscal year America, and South America. (as a percentage of new hires) 2023 2022 Siemens 30 30 Europe, C.I.S.¹, Middle East, Africa 29 28 Siemens employees Americas 29 33 (in % of total number of employees) September 30, 2023 Asia, Australia 32 30 21% 1 Commonwealth of Independent States. 24% Americas Asia, Australia 320,000 Employee turnover rate¹ total Fiscal year 55% (in %) 2023 2022 1 Europe, C.I.S. , 2 Middle East, Voluntary turnover rate 5.3 6.6 Africa 3 Involuntary turnover rate : 4.3 5.0 1 Commonwealth of Independent States. • Dismissals 1.1 1.2 • End of temporary contract, mutual consent 1.6 1.9 The percentage of women in the total workforce is 27%. • Retirement 1.2 1.3 • Other reasons 0.4 0.6 Total 9.6 11.6 27% 1 Employee turnover is defined as the ratio of voluntary and involuntary exits from Siemens during the fiscal year to the average number of employees. 2 Voluntary turnover rate is based on employee decisions. 3 Involuntary turnover rate is based on other reasons, including dismissals, end of Women as a temporary contracts, mutual consent, (early) retirement, death, and other reasons percentage of total that are not an employee decision. employees 2 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 87
5.1 Working at Siemens Employment characteristics Changes in age distribution In fiscal 2023, 94% of our own workforce had permanent The distribution of employees by age group remained almost contracts. unchanged from the previous year. The average age in fiscal 2023 was 42 years. Permanent and temporary employees Fiscal year Age structure (in thousands) 2023 2022 (as a percentage of total employees) September 30, 2023 Permanent 300 290 < 30 30 – 50 > 50 Temporary 19 20 Siemens 16% 59% 25% Total 320 311 1 Europe, C.I.S. , 13% 56% 30% Middle East, Africa Americas 15% 53% 32% 4% of our own workforce used part-time working models. Asia, Australia 21% 71% 8% Full-time and part-time employees 1 Commonwealth of Independent States. Fiscal year (in thousands) 2023 2022 Further data on Working at Siemens are disclosed in the Full-time 305 295 indicator table. OUR SUSTAINABLITY INDICATORS Part-time 14 14 Total 320 311 SIEMENS SUSTAINABILITY REPORT 2023 88
5.2 Diversity, Equity & Inclusion 5.2 Diversity, Equity & Inclusion – Focus on strengthening a sense of belonging Our governance and policies for diversity, equity, – Greater equity of opportunities continues through and inclusion 1 We have established a global Diversity, Equity, and Inclusion our global Gender Equity Program – One of our DEGREE ambitions: 30% female share in (DEI) unit that is active in many regions of the world. Led by 1 our Chief Diversity Officer (CDO), the global Diversity, Equity, top management by 2025 and Inclusion Office manages and supports a wide range of activities. Management approach At Siemens, we transform the everyday, for everyone – for Siemens Healthineers has its own Diversity, Equity, and our customers, our people, and society at large. This also Inclusion (DEI) organization to manage and orchestrate means committing to diversity, equity, and inclusion. ambitions and activities. We strive to create a work environment where our people are Our commitment to Human Rights is anchored in our empowered and feel a sense of belonging. We believe that Siemens Business Conduct Guidelines (BCGs) and global diversity positively impacts our teams and workplace and Human Rights policy. We do not tolerate discrimination, leads to more creative and innovative solutions. At Siemens, sexual or any other form of harassment, or inappropriate diversity means the inclusion and interaction of different behavior toward individuals or groups. The guidelines clearly ways of thinking, backgrounds, experiences, skills, and indi- state: vidual qualities across all levels and dimensions of the com- pany. Equity is an essential part of our corporate culture. → “We respect the personal dignity, privacy, and rights of Inclusion enables every voice to be heard and every individual - each individual. We believe diversity enriches our work to get involved. place. We work together without regard to ethnic origin, culture, religion, age, disability, skin color, gender, sexual We believe that focusing on diversity, equity, and inclusion identity and orientation, or world view.” reduces the risk of making biased talent decisions. We have → “We respect the human rights of local communities and of implemented recruitment and promotion strategies that people who are particularly vulnerable.” HUMAN RIGHTS promote equity of opportunities through our Gender Equity Program (GEP)1. We also offer various training opportunities We foster a sense of belonging to empower our people and on our new Diversity, Equity, and Inclusion (DEI) Learning to discover untapped growth potential in every individual. - Channel, we empower managers and teams through our This principle is reflected in the motto #BelongingTrans Belonging Playbook, and we foster an open dialog and forms.1 insights on diversity, equity, and inclusion for all our people on our Belonging Days. This helps us to foster a diverse work Siemens also participates in strategic sponsorships and 1 PROFESSIONAL EDUCATION AND LIFELONG LEARNING partnerships that facilitate worldwide programs and initia- environment. tives, including the Diversity Charter. Initiatives like these enable Siemens to strengthen its commitment to promoting 2 diversity, equity, and inclusion for all its people. 1 Siemens without SHS. 2 Siemens AG Germany. SIEMENS SUSTAINABILITY REPORT 2023 89
5.2 Diversity, Equity & Inclusion Targets Actions and results Equity is one field of action in our DEGREE sustainability We actively promote diversity, equity, and inclusion by creating framework that contributes to a greater sense of belonging a working environment that is open and welcoming to all for all our people. DEGREE ambition #9 – “30% female share people. in top management” – is aimed at continuously improving 1 gender equity. Global LGBTQIA+- Standards and further activities Siemens supports the UN Initiative for Global LGBTQIA+- Standards of Conduct for Companies.1 E Equity Progress on DEGREE ambition #9: In alignment with the Diversity Charter, Siemens and its 30% female share in top management General Works Council have initiated activities like “Respect by 2025 and Appreciation,” which sponsors local projects intended to bring these values to life for our people in Germany. We aim to increase the percentage of top manage- ment positions held by women globally to 30% by Our German prototype program “Trans* at work” supports 1 As of September 30, 2023, September 30, 2025. our people with collegial counselling before, during, and 31.1% of top management positions were held by 1 Following its success, we developed rele- after transition. women (+3.4% points compared to the previous vant program guidelines for our people and managers. In year). OUR DEGREE SUSTAINABILITY FRAMEWORK addition, we were able to work with our people to identify Trans Advocates who could serve as a first point of contact Progress 1 for any inquiries about the program. FY 20: 22.7% 31.1% 30% by 2025 Siemens also released a global Diversity, Equity, and Inclusion 1 This does not affect local or company-specific diversity targets and Learning Channel to raise awareness of the importance of a requirements set by law or regulation. More details about the targets and staffing requirements that apply to Siemens AG, as well as the diversity more equitable and inclusive workplace and to recognize concepts that are being pursued for the Supervisory Board and Managing Board of Siemens AG, can be found in the annual Corporate Governance and address any potential biases or discriminatory practices.1 Statement available on the Siemens Investor Relations website under the Corporate Governance heading. Siemens without SHS Integrating diversity, equity, and inclusion into all aspects of our people experience journey During the regular review of our practices, we realized that integrating diversity, equity, and inclusion into all aspects of Our commitment to greater gender equity is not limited to our people experience – from recruitment and onboarding top management or to complying with statutory and regula- to career development – is the key element in a more diverse tory requirements; rather, it aims to ensure equal opportunities and inclusive working environment. for all genders at all levels of our company. 1 We launched our global Gender Equity Program (GEP) with the aim of ensuring equity of opportunities across the entire organization – from equitable hiring into business functions and equitable promotions to management to representation 1 of women in top management. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 90
5.2 Diversity, Equity & Inclusion 5 Inclusion of people with disabilities In our Pride@SIEMENS networks for the LGBTQIA+ Commu- Siemens strives to ensure equity for people with disabilities, nity, our people around the world can meet and share their their inclusion in society and the workplace, their self-deter- thoughts, feelings, and support each other. People on the mined participation, and their right to be treated with LGBTQIA+ spectrum and straight allies6 are equally welcome. respect. At Siemens, we believe that each person is of value and importance, regardless of their ability. And while we aim Accountability of our local CEOs and business for a barrier-free work environment at Siemens, inclusion leaders means more than just accessibility. It is a holistic way of A lesson learned on our journey to fostering diversity, equity, thinking and acting that eliminates both visible and invisible and inclusion is that the involvement and accountability of barriers and encourages a culture of conscious, equitable our local CEOs and business leaders is integral to the success participation and understanding. We believe that this way of of the DEGREE sustainability framework Equity1 field of thinking supports and enables people with disabilities to be action. This led to our regular CEO Check-In sessions with the included and to give their best. aim of acquiring a deeper understanding of our local com- munities and the societies in which we operate. The Ability@Siemens1 initiative promotes a culture of inte- 3 gration for approximately 4,800 disabled people currently Women in the workforce working at Siemens in Germany. It is based on an inclusion In fiscal 2023, the share of women in the own workforce at agreement with the general representative board for dis- Siemens was 27%. abled employees.4 For many years, we have been working to build a diverse, Global awareness days foster the spirit of equitable, inclusive corporate culture, and we have achieved tolerance and acceptance measurable success. This includes our efforts to increase the We foster the spirit of tolerance and acceptance at Siemens global share of management positions held by women by worldwide through our internal campaigns on global aware- the end of fiscal 2025. In fiscal 2023, 32,900 employees ness days: for instance, International Women’s Day and 7. The share of held management positions at Siemens Global Accessibility Awareness Day. Beyond, in our Belonging women in management positions was 21.6%. Days, we are offering insights and learning opportunities on 1 Further data on Diversity, Equity & Inclusion at Siemens are DEI via a global broadcast to all our people. disclosed in the indicator table. OUR SUSTAINABILITY INDICATORS Siemens also joined the Valuable 500, an initiative launched by the World Economic Forum to place the concerns of per- We are also pursuing a variety of initiatives, programs, and 1 measures to foster a cultural change toward gender equity, sons with disabilities on companies’ management agendas. We support Employee Resource Groups (ERG)1 and people- led diversity, and integration. The following represent two of the activities to help transform our business by bolstering a many different women’s networks around the world: commitment to diversity, equity, and inclusion. These groups include Siemens PRIDE (global), the Neurodiversity Network (United Kingdom), the Black Professional Network (United States), and Women in Tech (China). 1 Siemens without SHS. 3 The number of severely handicapped employees (SHE) is based on legally defined guidelines and specifications according §§ 154-1+3 SGB IX (German Social Law). 4 Inclusion Agreement for Siemens AG Germany. 5 Lesbian, gay, bisexual, trans, queer, intersexual, and asexual. 6 “Straight allies” are persons who identify as heterosexual and cisgender who support the LGBTQIA+ movement and speak out against homophobia, lesbophobia, and transphobia. 7 Employees in management positions include all managers with disciplinary responsibility. SIEMENS SUSTAINABILITY REPORT 2023 91
5.2 Diversity, Equity & Inclusion → Global Leadership of Women@Technology & Innovation 1: The GLOW@TI network aims to promote (GLOW@TI) careers for women with a background in science. Women in this network are often appointed to technology field and research group management positions. 1 → GROW2GLOW : The GROW2GLOW network provides business coaching for women as a way of helping them realize their full potential. The network comprises more than 140 coaches in 13 countries. Our people’s satisfaction with their belonging, inclusion, and well-being In our Siemens Global Engagement Survey (SGES)1 in fiscal 2023, we asked our people about their belonging, inclusion, and well-being. We are constantly working to make our - people feel that they can be themselves at work by imple menting the measures mentioned in this section – throughout the people experience journey at Siemens. In fiscal 2023, Siemens received many diversity prizes and awards worldwide, including the “#Diversity:IN” in the United States and “Best Place to Work for LGBTQ+ Equality – Human 1 Rights Campaign (HRC)” in Mexico. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 92
5.3 Professional education and lifelong learning 5.3 Professional education and lifelong learning – Broad portfolio for vocational education and train Our P&O Talent & Leadership governance and ing (VET) and lifelong learning policies – MyGrowth program to foster individual growth and Siemens’ global P&O Talent & Leadership unit is responsible performance at scale for winning, developing, connecting, and retaining talents – One of our DEGREE ambitions: 25 digital learning (WIN, GROW and BOND). 1 hours by 2025 Our Global Learning and Growth (GLG) unit is responsible for learning and individual growth at scale by orchestrating and Management approach managing our Siemens Learning & Growth ecosystem, Siemens’ continued growth and success depends on our including our MyGrowth program, with our learning experi- highly qualified and skilled people. That’s why we have ence platform My Learning World, our policies, and other developed an extensive portfolio of lifelong learning oppor- strategic learning initiatives. It gives orientation and guidance tunities to empower our people and help them acquire rele- to our people and leadership and manages development vant skills and enhanced resilience for today and tomorrow. opportunities around the globe. We provide a broad range of trainings that cover technology and other specialties, along We are continuously improving our learning, career develop- with developmental courses for inter-personal skills like ment, and growth opportunities to positively impact our team leadership and team building. people. We focus on lifelong learning and upskilling to - Siemens Professional Education (SPE) coordinates and enable our people to adapt to an ever-changing environ ment. We promote a growth mindset in order to create an manages our international apprenticeships and dual-study inclusive, empowering culture of growth and transformation programs to support ongoing talent development. that helps enhance our people’s employability and supports our sustainable business success. As part of our commitment to our strategic priorities of Empowered People and Growth Mindset, a core focus is on Our comprehensive learning portfolio enables us to continu- driving awareness of the importance of lifelong learning. ally expand and evolve our people’s core competencies. We Siemens’ objective is to help our people manage change aim to support our people in successfully managing transi- effectively and support them in remaining resilient as indi- tion and change while simultaneously enhancing Siemens’ viduals and relevant to the employment market. agility and resilience. Today’s talent recruitment needs to satisfy an increasing need for digital and technical expertise. Targets As the pace of technological development and digitalization In our Siemens DEGREE sustainability framework, our learn- reduces the half-life of expertise, continuous learning and ing ambition and measures related to lifelong learning are upskilling is fundamental to Siemens’ continuing success. embedded in Employability, one of the six fields of action, in order to encourage our people’s resilience.1 Our ongoing investments in vocational education and train- ing (VET) and talent-entry programs also help us attract and retain talents. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 93
5.3 Professional education and lifelong learning → With our Siemens Potential Development Programs E Employability 1 (PDP) , we have created an ever-growing network of more Progress on DEGREE ambition #12: than 4,000 people from 57 countries which constantly Increase digital learning hours feeds our talent pipeline. Almost 40 certified programs to “25 by 25” are hosted by different organizations according to their specific business needs. They enable talents to acquire In terms of our DEGREE ambitions, each employee skills that address current and future needs through accel- completed 23 hours of digital learning (+16 hours erated learning interventions and stretch assignments in from fiscal 2020, the basis year – a 229% increase). order to equip them to be powerful transformation OUR DEGREE SUSTAINABILITY FRAMEWORK agents. → GLOW@TI (Global Leadership of Women@Technology & Progress Innovation)1: The GLOW@TI initiative focuses on attract- FY 20: 7h 23h 25h by 2025 ing, developing, and retaining talented women with a background in STEM and associated innovation fields. The Siemens without SHS initiative helps women realize their full potential and promotes a culture of innovation by building strong net- works between departments and organizations. → Siemens Leadership Excellence (SLE)1: Our SLE programs Management compensation at Siemens also includes a life- are designed to connect and enable our leaders. The long learning component. It incorporates long-term perfor- objective of our SLE Pipeline programs for high-ranking mance incentives based on ESG criteria and is defined under executives and global talents is to strategically strengthen Governance in our DEGREE sustainability framework. The our succession planning. Our top management leadership assessment is based on the internal ESG/Sustainability Index, program Leading in Sustainability helps participants think which includes, among other things, digital learning hours.2 strategically about sustainability opportunities for SUSTAINABILITY GOVERNANCE AND ORGANIZATION Siemens, identify sustainable solutions to their business challenges, and provide a common understanding of the Actions and results core competencies and organizational readiness required As a responsible employer, we offer a wide range of profes- for corporate management and transformation. The SLE sional education and learning opportunities to our people. Leaders’ Labs for alumni also enable Siemens to build a These opportunities include development programs, talent- strong global network of managers, both within the entry programs, future-oriented learning, re- and upskilling, organization and beyond. As one of the strategic learning and additional funding for appropriate programs. priorities, we initiated the new scalable L.E.A.P. – Lead. Empower. Accelerate. Practice. program in 2023 for all Customized development programs for our people management levels. Our development programs are customized for both global and local use. Key programs include: Our talent entry programs for individual career paths → Siemens Core Learning Paths (CLP): Designed for specific Siemens’ development and integration of the next generation areas like sales, project management, procurement, of leaders will allow us to build diverse and agile manage- production, and software architecture, CLPs provide self- ment teams capable of successfully managing change and guided learning content and trainer-supported virtual transition and driving growth. Our people are grounded in a training sessions. In fiscal 2023, a total of 29 CLPs were strong growth mindset and values of cohesion and dedication made available to target groups worldwide. that extend above and beyond our programs and even their time at Siemens. 1 Siemens without SHS. 2 Assessment based on the Siemens internal ESG/sustainability index, which is based on customer satisfaction (Net Promoter Score), CO reduction, and digital learning hours. 2 SIEMENS SUSTAINABILITY REPORT 2023 94
5.3 Professional education and lifelong learning 1 → Xcelerate Your Potential at Siemens – XPS Leadership → MyGrowth Learning : Our AI-driven learning platform Program1 is an opportunity for outstanding candidates in My Learning World creates a personalized learning expe- the field of digital business management. By developing rience that is globally accessible any time and offers more their skills and their global networks, the program sup- than 135,000 learning resources across a variety of topics ports participants develop in leadership roles. and formats in order to meet our people’s varied learning → Finance Excellence Program (FEP) is a finance leadership preferences and requirements. Our people can benefit program that builds a foundation for future commercial from multiple learning formats including videos, e-learning leaders with a digital mindset. Participants benefit from modules, virtual training courses, technical literature, being assigned a personal mentor from Siemens’ finance podcasts, and e-books. leadership team and customized development measures. → MyGrowth Career: This program allows our people to → Siemens Graduate Program (SGP) is an international shape their own career development. It is integrated into trainee program for high-potential candidates with a a holistic concept and focuses on the individual’s career master’s degree that has been in existence for more than trajectory. Core components of MyGrowth Career include 100 years. It offers a customized development journey the open markets reflected in the Open Job Market and and excellent networking opportunities throughout the People Profile and other options like Job Tagging (show- company. ing interest in a particular department), Job Shadowing, and Mentoring to encourage personal growth. Our shift to digital learning is key We have seen digital learning accelerate in recent years as Siemens Growth Talks are the connecting links between the the global pandemic compelled a shift in how we deliver elements mentioned above. All of our people receive regular our learning programs. This digitalization trend was well- performance reviews in the form of Siemens Growth Talks. received. Based on the positive reception, we added more These agile, ongoing, forward-looking, strength-based digital training programs, modules, and courses with the conversations support both individual and organizational intention of ensuring broad-based participation and providing growth, performance, and well-being. Support materials like learners with flexibility. discussion guidelines, questions for reflection, and workshop templates help our people, teams, and managers maintain Future-oriented learning and career an ongoing, respectful, and encouraging dialog on personal development instruments development and learning. The MyGrowth program combines our learning and career development tools and content to promote continuous Future Fund supports the transition to a new growth at scale and carve out career progression paths for world of work our people. This program comprises the following three Siemens AG and its Central Works Council intend to take a components: proactive role in shaping structural change. We’re working together to create a learning organization that can master → MyGrowth Self-Reflection: To build a successful career, it structural transformation as well as optimize the opportunities is essential for our people to know their own strengths of change that will benefit our people. A Future Fund has and weaknesses and to be aware of their personal stage been established to support development programs intended of development. A variety of tools and services are offered to help our people stay oriented in a disruptive employment along with content that includes identifying strengths environment. In particular, it enables them to qualify and (Strengthscope®), perception of others (feedback tool), learn beyond their previous limits. It finances projects related and coaching (Peer2Peer). to structural change that go beyond site boundaries, with support from the site management and the Central Works Council. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 95
