2023 Sustainability ReportContents3 Introduction/3 President and CEO Message5 CSO Message7 2022 High.
2024-07-08
100页
5星级
2024 Sustainability&Social Impact ReportThe Boeing CompanyThe Boeing Company 2024 Sustainability&Social Impact ReportiiPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresThe Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresTable of Contents01 President&CEO Letter03 Business Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data Privacy16 Safety&Quality Global Aerospace Safety and Quality Employee Safety21 People&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional Development33 Climate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply Chain61 Community Our Commitment 2023 Community Investments Our Employees Our Future Our Heroes Our Homes72 Reporting&Disclosures Key ESG Data GRI Index SASB Index TCFD Index Sustainable Development Goals Forward-Looking StatementsThe Boeing Company 2024 Sustainability&Social Impact Report1President&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresEverything starts with purpose.At Boeing,our mission is to protect,connect and explore our world and beyond,and it is founded on ensuring safety and quality are at the forefront of everything we do.In our first combined Sustainability&Social Impact Report,we are highlighting our progress in support of our environment,our people and our communities.Each day,our Boeing teammates are dedicated to living our core values of safety,quality,integrity and sustainability.When it comes to the safety of Boeings products and services,every decision and every action matters.We are making daily progress and are holding ourselves accountable to the highest standards.Making Strides for the EnvironmentWe continue to work to support the commercial aviation industrys ambition to reach net-zero emissions by 2050 by making strides in reducing our carbon footprint.Each decision we make has a bearing on the future health of our planet,and we take the responsibility to come up with innovative solutions seriously.It starts within our four walls.Boeing increased renewable electricity procurement by 16%in 2023,which translates to 39%renewable electricity across the enterprise through direct purchases and renewable energy credits.We also saw the highest participation rate in Boeings history in our Battle of the Buildings campaign,with our teammates taking more than 1 million 60-second actions across 189 sites in 28 countries,contributing to reductions in energy use,waste to landfill and water consumption.In 2023,we hosted the first global Sustainable Aerospace Together Forum where we convened global leaders from energy,aviation,finance and policy sectors to discuss solutions for a more sustainable future.We look forward to hosting our second forum in October.We also launched the public version of the Cascade Climate Impact Model,a dynamic modeling tool that allows users to analyze strategies and scenarios to reduce aviations emissions through 2050.We continue to refine the tool and introduce new features and insights.Building an Inclusive CulturePeople are at the center of all we do.Our 171,000 diverse teammates operate in more than 65 countries around the world,building and supporting products that connect communities and serve customers in more than 150 countries.We have manufacturing,service and technology partnerships with companies and governments worldwide and contracts with more than 11,000 suppliers.A Letter From President and CEO David L.CalhounHow We Operate:Start with engineering excellenceBe accountable from beginning to endApply Lean principles eliminate traveled workCrush bureaucracyReward predictability and stability everywhere in our businessOur ValuesInnovate and Operate To Make the World BetterHow We Act:Lead on safety,quality,integrity and sustainabilityFoster a Just Culture grounded in humility,inclusion and transparencyImport best leadership practicesEarn stakeholder trust and preferenceRespect one another and advance a global,diverse teamThe Boeing Company 2024 Sustainability&Social Impact Report2President&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresMaintaining strong relationships with these partners is critical to our business.Within Boeing,we continue to foster an inclusive workplace where employees can have rewarding careers.We value diverse perspectives and continue to see more women and U.S.racial and ethnic minorities represented at nearly every level of the company compared with a year ago.Boeing has nine employee-led business resource groups that connect teammates with shared interests and help our people grow personally and professionally.We encourage employees to practice Seek,Speak&Listen habits to create an environment where all voices are heard and valued.We are strongest when teammates speak up with ideas and suggestions,and trust that appropriate action will be taken without fear of retaliation.Transforming Our CommunitiesBoeings commitment to bringing about positive and lasting change also applies to communities around us across the globe.Our team members embody a“giving”mindset and donate time and money with a goal of improving the communities in which they live and work.We encourage our volunteers in their efforts and match donations to accredited nonprofit organizations.As part of our ongoing work in communities around the world,Boeing supports humanitarian and disaster relief efforts.The safety of our teammates and the communities they call home is of the utmost importance to us,and we maintain an established process to keep all channels of communication open with them throughout any crises they are facing.We continue to nurture a healthy talent network and pipeline through volunteer efforts in support of STEM education in schools and workforce development programs.We are also proud of the work we do to support veterans as they transition to civilian life and in their recovery and rehabilitation journeys.As part of this commitment,Boeing continued its partnership with the Invictus Games,an international event that brings wounded and injured service personnel together to heal through sport.Boeing currently has more than 18,000 military veterans that represent 14%of our U.S.workforce.Looking AheadGuided by our mission,we set our goals for the near term and our aspirations for the future.We act transparently and hold ourselves accountable every step of the way.Our work in support of our environment,our people and our communities involves all of us at Boeing,with safety and quality at the core.We also extend our gratitude to the local and global partnerships on these fronts that help us further our endeavors to work toward a bright tomorrow for all of our stakeholders.We showcased the Boeing Cascade Climate Impact Model at a conference in Dubai,where governments from over 100 countries set a 2030 goal that aviation fuel should be 5%less carbon intensive than conventional jet fuel.David L.CalhounPresident and CEOThe Boeing Company 2024 Sustainability&Social Impact Report3President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresBusiness ApproachBoeing continues to engage our stakeholders on all aspects of sustainability while making progress on our sustainability goals,managing risk and enhancing our culture,which are all underpinned by transparency and an unwavering commitment to safety,quality and integrity.Final assembly of 737 MAX airplanes in Renton,Washington.The Boeing Company 2024 Sustainability&Social Impact Report4President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresAs a leading global aerospace company,we develop,manufacture and service commercial airplanes,defense products and space systems for customers in more than 150 countries.As a top U.S.exporter,the company leverages the talents of a global supplier base to advance economic opportunity,sustainability and community impact.Our diverse team is committed to innovating for the future;cultivating a culture based on the companys core values of safety,quality,integrity and sustainability.Learn more at .Boeing Commercial Airplanes(BCA)This segment develops,produces and markets commercial jet aircraft principally to the commercial airline industry worldwide.We are a leading producer of commercial aircraft and offer a family of commercial jetliners designed to meet a broad spectrum of global passenger and cargo requirements of airlines.This family of commercial jet aircraft in production includes the 737 narrow-body model and the 767,777 and 787 wide-body models.Development continues on the 777X program and the 737-7 and 737-10 derivatives.Boeing Defense,Space&Security(BDS)This segment engages in the research,development,production and modification of manned and unmanned military aircraft and weapons systems for strike,surveillance and mobility,including fighter and trainer aircraft;vertical lift,including rotorcraft and tilt-rotor aircraft;and commercial derivative aircraft,including anti-submarine and tanker aircraft.In addition,this segment engages in the research,development,production and modification of the following products and related services:strategic defense and intelligence systems,including strategic missile and defense systems;command,control,communications,computers,intelligence,surveillance and reconnaissance(C4ISR);cyber and information solutions;intelligence systems,satellite systems;including government and commercial satellites;and space exploration.Boeing Global Services(BGS)This segment provides services to our commercial and defense customers worldwide.Global Services sustains aerospace platforms and systems with a full spectrum of products and services,including supply chain and logistics management;engineering,maintenance and modifications;upgrades and conversions;spare parts;pilot and maintenance training systems and services;technical and maintenance documents;and data analytics and digital services.2023 Company ProfileBCA$33.9BBDS$24.9BBGS$19.1BBCA$3.9TBDS$3.1TBGS$3.7T*See Form 10-K for more information170,688*Workforce MembersBCA47,948BDS 17,925BGS22,323Enterprise82,4922023 by the Numbers$77.8B*Revenue$10.7TMarket OutlookThe Boeing Company 2024 Sustainability&Social Impact Report5President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresTransparency is core to our values and woven into how we operate at Boeing.Im honored to join teammates from around the globe as well as my colleagues on the Executive Council to share the progress weve made on our environmental efforts;on diversity and inclusion;and on our positive community impact around the world.As Boeings Chief Sustainability Officer,I am humbled to help advance our sustainability journey and promote a future that will always be anchored in safety and quality first and foremost.As we recommit to these fundamental values,it is energizing to see our companys focus on helping our industry decarbonize while uplifting our communities and driving a culture of inclusion where everyones voice is heard.With more than two decades at Boeing,its an honor for me to bring my passion for innovation and collaboration with global stakeholders to the CSO role.As we strive to protect,connect and explore the world and beyond,our sustainability mission to promote an even safer and more sustainable aerospace future could not be more befitting.Over the past few years,I have been fortunate to lead a global team that worked closely with our partners in aviation,energy,policy and finance to progress our ambitious sustainability goals.The actions we take come in many forms,including scaling the availability of sustainable aviation fuel(SAF);investing in innovation and technology demonstrators,illuminating the future through our Cascade Climate Impact Model and working with stakeholders on conservation,compliance and remediation efforts.Throughout the report,youll see weve made steady progress in many areas,with more work to do in others.Well continue to be transparent with our stakeholders,humbly conveying our actions every step of the way and holding ourselves accountable as we earn trust and reestablish confidence in this great company.A Letter From CSO Brian Moran“A more sustainable future will always be anchored in safety and quality first and foremost.”As a Patron of the World Energy Council,Brian Moran speaks at the 26th World Energy Congress in Rotterdam,Netherlands.Brian MoranChief Sustainability OfficerThe Boeing Company 2024 Sustainability&Social