Sustainability strategy and management

In keeping with its guiding principle “enabling green mobility”, Vossloh is a driving force behind customerfocused, innovative and sustainable products and services for rail transport. This motto is also reflected in Vossloh’s sustainability strategy. Since the 2021 fiscal year, Vossloh has pursued a revised group-wide sustainability strategy in order to centrally align and focus sustainability activities within the Group, to further improve Vossloh’s positive impact on the environment and society, and to improve the transparency of the Group‘s sustainability performance. It is intended to make Vossloh a reference in the area of sustainability in the rail infrastructure business. Vossloh AG‘s Executive Board adopted the sustainability strategy and the guideline supporting it in 2021. Vossloh‘s sustainability commitment, with which the Executive Board underlined and reaffirmed Vossloh‘s motto and focus, was published on the company‘s website.

Sustainability commitment by the Executive Board of Vossloh AG

The sustainability guideline provides the Group-wide organizational framework and sets out the principles for all Vossloh’s sustainability measures and initiatives. The guideline defines in particular the scope of action, as well as organization, responsibility and processes. The direction and focus of sustainability measures were set by a materiality analysis in order to determine the sustainability topics relevant to Vossloh. They are adapted to changing conditions and requirements with the help of regular reviews by the Executive Board. Specific sustainability goals have been defined for the sustainability topics classified as material. These goals are pursued through sustainability initiatives and the integration of environmental and social aspects into the company’s business and decision-making processes. Vossloh is using internal and external communication to make its sustainability performance transparent and also to further strengthen the commitment of its employees on the way to becoming a sustainable company.

Vossloh has divided its sustainability activities into eight areas of action, which enable the topics identified as material to be pursued in a targeted and efficient manner:

• Sustainability strategy and management
• Environmental and climate protection
• Safe and sustainable mobility
• Occupational health and safety
• Human resources and leadership
• Good corporate citizenship
• Sustainable supply chains and operations
• Business ethics and human rights

The overarching area, “Sustainability strategy and management“, provides the framework for the seven other areas as well as for the Group’s future approach.

The Group’s Executive Board bears overall responsibility for all sustainability topics and ensures that Vossloh lives up to its ecological, economic and social responsibilities and makes a positive contribution to the environment and society. In operational management, sustainability is the responsibility of the Chief Operating Officer (COO). In addition, Vossloh AG has the Corporate Sustainability department. Created in 2020, the role of head of Corporate Sustainability, who reports directly to the Executive Board, is responsible for the development and implementation of the sustainability strategy as well as for the management of Group-wide sustainability initiatives. In addition, the Executive Board has established a Group Sustainability Committee to centrally manage all sustainability measures within the Group. The committee is run by the head of Corporate Sustainability. Its members include the division heads of key central offices at Vossloh AG as well as the managing directors and sustainability officers of the business units. In addition, each business unit has appointed a sustainability, health and safety officer.

For many years, rating agencies have assessed and recognized Vossloh’s sustainability performance on a regular basis. Among other things, the company currently has a “prime status” according to Institutional Shareholder Services (ISS) ESG, which places Vossloh in the top 10 % of its sector. EcoVadis continues to list Vossloh with a Silver status; however, according to the improved score received in 2023, Vossloh is now among the top seven percent of all companies rated by EcoVadis. MSCI ESG Research continued to rank Vossloh at the second-best AA rating level (on a scale from AAA to CCC) in the 2023 reporting year. Such ratings play a special role for Vossloh: the Group was one of the first companies in Germany to place a sustainability-oriented hybrid bond at the beginning of 2021. The redemption amount of the note is linked to the company’s sustainability performance as measured by ISS ESG and MSCI ESG Research ratings.

Another criterion for assessing Vossloh‘s sustainability performance is certification in accordance with internationally recognized norms and standards. Most Vossloh units are certified according to at least one of the international quality, environmental, energy efficiency or occupational health and safety standards such as ISO 9001, ISO 14001, ISO 50001, ISO 45001 or a comparable national standard and have corresponding management systems in place. As of December 31, 2023, 98 % of Vossloh employees were employed at a location with one or more of these certifications, as in the previous year. The proportion of operating companies with at least one of these certifications is 97 %.

The Vossloh Group received great public recognition for its commitment to green mobility in 2023 with its nomination as one of three finalists in the competition for the prestigious German Sustainability Award in the field of mobility and logistics. Europe‘s most important award for ecological and social commitment honors companies that have made an outstanding contribution to spreading the transformation towards greater sustainability.

In order to identify the sustainability topics, Vossloh conducted a materiality analysis in 2021 with the participation of representative external and internal stakeholders as well as the Group Sustainability Committee and the Executive Board. To this end, a total of 38 potentially relevant sustainability topics were divided into seven areas of action. As part of the materiality analysis, 198 representative stakeholders were surveyed, including 53 external participants. The ranking and prioritization of the sustainability topics were determined by linking stakeholders’ expectations to the relevance for Vossloh in each focus area.

The nonfinancial statement covers Vossloh’s global activities. The companies considered correspond to the scope of consolidation of the consolidated financial statements. The management report contains supplementary and/or more detailed information regarding a number of the nonfinancial topics and these are cross-referenced accordingly. The company’s risk reporting covers all major risks associated with Vossloh’s business activities. It also includes the major nonfinancial risks to which Vossloh may be exposed.

Key performance indicators are defined for all of the above goals, which can be used to measure the degree to which they have been achieved. At the end of 2021, the company also launched a Group-wide sustainability initiative for each goal. These initiatives were continued in 2023; the degree of target achievement is reported in the respective chapters. The Group Sustainability Committee and the Executive Board received regular updates on all activities.

In addition to the areas of action and sustainability goals, which apply to the entire Group, a wide range of other sustainability initiatives are being implemented in the various business units and at the company’s sites. As of December 31, 2023, there were a total of 52 ongoing sustainability initiatives.