5.3 Professional education and lifelong learning Siemens AG in Germany allocated a total of €100 million for Average training hours per employee the Future Fund that will be invested over a period of four fiscal years starting in January 2019. The term of the Future Fund has now been extended to 2026. More than €3 million ∅ 30 training hours per employee. were approved for Future Fund projects in fiscal 2023, about €11 million less than in the previous year. Our open SiTecSkills Academy for technical Average training hours per employee by gender re- and upskilling in fiscal 2023: Working with our external education partners, we opened the SiTecSkills Academy to the wider learning ecosystem, because we want to share our expertise and experience in skilled worker qualification with our customers and other Women: Men: No/other companies. In fiscal 2023, we had 18 training centers in gender entry: Germany that offered about 200 trainings focused on technical ∅ 28h ∅ 30h ∅ 18h re- and upskilling, complemented by professional consulting and support. Vocational training to start your career Further data on professional education and lifelong learning With a dedicated in-house education institution for voca- at Siemens are disclosed in the indicator table. tional training – Siemens Professional Education (SPE) – OUR SUSTAINABLITY INDICATORS Siemens is one of the largest training companies for secondary school graduates. SPE offers apprenticeships and Our people shape Siemens’ learning activities dual-study programs in technical, IT, and commercial fields In our regular Siemens Global Engagement Survey (SGES)1 in to enable young talents to strengthen their existing capabil- fiscal 2023, we asked our people about the growth mindset ities and acquire the new skills needed to shape a digital and culture and their satisfaction with our learning opportunities. automated future. In fiscal 2023, we had approximately 5,800 apprentices and students in dual-study programs The feedback of the SGES underlines that digital learning worldwide. offers our people access to many more learning opportuni- ties and greater flexibility. Lifelong learning is crucial to success On average, each employee spent about 30 hours in digital The survey results also shed light on the fact that our estab- learning or on-site trainings during the fiscal year. Our new lished Siemens MyGrowth program was successfully pro- training opportunities and learning week promotions moted worldwide and was well-received by our people. This resulted in an increase in the number of training hours in was confirmed when we were recognized with several fiscal 2023. awards in fiscal 2023, such as two “Red Dot Design Awards” in the categories “Corporate Design” and “Educational Illus- In fiscal 2023, Siemens invested €237 million in our people’s tration” for MyGrowth. training, which corresponds to an average of €753 per employee. In total, we invested approximately €416 million We will continue to use the survey results to focus on in employee education and training. strategic learning and continuously shaping our portfolio of futureoriented learning opportunities. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 96
5.4 Occupational health and safety management 5.4 Occupational health and safety management – Resilience and well being are at the core of EHS Officers coordinate the collaboration of EHS experts occupational health and safety management across the various fields of action. The main task of this – The Healthy & Safe @ Siemens program will expert function is to advise managers and teams. The func- continue to be rolled out worldwide tion’s profile has changed significantly in recent years: – Further reduction in the accident rate Rather than monitoring compliance with rules and workflows as in the past, the focus is now on supporting our people in dealing safely with dynamically changing requirements. Management approach At Siemens we are committed to creating a healthy and safe Health and safety committees that meet regularly have been work environment for our people and to sustainably support- established in the relevant country organizations and on the ing their well-being and performance. local level. Here, management and employee representatives jointly coordinate the specific measures and initiatives The world of work is changing dynamically, as are the needed for a healthy and safe work environment. demands and needs regarding health and safety. A core task for our occupational health and safety department is to Based on our Business Conduct Guidelines (BCGs), we have maintain and further improve the resilience, adaptability, established internal monitoring systems and a company- and well-being of our people. We believe that focusing on wide risk management and control process. health and safety management reduces the risk of physical injuries and mental ill health. Siemens aims to mitigate We anchor our actions in Siemens’ EHS Principles, which health and safety risks effectively through management embed our EHS policy. They also include an obligation for all systems, designing healthy and safe working conditions, operating units to demonstrate a management system certi- internal monitoring, and controls. Our Employee Assistance fiable to ISO 45001. The effectiveness of these management Program also supports our people in coping with psychosocial systems is subject to an annual internal review that checks, personal concerns through individual counseling. Adapting among other things, whether processes for risk assessments and re-designing our work systems is a continuous task. The and emergency management are implemented in accor- goal is to empower our people to get involved, engage, and dance with internal and external regulations, that inspec- participate. By changing the way we work, digitalization tions and reviews have been carried out, significant risks and provides the opportunity to steadily improve our health and opportunities have been identified and whether they are - safety assessments and management systems globally. reflected in measurable goals and measures. The manage ment system is also externally certified according to market Our occupational health and safety governance requirements in the respective operating units. and policies The Environmental Protection, Health Management, and Siemens’ suppliers commit to upholding the Siemens Group - Code of Conduct for Suppliers and Third-Party Intermediaries Safety (EHS) department manages health and safety mea sures at Siemens. It is organized locally, integrated into each and Business Partners. This Code of Conduct obligates our business unit and each regional company, and reports suppliers to comply with health and safety standards and to directly to the respective business manager. take responsibility for the health and well-being of their employees. SIEMENS SUSTAINABILITY REPORT 2023 97
5.4 Occupational health and safety management Targets We design healthy and safe working conditions by continu- One of the DEGREE sustainability framework fields of action ously monitoring and evaluating potential risks and deriving is Employability1. This speaks to the ability of our people to appropriate measures. By doing so, we aim to enable our successfully manage continually changing requirements. In people to achieve a balanced state of well-being, better addition to continuous professional development, individual handle stressors, and use their capacities and resources with resilience is essential for adapting to challenging life events greater awareness. Moreover, we empower our people to and work situations. With our health and safety ambitions to grow, work more productively, and make important contri- maintain and expand access to the Employee Assistance butions to the company’s success. WORKING AT SIEMENS To Program (EAP) and improve the global aggregated accident achieve this, we provide a broad variety of resilience-focused rate (LTIFR), we are contributing to the DEGREE field of activities that include training and curated learning paths via 1 action Employability. our learning platform. PROFESSIONAL EDUCATION AND LIFELONG LEARNING E Employability Progress on DEGREE ambition #13: E Employability Access to Employee Assistance Program: Progress on DEGREE ambition #14: Maintain high level and expand to 100% 30% improvement in Siemens’ globally globally by 2025 aggregated LTIFR by 2025 100% access to the Employee Assistance Program 30% improvement in the global accident rate (LTIFR) (EAP) by 2025 – As an integral part of our psychosocial by 2025 (base year: 2020) – compared to the refer- risk management, the EAP anonymously supports ence value of 0.31 in fiscal 2020, we have achieved individual employees in coping with psychosocial an improvement of 26% to date. stress through individual consultations. In 2023, 96% of all our colleagues worldwide had access to EAP. Progress This enables us to not only support all our people FY 20: 0.31 – 26% –30% by 2025 worldwide in developing health-promoting behaviors, but shall also help to raise general awareness of psy- Siemens without SHS chosocial issues in society as a whole. Progress FY 20: 82% 96% 100% by 2025 Siemens without SHS 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 98
5.4 Occupational health and safety management Actions and results In the second step, measures are defined and agreed upon The Siemens-wide strategic priority of having empowered for resilient health & safety management. people guides our actions in the areas of health and safety. Safety, health, resilience, and well-being are intangible The results are then evaluated in the third step. assets for our company. 1 Elements of Healthy and Safe @ Siemens The company-wide Healthy and Safe @ Siemens 1 program Our company-wide Healthy and Safe @ Siemens (HS @ S) program invites employees to help shape leadership, learn K s e from each other, increase well-being at work, and promote ult y s T re e Re o r s o s innovations and improvements in occupational health and y x k ilie lb u o c n o l e b e t x ts K ol h H safety. It is based on five principles: c S o y m T t i al a e n R ag We care for our own and each other’s well-being. Principles em tne We speak up and take part in making the workplace healthier and safer. We are inclusive and invite a diverse range of views Ev al u on health and safety. ation T o ol bo We are engaged in learning and sharing about how x we can work better, safer, and healthier. K e y re s ul t s We prepare for and adapt well to changing circum- stances. Siemens has created a toolbox containing the necessary The principles guide the process of HS @ S in three steps: materials for implementing the HS @ S process that can be reality check, resilient health and safety management, and customized to each country, location, and business. evaluation. The program is designed to run until 2030. Individual priorities The reality check helps build a comprehensive understanding and objectives may be adjusted over time. Two of the key of the status of health and safety. It includes a survey that results (access to Employee Assistance Program and 30% provides a snapshot of employee perception across various improvement in the global accident rate (LTIFR)) have also aspects in the categories “work climate,” “leadership,” “learn- been incorporated into the DEGREE sustainability framework 1 ing,” and “processes and resources.” Results are reviewed in the field of action Employability. and potential for improvement is identified. Based on the first rollout of the HS @ S, additional perspectives – including Continued demand for occupational health and the perceptions of management in key functions and data- safety management based expert views – were added to the reality check. Addressing the increasing need to enhance both individual Furthermore, in fiscal 2023, the management’s perceptions and organizational resilience is crucial in today’s world. This of our business challenges and their impacts on health and is essential for the sustainability of our business operations safety were added by interviews and specific local factors and also aligns with the sustainability imperative. Over the influencing health and safety were further analyzed. last few years, our health and safety management continued to prove its resilience and reliability throughout diverse global crises. 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 99
5.4 Occupational health and safety management To support our people’s resilience, we have implemented key → Managers and team members engage in ongoing commu- measures: nication about health, safety, and well-being at work. → We have implemented two global campaigns addressing → We have expanded the scope of learning and exchange contributing factors of injuries and mental health. We opportunities, particularly regarding resilience, psycho- also address psychosocial risks in our EHS Hazards Identi- logical safety, and psychosocial risk management. In fiscal fication, Risk Assessment, and Risk Control (HIRARC) pro- 2023, we added trainings on resilience and well-being to cess. our new scalable Lead. Empower. Accelerate. Practice → In addition, Siemens’ regional companies and business (L.E.A.P) learning program. units have developed a variety of initiatives, including → Managers and employees can take advantage of continu- regular “Health Talks,” learning and action weeks, and ously updated digital learning opportunities for self- “Safety Focus Days.” determined learning. In the Siemens Learning World, these offerings are tailored to different target groups and The Siemens Safety Essentials are bundled according to topic. PROFESSIONAL EDUCATION Maintaining health, safety, and well-being is a responsibility AND LIFELONG LEARNING that is shared by our management and people. This respon- → In fiscal 2023, we launched the Digital Safety Transforma- sibility extends beyond providing workplaces in accordance tion Series, offering an opportunity to provide our EHS with all applicable norms, standards, and requirements. To professionals with guidance in developing digital safety protect and train our people, we have established the Safety strategies and remote safety management programs, Essentials with core safety behaviors. We expect our people implementing emerging technologies to control risk, to adhere to those essentials at all times and to place health, deploying EHS software, and improving digital literacy. safety, and the environment first in all that they do when working for Siemens. Safety Essentials Hazardous Driver and energy control vehicle safety Electrical Safety Safety with core safety Essentials behaviors Working at height/ fall protection Cranes and Potential lifting explosive gas and vapors Machine guarding Confined space signage and entry safety interlocks SIEMENS SUSTAINABILITY REPORT 2023 100
5.4 Occupational health and safety management Continuous expansion of health services We are continuously expanding our spectrum of health ser- LTIFR Employees and Temporary Workers¹ vices to support the resilience and health of our people at Fiscal year work and beyond. In fiscal 2023, 99%1 of our employees 2023 2022 have access to company medical care. This includes the Employees 0.23 0.25 prevention and early identification of health problems Temporary Workers² 0.30 0.38 through health checks, screenings, and vaccinations. We Total 0.24 0.26 treat health issues seriously and in a timely manner, which includes leveraging telemedicine consultations or referrals 1 Lost Time Injury Frequency Rate (LTIFR): number of lost-time cases (LTC) × 200,000 / to experts. In addition, we facilitate a successful return to work hours; LTC are accidents that result in at least one lost day of work. 2 As a globally operating company, Siemens isn’t always authorized or able to obtain work by supporting our employees with reintegration mea- sensitive information about contract workers‘ health and occupational safety or complete figures on their work hours. As a result, the Temporary Worker LTIFR for sures and ergonomic advice. Siemens includes only temporary workers hired by a temporary employment agency or under a contract for work and services. 1 94% of our employees were able to take advantage of a wide range of health education offerings designed to Fatalities (work-related) strengthen their health literacy. These offerings are delivered Fiscal year through a holistic approach that covers physical, mental, and 2023 2022 social health and well-being. Employees 0 1 Temporary Workers 0 0 Accident numbers at a low level Contractors 4 1 In fiscal 2023, the number of work-related accidents further Total 4 2 decreased, which correlated with the reduction in the global accident rate (LTIFR) for the same period. Accidents are analyzed and lessons are derived to continuously improve In fiscal 2023, a total of 62 occupational illness cases were and minimize the occurrence of accidents. The characteris- registered.2 The majority of cases were attributed to occupa- tics of this year’s accidents are comparable to the previous tional cancer. year: Joint contribution to our health and safety 78% of the reported incidents were assigned to the “minor” approach category (minor injuries like scratches and abrasions). Finger Our people contribute to our joint health and safety approach injuries continued to account for the majority of incidents. every day. There is no one-size-fits-all solution for imple- menting health and safety due to differing requirements, 4 fatalities occurred in fiscal 2023. One contractor lost their tasks, and work situations throughout the company. Recog- life due to burns sustained in an arc-flash incident, and nizing this, we want to involve our employees in the design another contractor passed away after being struck by a piling and implementation of our health and safety initiatives and rig’s leg. Among the other two contractor fatalities, one programs. The active participation of our people enables our occurred during ventilation maintenance using a lifting company-wide, country-specific, and business-specific initia- platform, and the other during work on a construction site tives and programs to thrive. For instance, psychosocial risks while using a mobile scaffold. Each incident and fatality is a are assessed once a year via the work well-being factors source of grief for the people concerned as well as their embedded in the Siemens Global Engagement Survey families, friends, and colleagues. Each incident is a renewed (SGES)1. The relevant teams then discuss and document the call for us to keep improving and ensuring a safe and healthy risks, opportunities, and measures, and outcomes in a struc- work environment for our people and partners. tured follow-up process. 1 Siemens without SHS. 2 Excluding temporary workers and contractors. SIEMENS SUSTAINABILITY REPORT 2023 101
5.5 Corporate citizenship 5.5 Corporate citizenship – Improving people’s living conditions Siemens believes that it is important to work for the good – Giving societies access to knowledge and of society beyond our business activities and to invest in technologies charitable work. This belief is anchored in our Corporate – A variety of projects with three strategic priorities Citizenship Strategy. Our principles serve as a global frame- work and provide guidance for local sponsorship activities, donations, charitable contributions, and memberships. This Management approach guidance defines how a variety of potential contributions Corporate citizenship has been an integral part of Siemens can be deployed connecting each one to our overarching from the very beginning, with the aim to empower people principles. and societies. As defined by Werner von Siemens over 175 years ago, the company’s mission is to provide technol- Our own Corporate Volunteering Standard describes a com- ogies that improve quality of life and create lasting value for mon global corporate citizenship concept and framework society based on our portfolio, knowledge, and expertise. In which is supported by an internal volunteering platform alignment with this mission, our corporate citizenship pro- being launched in fiscal 2023. gram aims to positively impact society in every country where we operate through voluntary work. Targets As an important element of our sustainability strategy, cor- The foundation for our approach are the UN’s Sustainable porate citizenship is embedded in the DEGREE sustainability Development Goals. We identify key topics for our respective framework.1 By strengthening our identification of different countries, derive specific actions and illustrate how we are target groups for our corporate citizenship activities and making a positive contribution to achieving them. This offering a range of training measures covering all phases of approach allows Siemens to focus primarily on giving back to life, we contribute to two of the framework’s fields of action: the societies where we operate. Equity and Employability. Our governance and policies for corporate In every society where we operate, our ambition is to improve citizenship general living and healthcare conditions, enhance educa- Responsibility for selecting and managing non-profit and tional and training opportunities for the labor market, and socially impactful activities lies with the local departments or strengthen social cohesion and cultural identification. At the management teams in each country. This approach helps to same time, we aim to strengthen Siemens’ reputation and provide support and create value where it is needed most. local footprint, increase understanding of our technologies, Simultaneously, we combine in-depth local knowledge with and position our company as an attractive employer, while long-term commitment to overcome social challenges that also laying the foundation for future innovation. vary from region to region. Along with six other international Siemens foundations and Siemens Caring Hands e.V., the Siemens Stiftung comple- ments our corporate citizenship initiatives. WWW.SIEMENSSTIFTUNG.ORG/EN 1 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 102
5.5 Corporate citizenship Actions and results In addition, by equipping research laboratories with control and automation equipment in countries like Hungary, Turkey, Scale sustainability impact with a shared value and Latvia, Siemens is helping improve educational and approach employment opportunities. Grounded in our core business and competencies, we have defined three strategic focus areas for our corporate citizen- In fiscal 2023, we worked with TANSAM, the Tamilnadu ship activities: access to technology, access to education, Smart and Advanced Manufacturing Centre, to build and and sustaining communities. equip an incubation center in India to spur industrial inno- vation at the grassroot level. The center employs under- In addition to participating in traditional philanthropy, we privileged people and has already trained more than 16,000 leverage our technological expertise, capabilities, and prod- students on Industry 4.0 skills. ucts to contribute to society. Donating refurbished laptops to people in need is another Access to technology on the basis of our core element in our aspiration to help transform communities for a competencies better tomorrow. People in need can connect and interact with We want to share our knowledge about automation, digita- others and at the same time get access to quality education. lization, and intelligent infrastructure with the intention of making it accessible to people around the world. Access to education is crucial for societies around the world This knowledge is especially important in developing coun- Our commitment to education encompasses diverse activi- tries, where it can help meet the fundamental needs of local ties and includes STEM-oriented training and promoting societies, including energy supply, clean water, and basic excellence through competition to providing free software medical care. The objective is to help these societies improve licenses and setting up new institutional education paths, their overall quality of life and develop new perspectives for including dual education and apprenticeship systems. solving problems in the future. Our Core Areas Access to Access to Sustaining technology education communities With the aid of our core competencies in Knowledge is a resource on which our future Our goals are to establish stable living condi- digitalization, automation, and electrifica- depends. Therefore, improving educational tions, protect values, unleash creativity, tion, as well as scientific research, we strive prospects and allowing broad access to improve intercultural understanding, and to give as many people as possible the education are critically important challenges contribute to progress. chance to use the latest technologies. for all societies everywhere in the world. SIEMENS SUSTAINABILITY REPORT 2023 103