Impact Report6President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresStakeholder Groups and Engagement ChannelsEmployees Statement of work Weekly pulse surveys Employee forums and meetings Internal websites Diversity and inclusion committees Business resource groups Quality stand downsInvestors Investor conferences Investor meetings and summits Working interactions and aligned collaborations Product development initiativesSuppliers Boeing supplier conferences Supplier Code of Conduct and communications Industry groups and forumsCustomers Air shows Trade shows Customer meetings and summits Industry groups and forums Regulators Nongovernmental organization events and forums Government regulator meetings Industry groups and forumsFlying Public Third-party surveys MediaBringing the Outside InBoeing is committed to transparency and considers stakeholder interests to identify and address key challenges and risks facing the company.Using widely applicable disclosure frameworks,Boeing reports each year on our financial performance and company priorities;our employee demographics and progress toward achieving equity,diversity and inclusion goals;our environmental sustainability performance;our community investments and advocacy;and our aerospace market outlooks.Throughout 2023,we engaged with key stakeholders through proactive ongoing dialogue,surveys,industry forums and events,and monitoring external data.This dialogue and collaboration informs our approach,goals and actions to drive sustainable,long-term value for our stakeholders.We look forward to continuing to evolve and refine our stakeholder engagement strategy throughout 2024 and beyond.Embedding Sustainability Our sustainability priorities and enterprise initiatives are managed across our business,with key goals and metrics monitored by company leaders and our Global Sustainability Council.These sustainability priorities are emphasized in this report.Our collaborative relationships inform these priorities and our sustainability goals,driving long-term value for our stakeholders.Global Aerospace Safety Employee Safety and Well-Being Climate Action Environmentally Responsible Operations Global Equity,Diversity and Inclusion Ethical and Compliant Business Data Privacy and Information Security Professional Development,Education and Learning Community Engagement Responsible Supply Chain Economic PerformanceStakeholder EngagementView our Reporting&Disclosures to learn more about our approach and alignment to:Global Reporting Initiative Sustainability Accounting Standards Board Task Force on Climate-Related Financial Disclosures United Nations Sustainable Development GoalsThe Boeing Company 2024 Sustainability&Social Impact Report7 7President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresSustainability GoalsGoal2030 TargetProgressEmployee Safety and Well-Being Value human life and well-being above all else and take action accordingly;strive to prevent all workplace injuriesTop-quartile recordable injury rate,as compared with performance of benchmarked industry companiesAchieved 2023 performance of 1.40,which was better than the 2023 baseline top-quartile target of 1.831Read more about employee safety on Page 1990lieve their manager supports their well-beingIn 2023,89%of employees agreed with the statement that their manager supports and encourages their well-being Read more about employee well-being on Page 29Global Aerospace SafetyDrive aerospace safety to prevent accidents,injury or loss of life with our Boeing culture and actions rooted in safetyDrive aerospace safety via global aerospace safety initiatives to maintain downward trend of worldwide commercial jet fleet 10-year moving average fatal accident rateIncreased promotion of the Speak Up reporting channel resulted in a more than 500%increase in the number of submissions during the first two months of 2024 compared with the same period in 2023Introduced a digital learning platform to employees,enabling them to reflect,learn and apply safety lessons to their workRenovated Safety Experience Center,incorporating flexible and dynamic formats,as well as a content creation center for SMS safety promotionRealigned the Boeing Internal Audit team in Commercial Airplanes Quality to report to the Chief Aerospace Safety Office to further the independence of the team to conduct their work as intendedExpanded Competency-Based Training and Assessment programs to five additional operators in 2023 for a total of nine customers,and provided enhanced Flight Operations support to more than 170 global operatorsEquity,Diversity&InclusionAddress representation gaps and strengthen equity,diversity and inclusion so that all team members feel supported and inspired to reach their full potentialClose representation gaps for women globally and underrepresented racial/ethnic minorities in the U.S.Increased women and U.S.racial/ethnic minority representation at Boeing at nearly every level of the companyMade progress on our six specific 2025 Aspirations we announced in 2021 and continue to report,see Page 23 Continued transparency by expanding our data to include generational diversityCommunity EngagementBuild better,more equitable communities through corporate investments and employee engagement programsExpand opportunities for more than 12.5 million youth,veterans,veterans families and underserved individuals across communities around the worldExpanded opportunities for over 14.3 million youth,veterans and their families,and underserved individuals around the world in 2023,by collaborating with community partners on programs that advance skills required for the modern workplace,support veterans and their families transitioning back to civilian life,improve environmental sustainability,and expand racial equity and social justice1.Recordable injury rate performance excludes privacy cases.Goal was established excluding privacy cases;data provided elsewhere in the report is inclusive of privacy cases.The Boeing Company 2024 Sustainability&Social Impact Report8 8President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresGoal2030 TargetProgressSustainable Operations1 Reduce greenhouse gas emissions from Boeing operations through conservation and renewable energyAchieve 55solute reduction in Scope 1 and Scope 2 market-based GHG emissions from 2017 base year2Achieved 26solute GHG reduction at year-end 2023 from 2017 base year toward 2030 goal(Scope 1 and Scope 2)Achieve 100%renewable electricity3Achieved 39%renewable electricity in 2023 through a combination of direct purchases and renewable energy creditsInnovation and Clean Tech Enable the transition to carbon-neutral aerospace through investments and partnerships for fleet efficiency improvements,SAF and future platform technologiesAll production commercial airplanes will be 100%SAF compatibleEstablished plan for all materials,systems,and part compatibility testing required to support qualification,certification and implementation of SAF compatibility by 2030Developed jet reference fluids(JRFs)composed of the simple chemical compounds found in SAF.These JRFs will help standardize testing and evaluation of how SAF interacts with airplane materials and systemsConvened a working group which Boeing now chairs within International Aerospace Environmental Group(IAEG)to focus on industry alignment toward 100%SAFSupport the commercial aviation industrys ambition to achieve net-zero carbon emissions for global commercial aviation operations by 2050Released the Boeing Cascade Climate Impact Model publicly and enhanced its capability to promote analysis of pathways toward achieving net-zero carbon emissions,increased engagement across sectors and promoted educational useAwarded a project funded by the Japanese government to explore the feasibility of integrating hydrogen fuel cell systems into an airplaneAccelerated global SAF scale-up through the following collaborations:Air-CRAFT,Zero Petroleum,Corporate Coalition for Innovation&Technology toward Net Zero(CCITNZ),Virgin Atlantic,MITs Zero Impact Aviation Alliance(ZIAA),Masdar and the Roundtable on Sustainable BiomaterialsBegan modification of the MD-90 that will become the X-66 aircraft produced through the Sustainable Flight Demonstrator(SFD)project with NASAExpanded the ecoDemonstrator program with Explorer airplanes to test even more sustainability-focused technologies focused on trajectory-based operations and SAFs emissionsBuild and certify our first zero-emission,electric,autonomous aircraft via WiskWisk led a team of aviation leaders including Boeing,Insitu Pacific,the New Zealand Civil Aviation Authority,and Airways New Zealand to successfully complete a first-of-its-kind flight trial integration of uncrewed aircraft into controlled airspace Wisk established a partnership with the City of Sugar Land,Texas,to bring autonomous air taxis to the greater Houston region1.In 2024,updates were made to our Sustainable Operations goal statement to align to our“Avoid First,Remove Second”strategy.Read more about our GHG Strategy for Operations on Page 35.Additionally,prior Supply Chain goal language has been removed in alignment with Climate Action 100 framework,which does not list purchased goods and services,capital goods,or upstream transportation and distribution as relevant Scope 3 categories for the companys sector.More information on this can be found on Page 42.2.The 2030 GHG reduction target is set with an operational boundary of The Boeing Company,and includes all Scope 1 and Scope 2 emissions.Learn more about our organizational boundary in our GHG Emissions Supplement.3.Renewable electricity is procured through a combination of direct purchases and renewable energy credits.The Boeing Company 2024 Sustainability&Social Impact Report9 9President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresSustainability OversightBoard of DirectorsGovernance&Public Policy CommitteeOversee Boeings sustainability policies and practices,including matters related to environmental stewardship and climate changeChief Sustainability OfficerExecutive Council Member;Leads Global Enterprise SustainabilityResponsible for enterprisewide sustainabillity strategy,focusing on priorities,stakeholder-oriented reporting and company performanceChief Executive OfficerChair of Executive Council and serves as a member of the Board of DirectorsGlobal Sustainability Council and Extended CouncilGlobal leaders from across business units and functions provide leadership,partnership and action to advance objectives and strategy for sustainabilitySub-councilsSustainability GovernanceThe Board of Directors has extensive oversight of strategy development,company culture,political and charitable contributions,corporate sustainability and key strategic,operational and compliance risks.Please see our corporate governance materials for more information.Sustainability is rooted in our values.Our Governance&Public Policy(GPP)Committee,as outlined in its charter,is responsible for oversight of the companys practices relating to public policy and corporate sustainability,including matters related to environmental stewardship,climate change,diversity,equity and inclusion;philanthropic programs and community engagement;and,where appropriate,make recommendations to the Board with respect to such practices.Read the Governance&Public Policy Committee Charter.Boeings Chief Sustainability Officer,Brian Moran,is an Executive Council member reporting to Boeings CEO.As CSO,Moran reports the progress of Boeings sustainability objectives and stakeholder-oriented reports regularly to the GPP Committee and the full Board of Directors.Boeings CSO leads an enterprise Global Sustainability Council(GSC)comprised of global leaders from across our business units and functions and oversees the Global Enterprise Sustainability team.The GSC was established to provide executive leadership,advocacy and collaboration across the enterprise to advance our sustainability objectives and strategy.The diverse membership ensures functions that contribute to sustainability are engaged across the enterprise.The GSC meets annually with council members also participating in sub-councils on a more regular cadence.Sub-councils are led by senior leaders from across the company.Oversight of Political AdvocacyTogether,the Board,the GPP Committee and senior leadership are committed to aligning political activities with the