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