5.5 Corporate citizenship The promotion of education can take different forms and We are continuously striving to improve our impact on social pursue different objectives: However, the primary objective cohesion. A major challenge in recent years included unfore- remains consistent. We aim to provide enhanced equal seen events like the global pandemic and the war in Ukraine. access to future opportunities, and to give young people the To help those affected, we launched a charity program in tools to master future challenges. Germany and will continue to roll it out in other countries to better coordinate our measures and offer our people options Coding skills are increasingly relevant to helping people and for help. organizations overcome the challenges of digitalization. As such, Siemens supports a diverse range of programming- Siemens Stiftung: Working for sustainable social oriented learning programs and projects designed for development children. These include UBBU in Portugal, Hacker School in Siemens Stiftung is an internationally operating foundation Germany, and Project Jigyaasa in India. Many of these pro- established by Siemens in 2008 as an independent nonprofit grams are supported by volunteers from Siemens staff. organization. The foundation focuses on three key themes: Access to Essential Services, Connected Societies and Climate In addition to the programs mentioned above, in fiscal 2023 and Sustainability, and adopts a proactive approach to we supported the Innovation4Sustainability bootcamp, a shaping the transformation required by these challenges. By local initiative for more than 30 students from public STEM working with partners in the fields of education, social schools across Egypt. The bootcamp was designed and entrepreneurship, and culture, the foundation reinforces developed with the intention of solving industrial waste collective learning and locally based sustainable structures. management challenges in the electronics sector by empow- The foundation works with the income from its €390 million ering a group of diverse students through a series of endowment as well as additional partner funding in Africa, hands-on trainings, workshops, and ideation using an agile Europe, and Latin America. methodology throughout the bootcamp. Siemens and its employees supported Siemens Stiftung’s In Argentina, we worked with the Siemens Foundation Argen- projects with a number of donation campaigns during the tina to design a 30-hour internationally certified training pro- fiscal year. One example is the COVID-19 Aid Fund, which gram based on Siemens’ 3D design software. The program supported the “STEM Education for Innovation” initiative provides an up-to-date technical education that meets the launched by Siemens Stiftung to advance innovative educa- needs and requirements of the socio-productive sector and tion formats in Latin American countries. To date it has spent aims to enhance employability by helping bridge the digital €0.75 million on projects that included producing 467 digital divide for more than 2,500 students and 250 teachers. and analog instructional media for the entire educational chain and providing more training for more than 245,000 Sustaining communities is key for social STEM teachers and other interested participants in more cohesion than 300 trainings, workshops, and webinars. The fund also Siemens believes that identification with one’s local cultural supported the creation of a multi-stakeholder network that heritage is important for social cohesion. With this objective promotes STEMplus education in 14 mainly Latin American in mind, we support cultural and social activities. The countries as well as the education portal “CREA” (Centro de Siemens Arts Program contributes to this objective with a Recursos Educativos Abiertos), which offers more than 1,700 diverse range of projects: for example, support for the first open educational resources for STEM lessons. Namibian opera designed to promote intercultural under- standing. In addition, we help local communities create safe and stable environments. For instance, in fiscal 2023, we provided accommodations at our company premises in Warsaw to Ukrainian refugees. SIEMENS SUSTAINABILITY REPORT 2023 104
5.5 Corporate citizenship In the fifth edition of the Cents4Sense program, employee shareholders around the world were able to donate up to five dividends from their Siemens shares, with the company matching every donation. Since the program began in 2018, it has raised almost €1,280,000 for selected Siemens Stiftung social projects in Africa, Europe, Latin America, and Germany. Corporate commitment to strive for the creation of lasting value for society In fiscal 2023, we delivered a total community investment of €43.2 million, and our people spent more than 36,000 h in volunteer projects as part of their working time. €43.2 million total community investment To evaluate our activities, we measure the achievement of the goals on the basis of the individual underlying targets and against a framework based on the I-O-O-I (input, output, outcome, impact) assessment method. A database and approval tool support the operating units in their efforts and helps to create transparency on a global level. This approach is accompanied by participation in numerous local and national working groups and commissions with the aim of improving the positive impact on society. SIEMENS SUSTAINABILITY REPORT 2023 105
Pages 106 – 123 Our sustainability indicators SIEMENS SUSTAINABILITY REPORT 2023 106
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards SIEMENS AT A GLANCE Total revenue Total Fiscal Year Billion € 77.8 72.0 8.0% GRI 201-1, WEF Net income Total Fiscal Year Billion € 8.5 4.4 94.2% GRI 201-1, WEF Adjusted EBITA Margin for the Industrial Business Total Fiscal Year % 15.4% 15.1% 2.0% GRI 201-1, WEF Research and development R&D expenses Total Fiscal Year Billion € 6.2 5.6 10.6% WEF R&D intensity Total Fiscal Year % of revenue 8.0% 7.8% 2.3% WEF Additions to capitalized development expenses Total Fiscal Year Billion € 0.3 0.3 1.7% WEF Patents granted Total Sept. 30th No. (rounded) 45,000 43,600 3.2% WEF Share of patent families with % of total patent SDG-relevance Total Sept. 30th families 46.8% 44.8% 4.5% WEF GOVERNANCE Compliance (continuing and discontinued operations) GRI 205-3, Total Fiscal Year No. 416 363 14.6% GRI 2-27, WEF GRI 205-3, Allegations of bribery1 Fiscal Year No. 21 12 75.0% GRI 2-27, WEF Compliance cases reported Allegations of bribery GRI 205-3, related to actual year Fiscal Year No. 12 7 71.4% GRI 2-27, WEF Allegations of bribery related to previous GRI 205-3, years Fiscal Year No. 11 5 120.0% GRI 2-27, WEF Total Fiscal Year No. 166 212 −21.7% GRI 205-3, WEF Disciplinary sanctions Warnings Fiscal Year No. 87 90 −3.3% GRI 205-3, WEF Dismissals Fiscal Year No. 43 74 −41.9% GRI 205-3, WEF Others2 Fiscal Year No. 36 48 −25.0% GRI 205-3, WEF BCG training – graduating quota % of invited current year Total Fiscal Year employees 67.9% 96.3% –29.5% GRI 205-2, WEF Total Fiscal Year No. (rounded) 129,300 102,000 26.8% GRI 205-2, WEF BCG training – persons graduating EMEA Fiscal Year No. (rounded) 75,900 50,000 51.8% GRI 205-2, WEF current year Americas Fiscal Year No. (rounded) 22,900 19,000 20.5% GRI 205-2, WEF Asia, Australia Fiscal Year No. (rounded) 30,500 20,000 52.5% GRI 205-2, WEF Other specific compliance trainings – persons graduating current year Total Fiscal Year No. (rounded) 461,000 409,000 12.7% GRI 205-2, WEF Integrity Initiative – Projects up to Total Sept. 30th No. 85 85 0.0% WEF Integrity Initiative – Finance budget up to Million US$ provided Total Sept. 30th (rounded) 120 120 0.0% WEF 1 Does also include allegations of granting benefits (but not taking bribes); time of the alleged misconduct may be in more than one period or may be unspecified. Therefore it can be included in both categories. 2 Includes loss of variable and voluntary compensation elements, transfer and suspension. SIEMENS SUSTAINABILITY REPORT 2023 107
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Sustainable supply chain management Purchasing Volume (PVO) Total Fiscal Year Billion € 36.9 34.6 6.7% GRI 2-6 Number of relevant (> €10,000 annual volume) suppliers Total Fiscal Year No. (rounded) 67,700 66,000 2.6% GRI 2-6 GRI 308-2, 408-1, Total Fiscal Year No. 5,096 4,912 3.7% 409-1, 414-2 GRI 308-2, 408-1, Corporate responsibility EMEA Fiscal Year No. 1,122 1,147 −2.2% 409-1, 414-2 self-assessments (CSRA)3 GRI 308-2, 408-1, Americas Fiscal Year No. 767 654 17.3% 409-1, 414-2 GRI 308-2, 408-1, Asia, Australia Fiscal Year No. 3,207 3,111 3.1% 409-1, 414-2 Agreed improvement measures out of CSRAs Total Fiscal Year No. 5,493 3,109 76.7% GRI 308-2, 414-2 GRI 308-2, 408-1, 409-1, 414-2, Total Fiscal Year No. 481 426 12.9% WEF GRI 308-2, 408-1, 409-1, 414-2, External sustainability audits EMEA Fiscal Year No. 97 113 −14.2% WEF GRI 308-2, 408-1, 409-1, 414-2, Americas Fiscal Year No. 51 50 2.0% WEF GRI 308-2, 408-1, 409-1, 414-2, Asia, Australia Fiscal Year No. 333 263 26.6% WEF Agreed improvement measures GRI 308-2, out of external sustainability audits Total Fiscal Year No. 9,521 7,275 30.9% 414-2, WEF ENVIRONMENT Holistic environmental protection Sites with environmental management system ISO 14001 certification Total Sept. 30th No. 182 184 −1.1% Share of sites with environmental management system ISO 14001 certification Total Sept. 30th % of reported sites 73% 72% 0.5% 3 To be conducted mainly by suppliers from non-OECD countries with a purchasing volume > € 50,000 p.a.. Questionnaires initiated and completed in the year under review. SIEMENS SUSTAINABILITY REPORT 2023 108
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Climate action Greenhouse gas emissions 1,000 metric tons Total Fiscal Year of CO e emissions 387 393 −1.6% GRI 305-1, WEF 2 1,000 metric tons CO emissions Fiscal Year of CO e emissions 342 357 −4.4% GRI 305-1, WEF 2 2 CO emissions 1,000 metric tons 2 from gas Fiscal Year of CO e emissions 109 138 −20.8% GRI 305-1, WEF 2 CO emissions 1,000 metric tons 2 from LPG Fiscal Year of CO e emissions 5 1 332.2% GRI 305-1, WEF 2 CO emissions 1,000 metric tons 2 from heating oil Fiscal Year of CO e emissions 15 2 643.9% GRI 305-1, WEF 2 CO emissions 1,000 metric tons 2 from fleet fuel Fiscal Year of CO e emissions 210 213 −1.7% GRI 305-1, WEF 2 CO emissions 1,000 metric tons 2 from site fuel Fiscal Year of CO e emissions 3 3 5.8% GRI 305-1, WEF 2 CO emissions 1,000 metric tons 2 from coal Fiscal Year of CO e emissions 0 0 GRI 305-1, WEF Scope 1 2 CO emissions 1,000 metric tons 2 from technical CO Fiscal Year of CO e emissions 0.2 0.1 37.1% GRI 305-1, WEF 2 2 1,000 metric tons SF emissions Fiscal Year of CO e emissions 30 23 31.7% GRI 305-1, WEF 6 2 1,000 metric tons CH emissions Fiscal Year of CO e emissions < 0,1 < 0,1 GRI 305-1, WEF 4 2 1,000 metric tons NO emissions Fiscal Year of CO e emissions 0.0 0.2 −91.8% GRI 305-1, WEF 2 2 1,000 metric tons HFC emissions Fiscal Year of CO e emissions 15.4 12.1 26.8% GRI 305-1, WEF 2 1,000 metric tons PFC emissions Fiscal Year of CO e emissions 0 0 GRI 305-1, WEF 2 1,000 metric tons NF emissions Fiscal Year of CO e emissions < 0,1 < 0,1 GRI 305-1, WEF 3 2 1,000 metric tons Acetylene emissions Fiscal Year of CO e emissions 0.1 1 −85.9% GRI 305-1, WEF 2 1,000 metric tons Total (market based) Fiscal Year of CO e emissions 163 189 −13.5% GRI 305-2, WEF 2 Market based from 1,000 metric tons electricity Fiscal Year of CO e emissions 142 164 −13.9% GRI 305-2, WEF 2 Market based from 1,000 metric tons heating Fiscal Year of CO e emissions 22 24 −11.1% GRI 305-2, WEF Scope 2 2 1,000 metric tons Total (location based) Fiscal Year of CO e emissions 624 670 −6.8% GRI 305-2, WEF 2 Location based from 1,000 metric tons electricity Fiscal Year of CO e emissions 597 633 −5.7% GRI 305-2, WEF 2 Location based from 1,000 metric tons heating Fiscal Year of CO e emissions 28 37 −25.3% GRI 305-2, WEF 2 1,000 metric tons GRI 305-1, 305-2, Scope 1+2 Total Fiscal Year of CO e emissions 550 582 −5.5% WEF 2 metric tons of CO2e Scope 1+2 intensity emissions per Total Fiscal Year Mio. € revenue 7.1 8.1 −12.5% GRI 305-4, WEF 1,000 metric tons Scope 1+2 reduction to last year Total Fiscal Year of CO e emissions 32 13 144.3% GRI 305-5, WEF 2 SIEMENS SUSTAINABILITY REPORT 2023 109
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards 1,000 metric tons Total (Scope 1 + 2) Fiscal Year of CO e emissions 467 482 −3.2% GRI 305-5, WEF 2 Reduced emissions through energy Gas from renewable 1,000 metric tons sources (Scope 1) Fiscal Year of CO e emissions 13 184 −26.0% GRI 305-5, WEF from renewable sources 2 Electricity from renewable sources 1,000 metric tons (Scope 2) Fiscal Year of CO e emissions 454 465 −2.4% GRI 305-5, WEF 2 1,000 metric tons Scope 3 Total Fiscal Year of CO e emissions 483,188 457,606 5.6% GRI 305-3, WEF 2 1,000 metric tons Total Fiscal Year of CO e emissions 11,048 11,515 −4.1% GRI 305-3, WEF 2 Purchased goods and 1,000 metric tons services Fiscal Year of CO e emissions 9,276 9,557 −2.9% GRI 305-3, WEF 2 1,000 metric tons Capital goods Fiscal Year of CO e emissions 416 458 −9.2% GRI 305-3, WEF 2 Fuel- and energy- 1,000 metric tons related activities Fiscal Year of CO e emissions 111 137 −19.0% GRI 305-3, WEF Scope 3 upstream 2 1,000 metric tons Waste in operations Fiscal Year of CO e emissions 29 25 16.0% GRI 305-3, WEF 2 1,000 metric tons Transportation Fiscal Year of CO e emissions 884 1,118 −20.9% GRI 305-3, WEF 2 1,000 metric tons Business travel Fiscal Year of CO e emissions 227 122 85.4% GRI 305-3, WEF 2 1,000 metric tons Employee commuting Fiscal Year of CO e emissions 105 98 7.1% GRI 305-3, WEF 2 1,000 metric tons Total Fiscal Year of CO e emissions 472,140 446,090 5.8% GRI 305-3, WEF 2 Scope 3 downstream 1,000 metric tons Use of sold products Fiscal Year of CO e emissions 469,180 442,175 6.1% GRI 305-3, WEF 2 1,000 metric tons Investment SFS5 Fiscal Year of CO e emissions 2,960 3,915 −24.4% GRI 305-3, WEF 2 metric tons of CO2e emissions per Scope 3 downstream intensity Total Fiscal Year Mio. € revenue 6,071 6,198 −2.0% GRI 305-4, WEF GHG emissions Scope 1+2+3 1,000 metric tons upstream (“Cradle to gate”) Total Fiscal Year of CO e emissions 11,598 12,097 −4.1% GRI 305-3, WEF 2 1,000 metric tons Biogenic CO e emissions Total Fiscal Year of CO e emissions 15 19 −22.2% 2 2 Greenhouse gas emissions – Fleet and real estate management Total number Sept. 30th No. (rounded) 44,000 42,000 4.8% Electrical vehicles Sept. 30th No. (rounded) 4,100 1,350 203.7% Hybrid vehicles Sept. 30th No. (rounded) 2,500 3,150 −20.6% Electrical and hybrid vehicles Sept. 30th No. (rounded) 6,600 4,500 46.7% Siemens fleet Rate of electrical and (owned or leased vehicles) hybrid vehicles Sept. 30th % of total fleet 15% 11% 40.0% Rate of electrical vehicles Sept. 30th % of total fleet 9% 3% 189.9% Fleet emissions (part 1,000 metric tons of Scope 1 emissions) Fiscal Year of CO e emissions 210 213 −1.7% GRI 305-1, WEF 2 Fuel consumption fleet Fiscal Year 1,000 gigajoule 2,894 2,920 −0.9% 4 Change in last year data caused by subsequent adjustment. 5 Emissions out of Siemens Financial Services (SFS) activities in financing fossile energy production projects. SIEMENS SUSTAINABILITY REPORT 2023 110
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Siemens sites with Net Zero CO e emissions 2 Total Sept. 30th No. 37 41 −9.8% Charging poles on company ground for electrical vehicles Total Sept. 30th No. (rounded) 2,750 2,200 25.0% Use phase impact at customers Avoided emissions: Greenhouse gas reductions achieved by our customers through products of the Siemens 6 Total Fiscal Year Mt CO e 189.9 153.2 24.0% Portfolio 2 EU Taxonomy Share eligible revenue Total Fiscal Year % of revenue 20.3% 20.1% 0.5% Share aligned revenue Total Fiscal Year % of revenue 16.5% n.a. Share eligible operational expenditures Total Fiscal Year % of relevant OpEx 12.4% 13.5% −8.2% Share aligned operational expenditures Total Fiscal Year % of relevant OpEx 8.2% n.a. Share eligible capital expenditures Total Fiscal Year % of relevant CapEx 34.5% 39.7% −13.3% Share aligned capital expenditures Total Fiscal Year % of relevant CapEx 12.2% n.a. Conservation of Resources GRI 302-1, SASB Total Fiscal Year 1,000 gigajoule 9,115 9,802 −7.0% RT-EE-130a.1 Energy Consumption: Share of renewable % of total energy GRI 302-1, SASB primary & secondary energy energy sources Fiscal Year consumption 51.1% 47.6%4 7.5% RT-EE-130a.1 Share of grid % of total energy GRI 302-1, SASB electricity Fiscal Year consumption 61.3% 57.4% 6.7% RT-EE-130a.1 1,000 gigajoule per GRI 302-1, SASB Primary & secondary energy intensity Total Fiscal Year Mio. € revenue 0.117 0.136 −13.9% RT-EE-130a.1 GRI 302-1, SASB Total Fiscal Year 1,000 gigajoule 2,513 3,010 −16.5% RT-EE-130a.1 Natural gas & liquid GRI 302-1, SASB gas Fiscal Year 1,000 gigajoule 2,277 2,927 −22.2% RT-EE-130a.1 Energy Consumption: Gas from renewable GRI 302-1, SASB primary energy sources Fiscal Year 1,000 gigajoule 233 3154 −26.0% RT-EE-130a.1 Gas share from GRI 302-1, SASB renewable sources Fiscal Year % of total gas used 10% 11% −4.9% RT-EE-130a.1 Fuel oil, gasoline, GRI 302-1, SASB diesel Fiscal Year 1,000 gigajoule 232 63 269.5% RT-EE-130a.1 GRI 302-1, SASB Total Fiscal Year 1,000 gigajoule 6,602 6,792 −2.8% RT-EE-130a.1 Electricity GRI 302-1, SASB (total) Fiscal Year 1,000 gigajoule 5,586 5,629 −0.8% RT-EE-130a.1 Energy consumption: Electricity GRI 302-1, SASB secondary energy (renewable sources) Fiscal Year 1,000 gigajoule 4,426 4,347 1.8% RT-EE-130a.1 Electricity Share of renewable energy % of total GRI 302-1, SASB sources Fiscal Year electricity used 79% 77% 2.6% RT-EE-130a.1 GRI 302-1, SASB District heating Fiscal Year 1,000 gigajoule 1,016 1,163 −12.6% RT-EE-130a.1 4 Change in last year data caused by subsequent adjustment. 6 Calculated over the entire use phase, analogue Scope 3.11 “Use Phase Emissions”. SIEMENS SUSTAINABILITY REPORT 2023 111
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards % revenue weighted to base Efficiency in energy Total (w/o SHS) Fiscal Year year (2021) 39% 13% 196.4% % to base year Energy reduction Total (w/o SHS) Fiscal Year (2021) 9.1% 3.4% 163.9% Waste 4 2.0% GRI 306-3 Total Fiscal Year 1,000 tons 261.2 256.2 Non-hazardous waste Fiscal Year 1,000 tons 214.7 224.4 –4.3% GRI 306-3 Waste GRI 306-3, SASB Hazardous waste Fiscal Year 1,000 tons 12.7 13.74 −7.8% RT-EE-150a.1 Construction waste Fiscal Year 1,000 tons 33.9 18.0 88.0% GRI 306-3 Total Fiscal Year 1,000 tons 214.7 224.4 −4.3% GRI 306-3 Recycling and Recovery Fiscal Year 1,000 tons 203.8 213.5 −4.5% GRI 306-3 Recycling (material) Fiscal Year 1,000 tons 179.6 186.2 −3.6% GRI 306-3 Recovery (thermal) Fiscal Year 1,000 tons 24.2 27.2 −11.2% GRI 306-3 Non-hazardous waste Landfill and other disposal Fiscal Year 1,000 tons 10.9 11.0 –0.9% GRI 306-3 Landfill Fiscal Year 1,000 tons 9.0 8.9 1.9% GRI 306-3 Other disposal (thermal/chemical/ physical) Fiscal Year 1,000 tons 1.8 2.1 −12.7% GRI 306-3 GRI 306-3, SASB Total Fiscal Year 1,000 tons 12.7 13.74 −7.8% RT-EE-150a.1 GRI 306-3, SASB Recycling and Recovery Fiscal Year 1,000 tons 7.2 8.74 −17.2% RT-EE-150a.1 GRI 306-3, SASB Recycling (material) Fiscal Year 1,000 tons 5.6 7.34 −22.4% RT-EE-150a.1 GRI 306-3, SASB Hazardous waste Recovery (thermal) Fiscal Year 1,000 tons 1.6 1.5 7.9% RT-EE-150a.1 Landfill and other GRI 306-3, SASB disposal Fiscal Year 1,000 tons 5.4 5.0 8.8% RT-EE-150a.1 GRI 306-3, SASB Landfill Fiscal Year 1,000 tons 0.9 0.7 28.1% RT-EE-150a.1 Other disposal (thermal/chemical/ GRI 306-3, SASB physical) Fiscal Year 1,000 tons 4.5 4.3 5.7% RT-EE-150a.1 Total Fiscal Year 1,000 tons 33.9 18.0 88.0% GRI 306-3 Construction waste Recycling and Recovery Fiscal Year 1,000 tons 27.0 17.4 55.2% GRI 306-3 Landfill and other disposal Fiscal Year 1,000 tons 6.9 0.6 1052.9% GRI 306-3 Total Fiscal Year 1,000 tons 227.3 238.14 −4.5% GRI 306-3 Recycling and Recovery Fiscal Year 1,000 tons 211.0 222.24 −5.0% GRI 306-4 Recycling (material) Fiscal Year 1,000 tons 185.2 193.54 −4.3% GRI 306-3 Recovery (thermal) Fiscal Year 1,000 tons 25.8 28.7 −10.2% GRI 306-3 Total waste Landfill and other (w/o construction waste) disposal Fiscal Year 1,000 tons 16.3 15.9 2.1% GRI 306-3 Landfill Fiscal Year 1,000 tons 9.9 9.6 3.8% GRI 306-3 Other disposal (thermal/chemical/ physical) Fiscal Year 1,000 tons 6.4 6.4 −0.3% GRI 306-3 4 Change in last year data caused by subsequent adjustment. SIEMENS SUSTAINABILITY REPORT 2023 112
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Total % of total waste (w/o construction) Fiscal Year (w/o construction) 93% 93% −0.5% GRI 306-4 % of total Hazardous waste Fiscal Year hazardous waste 57% 64%4 −10.3% GRI 306-4 Recycling & Recovery rate % of total non- Non-hazardous waste Fiscal Year hazardous waste 95% 95% −0.2% GRI 306-4 % of construction Construction waste Fiscal Year waste 80% 97% −17.5% GRI 306-4 Total % of total waste Material Recycling rate (w/o construction) Fiscal Year (w/o construction) 81% 81% 0.3% GRI 306-4 Upstream waste7 8 Total Fiscal Year 1,000 tons 1,433 1,412 1.5% GRI 306-1 Upstream waste Non-hazardous waste Fiscal Year 1,000 tons 1,369 1,3498 1.5% GRI 306-1 Hazardous waste Fiscal Year 1,000 tons 63 638 1.0% GRI 306-1 Water Total Fiscal Year Million cubic meter 14.26 12.93 10.3% GRI 303-3, WEF Surface water Fiscal Year Million cubic meter 1.10 1.03 7.0% GRI 303-3, WEF Water withdrawal Groundwater Fiscal Year Million cubic meter 9.26 7.94 16.6% GRI 303-3, WEF 3rd party water Fiscal Year Million cubic meter 3.85 3.91 −1.5% GRI 303-3, WEF Other sources Fiscal Year Million cubic meter 0.05 0.04 9.9% GRI 303-3, WEF Cubic meter per Water withdrawal intensity Total Fiscal Year Mio. € revenue 183.39 179.71 2.0% GRI 303-3, WEF Water withdrawal in Total Fiscal Year Million cubic meter 1.36 1.344 1.0% GRI 303-3, WEF water-stressed areas Share of withdrawal Fiscal Year % of total withdrawal 10% 10%4 −8.4% GRI 303-3, WEF Water consumption Total Fiscal Year Million cubic meter 0.51 0.45 13.3% GRI 303-5 Cubic meter per Water consumption intensity Total Fiscal Year Mio. € revenue 6.52 6.22 4.8% GRI 303-5 Water consumption in Total Fiscal Year Million cubic meter 0.07 0.07 1.5% GRI 303-5 water-stressed areas % of total Consumption share Fiscal Year consumption 15% 16.2% −10.4% GRI 303-5 Total Fiscal Year Million cubic meter 13.56 12.36 9.7% GRI 303-4 Water discharge Surface water Fiscal Year Million cubic meter 1.03 1.07 −3.4% GRI 303-4 Groundwater Fiscal Year Million cubic meter 9.20 7.73 19.0% GRI 303-4 3rd party water Fiscal Year Million cubic meter 3.33 3.56 −6.5% GRI 303-4 Total Fiscal Year Million cubic meter 13.56 12.36 9.7% GRI 303-4 Sanitary wastewater Fiscal Year Million cubic meter 2.80 2.90 −3.6% GRI303-4 Manufacturing processes Fiscal Year Million cubic meter 0.61 0.55 11.7% GRI303-4 Other Discharge usage (including losses) Fiscal Year Million cubic meter 0.24 0.33 −26.3% GRI303-4 Cooling water dis- charged as wastewater Fiscal Year Million cubic meter 0.14 0.13 5.2% GRI303-4 Chemically unchanged cooling water (returned to receiving water body chemically unchanged, but warmed) Fiscal Year Million cubic meter 9.80 8.49 15.5% GRI303-4 4 Change in last year data caused by subsequent adjustment. 7 Analysis of our supply chain based on purchase data by using of a macroeconomic input-output-model also adjusted for inflation. 8 Change in last year data caused by new calculation method. SIEMENS SUSTAINABILITY REPORT 2023 113
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Rate of sites with implemented water strategy Total Sept. 30th % of sites 96% 93% 3.8% GRI 303-1, WEF Atmospheric pollutant emissions Volatile Organic Compounds Total Fiscal Year metric tons 249.7 274.4 −9.0% GRI 305-7 metric tons 9 Ozone-depleting substances Total Fiscal Year (R11 equivalent) 0.044 0.036 22.3% GRI 305-6 Nitrogen oxides Total Fiscal Year metric tons 53.5 57.6 −7.1% GRI 305-7 Sulphur oxides Total Fiscal Year metric tons 1.18 0.94 25.5% GRI 305-7 Respirable dust Total Fiscal Year metric tons 0.23 0.08 186.7% GRI 305-7 Additional environmental topics Environment-related incidents with GRI 307-1, SASB significant fines Total Fiscal Year No. 0 n.a.10 RT-EE-150a2 GRI 307-1, SASB Amount of significant fines Total Fiscal Year € 0 n.a.10 RT-EE-150a2 GRI 307-1, SASB Total Fiscal Year No. 14 7 100.0% RT-EE-150a2 Reportable spills Quantity reportable GRI 307-1, SASB spills Fiscal Year kg 3,319 2,562 29.5% RT-EE-150a2 Quantity recovered GRI 307-1, SASB spills Fiscal Year kg 2,079 342 507.7% RT-EE-150a2 Sites with energy management system ISO 50001 certification Total Sept. 30th No. 45 38 18.4% Sites in or adjacent to protected areas Total Sept. 30th No. 25 20 25.0% WEF Area of sites in or adjacent to protected areas Total Sept. 30th Hectare 29011 184 57.2% WEF Product Stewardship Lifecycle assessment (LCA)12 Total Sept. 30th No. 334 92 263.0% Environmental Product Declarations (EPD) Total Sept. 30th No. 1,540 1,346 14.4% Share of lifecycle assessment (LCA) 13 14 8 revenue Total (w/o SHS) Fiscal Year % of total revenue 39% 27% 45.8% Share of Environmental Product 13 14 8 Declarations (EPD) revenue Total (w/o SHS) Fiscal Year % of total revenue 36% 22% 64.1% Rate of products by revenue that contain IEC 62474-declarable SASB RT-EE- 14 substances Total (w/o SHS) Fiscal Year % of total revenue 50% 49% 2.2% 410a1 8 Change in last year data caused by new calculation method. 9 R11 equivalent measures ozone depletion potential. 10 Change in last year data caused by new definition with threshold. 11 Therein 49 hectare of an office location without production in Erlangen/Germany. 12 Full-scale. 13 Based on 3rd party revenue with products. 14 Siemens without SHS. SIEMENS SUSTAINABILITY REPORT 2023 114