Governance and Risk ManagementPolicyFinance and GovernanceTechnology and Future MobilitySustainable Aviation FuelSustainable OperationsCustomersThe Boeing Company 2024 Sustainability&Social Impact Report1010President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&Disclosurescompanys values,business strategies,long-term shareholder interests and strategic imperatives.This includes regular discussions about the companys public policy priorities,the companys memberships in and payments to trade associations and other tax-exempt organizations,Boeing Political Action Committee strategy and expenditures,and the companys compliance procedures related to these activities.See the companys U.S.Political Advocacy Report.Risk ManagementBoeing has established processes to identify,assess,mitigate and manage risk.The Board has delegated to the Audit Committee primary responsibility for oversight of the companys policies,practices and guidelines with respect to risk assessment and risk management,including assessing key strategic,operational and compliance risks.Enterprise and Compliance Risk ManagementOur enterprise risk management(ERM)process considers key strategic risks,such as those relating to product safety,geopolitics,airline health,reputation,long-term competitiveness,talent and sustainability,and key operational risks,such as those relating to development program execution,supply chain,production system health and quality,cybersecurity,liquidity,significant legal items and business continuity,as well as mitigation efforts.Our compliance risk management(CRM)process evaluates the companys current and emerging compliance risks,such as those relating to design and certification,production and quality,cybersecurity,industrial security,financial accounting and procurement integrity.All business units and functions participate in both the ERM and CRM on an annual basis to assess and prioritize the most critical risks facing the company,evaluate the effectiveness of mitigation strategies and controls,and identify important emerging risks.Both our ERM and CRM processes are continually evolving in the detection and response to risks,including through increased reliance on data.The results of the ERM and CRM processes are reviewed with both the Audit Committee and the full Board at least annually.Safety Management SystemOur Safety Management System(SMS)is an integrating framework for managing safety risks throughout the life cycle of a product or service by identifying hazards,mitigating product safety risks,continuously improving safety performance and other activities designed to promote and sustain a positive safety culture,and shape policies that uphold our commitment to aerospace safety.The SMS infrastructure is comprised of four components designed to create a Risk OversightBoard of Directors The full Board is briefed at least annually on the ERM and CRM processes and assessments and throughout the year as needed on specific risks facing the Company,including those relating to the SMS Risk RegisterAudit CommitteeThe Audit Committee is briefed at least annually on the ERM and CRM processes and assessmentsAerospace Safety CommitteeThe Aerospace Safety Committee is briefed at every meeting on the SMS Risk RegisterAnnual Employee Training and Ethics RecommitmentOn an annual basis,all employees are required to complete:Training on compliance risk areas tailored to their specific duties and responsibilities Product safety training that highlights the importance of speaking up about any potential product or services-related safety concerns An ethics recommitment and training that features real-life compliance issues and consequences and highlights how adherence to our values and doing business with integrity is critical to Boeings successCompliance Risk ManagementEnterprise Risk ManagementSafety Management SystemThe Boeing Company 2024 Sustainability&Social Impact Report1111President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&Disclosuresdisciplined environment to manage safety risks and promote a positive safety culture:Safety Policy and Objectives,Safety Risk Management,Safety Assurance and Safety Promotion.Our SMS is continually evolving and improving.Our SMS includes a risk elevation process pursuant to which our business unit presidents regularly review safety risks,the associated risk mitigation and corrective action plans,and the relevant safety metrics to determine if additional resources and/or mitigation activities are necessary.Our business unit presidents determine those risks that will be briefed to our Chief Executive Officer during his SMS reviews,which occur at least bimonthly.The Aerospace Safety Committee reviews SMS performance and the SMS Risk Register at every meeting.Risk MonitoringThe risk assessments and sustainability priorities are compared for commonality,and overlapping risks receive additional monitoring and management.Taking Action:Innovation and Clean Tech,supporting our 2030 goal of 100%SAF-compatible commercial airplanes,is a key component to decarbonizing aerospace.Within the risk management process,Boeing mitigates and manages the strategic risk to this priority and goal the ability to scale SAF supply to meet the demand needed to achieve the commercial aviation industrys net-zero ambitions.SAF as a drop-in fuel is approved to be blended at 50/50 blend with Jet A and works with existing airplanes and offers the largest potential to reduce carbon emissions over the next 20 to 30 years in all aviation segments.Our intent is to help catalyze SAF scaling through subject matter expertise,investments in product compatibility work,purchasing SAF for our own fuel use and policy advocacy.In 2023,Boeing placed agreements to purchase 5.6 million gallons(21.2 million liters)of blended SAF to support its U.S.commercial operations.Read more about our SAF scaling initiatives on Page 47.Throughout this report,we will continue to discuss our governance,risk identification and management of our key priorities.Business Continuity ManagementBoeing strengthens its resiliency through Business Continuity Management(BCM),managing and mitigating risks should a significant incident disrupt business operations.This entails five key preparedness initiatives:Business,Emergency,Information Technology,Supply Chain and Human Resources working together to facilitate company resiliency.The primary objective of these initiatives is to develop and maintain guidelines,standards,processes and tools that enable business units and functions to mitigate risk and recover critical programs,applications and suppliers.Boeing navigated challenges in 2023 that added to the companys risk profile,including:Safety and quality issues.Regulatory review of commercial production programs.Increase in supply chain risks from conflicts and geopolitical events.BCM continues to identify risks and to implement strategies and processes to mitigate those risks to our people,programs,infrastructure,network and supply chain.Tax Governance and ComplianceWe are committed to being a responsible taxpayer wherever we operate.Our global tax team is responsible for maintaining the highest compliance standards,being transparent in our dealings with authorities and sustaining robust internal controls for risk management.Boeings principled tax approach is grounded in ethical business practices and tax guidance that follows business substance.Learn more about Boeings approach to global tax governance and complianceBoeing teammates on the F-15 line in St.Louis.The Boeing Company 2024 Sustainability&Social Impact Report1212President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresCode of Conduct Safety,quality,integrity,transparency and sustainability are core values that guide the design,build and service of our products.Each year,Boeing employees affirm their commitment to these values by signing our companys Code of Conduct.We pledge to adhere to applicable laws,regulations and company policies,serving as a powerful reminder that to earn the trust of our customers,regulators and the flying public,we must foster a workplace where we hold ourselves accountable.That means making the right decisions,operating at the very highest standards.Members of our Board of Directors annually sign a Code of Ethical Business Conduct to affirm their commitment to Boeings values.Recommitment TrainingEvery employee also participates in annual Recommitment training,which features real-life examples of compliance issues and consequences,and highlights how adherence to our values and doing business with integrity are critical to the companys success.Site Compliance and Ethics OfficersIn 2023,we continued our work to enable an environment where each team member feels comfortable:Identifying issues.Seeking guidance.Speaking up without fear of retaliation to prevent or mitigate potential negative impacts.Site Compliance and Ethics Officers(SCEOs)are placed at several sites across the enterprise to:Engage with employees and leadership teams to support an open and accountable culture.Identify potential risk areas,pockets of anxiety or areas for improvement.Connect with the appropriate employee population or elevate concerns.This work is conducted in collaboration with site leadership and Law and Global Compliance teams,when appropriate.Through the local teams that we established with our SCEOs and Ethics Ambassador programs,we drove improvements across our locations and business units using site-specific data.Rewarding Values and BehaviorsSCEOs and other Ethics employees support Our Values Recognition Ethical and Compliant BusinessTeammates prepare to roll a 787 Dreamliner out of the Decorative Paint facility at Boeing South Carolina.“Our Code of Conduct prohibits retaliation with a strong procedure that reinforces a workplace where employees feel safe to ask questions,identify issues,and raise their hand for help.”Darrin HostetlerChief Compliance OfficerLearn more about our Code of Conduct and RecommitmentThe Boeing Company 2024 Sustainability&Social Impact Report1313President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&Disclosuresinitiatives at various sites,which reward employees that model our values and behaviors,especially actions that pertain to strengthening safety,quality and compliance.SCEOs,through this initiative,routinely:Host roundtables.Conduct floor walks to gain feedback from employees at all levels.Additionally,SCEOs work with teammates outside of Law and Global Compliance who have been selected as Ethics Ambassadors and Champions.These teammates exemplify our values and spend significant time providing compliance and ethics-related resources and answering questions.Ethics Ambassadors and Champions demonstrate our values and also gain crucial insight from other teammates,creating another avenue of actionable information.Risk Reporting and MitigationOur Ethics function has a dedicated team of employees to evaluate the effectiveness of our actions,the Risk Reporting and Mitigation team.This team utilizes data compiled in the internal Inquiries and Investigations dashboard,information learned in Human Resources surveys,quarterly compliance surveys,and information provided by SCEOs and Ethics Ambassadors/Champions.The Risk Reporting and Mitigation team:Reviews quarterly survey results and other data to determine where risk may be present and then works with other groups to mitigate it.Completes a regular review of the ethics program to determine its effectiveness and recommends any changes that may be needed.Includes subject matter experts who review and work with functional teams to determine whether proposed employee activity would constitute a conflict of interest and review events,gifts or anything of value that would be given by third parties to determine if those things would constitute an impermissible business courtesy.Responds to Ethics Line inquiries and concerns,provides guidance to employees or elevates concerns for detailed analysis by the Issues Review Team.Ethics also works with Corporate Investigations to determine whether a raised concern should be addressed with individual corrective action,a remediation plan or both.That remediation plan could include coordination with Corporate Compliance to add or modify existing mandatory training.Additionally,we have prioritized and enhanced our compliance training,manager engagements and communication with employees to emphasize each teammates personal responsibility for compliant and ethical behavior.Inquiries and Investigations DashboardEthics monitors information available through the internal dashboard.This captures metrics based on different levels,starting at the enterprise level,by site,city,subsidiary,business group or other subsets of Boeings employee population.The dashboard tracks the:Anonymous rate of reported cases.Most common ways employees reported concerns.Instances and topic areas of concerns that have been alleged and cases that have been substantiated.Amount and subject areas of inquiries.Number of conflicts of interest reviews submitted.Quantity of business courtesy reviews submitted.Monthly trends associated with the number of contacts to Ethics.Percentage of employees who have signed the Code of Conduct and completed Recommitment training,with a benchmarked goal of 99%completion each year.Several surveys are developed throughout the year to help indicate the effectiveness of the companys ethics and compliance programs.This includes Recommitment,quarterly compliance surveys and surveys sent to U.S.