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards SOCIAL 15 Working for Siemens GRI 2-7, SASB Siemens employees16 Total Sept. 30th No. (rounded) 320,000 311,000 2.9% RT-EE_000B Other internal workforce17 Total Sept. 30th No. (rounded) 17,200 16,900 1.8% GRI 2-7 External/third party workers18 Germany Sept. 30th No. (rounded) 4,400 4,400 0.0% GRI 2-8 EMEA Sept. 30th No. (rounded) 175,000 172,000 1.7% GRI 2-7 Americas Sept. 30th No. (rounded) 66,000 64,000 3.1% GRI 2-7 Asia, Australia Sept. 30th No. (rounded) 78,000 75,000 4.0% GRI 2-7 Women Sept. 30th No. (rounded) 88,000 84,000 4.8% GRI 2-7, WEF Men Sept. 30th No. (rounded) 231,000 225,000 2.7% GRI 2-7, WEF No/other gender entry Sept. 30th No. (rounded) 140 180 –22.2% GRI 2-7, WEF Gender n/a Sept. 30th No. (rounded) 900 1,600 –43.8% GRI 2-7, WEF Age group < 30 Sept. 30th No. (rounded) 50,000 48,000 4.2% GRI 2-7 Employee structure19 Age group 30 – 50 Sept. 30th No. (rounded) 188,000 182,000 3.3% GRI 2-7 Age group > 50 Sept. 30th No. (rounded) 81,000 79,000 2.5% GRI 2-7 Age n/a Sept. 30th No. (rounded) 900 1,600 −43.8% GRI 2-7 Young workers below 15 years Sept. 30th % of total employees 0.0% 0.0% GRI 405-1, WEF Young workers 15 – 17 years Sept. 30th % of total employees 0.0% 0.0% GRI 405-1, WEF Blue-collar workers Sept. 30th % of total employees 16.9% 17.3% –2.3% WEF White-collar workers Sept. 30th % of total employees 83.1% 82.7% 0.5% WEF % of employees in Germany Sept. 30th Germany 5.6% 5.7% –1.8% GRI 405-1, WEF % of employees in Germany – Germany in top Top management management positions Sept. 30th positions 0.0% 0.0% GRI 405-1, WEF Disabled employees20 Germany – % of employees in Middle & junior Germany in middle management & junior manage- positions Sept. 30th ment positions 1.9% 1.8% 5.6% GRI 405-1, WEF % of employees in Germany – Germany in Non- management non-management positions Sept. 30th positions 5.3% 5.5% –3.6% GRI 405-1, WEF Employee nationalities21 Total Sept. 30th No. 170 168 1.2% GRI 405-1 15 All employee data in this section are based on headcount. 16 Employee refers to every natural person in an active employment relationship with a fully consolidated Siemens company. Employees are all internal workforce without apprentices, students, interns and other internal workforce. 17 Other internal workforce/non-employees according to our financial reporting guidelines (e.g. apprentices, students, interns and other internal workforce). 18 External/third party workers who work in our workforce/contingent workers. 19 Employee structure data are only for employees, without other internal workforce and without external/third party workers. 20 Severely Handicapped Employees-rate (SHE) is based on legally defined guidelines and specifications according §§ 154-1+3 SGB IX (German Social Law). 21 Employees, without other internal workforce and without external workforce. SIEMENS SUSTAINABILITY REPORT 2023 115
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards German Sept. 30th % of total employees 25% 26% –2.1% GRI 405-1 American Sept. 30th % of total employees 14% 14% 0.0% GRI 405-1 21 Indian Sept. 30th % of total employees 12% 11% 5.5% GRI 405-1 Top nationalities worldwide Chinese Sept. 30th % of total employees 10% 10% 0.0% GRI 405-1 Czech Sept. 30th % of total employees 3% 3% 0.0% GRI 405-1 Other nationalities Sept. 30th % of total employees 36% 36% 0.0% GRI 405-1 Employment characteristics22 Total Sept. 30th No. (rounded) 300,100 289,600 3.6% GRI 2-7b, WEF EMEA Sept. 30th No. (rounded) 170,300 165,300 3.0% GRI 2-7b, WEF Americas Sept. 30th No. (rounded) 65,400 63,300 3.3% GRI 2-7b, WEF Employees with permanent Asia, Australia Sept. 30th No. (rounded) 64,400 61,000 5.6% GRI 2-7b, WEF working contract Women Sept. 30th No. (rounded) 81,500 77,900 4.6% GRI 2-7b, WEF Men Sept. 30th No. (rounded) 218,400 211,500 3.3% GRI 2-7b, WEF No/other gender entry Sept. 30th No. (rounded) 140 170 −17.6% GRI 2-7b, WEF Total Sept. 30th No. (rounded) 18,500 19,500 −5.1% GRI 2-7b, WEF EMEA Sept. 30th No. (rounded) 4,800 5,200 −7.7% GRI 2-7b, WEF Americas Sept. 30th No. (rounded) 400 400 0.0% GRI 2-7b, WEF Employees with temporary Asia, Australia Sept. 30th No. (rounded) 13,400 13,900 −3.6% GRI 2-7b, WEF working contract Women Sept. 30th No. (rounded) 6,100 6,300 −3.2% GRI 2-7b, WEF Men Sept. 30th No. (rounded) 12,500 13,200 −5.3% GRI 2-7b, WEF No/other gender entry Sept. 30th No. 2 12 −83.3% GRI 2-7b, WEF Permanent/temporary working contract Contract type n/a Sept. 30th No. (rounded) 900 1,600 −43.8% GRI 2-7b, WEF Total Sept. 30th No. (rounded) 304,500 295,400 3.1% GRI 2-7 EMEA Sept. 30th No. (rounded) 161,400 157,200 2.7% GRI 2-7 Americas Sept. 30th No. (rounded) 65,500 63,400 3.3% GRI 2-7 Full-time employees in headcount Asia, Australia Sept. 30th No. (rounded) 77,600 74,700 3.9% GRI 2-7 Women Sept. 30th No. (rounded) 78,100 74,700 4.6% GRI 2-7 Men Sept. 30th No. (rounded) 226,300 220,400 2.7% GRI 2-7 No/other gender entry Sept. 30th No. (rounded) 140 180 −22.2% GRI 2-7 Total Sept. 30th No. (rounded) 14,100 13,800 2.2% GRI 2-7 EMEA Sept. 30th No. (rounded) 13,600 13,300 2.3% GRI 2-7 Americas Sept. 30th No. (rounded) 300 300 0.0% GRI 2-7 Part-time employees in headcount Asia, Australia Sept. 30th No. (rounded) 160 150 6.7% GRI 2-7 Women Sept. 30th No. (rounded) 9,500 9,500 0.0% GRI 2-7 Men Sept. 30th No. (rounded) 4,600 4,300 7.0% GRI 2-7 No/other gender entry Sept. 30th No. 6 6 0.0% GRI 2-7 21 Employees, without other internal workforce and without external workforce. 22 Employment characteristics only for employees, without other internal workforce and without external/third party workers. SIEMENS SUSTAINABILITY REPORT 2023 116
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Full-/part-time employees in headcount Full-/part-time n/a Sept. 30th No. (rounded) 900 1,600 −43.8% GRI 2-7 Employees covered by collective % of total employees bargaining agreements Germany Sept. 30th in Germany 78.6% 78.3% 0.4% GRI 2-30 Additional employees covered by % of total employees collective agreements23 Germany Sept. 30th in Germany 19.2% 19.5% –1.5% GRI 2-30 Senior managers represented by % of total employees “Executive staff committee” Germany Sept. 30th in Germany 2.2% 2.2% 0.0% GRI 2-30 Diversity of employees per category and function24 Total Sept. 30th No. (rounded) 32,900 30,900 6.5% GRI 405-1 % of employees in all management Women Sept. 30th positions 21.6% 20.6% 4.9% GRI 405-1 Employees in all management % of employees in 25 positions all management Men Sept. 30th positions 78.4% 79.4% –1.3% GRI 405-1 % of employees in all management No/other gender entry Sept. 30th positions 0.0% 0.0% GRI 405-1 Total Sept. 30th No. (rounded) 500 500 0.0% GRI 405-1 % of employees in top management Women Sept. 30th positions 30.8% 27.2% 13.2% GRI 405-1 % of employees in top management Men Sept. 30th positions 69.2% 72.8% –4.9% GRI 405-1 % of employees in Employees in top management top management positions26 No/other gender entry Sept. 30th positions 0.0% 0.0% GRI 405-1 % of employees in top management Age group < 30 Sept. 30th positions 0.2% 0.2% 0.0% GRI 405-1 % of employees in top management Age group 30 – 50 Sept. 30th positions 42.7% 46.0% –7.2% GRI 405-1 % of employees in top management Age group > 50 Sept. 30th positions 57.1% 53.7% 6.3% GRI 405-1 23 Employees not covered by collective bargaining agreements, but the organization determines their working conditions and terms of employment based on collective bargaining agreements that cover its other employees or similar agreements. 24 Diversity data only for employees, without other internal workforce and without external/third party workers. 25 Employees in all management positions with disciplinary responsibility, but without Managing Board Members. 26 Employees in top management positions with disciplinary responsibility, but without Managing Board Members. SIEMENS SUSTAINABILITY REPORT 2023 117
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Total Sept. 30th No. (rounded) 32,400 30,400 6.6% GRI 405-1 % of employees in middle & junior management Women Sept. 30th positions 21.4% 20.5% 4.4% GRI 405-1 % of employees in middle & junior management Men Sept. 30th positions 78.6% 79.5% –1.1% GRI 405-1 % of employees in middle & junior Employees in middle & junior management 27 No/other gender entry Sept. 30th positions 0.0% 0.0% GRI 405-1 management positions % of employees in middle & junior management Age group < 30 Sept. 30th positions 1.1% 1.0% 10.0% GRI 405-1 % of employees in middle & junior management Age group 30 – 50 Sept. 30th positions 64.7% 64.5% 0.3% GRI 405-1 % of employees in middle & junior management Age group > 50 Sept. 30th positions 34.2% 34.5% –0.9% GRI 405-1 Total Sept. 30th No. (rounded) 285,700 278,200 2.7% GRI 405-1 % of employees in non-management Women Sept. 30th positions 28.2% 28.0% 0.7% GRI 405-1 % of employees in non-management Men Sept. 30th positions 71.8% 72.0% –0.3% GRI 405-1 % of employees in Employees in non-management non-management positions No/other gender entry Sept. 30th positions 0.0% 0.1% –100.0% GRI 405-1 % of employees in non-management Age group < 30 Sept. 30th positions 17.2% 17.1% 0.6% GRI 405-1 % of employees in non-management Age group 30 – 50 Sept. 30th positions 58.5% 58.4% 0.2% GRI 405-1 % of employees in non-management Age group > 50 Sept. 30th positions 24.3% 24.5% –0.8% GRI 405-1 % of total employees Production Sept. 30th in function 25.2% 25.0% 0.8% GRI 405-1 % of total employees Women in functions Sales and marketing Sept. 30th in function 29.3% 28.7% 2.1% GRI 405-1 Research and % of total employees development Sept. 30th in function 22.7% 22.5% 0.9% GRI 405-1 % of total employees General administration Sept. 30th in function 48.4% 48.2% 0.4% GRI 405-1 27 Employees in middle & junior management positions with disciplinary responsibility, but without Managing Board Members. SIEMENS SUSTAINABILITY REPORT 2023 118
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards % of total employees Total Sept. 30th in STEM 19.3% 19.3% 0.0% GRI 405-1 Women in STEM-related positions % of total employees In management in STEM and positions28 Sept. 30th management 14.3% 13.3% 7.5% GRI 405-1 % of total employees in revenue-generat- Women in revenue-generating In management ing functions and in functions positions28 Sept. 30th management 15.6% 14.6% 6.8% GRI 405-1 Hirings Total Fiscal Year No. (rounded) 40,700 47,300 −14.0% GRI 401-1, WEF EMEA Fiscal Year No. (rounded) 17,300 19,300 −10.4% GRI 401-1, WEF Americas Fiscal Year No. (rounded) 12,000 13,800 −13.0% GRI 401-1, WEF Asia, Australia Fiscal Year No. (rounded) 11,400 14,300 −20.3% GRI 401-1, WEF Women Fiscal Year No. (rounded) 12,000 14,100 −14.9% GRI 401-1, WEF Hirings Men Fiscal Year No. (rounded) 28,500 32,900 −13.4% GRI 401-1, WEF No/other gender entry Fiscal Year No. 26 50 −48.0% GRI 401-1, WEF Gender n/a Fiscal Year No. 200 228 –12.3% GRI 401-1, WEF Age group < 30 Fiscal Year No. (rounded) 18,400 21,600 −14.8% GRI 401-1, WEF Age group 30 – 50 Fiscal Year No. (rounded) 19,600 22,600 –13.3% GRI 401-1, WEF Age group > 50 Fiscal Year No. (rounded) 2,500 3,000 −16.7% GRI 401-1, WEF Age n/a Fiscal Year No. 200 228 −12.3% GRI 401-1, WEF % of average number Total Fiscal Year of employees 12.9% 15.4% −16.2% GRI 401-1, WEF % of average number of employees EMEA Fiscal Year in region 10.0% 11.2% −10.7% GRI 401-1, WEF % of average number of employees Americas Fiscal Year in region 18.2% 21.9% −16.9% GRI 401-1, WEF % of average number of employees Asia, Australia Fiscal Year in region 14.9% 19.7% −24.4% GRI 401-1, WEF % of average Women Fiscal Year number of women 14.0% 17.1% −18.1% GRI 401-1, WEF Hiring rate29 % of average Men Fiscal Year number of men 12.5% 14.7% −15.0% GRI 401-1, WEF % of average number of employees with No/other gender entry Fiscal Year no/other gender 16.4% 89.8% −81.7% GRI 401-1, WEF % of average number of employees Age group < 30 Fiscal Year in age group 37.6% 46.7% −19.5% GRI 401-1, WEF % of average number of employees Age group 30 – 50 Fiscal Year in age group 10.6% 12.4% −14.5% GRI 401-1, WEF % of average number of employees Age group > 50 Fiscal Year in age group 3.2% 3.7% −13.5% GRI 401-1, WEF 28 Employees in management positions with disciplinary responsibility, but without Managing Board Members. 29 Hiring rate is defined as the ratio of hirings into Siemens during the fiscal year to the average number of employees. SIEMENS SUSTAINABILITY REPORT 2023 119
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Exits Total Fiscal Year No. (rounded) 30,400 35,800 −15.1% GRI 401-1, WEF EMEA Fiscal Year No. (rounded) 13,000 15,000 −13.3% GRI 401-1, WEF Americas Fiscal Year No. (rounded) 9,200 11,700 −21.4% GRI 401-1, WEF Asia, Australia Fiscal Year No. (rounded) 8,200 9,200 −10.9% GRI 401-1, WEF Women Fiscal Year No. (rounded) 8,500 9,500 −10.5% GRI 401-1, WEF 30 Men Fiscal Year No. (rounded) 21,800 26,100 −16.5% GRI 401-1, WEF Exits No/other gender entry Fiscal Year No. 28 10 180.0% GRI 401-1, WEF Gender n/a Fiscal Year No. 118 203 −41.9% GRI 401-1, WEF Age group < 30 Fiscal Year No. (rounded) 8,000 9,400 −14.9% GRI 401-1, WEF Age group 30 – 50 Fiscal Year No. (rounded) 14,900 18,200 −18.1% GRI 401-1, WEF Age group > 50 Fiscal Year No. (rounded) 7,400 8,000 −7.5% GRI 401-1, WEF Age n/a Fiscal Year No. 118 203 −41.9% GRI 401-1, WEF % of average number Total Fiscal Year of employees 9.6% 11.6% −17.2% GRI 401-1 Voluntary turnover % of average number rate31 Fiscal Year of employees 5.3% 6.6% −19.7% GRI 401-1 Involuntary turnover % of average number rate32 Fiscal Year of employees 4.3% 5.0% −14.0% GRI 401-1 % of average number of employees in EMEA Fiscal Year region 7.5% 8.7% −13.8% GRI 401-1 % of average number of employees in Americas Fiscal Year region 14.0% 18.6% −24.7% GRI 401-1 % of average number of employees in Asia, Australia Fiscal Year region 10.7% 12.6% −15.1% GRI 401-1 Employee turnover rate30 % of average number Women Fiscal Year of women 9.9% 11.5% −13.9% GRI 401-1 % of average number Men Fiscal Year of men 9.5% 11.6% −18.1% GRI 401-1 % of average number of employees with no/other gender No/other gender entry Fiscal Year entry 17.7% 18.0% −1.7% GRI 401-1 % of average number of employees in Age group < 30 Fiscal Year age group 16.4% 20.4% −19.6% GRI 401-1 % of average number of employees in Age group 30 – 50 Fiscal Year age group 8.0% 10.0% −20.0% GRI 401-1 % of average number of employees in Age group > 50 Fiscal Year age group 9.2% 10.1% −8.9% GRI 401-1 Employee share programs33 Employees participating in the Total (w/o SHS) Fiscal Year No. (rounded) 102,000 103,000 −1.0% Siemens employee share plans Total (w/o SHS) Fiscal Year % of total employees 43.5% 44.5% −2.2% 30 Turnover rate is defined as the ratio of voluntary and involuntary exits from Siemens during the fiscal year to the average number of employees. 31 Voluntary turnover rate is based on employee decision. 32 Involuntary turnover rate is based on other reasons, including dismissals, end of temporary contracts, mutual consent, (early) retirement, death, and other reasons that are not an employee decision. 33 Based on employees with eligibility to share plans. SIEMENS SUSTAINABILITY REPORT 2023 120
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Professional education and lifelong learning Apprentices and dual students Total Sept. 30th No. (rounded) 5,800 5,500 5.5% GRI 2-7 Germany Sept. 30th No. (rounded) 3,600 3,900 −7.7% GRI 2-7 Average number of interns/(doctoral) students with an educational/ learning target (e.g. mandatory internship) Total Sept. 30th No. (rounded) 1,100 1,000 10.0% GRI 2-7 Spending on employee education and training Total Fiscal Year Million € 416.3 374.6 11.1% GRI 404-2, WEF Spending on employee training Total Fiscal Year Million € 237.0 205.4 15.4% GRI 404-2, WEF Spending on employee training per employee Total Fiscal Year € 753 667 12.9% GRI 404-2, WEF Spending on employee training per full time employee Total Fiscal Year € 763 676 12.8% GRI 404-2, WEF Total Fiscal Year No. 30 26 12.1% GRI 404-1, WEF Digital learning Fiscal Year No. 23 21 9.4% GRI 404-1, WEF On-site training Fiscal Year No. 6 5 23.1% GRI 404-1, WEF Average training hours per Women Fiscal Year No. 28 26 9.0% GRI 404-1, WEF employee Men Fiscal Year No. 30 27 13.1% GRI 404-1, WEF no/other gender Fiscal Year No. 18 39 −54.2% GRI 404-1, WEF Blue-collar workers Fiscal Year No. 22 20 12.0% GRI 404-1, WEF White-collar workers Fiscal Year No. 31 28 12.6% GRI 404-1, WEF Top management positions Fiscal Year No. 34 28 21.5% GRI 404-1, WEF Middle/junior man- agement positions Fiscal Year No. 36 28 26.6% GRI 404-1, WEF Non-management positions Fiscal Year No. 29 26 10.7% GRI 404-1, WEF Average training hours per Function: Production Fiscal Year No. 30 27 12.6% GRI 404-1, WEF employee category Function: Sales and marketing Fiscal Year No. 27 24 10.7% GRI 404-1, WEF Function: Research and development Fiscal Year No. 31 27 16.7% GRI 404-1, WEF Function: General administration Fiscal Year No. 27 24 12.8% GRI 404-1, WEF Modules in Siemens digital global learning platform My Learning World Total (w/o SHS) Fiscal Year No. (rounded) 136,000 116,600 –16.6% GRI 404-2, WEF Share of employees with access to digital learning offerings Total Fiscal Year % of total employees 99.6% 90% 10.7% GRI 404-2, WEF Participation rate in learning offerings Total Fiscal Year % of total employees 100% 100% 0.0% GRI 404-2, WEF Development programs Siemens Core Learning Paths (CLP) Total Fiscal Year No. 29 29 0.0% GRI 404-2, WEF Siemens Potential Development Programs (PDP) Total (w/o SHS) Fiscal Year No. 38 36 5.6% GRI 404-2, WEF Xcelerate Your Potential @ Siemens Total community Sept. 30th No. 23 22 4.5% GRI 404-2, WEF (XPS) Active participants (w/o SHS) Sept. 30th No. 3 2 50.0% GRI 404-2, WEF Siemens Finance Excellence Total community Sept. 30th No. 69 68 1.5% GRI 404-2, WEF Program (FEP) Active participants Sept. 30th No. 8 9 –11.1% GRI 404-2, WEF SIEMENS SUSTAINABILITY REPORT 2023 121
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Siemens Graduate Program (SGP) Total community Sept. 30th No. 954 913 4.5% GRI 404-2, WEF Active participants Sept. 30th No. 132 99 33.3% GRI 404-2, WEF Occupational health & safety34 Total Fiscal Year No. 4 2 100.0% GRI 403-9, WEF Fatalities – work related Temporary workers Fiscal Year No. 0 0 GRI 403-9, WEF Employees Fiscal Year No. 0 1 −100.0% GRI 403-9, WEF Contractors Fiscal Year No. 4 1 300.0% GRI 403-9, WEF Total36 Fiscal Year No. 0.000 0.001 –100.0% GRI 403-9, WEF Fatality Rate – work related35 Temporary workers Fiscal Year No. 0.000 0.000 GRI 403-9, WEF Employees Fiscal Year No. 0.000 0.0003 −100.0% GRI 403-9, WEF Total Fiscal Year No. 50 68 −26.5% GRI 403-9, WEF High-consequence work-related Temporary workers Fiscal Year No. 3 1 200.0% GRI 403-9, WEF injuries (excluding fatalities) Employees Fiscal Year No. 47 67 −29.9% GRI 403-9, WEF Total Fiscal Year No. 0.015 0.021 –28.5% GRI 403-9, WEF High-consequence injury rate37 Temporary workers Fiscal Year No. 0.009 0.003 178.4% GRI 403-9, WEF Employees Fiscal Year No. 0.015 0.022 –31.4% GRI 403-9, WEF Total Fiscal Year No. 1,466 1,518 −3.4% GRI 403-9, WEF Recordable injuries Temporary workers Fiscal Year No. 199 210 −5.2% GRI 403-9, WEF Employees Fiscal Year No. 1,267 1,308 −3.1% GRI 403-9, WEF Total Fiscal Year No. 0.43 0.46 –6.1% GRI 403-9, WEF Total recordable injury rate38 Temporary workers Fiscal Year No. 0.63 0.71 –12.1% GRI 403-9, WEF Employees Fiscal Year No. 0.41 0.44 –5.3% GRI 403-9, WEF Total Fiscal Year No. 805 853 −5.6% GRI 403-9, WEF Lost time injuries (LTI) Temporary workers Fiscal Year No. 96 112 −14.3% GRI 403-9, WEF Employees Fiscal Year No. 709 741 −4.3% GRI 403-9, WEF Total Fiscal Year No. 0.24 0.26 −8.2% GRI 403-9, WEF Lost time injury frequency rate Temporary workers Fiscal Year No. 0.30 0.38 −20.5% GRI 403-9, WEF (LTIFR)39 Employees Fiscal Year No. 0.23 0.25 −6.5% GRI 403-9, WEF Number of hours worked Employees Fiscal Year No. (in thousand) 614,731 600,758 2.3% GRI 403-9 Occupational Illness cases Selected countries Fiscal Year No. 62 8840 −29.5% GRI 403-10, WEF Fatalities due to occupational Illness Selected countries Fiscal Year No. 6 1140 –45.5% GRI 403-10 Rate of employees covered with OHS MS that has been externally % of total number audited Total Sept. 30th employees 57% 57%41 0.0% GRI 403-8 Rate employees covered with OHS % of total number MS that has been internally audited Total (w/o SHS) Sept. 30th employees 99.9% n.a. GRI 403-8 % of total number Rate of access to Medical Care42 Total (w/o SHS) Sept. 30th employees 99% 89% 11.8% GRI 403-6 % of total number Rate of access to Health Education42 Total (w/o SHS) Sept. 30th employees 94% 85% 11.0% 34 Excluding CTSI Oncology Solutions. 35 Number of Fatalities x 200,000 / working hours. 36 Fatality Rate w/o contractors. 37 Number of High-consequence injuries x 200,000 / working hours. 38 Number of Recordable injuries x 200,000 / working hours. 39 Number of Lost Time Cases (LTC) x 200,000 / working hours. LTC are accidents that results in at least one lost working day. 40 Due to system change of German Statutory Agency adjusted prior year figures. 41 Realignment due to calculation error in last year. 42 Scope of HM Reporting: Countries >30 employees as well as affiliated companies >30 employees. SIEMENS SUSTAINABILITY REPORT 2023 122
6 Our sustainability indicators Sustainability Key Performance Indicators Fiscal Year/ (KPIs) September 30th Unit FY 2023 FY 2022 +/– Standards Corporate Citizenship Donations Total Fiscal Year Million € 29.2 32.1 −9.0% GRI 201-1, WEF Total Fiscal Year % of Net Income 0.3% 0.7% −53.1% GRI 201-1, WEF Sponsoring Social programs (e.g. Arts and education) Total Fiscal Year Million € 14.0 13.5 3.5% GRI 201-1, WEF Community investment total Total Fiscal Year Million € 43.2 45.6 −5.3% GRI 201-1, WEF Total Fiscal Year % of Net Income 0.5% 1.0% −51.2% GRI 201-1, WEF Volunteering hours Total (w/o SHS) Fiscal Year No. (rounded) 36,500 32,650 11.8% GRI 201-1, WEF DEGREE SUSTAINABILITY FRAMEWORK – KPI OVERVIEW (FIGURES WITHOUT SIEMENS HEALTHINEERS) Decarbonization Scope 1+2: Emission reduction % to base year to base year Total (w/o SHS) Fiscal Year (2019) −50% −46% 9.5% Supply Chain: Emission reduction % to base year to base year Total (w/o SHS) Fiscal Year (2020)43 −0.9% 2.5% −134.0% Ethics Quota of participants of Business Conduct Guideline training up to Sept. % of total number (since FY 23) Total (w/o SHS) 30th of employees 69.0% 99.9%44 Governance Resource efficiency Quota of product families with % of relevant 45 51% 35% 43.0% Robust Eco Design Total (w/o SHS) Fiscal Year revenue Purchase Quota – % of relevant Secondary material for metals Total (w/o SHS) Fiscal Year purchase volume 35% 34% 3.0% Purchase Quota – % of relevant Secondary material for resins Total (w/o SHS) Fiscal Year purchase volume < 1% < 1% Quota of waste-to-landfill reduction % to base year to base year (w/o construction waste) Total (w/o SHS) Fiscal Year (2021) −15% −12% 20.2% Equity % of employees in Female share in top management Total (w/o SHS) Sept. 30th top management 31.1% 27.7% 12.3% Share of employees with access to % of total number Siemens employee share plans46 Total (w/o SHS) Fiscal Year of employees 99.9% 98.6% 1.3% Employability Digital learning hours per employee Total (w/o SHS) Fiscal Year No. 23 21 9.5% Level of access to Employee % of total number 42 Total (w/o SHS) Sept. 30th of employees 96% 87% 10.3% Assistance Program Improvement in global LTIFR47 % to base year to base year Total (w/o SHS) Fiscal Year (2020) −26% −19% 36.8% 42 Scope of HM Reporting: Countries >30 employees as well as affiliated companies >30 employees. 43 Base year 2020 is calculated w/o individual supplier emission data. 44 Year-to-year comparison between fiscal 2022 and fiscal 2023 is limited. The current cycle started in fiscal 2023. 45 In FY 23 the share of relevant revenue was 65% of total revenue Siemens w/o SHS. 46 Where legally possible and reasonable. 47 Number of Lost Time Cases (LTC) x 200,000 / working hours. LTC are accidents that results in at least one lost working day. SIEMENS SUSTAINABILITY REPORT 2023 123
Pages 124 – 157 Annex SIEMENS SUSTAINABILITY REPORT 2023 124
7.1 Reporting methodology 7.1 Reporting methodology Sustainability is a fundamental principle that guides our Nonetheless, they are consistent with the DEGREE sustain- every action. The Sustainability Report 2023 (below, the ability framework and the global nonfinancial programs and “Report”) supplements our financial reporting for fiscal initiatives at Siemens. 2023. The present chapter describes the key elements of our sustainability reporting. Data collection Given the size and worldwide presence of Siemens, data Reporting approach collection poses a logistical challenge. Moreover, our compa- The Report explains the strategy, organization, initiatives, nies throughout the world need to comply with national programs, management approach, targets, actions, and regulations on the compilation and definition of their key results of sustainable corporate governance. It supplements figures, which means that the generated data is not always the financial reporting provided in the current Annual Report comparable. Where applicable, we point out any significant and updates the financial reporting from the previous year. limitations in the information presented in the Report. It also documents the progress we have made in implement- ing the Ten Principles of the United Nations Global Compact, The data presented in this Report is collected via various the United Nations CEO Water Mandate, and the recommen- internal reporting systems, which for the most part are dif- dations of the Task Force on Climate-Related Financial ferent from those used to collect the financial information Disclosures (TCFD). presented in our consolidated financial statements. In partic- ular, the internal reporting systems used to collect the This Report has been prepared in accordance with the Stan- information presented in this Report may be subject to less dards of the Global Reporting Initiative (GRI 2021) and the stringent internal requirements for documentation, data anti-corruption reporting recommendations of the Global generation, and auditing, including with respect to the IT Compact from Transparency International. Our reporting on systems and controls employed. We reserve the right to human rights activities is based on the UN Guiding Principles change the internal guidelines applicable to the collection of (UN GP) Reporting Framework and the corresponding guide- the data published in this Report without prior notice. Due to lines. rounding, some of the numbers presented in this Report may not add up precisely to the totals presented, and percentages Reporting period and Report boundaries may not precisely reflect the absolute figures to which they This Report refers to the Siemens 2023 fiscal year (October 1, refer. 2022, to September 30, 2023). Any exceptions are indicated as such. In general, the Report covers all our fully consoli- dated companies. As a general rule, minority interests are not included in the Report. Unless otherwise noted, the key indicators and information reported here relate to the com- pany’s ongoing operations. Some management approaches do not cover all Siemens entities or parts of the organization. Some parts of the Siemens organization may have intro- duced specific programs or initiatives that differ from the general approaches described in this Report. SIEMENS SUSTAINABILITY REPORT 2023 125
7.1 Reporting methodology Methodology, environmental reporting, and We include all Kyoto gases in our emissions calculations: collection of environmental data carbon dioxide (CO ), methane (CH ), nitrous oxide (N O), 2 4 2 Within our environmental information system, in fiscal 2023 hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and we evaluated 250 reports from locations in all relevant sulphur hexafluoride (SF ). To assess the relevance of GHG 6 countries where defined threshold values for environmental emissions other than CO2, they are converted into metric management parameters like energy usage, resource usage, tons of CO equivalents (CO e). This number is based on the 2 2 water consumption, and emissions were exceeded. We use global warming potential over 100 years of each of the absolute values – for example, energy consumption in giga- greenhouse gases compared to the global warming potential joules – to measure and monitor our environmental impacts. of CO . 2 We report environmental data for ongoing operations. We follow the financial control approach to consolidate the Values have been extrapolated where applicable (e.g., reporting of emissions. waste, energy consumption, or emissions) to 100% coverage in order to reflect total consumption. The extrapolation is The source of the emissions factors applied in the 2023 performed on the basis of the area not covered in the report- reporting year is the “IEA Emissions Factors 2022” published ing system. The difference represents a share of 20% for the by the International Energy Agency. For example, the global reporting period. We monitor our environmental impacts at CO2e emissions factor used for electricity generation only is all environmentally relevant office and production sites on 461 g CO2e/kWh. If regional calculations are available, local the basis of environmental data collected on a quarterly emissions factors should be used. basis. Customer Avoided Emissions Scope 3 upstream emissions The description of our methodology for calculating “cus tomer Scope 3 emissions from our supply chain have been calcu- avoided emissions” can be found the Annex on REPORTING lated using a cross-regional, macroeconomic input-output PRINCIPLES FOR CUSTOMER AVOIDED EMISSIONS. model based on our volume of purchased goods and services. Methodology, headcount reporting, and Scope 3 downstream emissions collection of employee data With regard to Scope 3 downstream emissions, we calculated Within our global HR reporting, we report headcount num- these emissions in fiscal 2023 in line with the Greenhouse bers according to our Siemens Corporate Financial Reporting Gas (GHG) Protocol, and therefore accounted for and Guidelines. These Guidelines are embedded in our global HR reported the emissions from the use of Siemens offerings reporting standards and HR reporting landscape system sold or investments made in the reporting year over their (HRL), which is the basis for employee reporting figures. entire use phase duration. For calculating these emissions, “Employee” refers to every natural person in an active in most cases we apply the global power-mix emissions employment relationship with a fully consolidated Siemens factor defined by the International Energy Agency (IEA). For company. Employees are all internal workforce without calculating the emissions of end products and key compo- apprentices, students, interns, and other internal workforce. nents of end products (intermediate products), we apply the All employee figures in the Social chapters refer to head- so-called “final product approach” defined in the GHG Protocol. count. For some companies no employee structure data are This means that in the case of motors, for example, we take available due to data delivery by SGATE (Siemens Global into account their power loss as well as their effective power. Adding Tool for Employees), which is a web-based tool for If we applied the “intermediate product approach” to all collecting, storing, and processing headcount figures for intermediate products – an approach that in the example of companies that are consolidated but for a short time not motors only takes into account their power loss – the able to deliver employee structure data. This can lead to reported emissions would be lower. minor deviations in breakdown data. SIEMENS SUSTAINABILITY REPORT 2023 126
7.1 Reporting methodology Employee turnover is defined as the ratio of voluntary and involuntary exits from Siemens during the fiscal year to the average number of employees. Voluntary turnover rate is based on employee decision, whereas Involuntary turnover rate is based on other reasons, including dismissals, end of temporary contract, mutual consent, (early) retirement, death, and other reasons that are not the employee’s decision. Hiring rate is defined as the ratio of hirings into the Siemens group during the fiscal year to the average number of employees. The headcount numbers and rates for employees in management positions include all managers with disci- plinary responsibility, but without Management Board Members (MBM). Independent assurance Our sustainability reporting is subject to high quality stan- dards. Therefore, as in previous years, we commissioned an independent audit firm to conduct a limited assurance of our Sustainability Report 2023. The results of the assurance conducted by Ernst & Young GmbH Wirtschaftsprüfungs- gesellschaft are presented in the chapter titled “Independent auditor’s limited assurance report.” Editor’s note An effort has been made to use gender-neutral language throughout. Nevertheless, if on occasion the masculine form is used for easier readability, it stands for people of all genders. SIEMENS SUSTAINABILITY REPORT 2023 127
7.2 Reporting principles for Customer Avoided Emissions 7.2 Reporting principles for Customer Avoided Emissions For 15 years (until fiscal 2021), we reported the revenue resulting from the use of the company’s products and solu- generated from our Environmental Portfolio and the result- tions (avoided emissions) helps convey a full picture of the ing annual reduction of greenhouse gas emissions (GHG) company’s contribution to global decarbonization. achieved by our customers on the basis of the internal regu- lations defined in our Environmental Portfolio Guideline. The term “Customer Avoided Emissions” refers to the “posi- Starting in fiscal 2022, we began to report key figures for tive” impact determined by comparing the GHG emissions of sustainable activities, including revenue, in accordance with two different solutions or scenarios. Avoided emissions are the new EU Taxonomy regulation. We are also continuing to emissions that are saved or avoided during the customer use calculate and report on Customer Avoided Emissions. phase from the use of our products or financing compared to a baseline (reference scenario). GHG Use Phase Impact Reporting Guideline The Siemens GHG Use Phase Impact Reporting Guideline sets The guideline used for calculating and reporting Customer out basic requirements and guidelines for calculating and Avoided Emissions is based on a methodology defined by reporting emissions associated with the use of products, Siemens itself due to the lack of a commonly used external systems, solutions, and services sold and investments made definition or standard. It is aligned with the GHG Scope 3 by Siemens. It covers: downstream reporting according to the GHG Protocol Standard. → Scope 3 downstream GHG emissions resulting from the Calculation principles use of sold products (Category 11) and investments The calculation principles are based on the standards “A Cor- (Category 15) according to the GHG Protocol Corporate porate Accounting and Reporting Standard – Revised Edition” Value Chain (Scope 3) Standard (GHG Protocol Standard) and “GHG Protocol for Project Accounting,” both published → Customer Avoided Emissions (according to Siemens’ own by the Greenhouse Gas Protocol Initiative. These principles methodology are relevance, completeness, consistency, transparency, accuracy, and conservativeness. The following summary will focus on the second part, the calculation and reporting of Customer Avoided Emissions. All Siemens Businesses and SFS are required to apply these Customer Avoided Emissions result either from products, principles in order to enable the integrity and credibility of systems, solutions, and/or services sold by Siemens or from the data and a true and fair presentation of Siemens’ Customer investments made by Siemens Financial Services (SFS). Avoided Emissions. Customer Avoided Emissions Accounting boundaries A company’s carbon footprint does not measure the company’s The accounting boundaries for data on Customer Avoided contribution to decarbonization by its partners and customers. Emissions only encompass the phase during which a prod- Although the carbon footprint can indeed reflect emissions uct, system, solution, or service is used by the customer or reductions resulting from the use of its solutions (Scope 3 the term of an investment. Therefore, GHG emissions occur- downstream emissions) over time, it does not indicate ring during other phases of the lifecycle – for instance, in the whether these solutions have enabled the customer to supply chain, in production, or upon end-of-life disposal – achieve lower emissions than an alternative solution (refer- are not included in the calculation. ence scenario). Quantifying the decarbonization impact SIEMENS SUSTAINABILITY REPORT 2023 128
7.2 Reporting principles for Customer Avoided Emissions Accounting for Customer Avoided Emissions Baseline methodology All Siemens Businesses and SFS are required to report the The baseline methodology defined in the guideline refers to Customer Avoided Emissions for all products, systems, solu- the comparison of a Siemens product, system, solution, tions, services, or investments that lead to the avoidance of service, or investment with a reference situation in the GHG emissions during the customer use phase. absence of the Siemens offering. To enable credibility and avoid overstating the positive effect, the reference scenario Customer Avoided Emissions represent the difference has to represent as best as possible the situation that would between the GHG emissions of a Siemens offering and the have occurred without the Siemens solution. GHG emissions of a baseline or reference scenario. Siemens Businesses and SFS must account for and report the annual → Beforeandafter comparison: Refers to the difference Customer Avoided Emissions from the use of Siemens offer- between an initial customer situation and the situation ings sold or investments made in the reporting year over the after the implementation of a Siemens offering intended entire duration of their use phase (“future impact of today’s to improve or substitute certain characteristics. This com- revenue” similar to Scope 3 use phase emissions according parison can be applied, for example, to cases in which a to the GHG Protocol Standard). Siemens solution optimizes a building’s energy consump- tion. Exclusion criteria: → Direct comparison with a reference technology: Before calculating Customer Avoided Emissions, all Siemens Refers to the difference between the Siemens offering products, systems, solutions, services, and investments need and a comparable other single technology or predecessor to be checked against the following exclusion criteria: with a similar purpose. This comparison may be applied, for example, to new product generations or the electrifi- → Field of application: No Customer Avoided Emissions may cation of fossil fuel technologies. be accounted for and reported in the military use or → Comparison with the installed base: Refers to the nuclear power application fields. difference between the Siemens offering and an average → Objections and concerns of external stakeholders: If market solution used for the same or a similar purpose stakeholders express concerns or objections, internal or (market standard). This comparison can be applied, for - external information is evaluated and appropriate mea example, to renewable energy projects by drawing a sures are taken. comparison with the average global greenhouse gas → Adverse effects: If evidence comes to Siemens’ attention emission factor for electricity generation. that a Siemens product, system, solution, service, or investment causes considerably greater adverse environ- Recognition of Customer Avoided Emissions mental impacts elsewhere in the element’s lifecycle, In general, Customer Avoided Emissions are recognized for Customer Avoided Emissions are not calculated. products, systems, solutions, services, or investments. In many cases, however, Siemens delivers only the components Greenhouse gases considered of a complete product, system, solution, service, or invest- The accounting for Customer Avoided Emissions includes, ment. In these cases, it is often impossible to directly deter- where appropriate, all six greenhouse gases defined in the mine the avoided emissions attributable to the components Kyoto Protocol (so-called “Kyoto gases”), including: carbon during the use phase with the customer. dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF ), hydrofluorocarbons (HFCs), and perfluo- Therefore, Siemens Businesses and SFS need to apply the 6 rocarbons (PFCs). following rules when accounting for and reporting Customer Avoided Emissions: To assess the relevance of GHG emissions other than CO2, they are converted into metric tons of CO equivalents → Siemens supplies the entire product, system, solution, 2 (CO2e). This number is based on the global warming potential service, or investment: Siemens accounts for 100% of the over 100 years of the respective greenhouse gas compared Customer Avoided Emissions during the customer use to the global warming potential of CO . phase. 2 SIEMENS SUSTAINABILITY REPORT 2023 129
7.2 Reporting principles for Customer Avoided Emissions → Siemens provides all core component(s), even if they only Calculation represent intermediate products of an end application: Siemens Businesses and SFS are required, where applicable, Siemens accounts for 100% of the Customer Avoided to report Customer Avoided Emissions associated with all Emissions during the customer use phase. products, systems, solutions, services, or investments that → Siemens provides some of the core component(s): In the lead to the avoidance of emissions in the customer use first step, all core components that are involved with phase. The amount of Customer Avoided Emissions is the Customer Avoided Emissions are identified. In the second difference between the GHG emissions of the given Siemens step, the Siemens share of the total Customer Avoided offering and the reference scenario defined above. Emissions of the end application is determined by calcu- lating the ratio of Siemens components to the total net Technical parameters and assumptions delivery price of all core components. The calculation of Customer Avoided Emissions is based on → Siemens does not provide any of the core components of different parameters in order to best reflect the amount of a product, system, solution, service, or investment: avoided emissions during the entire use phase of a Siemens Siemens reports no Customer Avoided Emissions. offering, similar to the calculation of downstream Scope 3 emissions. The calculation parameters (e.g., emission factors Optional accounting of Customer Avoided Emissions or expected use phase duration) should be reviewed and So far, there are no robust calculation approaches to quantify updated regularly in order to reflect the most current status the decarbonization effect of all portfolio elements: for of these numbers. The calculation approach should be instance, software or automation technology. Some Siemens consistent with the calculation of downstream Scope 3 products, systems, solutions, or services are “enabling tech- emissions (Categories 11 and 15). nologies” and do not demonstrate a direct decarbonization effect on the product-level. Nevertheless, these enabling In some cases, the actual parameters, like the product’s technologies can often be critical components needed for operating time or intended intensity of use by the customer, the transition to a low-carbon economy. One example are cannot be reliably determined. Under these circumstances, solutions from Smart Infrastructure which can facilitate the conservative estimates should be applied and documented system transformation to an electrification of the global appropriately. In general, the emissions of the reference energy system. Therefore, quantifying these enabling decar- scenario and the Siemens offering should include the poten- bonization impacts requires calculation approaches on a tial development of the situation over time. The calculation system level where these components are built in. Due to the of future emissions from products with long lifespans is lack of a commonly used external definition or standard, in subject to a high degree of uncertainty. Using an energy fiscal 2023 Siemens began to account for these “indirect” or scenario to describe a changing emission factor would lead “enabling” decarbonization effects but has decided to report to incomparable calculation results whenever the scenario is them separately for the purpose of transparency and conser- updated. Therefore, we decided to use the annually updated vativeness. The same accounting principles are applied as emission factors, which incorporate the changes in the described above. With regard to the example from Smart global energy mix from year to year, in a manner consistent Infrastructure, the calculation to determine the contribution with the calculation of our downstream Scope 3 emissions. to electrification and therefore decarbonization is based on the total global energy use and the share of electrification The source of the emission factors applied in the 2023 and automation solutions from Smart Infrastructure as part reporting year is the “IEA Emission Factors 2022” published of the total global investment in electrification. The eligible by the International Energy Agency. For example, the global revenue, based on the EU Taxonomy, is included in the CO2e emissions factor used for electricity generation only is calculation along with the grid mix evolution of electricity 461 g CO e/kWh. 2 generation. SIEMENS SUSTAINABILITY REPORT 2023 130
7.2 Reporting principles for Customer Avoided Emissions If regional calculations are available, local emissions factors should be used. Offerings with no material Customer Avoided Emissions impact, or in cases where the calculation cannot be reliably determined when applying reasonable cost-benefit consid- erations, are not considered in the accounting. Recalculation To enable consistency, especially over time, Siemens Busi- nesses and SFS recalculate the Customer Avoided Emissions in accordance with the guideline. Events that lead to relevant changes in the data on Customer Avoided Emissions typically include corporate mergers, acquisitions, and divestments, mistakes in previous calculations, changes in external stan- dards or in the Siemens calculation methodology, significant changes in the parameters and assumptions applied in the calculation, and any other events that lead to material changes in calculation estimates. SIEMENS SUSTAINABILITY REPORT 2023 131
7.3 Our contribution to sustainable development of societies 7.3 Our contribution to sustainable development of societies – Effective influence in achieving UN’s Sustainable The United Nations’ 17 Sustainable Development Goals Development Goals (SDGs) (SDGs) and their 169 targets serve as a compass for the – SDGs included in our DEGREE sustainability change efforts that must be made by governments, busi- framework nesses, cities, and civil society as a whole if we are to achieve a more sustainable future. The SDGs and their associated targets address the most important economic, social, envi- ronmental, and governance-related challenges of our times, and therefore they help stimulate transformational change. At Siemens we have adopted them as values, and so the SDGs also influence us as a company. Allocation of the SDG goals to Siemens sustainability framework DEGREE n o i b za ar t i c on De y t i l i E b t a h y ic o l s mp E Go rev nan ec E q u i t y y c n e i c R f e e s o e c r u SIEMENS SUSTAINABILITY REPORT 2023 132