-based employees who have raised concerns or shared ideas for improvement.SCEOs and the Risk Monitoring and Mitigation teams review the internal dashboard to determine whether engagements mitigated risk or misconduct.Information from the compliance survey is also examined.Stakeholder EngagementEngagement with stakeholders is critical to Ethics activities.Our teams work across functions to get employee feedback to help elevate risks and concerns and to support an ethical culture.This data is collected through various reporting platforms.Learn more about our ethics and compliance programThe Boeing Company 2024 Sustainability&Social Impact Report1414President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresUnderstanding Ethical Concerns:2023 Data1,2Further,Global Compliance teams interact with employees daily,receiving questions,concerns and ideas for improvement.That information is collected in our reporting database and triaged to the right subject matter experts and includes support from additional functions,site leadership or our regulators.Education and AwarenessThe Ethics Education and Awareness team provides resources,communications and training to support all employees.They also provide localized communications where risks are identified.Additionally,they support deployment and completion tracking of the Code of Conduct and Recommitment programs.The Ethics Education and Awareness team also highlights positive Speak Up program examples through Recommitment training and Ethics Reports.Robust Anti-Corruption ProgramIntegrity is a core company value,and we strictly forbid bribery and corruption of any kind.Our robust anti-corruption program includes extensive controls,rigorous policies and procedures,and an annual risk assessment to ensure effectiveness and identify potential enhancement opportunities.Expectations for Employees and SuppliersWe publish an internal policy that explains our anti-corruption and anti-bribery requirements and expectations for employees.We also make guidelines for ethical business conduct publicly available to employees and other stakeholders.The company makes employees aware of their federally protected whistleblower rights.These are designed to protect employees against retaliation for reporting potential wrongdoing by a U.S.contractor or subcontractor.Through our Supplier Code of Conduct,we establish foundational expectations of prospective and active suppliers,including adherence to human rights standards.Contacting EthicsBoeing encourages employees,subsidiaries,suppliers and external stakeholders to promptly raise concerns about safety,quality or potential violations of the law or our policies.If any employee notices any cause for concern,they can reach our internal and external Ethics lines,use the confidential and anonymous web portal,or use Boeings Speak Up website.Learn more about how to contact Boeing Ethics.Enabling a Speak Up CultureBoeing is committed to creating an environment in which its employees feel comfortable speaking up and raising issues without fear of judgment,embarrassment or retaliation.The companys Safety Management System,which further empowers employees to identify risks and take the necessary steps to prevent accidents,injuries or loss of life,is key to a positive safety culture.While Boeings Code of Conduct and related policies always have prohibited retaliation against employees who raise concerns in good faith,the company identified opportunities to strengthen and enhance these protocols and launched a stand-alone anti-retaliation policy in 2023.This new policy explains how retaliation may appear in the workplace,providing real-world examples and information about how employees can report it.Additional new procedures require more follow up with employees who report concerns after the completion of an investigation to ensure they have not encountered retaliation for speaking up.Boeing also updated its training to further reinforce the companys zero-tolerance policy for retaliation.As part of Boeings most recent compliance survey,approximately 85%of employees who responded felt confident in the companys enforcement of its non-retaliation policy,an increase of more than 5%since 2021.Boeing will continue its efforts to foster a culture where employees feel encouraged to speak up and know they can do so without facing retaliation.1.Data reflects the reporting period of Nov.1,2022,through Oct.31,2023,to account for full Board of Directors year.2.Further information pertaining to Ethics data can be found in the Key ESG Data Table.Learn more about our anti-corruption program1,407Ethics inquiries 1,527Conflict of interest determinations4,194Investigative requests 7,128Total contacts to Ethics and Business ConductInvestigated requests that were substantiated3,428Investigative requests with enough information to investigate34%The Boeing Company 2024 Sustainability&Social Impact Report1515President&CEO LetterBusiness Approach 2023 Company Profile CSO Letter Stakeholder Engagement Sustainability Goals Governance and Risk Management Ethical and Compliant Business Enterprise Security and Data PrivacySafety&QualityPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresEnabling Operations and Mitigating Cyber ThreatsBoeing Enterprise Security plays a pivotal role in enabling Boeings operations around the world by providing a fabric of policy,standards and operating principles that support the confidentiality,integrity and availability of the companys information systems.In an era where cyber threats are increasingly sophisticated and pervasive,we maintain an enterprise security posture that incorporates globally recognized security principles and standards and industry-leading security practices.As part of our cybersecurity risk management processes,we conduct“tabletop”exercises and regular risk assessments to highlight areas of improvement and implement necessary controls.We continue to integrate our cyber risk processes into our Enterprise and Compliance Risks.These are overseen by our Board of Directors and provide central,standardized frameworks for identifying and tracking cyber-related business and compliance risks across the company.At the management level,we established a Global Security Governance Council to further strengthen our cybersecurity risk management activities across the company.The council is responsible for developing and coordinating enterprise cybersecurity policy and strategy,and for providing guidance to key management and oversight bodies.The council includes,among other senior executives,our Chief Security Officer,Chief Engineer,Chief Information and Data Analytics Officer,Chief Aerospace Safety Officer and Chief Product Security Engineer.Each member has several decades of business and senior leadership experience managing risks in their respective fields.This includes all aspects of cybersecurity,data and analytics,product security engineering,enterprise engineering,safety and the technical integrity of our products and services.Protecting Personal Information GloballyBoeings Global Privacy Office is dedicated to protecting the privacy of individuals and earning and maintaining the trust of employees,customers and the global marketplace.We are responsible for developing and implementing the policies,strategies and capabilities designed to protect personal information.We continuously improve our program framework and embed“privacy-by-design”throughout the life cycles of our products,services and activities that process personal information.Enterprise Security and Data PrivacyDigital Support Operations Center,Digital Aviation Solutions,Englewood,Colorado.The Boeing Company 2024 Sustainability&Social Impact Report16President&CEO LetterBusiness ApproachSafety&Quality Global Aerospace Safety and Quality Employee SafetyPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresSafety&QualitySafety and quality are at the core of everything we do.The Boeing team is dedicated to ensuring every person who builds,flies on,uses,operates,designs or services Boeing products gets home safely.Boeing teammates,through our Go4Zero workplace safety program,are reminded of our zero-injury goal.Another banner prompts the workforce to eliminate foreign object debris in our 737 factory in Renton,Washington.The Boeing Company 2024 Sustainability&Social Impact Report17President&CEO LetterBusiness ApproachSafety&Quality Global Aerospace Safety and Quality Employee SafetyPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresWe value human life above all else,and our teammates take that personally knowing every decision,every task must be done with transparency and accountability.Creating a Step Change in Safety and Quality Safety and quality are core Boeing values and fundamental to every product we design,build and support.The 737 MAX accident in January was a stark reminder that our focus on these core values must continue with actions that ensure the safety and quality of our products.Since the pandemic,our industry has faced significant labor turnover,creating unique challenges and opportunities to shape workplace culture.We have sought the advice and counsel of more than 70,000 employees who know our products best and know where we need to improve.We are acting on their feedback and input from customers and key stakeholders with oversight from the U.S.Federal Aviation Administration to improve our production system and demonstrate our commitment to safety,quality and compliance in everything we do.There is still work to do,but we are making progress in the following critical areas:Training and readiness:We are increasing time in training centers for new hires in Commercial Airplanes to get additional manufacturing systems and technical skill education.Following their foundational training,we are partnering them with experienced peer-mentors for structured on-the-job training to ensure confidence and proficiency in their work.Additionally,workplace coaches are being deployed to support manufacturing operations.Simplification and production compliance:We are auditing and simplifying build plans,work instructions and installation plans to clarify processes and procedures for the team and to make it easier for them to do their work.We have implemented new product inspections and risk assessments to control out-of-sequence work and established compliance checks as part of the teams regular operating rhythms.We are also working with our suppliers to address defects and provide solutions at the source with more inspections and added checks prior to shipment from certain suppliers of structural components.Global Aerospace Safety and Quality“The people who depend on our products entrust us with their safety.We must ensure the safety,compliance and conformance of our products without compromise.”Mike DelaneyChief Aerospace Safety OfficerA Boeing Customer Quality Support teammate inspects the overwing exit doors of a 737 MAX in Renton,Washington.The Boeing Company 2024 Sustainability&Social Impact Report18President&CEO LetterBusiness ApproachSafety&Quality Global Aerospace Safety and Quality Employee SafetyPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresSafety and quality culture:We are expanding our deployment of Boeings Safety Management System(SMS),an industry best practice