7.3 Our contribution to sustainable development of societies They are firmly associated with our DEGREE sustainability How we contribute to achieving the SDGs framework, which guides our sustainability management, and From a global perspective, these are the SDGs where Siemens they also describe the details of our sustainability ambitions. has a high or medium impact: The long-term priorities for Siemens as part of our sustain- Goal 3 – Ensure healthy lives and promote able development agenda are clear: We want to apply our well-being for all at all ages engineering expertise and our approach to connect the real and digital worlds, improve people’s quality of life, and protect We make a significant impact on SDG 3 with our business the planet. In particular, this is supported by our corporate - portfolio, especially through SHS and the production tech purpose of “We create technology to transform the everyday, nologies we provide to pharmaceutical companies. In addition for everyone.” The UN’s 17 SDGs have therefore become to the impact of our portfolio, we also care about the health fixtures in our everyday business. Siemens deploys its tech- and safety of our people and contract workers. Separately nology portfolio to support the public and private sectors in from SHS, Siemens sets ambitious goals for access to the digital transformation of industry, building and network Employee Assistance Programs and for reducing employee infrastructures, mobility, and healthcare and can offer exten- accident rates (Lost time injury frequency rate – LTIFR). We sive business opportunities for value-enhancing growth. At also participate in health-related community engagement the same time, we provide cost-effective, innovative solutions activities like cancer awareness campaigns and mobile clinics. for the transition to carbon neutrality. These technologies support customers in achieving their objectives while Goal 4 – Ensure inclusive and equitable quality - consuming fewer resources. To varying extents, Siemens education and promote lifelong learning oppor helps achieve most of the SDGs in the UN’s Agenda 2030 in tunities for all four important ways: Lifelong learning is a basic prerequisite for ensuring employ- → through our products and solutions, ability for our people and in the job market in general. We → by doing business responsibly, offer access to education in multiple ways, including learn- → through our expertise and thought leadership, and ing and education opportunities for all our people, as well as → through our corporate citizenship activities and vocational and more advanced training through partnerships community engagement. with schools and universities. Education for our customers and suppliers is likewise high on our agenda. We also aim to inspire young people to pursue careers in STEM fields (science, technology, engineering, and mathematics) with our numerous corporate citizenship activities around the world. SIEMENS SUSTAINABILITY REPORT 2023 133
7.3 Our contribution to sustainable development of societies Goal 5 – Achieve gender equality and empower Goal 8 – Promote sustained, inclusive and sus- all women and girls tainable economic growth, full and productive employment, and decent work for all We firmly believe that promoting diversity in the workforce serves the interests of both society and Siemens itself. Siemens is committed globally to the New Normal Working Diversity reinforces our innovative strength, unleashes Model. Our aim with the new normal is for all our people employee potential, and directly contributes to our business around the world to be able to work on a mobile basis two to success. Our human resources management also supports a three days a week, wherever feasible and reasonable. Mobile transformation in top management, where there is room for working has many advantages for the individual and also for improvement. We are recruiting more women for top mana- the company: for instance, by ensuring that we are prepared gerial positions and are including more women in network- to respond flexibly during future crises. Our worldwide ing activities, trainings, and mentoring programs. Without business operations and our position as a thought leader SHS, Siemens aims to have 30% of its top management mean that in many countries we contribute toward the positions worldwide filled by women by 2025. growth of the gross domestic product (GDP). We are committed to offering attractive jobs and facilitating employment, and Goal 7 – Ensure access to affordable, reliable, we are encouraging the decoupling of economic growth sustainable, and modern energy for all from energy consumption. Our business portfolio covers the entire spectrum of applica- Goal 9 – Build resilient infrastructure, promote tions for modern smart grids and energy distribution systems. inclusive and sustainable industrialization, and The rapid expansion of decentralized energy structures foster innovation powered by Siemens technology creates a more diverse energy mix and improves the security of the energy supply. As a global technology company and innovation leader in The Internet of Things and data-based technologies foster electrification, automation, and digitalization, Siemens energy intelligence and pave the way toward a sustainable supports sustainable industrialization. With our engineering energy landscape. Our technologies facilitate access to expertise, our knowledge of numerous sectors, and our clean, reliable, low-carbon energy. digital technology, we help our business partners across the entire value chain, from design to production, and from operations to maintenance. We believe in international partnerships as the key to innovation. A large percentage of our customers and suppliers are small and medium-sized enterprises (SMEs). We have officially adopted sustainability as an additional strategic imperative for our investment decisions. SIEMENS SUSTAINABILITY REPORT 2023 134
7.3 Our contribution to sustainable development of societies Goal 11 – Make cities and human settlements Goal 16 – Promote peaceful and inclusive societ- inclusive, safe, resilient, and sustainable ies for sustainable development, provide access to justice for all, and build effective, accountable, Siemens is a trusted partner for municipal governments and and inclusive institutions at all levels offers solutions across all infrastructure domains to make cities more efficient, sustainable, and resilient – for instance, We anchor integrity and compliance throughout our company with intelligent transportation solutions, efficient and safe and advance the Siemens Integrity Initiative with external buildings, and smart-city initiatives that leverage the power stakeholders. By these means and through our activities with of digitalization. other players, we support fair competition and ensure our company’s long-term success. Siemens is committed to Goal 12 – Ensure sustainable consumption and incorporating the requirements of the United Nations Global production patterns Compact (UNGC), the Human Rights Declaration, and all other relevant regulations into our supply chain and to pro- Siemens is committed to using resources responsibly and moting their principles through our work with external recognizes that the circular economy offers highly beneficial organizations and institutions. opportunities for business, the environment, and society. By the end of this decade we want to evolve even more toward Goal 17 – Strengthen the means of implementa- the circular economy, for example by increasing the percent- tion and revitalize the Global Partnership for age of metals and plastics we procure as secondary materials. Sustainable Development We also aim to reduce our amount of landfill waste. Siemens has worldwide strategic initiatives for the design phase to As a global company and an advocate of free trade, we - the end of lifecycle of its products and operations, and is believe that partnerships are a key to sustainable develop committed to robust, ecologically friendly design. We apply ment and to our company’s success. We also recognize the disruptive technologies and innovative business models to importance of digitalization, project financing, and public- make an active contribution to the circular economy. private partnerships for sustainable development. In all of these areas, we are partnering with international organiza- Goal 13 – Take urgent action to combat climate tions, business organizations, think tanks, nongovernmental change and its impacts organizations (NGOs), and academia, including the UNGC, World Economic Forum (WEF), econsense, Transparency Our portfolio helps our customers reduce their emissions International, and numerous universities. and thereby achieve their decarbonization goals. Siemens was one of the world’s first industrial firms to commit to making its own business activities carbon neutral by 2030. In addition to reducing emissions from Siemens' operations without SHS by 55% by 2025 and by 90% by 2030, we also strive to lower all emissions associated with us – from our supply chain throughout the entire use phase of our prod- ucts. Siemens without SHS is committed to a 20% reduction in emissions in its supply chain by 2030 compared to 2020 and aims to achieve a CO neutral supply chain by 2050. 2 With its commitment to science-based targets, Siemens supports the goal of the Paris Climate Agreement to limit climate change to 1.5°C (Science-Based Target Initiative, including SHS). SIEMENS SUSTAINABILITY REPORT 2023 135
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) 7.4 Task Force on ClimateRelated Financial Disclosure (TCFD) The G20 Financial Stability Board’s Task Force on Climate- The Managing Board addresses sustainability-related risks Related Financial Disclosure provides a uniform framework - and opportunities of strategic and company-wide impor that companies can voluntarily use to report their climate- tance and adopts appropriate measures. The Managing related risks and opportunities and disclose the correspond- Board also approves any changes to the DEGREE sustainability ing information to investors, lenders, insurers, and other framework. stakeholders. This Annex provides an overview of Siemens’ activities based on these recommendations and offers refer- The Siemens Sustainability Board (SSB) monitors and ences to other sources of relevant information. resolves Siemens’ sustainability topics, including tracking the progress of our DEGREE ambition, providing input and Our governance in the area of climate action guidance on sustainability reporting, and acting as a catalyst Governance at the Managing Board level for regional sustainability initiatives with the potential to At Siemens, sustainability is rooted in all that we do, includ- scale across Siemens. The SSB is composed of representa- ing our business purpose and strategy, corporate culture, tives from Siemens’ businesses, countries, and Service and processes, and guidelines. The management of sustainability Governance units. The SSB meets four times per year or matters is embedded across our Siemens businesses, Service more frequently as needed. The SSB provides updates and and Governance units, and countries. Sustainability has also recommendations to the Managing Board. been an integral component of management compensation since fiscal 2020. Put simply, we strive to make sustainability Topics associated with climate change appeared regularly on everyone’s responsibility at Siemens. the agenda of EC SUS and SSB meetings in fiscal 2023 and included, for example, our Net Zero Operations Program As the top management body, the Managing Board is implementation or product-related decarbonization efforts. responsible for serving the company’s best interests and for achieving sustainable growth in company value. The Managing The Sustainability Executive Committee (EC SUS) acts as Board members are responsible for the entire management guidance body for Siemens sustainability business – the of the company and decide on key issues of business policy Siemens portfolio that enables positive sustainability impact and corporate strategy. by addressing and financing (i) decarbonization and energy efficiency, (ii) resource efficiency and circularity as well as The Supervisory Board oversees and advises the Managing (iii) people centricity and social impact – with a focus on Board in its management of the company’s business. The portfolio market segments and go-to-market topics, and it Supervisory Board meets regularly to discuss business devel- meets on an ad hoc basis to discuss relevant subjects. opment, planning, strategy, and the implementation of that Chaired by Siemens’ CEO, the EC SUS includes Siemens’ CSO, strategy. the CEOs of key businesses, Chief Strategy Officer, General Counsel, and Global Head of SUS. In 2023, we significantly strengthened our sustainability organization throughout the company by introducing the The Chief Sustainability Officer (CSO) oversees Siemens’ Sustainability Executive Committee (EC SUS) and Heads of sustainability topics. The CSO is a member of the Siemens Sustainability in key businesses and business units, and we Managing Board, chairs the Siemens Sustainability Board increased the responsibility of the Global Head of Sustain- (SSB), and is a member of the Sustainability Executive Com- ability (Global Head of SUS) and the Siemens Sustainability mittee (EC SUS). The CSO is also responsible for the Siemens department. Sustainability department. SIEMENS SUSTAINABILITY REPORT 2023 136
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) In addition to our strategic sustainability activities, the CSO The CEOs of Digital Industries, Smart Infrastructure, Siemens ensures that we operate in compliance with our environ- Mobility, and Siemens Financial Services (SFS) are supported mental guidelines. Our EHS Principles serve as internal by their respective Heads of SUS to achieve their sustainabil- binding guidelines for this purpose. Siemens has also ity mandates. The Heads of SUS also assist the Global Head founded expert panels to ensure that environmental consid- of SUS with their responsibilities in the Sustainability depart- erations are integral to our decision-making. The Global ment, as they pertain to their businesses. Heads of SUS have Board EHS is composed of subject-matter experts who a governance reporting line to the Global Head of SUS in develop environmental protection measures and programs addition to their reporting line to their respective CEOs. The and provide advice to the Chief People and Sustainability Heads of SUS are appointed by the respective CEOs, in align- Officer in consultation with the Siemens Sustainability Board. ment with the Global Head of SUS. SUSTAINABILITY GOVERNANCE AND ORGANIZATION, CDP 2023 C1, OUR DEGREE SUSTAINABILITY FRAMEWORK In addition, the CEOs of the business units in Digital Industries, Smart Infrastructure, Siemens Mobility, and SFS each appoint Governance at the business and management levels Sustainability Managers who have a governance reporting The Global Head of Sustainability (Global Head of SUS) leads line to the Heads of SUS and to their reporting line to their the Siemens Sustainability department. In this capacity, the respective CEOs. Global Head of SUS reports to the CSO on all Siemens sustainability topics excluding sustainability business and Lead Country SUS Managers support their respective Lead related strategy topics. For the latter topics, the Global Head Country CEOs and their assigned countries. They also lead of SUS reports to Siemens’ CEO. The Global Head of SUS is a Siemens’ sustainability topics within the scope of responsi- regular member of the SSB. The Global Head of SUS regularly bility of the Lead Country management. informs the Supervisory Board on sustainability matters. Our Service and Governance units are responsible for the The Siemens Sustainability department is responsible for ongoing development of sustainability-related topics within developing our DEGREE sustainability framework in coordi- their own mandate in line with the DEGREE sustainability nation with the SSB, businesses, Service and Governance framework and regulatory and organizational requirements. units, and countries and controlling the DEGREE target achievements. Responsibility for sustainability reporting and Lastly, Sustainability Risk Due Diligence Subject Matter the Net Zero Operations Program also lies with the Sustain- Experts are appointed by and support Digital Industries, ability department. It also governs the purchase of carbon Smart Infrastructure, Siemens Mobility, and SFS to responsibly offsets and the Sustainability Risk Due Diligence Process. The conduct the Sustainability Risk Due Diligence Process. Sustainability department also supports sustainability initia- tives with scalability across Siemens. This includes developing Siemens’ Environmental Council assesses Siemens’ environ- the processes, training, and tools needed to address over- mental risks, opportunities, and trends based on uniform arching sustainability topics for our countries, businesses, criteria and reports them to the Siemens Enterprise Risk and Service and Governance units in collaboration with other Management. The council is composed of environmental Siemens organizations. Finally, the Sustainability department experts from our business units and countries as well as is responsible for developing strategic considerations for the experts in corporate governance, environmental protection, Siemens sustainability business in alignment with the supply chain, sustainability, finance, technology, real estate, Managing Board, EC SUS, and the CEOs. and insurance. SUSTAINABILITY GOVERNANCE AND ORGANIZATION, SUSTAINABLE CEOs are ultimately responsible for all sustainability topics in SUPPLY CHAIN PRACTICES, ENVIORNMENT, CONSERVING RESOURCES, their area of responsibility. This includes responsibility for CDP 2023 C1, OUR DEGREE SUSTAINABILITY FRAMEWORK the sustainability business, implementation of DEGREE, sustainability reporting, the Sustainability Risk Due Diligence Process, and other related responsibilities. SIEMENS SUSTAINABILITY REPORT 2023 137
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) Our strategic response to climate-related Resource efficiency & circularity opportunities and risks Through their use of our digital technology, our customers The DEGREE sustainability framework includes the sustain- can achieve resource efficiency and profitability. For ability-related topics important for Siemens, including instance, we harness digitalization to reduce the require- decarbonization and resource efficiency, for which we have ments of physical assets and resources. We combine the real set ambitious targets (see paragraph “Metrics and targets”). and the digital worlds with our digital twin technology, a These targets, in conjunction with our overall Science-Based virtual representation of a physical product or process that is Targets initiative-validated (SBTi) decarbonization target, used to simulate, predict, and optimize its physical counter- apply to Siemens’ own operations and to our upstream and part. Digital twins enable users to do more with fewer downstream value chain. resources and make current and future environmental foot- prints transparent. Our building solutions also contribute to We have officially adopted sustainability as an additional optimized space utilization and ultimately increase resource strategic imperative for our investment decisions. efficiency. Our mobility solutions focus on enhanced net- work capacity and extended lifecycles. Siemens is a leading technology company with a portfolio STRATEGY, OUR DEGREE SUSTAINABILITY FRAMEWORK designed to drive the digital and sustainable transformation of industry, infrastructure, mobility, and healthcare. We Climaterelated opportunities and risks firmly believe that technology is the answer to creating a Climate-related opportunities and risks are integrated into sustainable future. As key pillars of our strategy, digitalization our company-wide Enterprise Risk Management (ERM) and sustainability help future-proof our business and that of process. ERM at Siemens is based on a net risk approach in our customers. which the risks and opportunities are addressed that remain after implementing existing, effective measures and controls. To further increase our positive impact, we believe that working in ecosystems is the best way to jointly create seam- As a global technology company and innovation leader in less solutions for our customers and their specific challenges. the fields of electrification, automation, and digitalization, Siemens supports sustainable industrialization. These topics Siemens’ business is focused on enabling customers to are becoming increasingly important in the transition to a achieve a positive sustainability and climate-related impact low-carbon economy – a development that confirms our along the following value propositions: company strategy. Although there are uncertainties about the impact of climate-related changes, we consider the Decarbonization & energy efficiency transition to a low-carbon economy as an opportunity. A We support our customers with their efforts to decarbonize favorable political and regulatory environment including the their infrastructure and operations, drive energy efficiency, transition towards a low-carbon economy could restore a and future-proof entire industries. We do this by offering more positive industrial investment sentiment that supports products, systems, solutions, and services that are based on the growth of our markets. In addition, government initia- our strategic focus on digitalization, electrification, and tives and subsidies (including tax reforms, green and digital automation. For example, our energy-efficient products and recovery plans, R&D among others) lead to more government solutions support the transition from fossil fuels to renew- spending (e.g. infrastructure, healthcare, mobility or digita- able energy sources, and our electrification solutions enable lization investments) and may ultimately result in an oppor- renewable grid integration and the electrification of heat tunity for us to participate in ways that increase our revenue and hydrogen. Across industries, we offer energy optimiza- and profit. Investments to strengthen countries’ resilience, tion and carbon footprint management throughout our energy and food security, as well as to diversify value chains products’ lifecycles and supply chains. In buildings, we offer close to major markets (reshoring, nearshoring) can present energy efficiency and decarbonization solutions, such as opportunities to businesses. By enabling our customers to smart buildings and smart energy management for a reduced reduce their greenhouse gas (GHG) emissions using our carbon footprint. Our rail systems offer low-carbon mobility portfolio and by reducing CO e emissions in our own opera- 2 and increased energy efficiency. tions, Siemens strives to support the transition towards a SIEMENS SUSTAINABILITY REPORT 2023 138
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) low-carbon economy. Siemens also welcomes and supports and risks. Our decarbonization target, which is approved by recent legislative and governmental measures to accelerate the Science-Based Targets initiative, is aligned with the 1.5°C the mitigation of climate change, especially in Europe such target and therefore the Paris Agreement. as through the Green Deal or sustainable finance initiatives. SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT As described in our STRATEGY chapter, there are several REPORT, CHAPTER 8.4 OPPORTUNITIES, CDP 2023 C2.4 megatrends that are driving us to rethink established ways of doing things. These megatrends and their impacts are To leverage these climate-related opportunities, we again reshaping the needs of our customers and markets. To create included sustainability and decarbonization in this year’s a holistic picture of potential futures, we execute sustainabil- strategy review, in which we formulated concrete action ity scenario analyses that enable us to map impacts and plans for our business units in order to support our customers risks, identify opportunities, and find new ways to create in achieving their sustainability and decarbonization goals in value through pathways by 2030 and 2040. Strategic an even more targeted fashion. insights are derived from scientific frameworks like the Intergovernmental Panel on Climate Change’s (IPCC) Repre- Potential transition risks (e.g., regulation, market, and tech- sentative Concentration Pathways (RCPs) and Shared Socio- nology) and physical climate-related risks are assessed in our economic Pathways (SSPs) as well as market trends and risk process. In this process, we have generally identified the expert knowledge. The sustainability scenarios illustrate risk of an increasing sustainability focus. Governments different possible development pathways for the global around the world continue to increase their focus on sustain- economy and Siemens’ operating environment, across the ability topics, resulting in the risk of increased costs to focus topics climate, circularity, biodiversity, and society that comply with new laws and related reporting requirements. take into account both an organized 1.5°C and a disorganized In addition, increasing stakeholder and investor focus on 3°C pathway. These scenarios guide the development of our sustainability topics brings reputational risk should our sus- sustainability strategy. tainability commitments, targets and activities be perceived as a deceptive use of green marketing or otherwise not By providing innovative technologies, we see ourselves as a credible. Climate change litigation has become a worldwide leading decarbonization partner to our customers and society phenomenon with a corresponding risk to Siemens as a large in general. To fulfill this role, we need to have a precise corporation. We address these risks in a variety of ways understanding of the technological changes that must be including through our sustainability framework DEGREE, in made in the next few decades and beyond. We rely primarily which we have set ambitious sustainability targets. DEGREE on scenarios from S&P Global (formerly IHS Markit), IEA, and includes measures to reduce our carbon footprint along with BloombergNEF to plan our business strategy and identify other initiatives addressing ESG topics more generally. company-wide risks and opportunities. These scenarios help We have implemented an ESG due diligence process that us, for example, to identify trends in the energy and mobility supports Siemens businesses with due diligence in the markets. For business planning purposes, we apply different customer- oriented environment with a view to possible scenarios like the S&P Global Green Rules (our baseline environmental and social risks as well as related human rights scenario), Inflections, and two net zero scenarios (ACCS, MTM); and reputational risks. Finally, we believe our overall portfolio and IEA STEPS, APS, NZE, and BloombergNEF New Energy is very well positioned to meet the current and future Outlook (Economic Transition Scenario, net zero scenario). sustainability needs of our customers and the societies in These scenarios help us predict market developments, assess which we operate. the implications of various scenarios, and make business SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT decisions on this basis. With a view to our own business, REPORT, CHAPTER 8.3 RISKS, CDP 2023 C2.3 analyzing climate-related scenarios allows us to predict the potential consequences in terms of regulatory requirements, Analysis of climaterelated scenarios R&D, and customer trends and requirements. Our business Different climate-related scenarios are used at Siemens for units also conduct business-specific scenario analyses. different purposes: for instance, for our business strategy CDP 2023 C3.2 and decarbonization strategy and to identify opportunities SIEMENS SUSTAINABILITY REPORT 2023 139
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) We also apply different climate scenarios to assess physical Climate change is not treated as a separate category in the climate-related risks and opportunities (see paragraph ERM approach; it is considered within the four topic areas of “Management of climate risks in our own operations”). strategic, operational, financial, and compliance-related risks. Risk processes have been implemented upstream Our risk management approach to climate- throughout the company to assess potential climate-related related opportunities and risks net risks for ERM reporting. Climate-related risks and opportunities are embedded in the Siemens-wide ERM approach. All identified climate risks are Material opportunities and risks are disclosed on an aggre- assessed and measures for risk prevention, transfer, or miti- gated basis within the abovementioned four topic areas in gation are devised for all relevant risks. the Siemens annual report. SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT Risk management at Siemens builds on a comprehensive, REPORT, CHAPTER 8, CDP 2023 C2.1 AND C2.2 interactive and management-oriented Enterprise Risk Man- agement (ERM) approach that is integrated into the organi- Management of climate risks in our own operations zation and that addresses both risks and opportunities. Our Climate change mitigation ERM process aims for early identification and evaluation of, We have set ambitious decarbonization targets that apply to and response regarding, risks and opportunities that could Siemens’ own operations and to our upstream and down- materially affect the achievement of our strategic, opera- stream value chain (see paragraph “Metrics and targets”). tional, financial, and compliance objectives. The time horizon is typically three years, and we take a net risk approach, The reduction of GHG emissions in our own operations is addressing risks and opportunities remaining after the integrated into Long-term Incentive (LTI) compensation as execution of existing and effective measures and controls. A part of an internal Siemens ESG/Sustainability Index that is detailed description of our enterprise risk management basic applicable to members of the Managing Board and senior principles and process can be found in our combined management (Siemens without SHS). Anchoring the reduc- management report, chapter 8.2 Risk management. tion of GHG emissions in this system and the responsibility SIEMENS FINANCIAL REPORT FOR FISCAL 2023, COMBINED MANAGEMENT of each of our businesses for reducing its prorated emissions REPORT, CHAPTER 8, CDP 2023 C2 are key elements of our management approach and require regular monitoring. Climate risks in the risk management system SUSTAINABILITY GOVERNANCE AND ORGANIZATION The consideration of sustainability and climate-related risks and opportunities is an integral part of our regular top-down Climate change adaptation process that communicates material issues and trends at risk We continuously evaluate the vulnerability of all Siemens workshops to the relevant company units so they can identify locations regarding acute physical risks based on assess- risks and opportunities. As a result, issue-related recommen- ments provided by external suppliers and data collected dations are available to all businesses at their quarterly internally. Through recurrent analyses conducted by Global reviews. In fiscal 2023, several climate-related topics were Risk Consultants on behalf of TÜV Süd, it is evident that the on the agenda of the top-down process, which then provided Siemens locations significantly surpass industry standards in input to the annual ERM process on topics that included terms of risk protection as per the respective insurer ratings physical climate risks, increasing regulation, and the trans- (industry average: approximately 70, Siemens: approxi- parency of environmental product data. mately 80). Consequently, Siemens locations are consistently characterized by notably low risk levels. We continuously In conjunction with the bottom-up approach, these measures conduct local risk assessments and collaborate closely with enable a comprehensive overview of our business activities various stakeholders to ensure an adequate protection level. and the related risks and opportunities. SIEMENS SUSTAINABILITY REPORT 2023 140
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) Furthermore, during this fiscal year, we conducted compre- We establish water targets at multiple sites to account for hensive global training sessions, featuring the participation the specific local environment and to drive effective mitiga- of qualified external specialists, aimed at strengthening our tion measures. At the corporate level, we have implemented business continuity management and standardizing our a defined water strategy, and have conducted risk assess- business impact analysis, particularly in the context of natural ments to shape local water targets. hazards. These initiatives also consider anticipated changes in risk exposures due to climate change. The aim of our water strategy is to minimize the adverse local effects of our water consumption and use. In fiscal Our decision-making process for selecting new locations and 2022, we expanded the analysis of our water-related risks to devising sustainable, long-term protective measures is based include our supply chain. Based on this analysis, we derived on an exhaustive risk analysis, with a particular emphasis on further measures for sustainable water use. natural hazards. This includes an in-depth examination and modeling of current risk factors and future climate scenarios, Our water risk analysis begins with an assessment of our facilitating the formulation of proactive measures. In addi- environmentally relevant sites using the Aqueduct Water tion to the assessment of physical risks, we engage in Risk Atlas from the World Resources Institute (WRI). With the transparent dialogues with partners to comprehensively aid of an internal analytical tool, Siemens assesses local-level evaluate transitional risks, such as regulatory changes, risks resulting from our sites’ activities, and then assesses thereby encompassing associated risks and opportunities. them in relation to regional water risks. Sites with a high-risk assessment need to define targets to reduce the level of risk. We employ a range of systems and meticulously compare the In fiscal 2023, 96% of our sites implemented this water parameters acquired from Swiss RE (RDS), Zurich Resilience strategy. Solutions (ZRS), Verizon Maplecroft, among others. CONSERVING RESOURCES, CDP 2023 C2, CDP 2023 WATER SECURITY In fiscal 2023, we conducted the Do No Significant Harm Management of climate risks along our value chain (DNSH) assessment with regards to future physical climate Climate change mitigation risks in the context of our reporting under the EU Taxonomy In addition to our Science-Based Target, we defined a target regulation for all activities related to the environmental in the DEGREE sustainability framework for our upstream objective “Climate Change Mitigation”. The assessment of Scope 3 emissions: Siemens without Siemens Healthineers physical climate-related risks of all eligible and substantially (SHS) has set a target to reduce CO e emissions generated in 2 contributing activities was conducted by technical experts our supply chain by 20% by 2030 compared to 2020. We also on site, supplier, and project type levels. We partnered with aim to achieve Net Zero emissions in our supply chain by insurers and other external risk data providers to assess 2050. Details on our upstream Scope 3 emissions in fiscal future hazards associated with climate change, e.g. cyclone, 2023 can be found in the chapter SUSTAINABLE SUPPLY CHAIN hurricane, typhoon, heavy precipitation, or wildfire, using PRACTICES. the IPCC scenario RCP 4.5. Additionally, we defined and - In our Carbon Reduction@Suppliers program, we collaborate started to implement measures at locations where signifi cant risks have been identified. with an external partner to analyze the economic data and model the carbon footprint of each of our suppliers. To Climate change is also having an impact on water supply. facilitate this process, we utilize a web-based tool called Water is one of humanity’s most important resources. For supplier+s that highlights the main sources of suppliers’ this reason, Siemens has been analyzing water scarcity, CO2e emissions and provides guidance on how to reduce water pollution, local fire risks, climate change, and flooding them. Once suppliers have completed the learning phase, and precipitation patterns at our sites for several years. We they provide us with their primary data through the tool. consider these analyses in our business decisions: for example, CONSERVING RESOURCES, SUSTAINABLE SUPPLY CHAIN PRACTICES when we select the location for a new site or implement precautionary measures. SIEMENS SUSTAINABILITY REPORT 2023 141
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) To make our portfolio’s contribution to decarbonization Our validated 1.5°C Science-Based Target, along with our more transparent, we report the amount of CO e emissions DEGREE decarbonization targets and our membership in the 2 that our products and solutions avoid compared to reference RE100, EV100, and EP100 initiatives, is strengthening our solutions. Customer avoided emissions represent the differ- climate protection strategy. ence between the CO e emissions of a Siemens offering and CLIMATE ACTION, CDP 2023 C3, C4, C6, C7, C9 AND C12 2 the CO e emissions of a baseline or reference scenario. In 2 fiscal 2023, we helped our customers avoid 190 million Science-Based Target metric tons of CO e emissions. The Siemens technologies By joining the Science-Based Targets initiative (SBTi), 2 that make the largest contribution to the avoidance of CO2e Siemens has pledged to reduce emissions from its own emissions at our customers are frequency converters, operations (Scope 1 and 2) by 50% and its value chain railbound passenger and freight transportation, and building (Scope 3) by 15% by 2030 compared to 2019. Our commit- systems. For a detailed description of our methodology ment to the SBTi is aimed at aligning our business activities for calculating customer avoided emissions, please see with the 1.5°C decarbonization pathway under the terms of REPORTING PRINCIPLES FOR CUSTOMER AVOIDED EMISSIONS, CLIMATE recognized climate models to ensure that our greenhouse ACTION gas emissions will be consistent with the Paris Climate Agreement’s 1.5°C target. We also invested €6.2 billion (compared to €5.6 billion in fiscal 2022) in research and development activities that are DEGREE targets geared towards developing innovative and sustainable solu- As part of our DEGREE sustainability framework (without tions for Siemens’ customers and businesses, while simul- Siemens Healthineers), we set a goal for all Siemens production taneously strengthening our competitive positioning. This is facilities and buildings worldwide and our vehicle fleet to also how we contribute to society. COMPANY PROFILE achieve a Net Zero carbon footprint by 2030. In effect, this means reducing Scope 1 and 2 CO e emissions in Siemens’ 2 Climate change adaptation business operations for Siemens without Siemens Healthineers We analyze potential risks in our supply chain, including (SHS) by 90% by 2030, compared to 2019. To achieve this environmental risks. We centralize sustainability-related target, Siemens has pledged to invest an additional €650 million data about our suppliers on the SCM Sustainability Platform, in its own decarbonization efforts by 2030. Any residual which enables us to gather information from diverse internal emissions will then be balanced with high-quality carbon and external sources. This includes data on carbon reduction offsets that meet established standards. initiatives, corporate responsibility self-assessments (CRSA), on-site audit results, and risks associated with conflict minerals. To drive additional transparency on our journey to 2030, we All employees in Siemens' purchasing departments can set an ambitious interim reduction target for our business access this integrated tool. - operations at Siemens without SHS of 55% by 2025 com SUSTAINABLE SUPPLY CHAIN PRACTICES pared to 2019. Metrics and targets For scope 3 emissions, Siemens (without Siemens Healthineers) Siemens considers climate-related risks and opportunities has set a target to reduce CO e emissions generated in our 2 along the entire value chain. Accordingly, we define metrics supply chain by 20% by 2030 compared to 2020. We also for reducing greenhouse gas emissions in the supply chain, aim to achieve Net Zero emissions in our supply chain by in the company’s own operations, and in the goods and 2050. services we provide to our customers. SIEMENS SUSTAINABILITY REPORT 2023 142
7.4 Task Force on ClimateRelated Financial Disclosures (TCFD) Our ambitious decarbonization measures and targets in our 3) Efficient Own Operations: The component Efficient Own own operations and along our value chain are helping elim- Operations of our Eco Efficiency @ Siemens program inate potential transitional climate risks and increasing our aims to reduce the environmental impact of our sites resilience and the energy independence of our production through dematerialization and circular economy princi- facilities. ples. We focus on improving our energy efficiency and CLIMATE ACTION, CDP 2023 C4 AND C6 reducing the environmental impact of the waste we generate. When it comes to environmentally responsible Eco Efficiency @ Siemens program energy use, we focus on reducing emissions from power Our Eco Efficiency @ Siemens program addresses environ- generation in addition to minimizing energy consump- mental factors specific to our products, systems, solutions, tion itself. As part of our commitment, we aim to improve and services and our production. It also defines objectives our overall energy efficiency by 10% by 2030 compared for improving our environmental management: for example, to 2021. To calculate energy efficiency, we analyze our by encouraging a circular economy and generally demateri- energy consumption in relation to sales development. alizing our business processes. CONSERVING RESOURCES, PRODUCT STEWARDSHIP The program has three components: 1) Robust Eco Design (RED) approach: At the center of the Responsible Product Development program component is our Robust Eco Design approach. Our Eco Design approach is also embedded in the field of action Resource efficiency in our DEGREE sustainability framework. The program intends to introduce methods and rules for dema- terialization along the entire value chain. Our aim has been to intensify the use of lifecycle assessments (LCAs) and environmental product declarations (EPDs), which will allow us to identify environmentally compatible design alternatives that take circularity into account and can be integrated into product specifications. Our ambi- tion is to apply the RED approach to all relevant products, systems, solutions, and services by 2030. This is associ- ated with our goal to increase the number of LCAs and EPDs available. 2) Clean Supply Chain: Building on the RED phase demate- rialization, the Clean Supply Chain category in the Eco Efficiency @ Siemens program maps our path to decou- pling natural resource use from our economic growth. That is why we will increasingly source secondary mate- rials and take action to replace regulated substances according to IEC 62474. We want to proportionately increase our procurement of secondary metal and resins by 2030. To achieve this, we are concentrating on suppliers of raw materials and semifinished products that can be directly influenced by our purchasing specifications. SIEMENS SUSTAINABILITY REPORT 2023 143
7.5 GRI Standards – key topics and boundaries 7.5 GRI Standards – key topics and boundaries Sustainability topics SDGs DEGREE GRI Standard Climate action1 D ECARBONIZATION GRI Standard 305 Emissions Innovation and business model D ECARBONIZATION GRI Standard 201 R ESOURCE EFFICIENCY Economic Performance G OVERNANCE Cybersecurity and data E THICS management Social and ecological standards G OVERNANCE GRI Standard 414 in the supply chain Supplier Social Assessment GRI Standard 308 Supplier Environmental Assessment Corporate governance and G OVERNANCE GRI Standard 413 sustainability leadership Local communities Partner management and G OVERNANCE GRI Standard 203 collaboration D ECARBONIZATION Indirect Economic Impacts ESG risk management G OVERNANCE GRI Standard 201 E THICS Economic Performance Compliance management G OVERNANCE GRI 2-27 E THICS Compliance with laws and regulations GRI Standard 205 Anti-Corruption GRI Standard 206 Anti-Competitive Behavior GRI Standard 408 Child Labor GRI Standard 409 Forced or Compulsory Labor 1 Top 2 material sustainability topics. Result of the assessment of organizational impacts (inside-out, i.e., on the environment and society), stakeholder relevance and business criticality (outside-in). The detailed GRI Standard Index 2021 is available on our Sustainability website. SIEMENS SUSTAINABILITY REPORT 2023 144
7.5 GRI Standards – key topics and boundaries Sustainability topics SDGs DEGREE GRI Standard Sustainable product design and R ESOURCE EFFICIENCY lifecycle management1 Waste and hazardous substance R ESOURCE EFFICIENCY GRI Standard 306 management Waste (2020) Sustainable handling of R ESOURCE EFFICIENCY GRI Standard 301 natural resources and material Materials efficiency GRI Standard 302 Energy GRI Standard 303 Water and Effluents (2018) GRI Standard 306 Waste (2020) Diversity, equity, and inclusion E QUITY GRI Standard 405 Diversity and Equal Opportunity GRI Standard 406 Non-Discrimination Future of work E QUITY GRI Standard 401 E MPLOYABILITY Employment GRI Standard 403 Occupational Health and Safety (2018) GRI Standard 404 Training and Education GRI Standard 405 Diversity and Equal Opportunity GRI Standard 406 Non Discrimination Employee development E QUITY GRI Standard 404 E MPLOYABILITY Training and Education Employee health and safety E MPLOYABILITY GRI Standard 403 Occupational Health and Safety (2018) 1 Top 2 material sustainability topics. Result of the assessment of organizational impacts (inside-out, i.e., on the environment and society), stakeholder relevance and business criticality (outside-in). The detailed GRI Standard Index 2021 is available on our Sustainability website. SIEMENS SUSTAINABILITY REPORT 2023 145
7.6 WEF IBC Metric 7.6 WEF IBC Metric Pillars Theme Core metrics Reference Omission Principles Governing Setting purpose Sustainability Report 2023 of Gover purpose The company’s stated purpose, as the expression of the means by Siemens at a glance nance which a business proposes solutions to economic, environmental p. 7 ff and social issues. Corporate purpose should create value for all stakeholders, including shareholders. Quality of Governance body composition Annual Financial Report 2023 governing Composition of the highest governance body and its committees by: Annual Financial Report body competencies relating to economic, environmental and social Annual Financial Statement topics; 3. Notes: 31 Members of the executive or non-executive; Managing Board and Supervisory independence; Board p. 131 f tenure on the governance body; WWW.SIEMENS.COM/ number of each individual’s other significant positions and GLOBAL/EN/COMPANY/ABOUT/ commitments, and the nature of the commitments; LEADERSHIP/MANAGEMENT.HTML gender; WWW.SIEMENS.COM/ membership of under-represented social groups; GLOBAL/EN/COMPANY/ABOUT/ LEADERSHIP/SUPERVISORYBOARD/ stakeholder representation. COMMITTEES.HTML Stakeholder Material issues impacting stakeholders Sustainability Report 2023 engagement A list of the topics that are material to key stakeholders and Materiality assessment the company, how the topics were identified and how the p. 21 ff stakeholders were engaged. Ethical Anticorruption Sustainability Report 2023 behaviour 1. Total percentage of governance body members, employees Compliance and Ethics p. 32 ff and business partners who have received training on the Our sustainability indicators organization’s anti-corruption policies and procedures, broken p. 106 ff down by region. a) Total number and nature of incidents of corruption confirmed during the current year, but related to previous years; and b) Total number and nature of incidents of corruption confirmed during the current year, related to this year. 2. Discussion of initiatives and stakeholder engagement to improve the broader operating environment and culture, in order to combat corruption. Protected ethics advice and reporting mechanisms Sustainability Report 2023 A description of internal and external mechanisms for: Compliance and Ethics p. 32 ff 1. Seeking advice about ethical and lawful behaviour and Our sustainability indicators organizational integrity; p. 106 ff 2. Reporting concerns about unethical or unlawful behaviour and lack of organizational integrity. Risk and Integrating risk and opportunity into business process Annual Financial Report 2023 opportunity Company risk factor and opportunity disclosures that clearly Combined Management Report 8. oversight identify the principal material risks and opportunities facing the Report on expected develop- company specifically (as opposed to generic sector risks), the ments and associated material company appetite in respect of these risks, how these risks and opportunities and risks p. 23 ff opportunities have moved over time and the response to those changes. These opportunities and risks should integrate material economic, environmental and social issues, including climate change and data stewardship. SIEMENS SUSTAINABILITY REPORT 2023 146
7.6 WEF IBC Metric Pillars Theme Core metrics Reference Omission Planet Climate Greenhouse gas (GHG) emissions Sustainability Report 2023 change For all relevant greenhouse gases (e.g. carbon dioxide, methane, Climate action p. 58 ff nitrous oxide, F-gases etc.), report in metric tonnes of carbon Conserving resources p. 65 ff dioxide equivalent (tCO e) GHG Protocol Scope 1 and Scope 2 Our sustainability indicators emissions. 2 p. 106 ff Estimate and report material upstream and downstream (GHG Protocol Scope 3) emissions where appropriate TCFD implementation Sustainability Report 2023 Fully implement the recommendations of the Task Force on Task Force on Climate-Related Climate-related Financial Disclosures (TCFD). If necessary, disclose Financial Disclosures a timeline of at most three years for full implementation. (TCFD) p. 136 ff Disclose whether you have set, or have committed to set, GHG emissions targets that are in line with the goals of the Paris Agreement – to limit global warming to well below 2°C above preindustrial levels and pursue efforts to limit warming to 1.5°C – and to achieve Net-Zero emissions before 2050. Nature loss Land use and ecological sensitivity Sustainability Report 2023 Report the number and area (in hectares) of sites owned, leased Conserving resources p. 65 ff or managed in or adjacent to protected areas and/or key biodiversity Our sustainability indicators areas (KBA) p. 110 ff Freshwater Water consumption and withdrawal in water stressed Sustainability Report 2023 availability areas Conserving resources p. 74 ff Report for operations where material: megalitres of water with- Our sustainability indicators drawn, megalitres of water consumed and the percentage of each p. 106 ff in regions with high or extremely high baseline water stress, according to WRI Aqueduct water risk atlas tool. Estimate and report the same information for the full value chain (upstream and downstream) where appropriate. SIEMENS SUSTAINABILITY REPORT 2023 147