used to proactively identify and address hazards within the systems used to design,build and support our products.Employee engagement,feedback and reporting of product safety hazards and concerns are vital to our safety and quality culture,and to the health of our SMS.We are seeing a significant increase in the use of Boeings Speak Up reporting channel,and since January,more than 70,000 employees have participated in Quality Stand Downs across our sites where we paused production and delivery for the day to focus on improving safety and quality.Additionally,more than 160,000 employees have participated in the Every Decision Matters product safety training that reinforced the importance of speaking up about concerns or mistakes,as well as the culture that supports such transparency.Moreover,we have commissioned an independent assessment of our safety and quality systems and practices,and we continue to make changes to our organization to better connect our safety and quality work.Retired U.S.Navy Adm.Kirkland H.Donald and a team of outside experts are conducting a thorough,independent assessment of Boeings quality management system for Commercial Airplanes,including quality programs and practices in Boeing manufacturing facilities and its oversight of commercial supplier quality.In the first quarter we realigned the Internal Audit function for Commercial Airplanes Quality to report to the Chief Aerospace Safety Officer,which will further the independence of the Commercial Airplanes Quality Internal Audit team and support the direct link between safety and quality.Since realigning the reporting structure,we have doubled our internal product audits across all Commercial Airplanes programs.70,000 employees have participated in Quality Stand Downs across our sitesSince January 2024,more than 70,000 employees have participated in Quality Stand Downs across our sites where we paused production and delivery for the day to focus on improving safety and quality.Read our Chief Aerospace Safety Officer ReportThe Boeing Company 2024 Sustainability&Social Impact Report19President&CEO LetterBusiness ApproachSafety&Quality Global Aerospace Safety and Quality Employee SafetyPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresEmployee Safety2023 Employee Safety Numbers102:1near-miss to hazard ratio99%found/fixed metric1,000 health and safety training courses available0.41lost workday casesOur workplace safety strategy is built on a comprehensive policy framework and a strong commitment to creating a safe workplace for all employees.This commitment is preserved in our Policies 1 and 2,which outline clear guidelines and procedures designed to prevent accidents and injuries.Overall,there are 16 procedure documents and 20 process documents that govern compliance with Environment,Health&Safety requirements and help engage teammates at all levels to foster a culture of safety,ensuring that safety protocols are not only understood but also integrated into daily operations.Our approach emphasizes proactive risk assessment,regular training and the implementation of innovative safety equipment and technology.We are dedicated to continuously improving our safety standards through feedback and consultation with our workforce,demonstrating our commitment to not just compliance,but excellence in safety.To manage and enhance the positive impacts of our safety initiatives,we employ a robust System of Record for tracking and analyzing safety-related data.This enables us to identify trends,pinpoint areas for improvement,and implement targeted actions to mitigate risks effectively.We conduct regular audits and reviews of our safety protocols and performance,adjusting our strategies based on the findings to ensure continuous improvement.Additionally,we celebrate and recognize the contributions of our teams toward enhancing safety standards through information sharing across the enterprise for potential replication and amplification.Through these concerted efforts and partnerships with industry groups such as the National Safety Council,we not only comply with regulatory requirements but also go above and beyond to protect our most valuable asset our teammates thereby ensuring the long-term sustainability and success of our company.Safety is more than a priority at Boeing.Its a core value that guides actions and decisions.Our workplace safety program,Go for Zero One Day at a Time,is a proactive and inclusive approach to safety with the goal of a zero-injury workplace,and we recognize that the first step in preventing an injury is raising awareness and sharing knowledge.Some operations performed at Boeing are recognized as High Hazard Processes due to their potential for a serious injury or fatality.Boeings Lifesaving Rules go beyond regulatory requirements and are intended to reduce or eliminate risks created when around or performing these processes and to prevent life-critical incidents by increasing accountability for following safety policies and procedures.Our occupational health and safety management system is modeled after the International Organization for Standardization(ISO)45001.As of 2023,four sites are certified to ISO 45001 with multiple sites conforming to ISO 45001 in support of our business objectives.The Boeing Company 2024 Sustainability&Social Impact Report20President&CEO LetterBusiness ApproachSafety&Quality Global Aerospace Safety and Quality Employee SafetyPeople&InclusionClimate&EnvironmentCommunityReporting&DisclosuresSafety Dojos Encourage Zero-Injury Workplace In 2016,we introduced our first Safety Dojo,a walk-in safety solution center staffed by a team of ergonomic and safety experts.It provides teammates with an opportunity to learn,collaborate and develop innovative solutions to challenging ergonomic and safety issues.Recognizing the impact the Safety Dojo has on achieving workplace safety goals,Boeing established six additional Safety Dojos across the enterprise.We also created four Safety“Dojos on the go,”which are mobile versions designed to bring safety tools and resources directly to teammates on the factory floor.The resources and activities of the Safety Dojo network go beyond compliance to create an environment where all teammates feel valued,protected and heard.This network of Safety Dojos underscores Boeings commitment,action and the collective responsibility of achieving a zero-injury workplace.A Boeing employee shows the way to the Safety Dojo in Everett,Washington.At the Safety Dojo,employees can learn about everything workplace safety related and develop,share and replicate safety solutions across the Boeing enterprise.“Besides sharing tools,the Dojo asks factory teammates about their safety needs and then develops innovative tools to help prevent workplace injuries.”Craig Morgan Employee Health&Safety Team LeadThe Boeing Company 2024 Sustainability&Social Impact Report2121President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresPeople&InclusionEach member of our global team brings something uniquely valuable to Boeing,and we grow stronger as everyone contributes to our shared mission.Boeings culture of inclusion continues to cultivate an open and respectful environment that retains and attracts the worlds top talent,and inspires all teammates to do their best work and grow their careers while making a positive impact on the world.Boeing teammates work on the F-15 line in St.Louis.The Boeing Company 2024 Sustainability&Social Impact Report2222President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresWho We AreBoeing employees bring their expertise to factory floors,engineering labs,flight lines and workspaces around the world,united by a mission to protect,connect and explore our world and beyond.It is our responsibility as a company to ensure employees are valued and supported in developing their skills and careers while contributing to that important mission.Our Shared Commitment to Inclusion All employees sign our Code of Conduct,which includes a commitment to“build an inclusive culture in which diverse experiences and voices are heard,respected and incorporated.”We take this pledge seriously because its the right thing to do,and it makes us better as a company.According to internal surveys in 2023,employees who feel included and who are part of gender-diverse teams are more likely to report their teams consistently identify opportunities to improve.Boeing continues to seek out top talent and create inclusive teams that inspire every employee to do their best work and grow their careers.One way we aim to strengthen our company is through the Seek,Speak&Listen habits,through which employees ask for different perspectives,share ideas and concerns,and act on what they hear.Our PeopleOur ability to report on the full range of diversity is limited,and while we share numbers related to gender,race and more,we know that these numbers do not fully represent the breadth of experiences,backgrounds and identities in our workforce.Based on what we can measure,we know that representation of women and U.S.racial/ethnic minorities has increased,including at manager and executive levels.Disability representation is also higher.And our workforce remains age diverse,comprising five generations who work with and learn from one another.Our AspirationsIn 2021,we established six aspirations we are striving to achieve by the end of 2025.We track our progress and identify where we have more work to do through talent data and culture surveys.“Our people are at the center of everything we do.Boeing is committed to creating a work environment where every teammate around the world can perform at their best and grow their careers while supporting our companys inspiring mission.”Uma AmuluruChief Human Resources OfficerBoeing India Engineering&Technology Center employee in Bengaluru recovers and measures the 3D features of airplane parts and components.The Boeing Company 2024 Sustainability&Social Impact Report2323President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresIncrease the Black representation rate in the U.S.by 20%Close representation gaps for historically underrepresented groupsProgressOur U.S.workforce is now 7.5%Black,a 17%rate increase from 2020.This progress is made possible by expanding our talent pool,which we do through our collaboration with the Thurgood Marshall College Fund and support of Historically Black Colleges and Universities,as well as through organizations like the National Society of Black Engineers,Black Engineer of the Year Awards and Women of Color in STEM.We also have apprenticeship programs for high school students interested in beginning their careers.For example,our Pre-Employment Training Program offered in St.Louis including primarily Black communities has graduated nearly 1,400 since its creation.ProgressOverall racial and ethnic minority representation increased to 37.6%of our U.S.workforce in 2023,up from 35.3%in 2022,and accounted for 48.6%of our new hires.Most individual race categories saw an increase except Native American,a group that remains at a steady 0.8%of our U.S.workforce.Our increased diversity is a byproduct of our recruitment,support and retention of top talent.In 2023,95%of candidate slates interviewed for open manager or executive roles in the U.S.included at least one woman or racial/ethnic minority.We also partner with hundreds of leading professional and technical societies and organizations around the world such as Women in Aviation International,the Society of Women Engineers,the American Indian Science and Engineering Society,the Society of Hispanic Professional Engineers and more to help broaden our reach and access to top talent.2025 Aspiration No.12025 Aspiration No.2U.S.Black representation over 2020 baseline2.3 ptsOverall racial/ethnic minority representation increase since 202217%U.S.Black representation over 2020 baselineGlobal Equity,Diversity&InclusionCelebrate our recent progress and view our awards and recognitionThe Boeing Company 2024 Sustainability&Social Impact Report2424President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresAchieve parity in retention rates of all groupsAdvance common understanding,shared experiences and mutual respectProgressFor the third year in a row,attrition rates between women,men and people of different races have remained within nearly a single percentage point of one another.Were working to narrow that gap