7.6 WEF IBC Metric Pillars Theme Core metrics Reference Omission People Dignity and Diversity and inclusion (%) Sustainability Report 2023 equality Percentage of employees per employee category, by age group, Diversity, Equity & Inclusion gender and other indicators of diversity (e.g. ethnicity). p. 89 ff Our sustainability indicators p. 106 ff Pay equality (%) Sustainability Report 2023 Siemens pursues Ratio of the basic salary and remuneration for each employee Working at Siemens the principle of category by significant locations of operation for priority areas of p. 82 ff performance- equality: women to men, minor to major ethnic groups, and other Our sustainability indicators related compen- relevant equality areas. p. 106 ff sation – regardless of gender. Remuneration data is regarded confidential and is therefore not reported. Wage level (%) Siemens pursues Ratios of standard entry level wage by gender compared to local the principle of minimum wage. performance- Ratio of the annual total compensation of the CEO to the median related compen- of the annual total compensation of all its employees, except the sation – regardless CEO. of gender. Remuneration data is regarded confidential and is therefore not reported. Risk for incidents of child, forced or compulsory labour Sustainability Report 2023 An explanation of the operations and suppliers considered to Human Rights p. 40 ff have significant risk for incidents of child labour, forced or Sustainable supply chain compulsory labour. Such risks could emerge in relation to: practice p. 44 ff a) type of operation (such as manufacturing plant) and type of Business Conduct Guidelines: supplier; and HTTPS://ASSETS.NEW. b) countries or geographic areas with operations and suppliers SIEMENS.COM/SIEMENS/ASSETS/ considered at risk. API/UUID:5C242542E9914B97 AF63090AD509BE74/SAG BCGEN.PDF Health and Health and safety (%) Sustainability Report 2023 well-being The number and rate of fatalities as a result of work-related Occupational health and safety injury; management high-consequence work-related injuries (excluding fatalities); p. 97 ff recordable work-related injuries; main types of work-related Our sustainability indicators injury; p. 106 ff and the number of hours worked. An explanation of how the organization facilitates workers’ access to non-occupational medical and healthcare services, and the scope of access provided for employees and workers. Skills for the Training provided (#, $) Sustainability Report 2023 future Average hours of training per person that the organization’s Professional education and life- employees have undertaken during the reporting period, by gender long learning p. 93 ff and employee category (total number of hours of training Our sustainability indicators provided to employees divided by the number of employees). p. 106 ff. Average training and development expenditure per full time employee (total cost of training provided to employees divided by the number of employees). SIEMENS SUSTAINABILITY REPORT 2023 148
7.6 WEF IBC Metric Pillars Theme Core metrics Reference Omission Prosperity Employment Absolute number and rate of employment Sustainability Report 2023 and wealth 1. Total number and rate of new employee hires during the Professional education and generation reporting period, by age group, gender, other indicators of lifelong learning p. 93 ff diversity and region. Our sustainability indicators 2. Total number and rate of employee turnover during the p. 106 ff reporting period, by age group, gender, other indicators of diversity and region. Economic contribution Siemens Annual Financial Report 1. Direct economic value generated and distributed (EVG&D), 2023 on an accruals basis, covering the basic components for the Consolidated Financial organization’s global operations, ideally split out by: Statements p. 46 ff – Revenues – Operating costs – Employee wages and benefits – Payments to providers of capital – Payments to government – Community investment 2. Financial assistance received from the government: total mon- etary value of financial assistance received by the organization from any government during the reporting period. Financial investment contribution Annual Financial Report 2023 1. Total capital expenditures (CapEx) minus depreciation, supported Consolidated Financial State- by narrative to describe the company’s investment strategy. ments 6. Note 19 Equity p. 70 2. Share buybacks plus dividend payments, supported by narrative Annual Financial Statements 3. to describe the company’s strategy for returns of capital to Note 15 Shareholder’s Equity shareholders. p. 124 f Innovation Total R&D expenses Sustainability Report of better Total costs related to research and development 2023 products and Company profile p. 10 ff services Community Total tax paid Annual Financial Report 2023 and social The total global tax borne by the company, including corporate Consolidated Financial State- vitality income taxes, property taxes, non-creditable VAT and other sales ments 6. Note 2 Material taxes, employer-paid payroll taxes, and other taxes that constitute accounting policies and critical costs to the company, by category of taxes. accounting estimates p. 51 ff Note 7 Income Taxes p. 58 f Annual Financial Statements 3. Note 13 Deferred tax assets p. 123 SIEMENS SUSTAINABILITY REPORT 2023 149
7.7 SASB – Electrical Electronic Equipment Index 7.7 SASB – Electrical Electronic Equipment Index Codified Topic metric code Disclosure Reference Omission Energy RT-EE-130a.1 (1) Total energy consumed Sustainability Report 2023: Management RT-EE-130a.1 (2) Percentage grid electricity Environment – Conserving resources, p. 65 ff (Energy used reduced), RT-EE-130a.1 (3) Percentage renewable Our sustainability indicators, p. 106 ff Hazardous RT-EE-150a.1 Amount of hazardous waste Sustainability Report 2023: Waste generated, percentage recycled Environment – Conserving resources, Management p. 65 ff, (Efficient Waste management), Our sustainability indictors, p. 106 ff RT-EE-150a.2 Number and aggregate quantity Sustainability Report 2023: of reportable spills, quantity Environment – Conserving resources, recovered p. 65 ff, (Incident relevant to the environment), Our sustainability indictors, p. 106 ff Product RT-EE-250a.1 Number of recalls issued, total not applicable Siemens has established a comprehen- Safety units recalled sive, company-wide product safety system to ensure that our products comply with applicable legal safety requirements and meet the latest tech- nical safety standards so that they do not pose a threat to the life or health of users or other third parties. Under this system, all company units are required to ensure that their products comply with the state of the art in safety matters. The units are also obliged to conduct systematic product monitoring and take the necessary corrective actions to remedy potential product safety deficiencies. RT-EE-250a.2 Total amount of monetary losses Annual Financial Report 2023 as a result of legal proceedings Consolidated Financial Statements 6. associated with product safety Notes 22 Legal proceedings, p. 71 f SIEMENS SUSTAINABILITY REPORT 2023 150
7.7 SASB – Electrical Electronic Equipment Index Codified Topic metric code Disclosure Reference Omission Product RT-EE-410a.1 Percentage of products by Sustainability Report 2023: Lifecycle revenue that contain IEC 62474 Environment – Product stewardship Management declarable substances p. 71 ff Our sustainability indicators, p. 106 ff RT-EE-410a.2 Percentage of eligible products not applicable by revenue that meet ENERGY STAR criteria RT-EE-410a.3 Revenue from renewable energy- Sustainability Report 2023: related and energy efficiency- Environment – Climate action, related products p. 58 ff, EU Taxonomy, p. 76 ff Our sustainability indicators, p. 106 ff Materials RT-EE-440a.1 Description of the management Sustainability Report 2023: Sourcing of risks associated with the use Environment – Product stewardship, of critical materials p. 71 ff (Risk-conscious handling of declarable substances), Sustainable supply chain practices, p. 44 ff (Responsibility for the world- wide supplier network) Business RT-EE-510a.1 Description of policies and Sustainability Report 2023: Ethics practices for prevention of: Compliance and ethics, p. 32 ff (1) corruption and bribery and (2) anti-competitive behavior RT-EE-510a.2 Total amount of monetary losses Annual Financial Report 2023: as a result of legal proceedings Consolidated Financial Statements 6. associated with incidents relating Notes 22 Legal proceedings, p. 71 f to bribery or corruption Sustainability Report 2023: Compliance and ethics, p. 32 ff RT-EE-510a.3 Total amount of monetary losses Annual Financial Report 2023: as a result of legal proceedings Consolidated Financial Statements 6. associated with anti-competitive Notes 22 Legal proceedings, p. 71 f behavior regulations Sustainability Report 2023: Compliance and ethics, p. 32 ff Activity RT-EE-000.A Number of units produced by not applicable Metric product category RT-EE-000.B Number of employees Sustainability Report 2023 Working at Siemens p. 82 ff Our sustainability indicators, p. 106 ff SIEMENS SUSTAINABILITY REPORT 2023 151
7.8 United Nations CEO Water Mandate 7.8 United Nations CEO Water Mandate Progress report Our customers Siemens became a signatory to the United Nations CEO We support our customers with water management solu- Water Mandate in 2008. We are continuing to support the tions, including the following. Mandate in two ways: by managing water efficiently at our own facilities and by providing solutions that help our Leak detection customers handle water and wastewater more efficiently. Non-revenue water not only impacts the economic perfor- mance of water supply companies; it also increases pressure Our own activities on natural water resources, because more water is produced We are continuing to implement the approach to water and processed than is actually needed. Thanks to our techno- resource management that we developed in 2012. This logical innovations, Siemens can detect leaks with the help includes monitoring factors like water scarcity, water pollution, of AI. Leaks in the pipeline network were responsible for flooding, environmental fire risks, and consequences of climate about 10% of the water supplied by the Swedish water change as well as performing site-specific risk analyses. company VA SYD that never reached consumers. With SIWA Individual goals and measures are defined for locations with LeakPlus, VA SYD now relies on artificial intelligence (AI) to high water-related risks. This approach minimizes the detect and repair leaks in its water distribution networks. site-specific adverse impacts of our water consumption by taking into account local risks like water scarcity, water Virtual process control system pollution, and flooding in environmentally sensitive areas. Thanks to implementing cutting-edge process control tech- You can find out more about conserving resources and water nology at the waste management company EGLV (Emscher consumption at Siemens’ locations in the ENVIRONMENT Genossenschaft & Lippe Verband), the customer was able section of this report. not only to save operational costs but also to contribute to the renaturation of the Emscher and Lippe River basins We use resources carefully. For example, Siemens India has through sustainable wastewater management. implemented sustainable water management by applying various measures, including utilizing water-efficient appli- Partnerships to reduce water loss ances, installing rainwater harvesting system at four major In line with our pledge to be an agile and active market factory locations, and building water reclamation facilities leader, we go beyond traditional distributorships and (zero liquid discharge facilities) that enable us to reduce increasingly rely on collaborations in a variety of areas. freshwater consumption and use treated water for landscaping We’ve signed collaboration agreements with component and toilet flushing. manufacturers like Hach Analytics and with global players like Acciona (desalination) and young entrepreneurs like Our supply chain partners BuntPlanet (digital portfolio). This is how our company and The environmental protection requirements for our supply our partners will be able to meet our customers’ require- chain partners are set out in the Siemens Group Code of ments and offer them a comprehensive, innovative product Conduct for Siemens Suppliers and Third Party Intermediaries. and system portfolio, a local presence worldwide, and our More information on these requirements and on supply usual high quality while also remaining cost-effective. chain management is available in the SUSTAINABLE SUPPLY CHAIN PRACTICES section of this report. SIEMENS SUSTAINABILITY REPORT 2023 152
7.8 United Nations CEO Water Mandate Social commitment Through our memberships in international organizations, we participate in numerous initiatives and projects like the water project on the Action 2020 platform of the World Business Council for Sustainable Development. We initiate, implement, and support projects that foster efficient water use in various regions of the world. The Siemens Stiftung, Siemens’ nonprofit foundation in Germany, employs an entrepreneurial approach to supplying communities with clean drinking water. One example is described below. The WeTu social enterprise in Kenya The WeTu social enterprise founded by Siemens Stiftung works on innovative solutions for supplying energy and drinking water to communities in Western Kenya near Lake Victoria. Its WeWater unit operates 13 water dispensing stations at various locations that supply the surrounding rural communities with safe, filtered drinking water at economical prices. In a multistage process, surface water is processed through various prefilters, an ultra-filtration membrane, and finally UV disinfection. Drinking water is dispensed around the clock by way of a cashless ATM system. This approach supplies more than 3 million liters of drinking water to 16,000 people. A variety of social marketing measures also alert customers about how contamination can occur in home use and how contaminated drinking water affects health. You can find out more about Siemens Stiftung projects at: WWW.SIEMENSSTIFTUNG.ORG/PROJECTS/WETU/ SIEMENS SUSTAINABILITY REPORT 2023 153
7.9 Independent auditor’s report on a limited assurance engagement 7.9 Independent auditor’s report on a limited assurance engagement TO SIEMENS AKTIENGESELLSCHAFT, BERLIN AND INDEPENDENCE AND QUALITY ASSURANCE OF MUNICH THE AUDIT FIRM We have performed a limited assurance engagement on the We have complied with the German professional requirements Sustainability Report of Siemens Aktiengesellschaft, Berlin on independence as well as other professional conduct and Munich (hereafter the “Company”), for the reporting requirements. period from October 1, 2022 to September 30, 2023 (here- after the “report”). Our audit firm applies the national legal requirements and professional pronouncements – in particular the BS WP/vBP Our engagement exclusively relates to the English PDF-version [“Berufssatzung für Wirtschaftsprüfer/vereidigte Buchprüfer”: of the report. Our engagement did not include the foreword Professional Charter for German Public Accountants/German and the information in the Annex to the report as well as any Sworn Auditors] in the exercise of their Profession and the prospective disclosures and links to other web pages. The IDW Standard on Quality Management issued by the Institute report is published as a PDF-version at WWW.SIEMENS.COM/ of Public Auditors in Germany (IDW): Requirements for Quality INVESTOR/EN. Management in the Audit Firm (IDW QS 1) and accordingly maintains a comprehensive quality management system RESPONSIBILITIES OF MANAGEMENT that includes documented policies and procedures with The Company’s management is responsible for the prepara- regard to compliance with professional ethical requirements, tion of the report in accordance with the Sustainability professional standards as well as relevant statutory and Reporting Standards of the Global Reporting Initiative (here- other legal requirements. after the “GRI criteria”) and for the selection of the informa- tion to be assessed. RESPONSIBILITIES OF THE AUDITOR Our responsibility is to express a conclusion with limited These responsibilities of the Company’s management include assurance on the report based on our assurance engagement. the selection and application of appropriate sustainability reporting methods and making assumptions and estimates We conducted our assurance engagement in accordance about individual sustainability disclosures that are reasonable with the International Standard on Assurance Engagements in the circumstances. Furthermore, management is respon- (ISAE) 3000 (Revised): “Assurance Engagements other than sible for such internal control as management considers Audits or Reviews of Historical Financial Information” issued necessary to enable the preparation of a report that is free by the International Auditing and Assurance Standards Board from material misstatement, whether due to fraud (manipu- (IAASB). This standard requires that we plan and perform the lation of the report) or error. assurance engagement to obtain limited assurance about whether any matters have come to our attention that cause us to believe that the Company’s report is not prepared, in all material respects, in accordance with the GRI criteria. SIEMENS SUSTAINABILITY REPORT 2023 154
7.9 Independent auditor’s report on a limited assurance engagement In a limited assurance engagement, the procedures per- RESTRICTION OF USE formed are less extensive than in a reasonable assurance We draw attention to the fact that the assurance engage- engagement, and accordingly, a substantially lower level of ment was conducted for the Company’s purposes and that assurance is obtained. The selection of the assurance proce- the assurance report is intended solely to inform the Com- dures is subject to the professional judgment of the auditor. pany about the result of the assurance engagement. As a result, it may not be suitable for another purpose than the In the course of our assurance engagement we have, among aforementioned. Accordingly, the assurance report is not other things, performed the following assurance procedures intended to be used by third parties for making (financial) and other activities: decisions based on it. Our responsibility is to the Company alone. We do not accept any responsibility to third parties. → Inquiries of employees and inspection of documents Our assurance conclusion is not modified in this respect. concerning the sustainability strategy, sustainability principles and sustainability management including the GENERAL ENGAGEMENT TERMS AND LIABILITY stakeholder dialog of Siemens AG, The “General Engagement Terms for Wirtschaftsprüfer and → Inquiries of management and relevant employees Wirtschaftsprüfungsgesellschaften [German Public Auditors involved in the preparation of the report about the prepa- and Public Audit Firms]” dated January 1, 2017 are applica- ration process, about the internal control system related ble to this engagement and also govern our relations with to this process, and about disclosures in the report, third parties in the context of this engagement ( WWW.DE.EY. → Inquiries of employees responsible for data capture and COM/GENERALENGAGEMENTTERMS). In addition, please refer to consolidation, about the data capture and compilation the liability provisions contained there in no. 9 and to the methods as well as internal controls to the extent relevant exclusion of liability towards third parties. We accept no for the assurance of the disclosures in the report, responsibility, liability or other obligations towards third → Identification of likely risks of material misstatement in parties unless we have concluded a written agreement to the the report, contrary with the respective third party or liability cannot → Analytical procedures on selected disclosures in the report effectively be precluded. at Group level and at the level of the Industrial Businesses, → Inquiries and inspection of documents relating to the We make express reference to the fact that we will not collection and reporting of selected data at Group level, at - update the assurance report to reflect events or circum the level of the Industrial Businesses and at selected sites, stances arising after it was issued, unless required to do so → Inquiries of employees on material qualitative statements by law. It is the sole responsibility of anyone taking note of in the report as well as the inspection of selected under- the summarized result of our work contained in this report lying documents, to decide whether and in what way this information is useful → Reconciliation of selected disclosures with the corre- or suitable for their purposes and to supplement, verify or sponding data in the consolidated financial statements update it by means of their own review procedures. and group management report, → Evaluation of the presentation of the report. Munich, December 4, 2023 ASSURANCE CONCLUSION Ernst & Young GmbH Based on the assurance procedures performed and the Wirtschaftsprüfungsgesellschaft evidence obtained, nothing has come to our attention that causes us to believe that the Sustainability Report of Siemens Keller Johne Aktiengesellschaft for the period from October 1, 2022 to Wirtschaftsprüfer Wirtschaftsprüferin September 30, 2023 is not prepared, in all material respects, (German Public Auditor) (German Public Auditor) in accordance with the GRI criteria. SIEMENS SUSTAINABILITY REPORT 2023 155
7.10 Notes and forwardlooking statements 7.10 Notes and forwardlooking statements This document contains statements related to our future This document includes – in the applicable financial reporting business and financial performance and future events or framework not clearly defined – supplemental financial developments involving Siemens that may constitute forward- measures that are or may be alternative performance mea- looking statements. These statements may be identified by sures. These supplemental financial measures should not be words such as “expect,” “look forward to,” “anticipate,” viewed in isolation or as alternatives to measures of Siemens’ “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project”, net assets and financial positions or results of operations as or words of similar meaning. We may also make forward- presented in accordance with the applicable financial looking statements in other reports, in prospectuses, in reporting framework in its Consolidated Financial Statements. presentations, in material delivered to shareholders, and in Other companies that report or describe similarly titled alter- press releases. In addition, our representatives may from native performance measures may calculate them differently. time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens’ management; many of them are therefore beyond Siemens’ control. These are subject to a number of risks, uncertainties, and factors, including, but not limited to those described in disclosures, in particular in the chapter Report on risks and opportunities, and including reports on expected development of the Annual Report. Should one or more of these risks or uncertainties materialize, events of force majeure, such as pandemics, occur, or should underlying expectations including future events occur at a later date or not at all or assumptions prove incorrect, actual results, performance, or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement “Notes and forward-looking statements” in the SIEMENS SUSTAINABILITY REPORT 2023. Siemens neither intends nor assumes any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated. SIEMENS SUSTAINABILITY REPORT 2023 156
7.11 Further information and information resources 7.11 Further information and information resources Additional information The online version of the Siemens annual financial report 2023 is available at: WWW.SIEMENS.COM/ANNUALREPORTS Further sustainability information Further information on our commitment to sustainability and sustainability figures are available at: WWW.SIEMENS.COM/GLOBAL/EN/COMPANY/SUSTAINABILITY.HTML WWW.SIEMENS.COM/GLOBAL/EN/COMPANY/SUSTAINABILITY/ SUSTAINABILITYFIGURES.HTML Further information on research, development, and innovation at Siemens is available at: WWW.SIEMENS.COM/GLOBAL/EN/COMPANY/INNOVATION.HTML Further information on Siemens Stiftung is available at: WWW.SIEMENSSTIFTUNG.ORG/EN/ © 2023 by Siemens AG, Berlin and Munich SIEMENS SUSTAINABILITY REPORT 2023 157
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