further.People tend to stay where they feel valued and know their voice matters.Our Seek,Speak&Listen habits help to create a work environment where employees are comfortable speaking up and trust that their ideas will be heard.Weve held listening sessions across the company to learn directly from employees about how we can improve their experiences and support their continued career growth at Boeing.Weve also continued investing in our people,from enhancing benefits packages to increasing training opportunities.ProgressWe continue to facilitate learning opportunities and programs that promote inclusive behaviors and strengthen teams.In 2023,our nine employee-led business resource groups(BRGs)grew by 10 chapters and 3,900 members.We also expanded the Inclusion Ambassador Network,a 3,800-employee group committed to advancing inclusion on their own teams.By organizing a wide range of global events,initiatives and team conversations,BRG members and Inclusion Ambassadors provide a platform for open dialogue,learning,and understanding.Their efforts help break down barriers,challenge biases,and foster acceptance and appreciation in the workplace.2025 Aspiration No.32025 Aspiration No.4In 2023,45 employees were selected to be enterprise board leaders for our nine business resource groups.The Boeing Company 2024 Sustainability&Social Impact Report2525President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresThe Power of InclusionDiverse teams enable everyone to perform better.As a whole,employees on teams with at least 40%women are.Men on gender-diverse teams were 60%-70%more likely to respond affirmatively to these statements than men on teams that are not gender-diverse.Source:Internal Boeing employee surveys of men and women,June-July 2023.31%more likely to say their team consistently identifies opportunities to improve processes,products or services39%more likely to say their team works to ensure everyone feels included46%more likely to say their team is committed to doing what is rightEliminate significant differences between the experiences of employees from different backgroundsReport diversity metrics and progress annuallyProgressUsing culture surveys to better understand how our teams feel about their experience at Boeing,we know that we have work to do to ensure all employees,regardless of gender or race,feel they are valued and included,enabling them to do their best work.More than 3,000 employees voluntarily completed our Building Conscious Inclusion course in 2023.In addition,teams throughout the company have access to resources related to inclusion,allyship,preventing bias and more.ProgressThis is the fourth year that were publishing our workforce data and progress on our aspirations.We are committed to sharing this information and responding to feedback from our employees.Additional U.S.data is available in our 2022 EEO-1 report.This year,weve added data to capture the generational makeup of our global workforce.This is an important measure for us to track as we improve our knowledge-sharing efforts and foster an inclusive environment for all generations within our workforce.We will continue to report our progress going forward.2025 Aspiration No.52025 Aspiration No.6The Boeing Company 2024 Sustainability&Social Impact Report2626President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&Disclosures2020202120222023Women23.2#.6$.1$.4!.2 pt1Men76.1u.6u.0u.5%2Undisclosed0.7%0.8%0.9%0.2%2Women of ColorU.S.Overall8.6%9.1%9.9.6%2.0 pt1U.S.Executives7.8%8.4%8.0%8.7%0.9 pt12020202120222023Board of Directors25.0%.00.80.8%5.8 pt1Executive Council13.6.0.0%.0.4 pt1Executives31.53.03.23.3%1.8 pt1Managers22.3.9#.7$.3%2.0 pt1Individual Contributors34.54.54.64.6%0.1 pt1Engineering16.5.9.4.1%1.6 pt1Production and Maintenance13.8.4.6.0%3.2 pt1Promotions27.6).7(.5.8%0.2 pt1Hires21.8$.7%.3$.5%2.7 pt1Pay Equity and Pay TransparencyEqual pay for equal work is foundational to our commitment to equity for all.We conduct annual compensation reviews to ensure employees are compensated equitably throughout their careers,independent of race,gender or ethnicity.Since 2018,we have published gender pay gap reports in countries that require it in an effort to determine the gap between how many men and women are concentrated in senior,higher-paying jobs.For example,our UK Gender Pay Gap Report can be found here.2023 Demographics*WomenOffering U.S.teammates the opportunity to voluntarily and confidentially self-identify(self-ID)their gender identity and sexual orientation helps us better understand and support our workforce.U.S.Gender Identity Self-ID Participation Rate14.0%U.S.Sexual Orientation Self-ID Participation Rate12.0%LGBTQIA *Further information pertaining to Global Equity,Diversity&Inclusion data can be found in the Key ESG Data Table.1 Since 2020.2 Values do not add up to 100%due to rounding.By Job DescriptionOverall1.2 pt1 24.4%Women2023The Boeing Company 2024 Sustainability&Social Impact Report2727President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresBy Job Description2020202120222023Minority31.22.75.37.6%6.4 pt1Non-minority68.8g.3d.7b.4%Asian14.2.6.9.5%2.3 pt1Black6.4%6.6%7.1%7.5%1.1 pt1Hispanic/Latino/a/x7.0%7.4%8.1%9.2%2.2 pt1Native American0.8%0.8%0.8%0.8%0.0 pt1Pacific Islander0.6%0.7%0.7%0.8%0.2 pt12 or more races2.2%2.3%2.6%2.9%0.7 pt1White68.8g.1d.2a.8 23 Demographics6.4 pt137.6%Racial and Ethnic Minorities2023U.S.Race and EthnicityOverall1 Since 2020.2020202120222023Board of Directors16.7%.0%.0%.0%8.3 pt1Executive Council35.03.3!.1.6.4 pt1Executives20.8.5!.8.6%1.8 pt1Managers23.0$.3.1(.7%5.7 pt1Individual Contributors28.2).20.72.0%3.8 pt1Engineering32.33.55.67.0%4.7 pt1Production and Maintenance36.08.4B.5F.5.5 pt1Promotions32.03.34.47.3%5.3 pt1Hires37.2B.5G.5H.6.4 pt1The Boeing Company 2024 Sustainability&Social Impact Report2828President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&Disclosures202020212022202314.8.6.6.2 23 Demographics 14.2%White Men31.7%Men of Color30.4%White Women18.0%Women of Color19.6%Traditionalist1(-1945)0.1by Boomer(1946-1964)16.8%Generation X(1965-1980)32.8%Generation Y(1981-1996)40.3%Generation Z(1997 )9.9%Unknown0.1%U.S.Disability3Self-ID Participation RateSelf-ID as Having a Disability47.0%8.1%3 Offering U.S.teammates the opportunity to voluntarily and confidentially self-identify(self-ID)helps us better understand and support our workforce.U.S.VeteransU.S.Interns2Generation1We are proud to have 148 Traditionalists still working at Boeing.Finding the Right OrbitPatrice Hall is a first-generation college graduate who earned an aerospace engineering degree from Tuskegee University,a historically Black university,during the first wave of the COVID-19 pandemic in 2020.While she might have drifted away from her early dreams of becoming an astronaut,her passion for space and exploring the stars remains as strong as ever.Hall has worked at NASAs Michoud Assembly Facility in Louisiana as an engineer on the Space Launch System program,where she built relationships with mentors,particularly other Black women,who support her dreams.She now works as a technical computing architect for the Commercial Airplanes Digital Transformation Architecture team.“You never know what route youll take,and its important to find someone willing to embark on that journey with you.You just dont realize that you can be in that position until you see someone like you there.”Patrice Hall Commercial Airplanes Digital Transformation Technical Computing ArchitectPatrice Hall joined Boeing full time after graduating magna cum laude from Tuskegee University in 2020.2 Values do not add up to 100%due to rounding and undisclosed self-ID inputs.The Boeing Company 2024 Sustainability&Social Impact Report2929President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresBoeings Well-Being programs focus on improving the lives of our employees and their families by cultivating community and by empowering and inspiring their journey toward a healthier lifestyle.We offer holistic support connected across emotional,physical and financial health pillars,in addition to community involvement and social support.Offerings are based on data-driven design,innovation,employee desire and industry best practices.These programs deliver through education and awareness,coaching and counseling services,condition management,family support resources,financial security and retirement planning,development and tuition/certification funding.Our strategy focuses on creating a supportive environment that enhances the multiple and diverse needs of employees lives.We continuously monitor,adjust and enhance our offerings as we strive to meet needs and provide timely relevant programming.Our programs focus on keeping people well and improving their well-being in areas that are both important to our workforce and the sustainability of our business.CompensationWe attract the best talent when we pay competitively.We hold ourselves accountable for providing equal pay for equal work by conducting regular compensation reviews to ensure equitable compensation at the time of hire and throughout every employees career.For those eligible,total pay may also include incentive opportunities that can deliver additional benefits based on individual and company performance.Managers also have options for recognizing contributions with cash awards,PrideBoeing catalog gifts and service anniversary awards.Most U.S.employees can also invest in Boeing stock at a discount by participating in the Boeing Employee Stock Purchase Plan(BESPP).CommunityEmployees are encouraged to work together and support causes that matter to them and provide ways to serve their community.Employees have the benefit of earning matching dollars when donating or volunteering time,supporting donation drives and finding volunteer opportunities.Read more about this and our employees impact in communities on Page 64.Employee Well-BeingSt.Louis teammates work in the composite lab.The Boeing Company 2024 Sustainability&Social Impact Report3030President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresFinancial Well-BeingWe provide tools and support to help employees manage their money and achieve their financial goals through every stage of life.The Boeing Company 401(k)Retirement Plan helps employees save for their future,with contributions from the company that can help grow retirement savings,and provides for immediate vesting,access to investment advice,and includes a Student Loan Match feature.Mental and Physical Well-BeingBoeing provides comprehensive health and insurance benefits for employees and families,including medical,prescription drug,dental,vision,virtual health care,disability and life insurance benefits as well as other voluntary benefits.Time away from work helps our employees balance work and life,refresh and care for personal needs.We offer paid time off,vacation and sick leave,holiday pay,jury duty and witness service as well as bereavement leave.We offer comprehensive physical well-being programs via flu shots,health screenings and assessments,digital health benefits/apps,fitness classes and a tobacco cessation program.We also offer tools and programs for stress relief and emotional well-being,including digital self-care programs,one-on-one support,an employee assistance program,behavioral health navigation and video-based therapy.For our employees outside of the U.S.,while we offer a number of well-being programs,in many cases health care services are provided under the countrys national health system to its citizens.LifeBoeing offers programs to help balance work and life,including telecommuting,alternative work schedules and flexible redistribution of hours.We accommodate overtime and extended work weeks.In the U.S.under our Boeing-sponsored medical plans,we also provide fertility benefits,adoption assistance,surrogacy assistance,womens health programs,domestic partner benefits,backup child/adult/elder care,pet care,parental coaching,leave of absence,commuter benefits and paid parental leave.Employees can also take advantage of the Boeing Discount Program to save time and money on a variety of goods and services.Learn more about our Total Rewards and benefitsBoeing South Carolina engineers support tooling efforts on the 787 line.The Boeing Company 2024 Sustainability&Social Impact Report3131President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresProfessional DevelopmentWe are committed to supporting the performance,development and growth of our global workforce.We provide meaningful work assignments that help teammates stretch their abilities and gain valuable experiences.Global Talent Acquisition We are committed to providing a transparent recruitment process for our employees and candidates across the globe.With a dedicated team to guide candidates through the recruitment process from start to finish,we strive to deliver clear and frequent communication to applicants.All job requisitions include detailed job descriptions that outline required qualifications,responsibilities and expectations for candidates to help applicants assess their fit for the role.In 2023,we redesigned the Boeing Careers site to provide an enhanced user experience that keeps candidates informed throughout their job search.The site offers resources to help candidates navigate the hiring process,including a step-by-step application guide and interview preparation guide to learn about what to expect and tips to prepare.As an Equal Opportunity Employer,we are committed to providing reasonable accommodations to applicants with disabilities.Applicants are encouraged to share with our recruitment team any accommodations required during the recruitment process.We have a dedicated team of Reasonable Accommodation employees who are specially trained to support candidates and employees requests for workplace accommodations.We are proud to be on the 2023 Best Places to Work for Disability Inclusion list and received a score of 100 on the Disability:INs Disability Equality Index for the eighth year in a row.Performance and DevelopmentLeaders are committed to coaching employees,helping them excel in their current role and prepare for the next steps in their careers.All employees are encouraged to create development plans and have access to resources to guide them in working with their managers to identify opportunities for growth.Leaders have ongoing dialogue with teammates about performance and development.Build SkillsOn-the-job training and structured learning provide employees with support and guidance for those new to the company or new to their role.Learning plans help managers identify training that their employees need to meet certification requirements specific to the work they are assigned.Manufacturing teammates attend courses at our training centers,followed by hands-on training in the factory,building the entry-level skills needed to work in a production environment.Some teammates are required to attain certifications for specific jobs they perform,or as they advance in their careers.Employees also have access to workplace coaches during and after training.LearnBoeingEmployees can tap into a wide range of learning experiences aligned with business goals to sharpen skills and build their future.How Our Teammates Advanced in 2023 12,000 employees received tuition assistance for degree and nondegree programs2Mhours of production training delivered452,000learnings completed on our digital learning platform22,000instructor-led courses4,000 participants in leadership development programsDiscover how we invest in our teammatesThe Boeing Company 2024 Sustainability&Social Impact Report3232President&CEO LetterBusiness ApproachSafety&QualityPeople&Inclusion Who We Are Global Equity,Diversity&Inclusion 2023 Demographics Employee Well-Being Professional DevelopmentClimate&EnvironmentCommunityReporting&DisclosuresOn a Mission To LeadLisa Schleuters interest in aerospace began as a child,hopping regular flights between the United States and Germany,where her family lived for a time.An internship with Boeing sealed the deal,and she joined the company full time out of college as a structural design engineer for the 787-10 Dreamliner wing team.After performing several engineering roles with our Commercial Airplanes production and product development teams,Schleuter earned her first leadership role as a manager.Eager to take on greater responsibility,she applied to the Leaders for Global Operations Boeing Sponsorship Program offered in partnership with the Massachusetts Institute of Technology.This competitive program consists of a two-year,on-campus dual masters degree program followed by a six-year rotation to help employees gain the experience needed for executive leadership.Its one of the many ways we develop our next generation of leaders.Boeing provides full-time salary,housing allowance,a stipend for incidentals,and fully paid tuition.Degrees in hand,Lisa is now back in the Puget Sound region to begin the rotation phase of the program,as the production engineering manager for the new 777-8 Freighter fuselage.Learning To Meet Needs and InterestsWe offer extensive in-person,on-demand and virtual learning resources.We strive to make opportunities easily accessible to help employees strengthen their skills and apply what theyve learned to deliver business outcomes.Our Career Foundation Programs in areas like engineering,IT,data analytics and finance functions accelerate the technical growth and leadership of college graduates and early career employees.These rotations enable teammates to explore a variety of roles and programs across our company,unlocking career-building opportunities and establishing a network of peers and mentors.Leadership DevelopmentWe empower our leaders with the skills they need at key transition points in their career.Aspiring leaders,new managers and senior executives can participate in development programs that refine their abilities to inspire excellence in others and prepare them to take on increased leadership roles.We offer both formal and informal mentoring programs to connect leaders and mentees.We want our people to think about working at Boeing as a lifetime endeavor full of opportunities to achieve their personal and professional goals.Get a Degree on UsOur industry-leading tuition assistance program,Learning Together,pays tuition and eligible expenses toward select undergraduate and graduate degrees,professional certifications,individual courses and certificate programs.We have invested more than$1.8 billion since the program launched in 1998,and we continue to invest more than$70 million annually in employee tuition assistance.We support up to$25,000 per year for graduate degree programs and up to$15,000 per year for undergraduate programs.There is no limit on tuition assistance for eligible STEM-related programs.On average,we provide tuition assistance to 10,000 employees each year.“I will lead a team of production engineers to determine the optimal way to build the airplane efficiently and with first-time quality.Im excited for whats next.”Lisa Schleuter 777-8F Production Engineering ManagerExplore employee learning and development opportunities at BoeingLisa Schleuter,Commercial Airplanes 777-8F production engineering manager,completed a dual masters degree program.$70M invested annually in employee tuition assistance33The Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply ChainCommunityReporting&DisclosuresClimate&EnvironmentIn innovating for a better tomorrow,we consider how every product we build,deliver and service affects our world.We strive to operate sustainably and efficiently.We are committed to working with our suppliers to source responsibly,create economic opportunities and drive industry sustainability progress.Employees fueling Boeing ecoDemonstrator with a SAF blend.34The Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply ChainCommunityReporting&DisclosuresBoeing considers climate change to be an urgent issue.We support the goals of the Paris Agreement and encourage our value chain to do the same.Our company achieved net-zero carbon emissions(Scope 1 and Scope 2)at manufacturing and other work sites,and in business travel(Scope 3,Category 6)in 2023 for the fourth consecutive year,by expanding conservation and renewable energy procurement while securing third-party-verified offsets for the remaining greenhouse gas(GHG)emissions.Boeing strives to reduce operational GHG emissions,both during times of growth and during times of challenge.We detail our GHG strategy for Scope 1 and Scope 2 in the next section,which aligns to a 1.5 degrees Celsius pathway in support of global climate goals.We provide further details about our Scope 3 GHG emissions strategy,focusing on Use of Sold Products,starting on Page 42.Climate Strategy and PlanningClimate risks and opportunities inform our strategy,as evidenced by our commitments and actions in our products and operations.Moreover,the commercial aviation industry recognizes its environmental responsibilities and was one of the first global industrial sectors to have a long-term plan to tackle climate change.The aviation and aerospace manufacturing industries together with Boeing face significant climate change-driven risks and opportunities as well as the need to decarbonize for sustained long-term growth.We believe that safe and sustainable aviation is an imperative for our commercial and governmental customers,employees and communities.We are operating in a global environment with human,technological and natural events adding challenges to our infrastructure,business operations and long-term strategy.Now more than ever,we must identify and develop strategies Addressing Climate ChangeBoeings ecoDemonstrator program takes promising technologies and tests them to solve real-world challenges for airlines,passengers and the environment.35The Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply ChainCommunityReporting&Disclosuresthat minimize the consequences and impact of potential threats or disruptions.We believe our business strategy is resilient to a changing climate,given sustained focus and investment in our products,services and operations,as well as enhanced risk management practices for global operations.Environmental assessments have informed our due diligence as we consider property transactions and the design of future products and infrastructure.For more information about our approach to climate change,see our TCFD Index.GHG Strategy for OperationsBoeings decarbonization strategy across its manufacturing sites and other operations facilities prioritizes avoiding and reducing direct emissions first via efficiency improvements,conservation and renewable energy procurement.Third-party verified offsets were used in 2023 and since 2020 to mitigate Scope 1 and Scope 2 GHG emissions Boeing could not first avoid,reduce or replace.We remain committed to supporting the commercial aviation industrys net zero 2050 ambition,which starts inside our four walls.To achieve our sustainable operations goals related to GHG,we actively monitor emissions,fuel use and energy efficiency and track our performance as we increase adoption of renewable energy sources and implement energy efficiency improvements.As part of Boeings business continuity program,we also monitor the length and severity of business interruptions due to climate or weather-related events.The scope of monitoring includes damaging weather and natural disasters,as well as public health crises,and helps us understand how to increase resiliency in light of a changing climate.Enterprise GHG emissions from operations are calculated after the conclusion of the reporting year.However,the emissions from natural gas and electricity procurement at Core Metric Sites,which represent the majority(70%)of Boeings GHG footprint from operations,are calculated and monitored on a monthly basis through the use of utility bills and are continuously validated and updated throughout the reporting year.The emissions factors for these energy sources are validated at least annually and updated when appropriate following guidance from the World Resources Institute GHG Protocol.The energy data and emissions factors are verified as part of a third-party limited assurance process.For more information about our GHG reporting,see the GHG Emissions Supplement.Boeings GHG management team tracks performance,procures energy and,with other Enterprise and site teams,initiates Wild Horse Wind and Solar Facility in central Washington state generates power for Boeing facilities.36The Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply ChainCommunityReporting&Disclosuresenergy and emissions reduction projects across the company.This proactive approach supports Boeing in achieving the sustainable operations goals we have set for GHG emissions reduction,energy procurement and energy conservation,see Page 53 to learn more about our progress.Avoid First,Remove Second StrategyOur strategy is to prioritize avoiding Scope 1 and Scope 2 GHG emissions in the first place,including through increasing use of renewable electricity and SAF in our operations,as the most direct way to reduce our carbon footprint.For emissions that are hard to abate,we plan to increase focus and investment in permanent carbon removal.For the past four years,we have voluntarily offset our Scope 1 and Scope 2 GHG emissions across manufacturing sites and other operations facilities,in addition to our Scope 3,Category 6 Business Travel emissions.Our 2023 offset purchases were guided by the following principles:Certified by top global verification organizations that ensure the offsets meet minimum criteria of being measurable,additional,independently verified and uniquely numbered and tracked on a registry with a diversified portfolio by geography and project type to reflect global company presence.Use of aviation-sector Carbon Offsetting and Reduction Scheme for International Aviation(CORSIA)credits for all offsets covering business travel(air and rental car).In 2024,Boeing will evolve from using offsets for our Scope 1 and Scope 2 GHG emissions to support our longer-view carbon management strategy of avoid first,remove second.To“avoid first,”we will continue to prioritize preventing carbon emissions from getting into the atmosphere in the first place by reducing our reliance on fossil fuels within operations by continuing to invest in renewable energy and energy-efficient infrastructure such as heating and cooling systems and LED lighting in factories and encouraging resource conservation.To“remove second,”we will diversify our investments in permanent carbon removal to strengthen our offset portfolio over time and support important tech development,which will support the long-term success of the voluntary carbon market.Boeing plans to continue to offset our business travel emissions,over time increasing the propor-tion of permanent removals.We will also continue to report our Scope 3,Category 11 GHG emissions(Use of Sold Products)to our stakeholders.As we continue efforts to decarbonize aviation,increase renewable energy procurement and focus on conservation behaviors in our operations,traditional carbon offsets,including nature-based projects,will continue to play an important role for Boeing and its customers.Image of the Earth from a Boeing airplane.37The Boeing Company 2024 Sustainability&Social Impact Report37The Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply ChainCommunityReporting&Disclosures2023 HighlightsBoeing and Zero Petroleum to work together to advance SAF.Launched its SAF Dashboard to track announced SAF capacity.(Credit:Jake Hanson)Launched public version of the Boeing Cascade Climate Impact Model.Boeing and U.S.government launched initiative to advance SAF among APEC economies.Wisk completed first-ever public demonstration flight at EAA AirVenture.(Credit:Wisk)Led the SAF compatibility testing with IAEG.Airplane arrived at Boeing site for X-66 modification.Helped launch UAE-based Research Consortium for Renewable and Advanced Fuel Technologies for Aviation.(Credit:Emirates)Joined the Corporate Coalition for Innovation&Technology toward Net Zero(CCITNZ),to learn and apply breakthrough decarbonization technologies.(Credit:GE Aerospace)737-10,DC-8 team up to test sustainable fuels.Watch the videoProvided technical expertise on the first 100%SAF flight across the Atlantic on a commercial jetliner a Boeing 787 Dreamliner.(Credit:Virgin Atlantic)Completed Everett Main Factory LED light conservation,converting 73 acres of manufacturing space to high-efficiency LED lighting.Masdar and Boeing joined forces to accelerate the SAF industry in the UAE and globally.(Credit:Masdar)Boeing,NASA and others conducted flight tests to measure how SAF affects contrails and non-carbon emissions using a 737-10 destined for United Airlines.MarchAprilMayJuneJulyAugustOctoberNovemberDecemberJanuaryFebruaryExpanded ecoDemonstrator flight testing with“Explorer”airplanes,announces 2023 ecoDemonstrator testing.In the 2023 Battle of the Buildings competition,employees took more than 1 million 60-second sustainable actions.Collaborated with Emirates and GE Aerospace on first 100%SAF flight test in the region.(Credit:Emirates)Selected to lead NASAs Sustainable Flight Demonstrator Program.Awarded project funded by the Japan government to explore feasibility of integrating hydrogen fuel cell systems into an airplane.Developed a SAF jet reference fluid,a significant milestone toward our commitment to deliver 100%SAF compatible airplanes by 2030.Convened aviation,energy,finance and policy to have discussions on reducing aviations emissions at first global Sustainable Aerospace Together Forum.Placed agreements to purchase 5.6 million gallons(21.2 million liters)of blended SAF to support its U.S.commercial operations.Mobilized suppliers to study SAF efforts on airplane materials and components.Watch the videoWorking with GE Aerospace,Aurora Flight Sciences completed baseline flight testing for NASAs Electrified Powertrain Flight Demonstration.(Credit:GE Aerospace)38The Boeing Company 2024 Sustainability&Social Impact ReportPresident&CEO LetterBusiness ApproachSafety&QualityPeople&InclusionClimate&Environment Addressing Climate Change 2023 Highlights 2023 Global Collaborations Decarbonizing Aerospace,Together Sustainable Operations Sustainable Product Life Cycle Responsible Supply ChainCommunityReporting&Disclosures2023 Global CollaborationsAmericasICAO Assistance,Capacity-building and Training for Sustainable Aviation Fuels MembershipCascade Reception for ICAO Council MembersZero Impact Aviation Alliance(ZIAA)Boeing Sustainable Aerospace Together ForumAsia-Pacific Economic Cooperation (APEC)CEO SummitBoeing 2nd Brazil Sustainability ForumWorld Economic Forum First Movers Coalition(WEF FMC)SAF WorkshopEuropeCascade Reception with EU StakeholdersParis Air ShowRoundtable on Sustainable Biomaterials(RSB)Annual ConferenceFlight 100Jet Zero Council Sheffield University Energy Innovation Centre(EIC)OpeningWorld Energy Counc
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?Panasonic GroupAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20231About the Sustainability Data Book 2023Panasonic Group reports on sustainability through our Sustainability page on our website and this Sustainability Data Book.Regarding environmental activities,we select main topics for this report from the content on the website such as our policy,approach,and performance data.For specific examples of initiatives,and more details generally,please refer to the Panasonic Sustainability website.Also,top management insights about sustainability are disclosed in our Annual Report(an integrated report).WEB Sustainability Site:https:/holdings.panasonic/global/corporate/sustainability.htmlWEB Annual Report:https:/holdings.panasonic/global/corporate/investors/library/annual-report.htmlScope of ReportingExcept when noted otherwise,results are calculated based on the following:Period:Fiscal 2023(April 1,2022 to March 31,2023)Organization:Panasonic Group(Panasonic Holdings Corporation and its consolidatedsubsidiaries),not included:Ficosa International S.A.,a consolidated subsidiary since April 2017 and its consolidated subsidiaries.In this data book,“the company”means Panasonic Holdings Corporation,and“we”,“Panasonic”,and“the Group”mean the Panasonic Group mentioned above.Data:Data concerning manufacturing business sites cover all the manufacturing business sites(totaling 227)that constitute the Panasonic Groups environmental management systemEnergy data and CO2 emissions data from energy sources are added for non-manufacturingsites(72)Data for which the fiscal year and region are not expressly stated are global results for fiscal2023AssurancesMain data relating to the environment have been assured by LRQA Limited.For details on the indicators covered by the assurance,please refer to the Independent Assurance Report on P148 Assured indicators are marked with.Reference GuidelinesReporting requirements of the GRI StandardsJapanese Ministry of the Environment,“Environmental Reporting Guidelines 2018”Structure of Reporting on Sustainability InitiativesPanasonic Group siteWEB Group CEOs Messagehttps:/holdings.panasonic/global/corporate/about/message.htmlWEB The Basic Business Philosophy of the Panasonic Grouphttps:/holdings.panasonic/global/corporate/about/philosophy.htmlWEB Panasonic Group Code of Ethics&Compliancehttps:/holdings.panasonic/global/corporate/about/code-of-conduct.htmlWEB Corporate Governancehttps:/holdings.panasonic/global/corporate/about/group-companies/phd/corporate-governance.htmlSustainability SiteInformation for InvestorsProvides comprehensive reports and information about the companys initiatives,attitudes and annual activities concerning Environmental,Social and Governance topics.Sustainability DatabookPrimarily reports on themes and data of particularly high interest to stakeholders.Mainly intended for investors.Releases information on business strategy,financial situation,and non-financial information.Annual Report(an integrated report)?Panasonic Group2023 edition will be published soonESG themes (Excerpts,links,etc.)1contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20232About the Sustainability Data Book 2023.1Corporate Profile.3Our Approach to Sustainability Management.4The Promotion of Sustainability Management.5Environment.9Policy .9 Mid-term to Long-term Environmental Vision .11Environmental Governance .23Environmental Management Systems .24 Environmental Risk Management .25 Response to TCFD .27 Strategic Resilience through Scenario Analysis .30 Our Businesses Contribution to Carbon Neutrality .34Environmental Information Systems .35 Overview of Environmental Impact and Environmental Accounting .36Eco-conscious Products and Factories .39 Reducing CO2 Emissions in Factories .41Resource .45Biodiversity Conservation .55 Water Resource Conservation .60 Chemical Substance Management .62Collaboration Across the Supply Chain .69 History of Environmental Activities .71Respect for Human Rights .74Policy.75Responsible Executive and Framework .75Internal Training&External Communications.75Human Rights Due Diligence.76Major Initiatives.76Grievance Mechanism.79Participation in International and Industrial Partnerships.79Employee Well-being.80Policy.80Responsible Executive and Framework .81Key Groupwide Indicators.81Implementation of Basic Business Philosophy.82Work in safe,secure and healthy state .83Work with a sense of fulfillment.89Work together by giving full play to all individuality.92HR Strategies in Investment Areas.99Contacts for Whistleblowing and Seeking Consultation.100Human Resources Data.101Responsible Supply Chain .102Policy.103Responsible Executive and Framework .103Supply Chain Due Diligence.103Initiatives for a Harmonious Relationship with the Environment.104Responsible Minerals Procurement.104Internal Training and External Awareness-Raising.105Systems for Whistleblowing and Seeking Consultation.106Raising Product Quality Levels and Ensuring Product Safety .107Policy.107 Training.108 Responsible Executive and Framework .108Internal Company Rules Concerning Product Labeling.109Product Security.109 Major Accidents and Responses.110List of Awards .111AI Ethics.112Policy.112Promoting Organization.113Education.113Risk Assessment.113External Cooperation.113Consulting and Reporting Mechanisms .113Customer Relations.114Policy.114Responsible Executive and Framework .115Initiatives Related to Improving Customer Satisfaction.116Responsible Publicity and Advertising.119Policy.119Principles concerning Advertising Activities.120Responsible Executive and Framework.120Promoting Fair and Honest Publicity and Advertising .120Intellectual Property.121Policy.121Responsible Executive and Framework .122Major Initiatives.122In-House Education and External Consumer Awareness-Raising.123Consultation&Whistle-blowing.123Evaluations.123Community Relations.124Basic Policy.124Management System of Corporate Citizenship Activities.124Policy.125Responsible Executive and Framework .126Employee Participation and Supporting Systems.126Performance Evaluation of Corporate Citizenship Activities.127Spending on Corporate Citizenship Activities in fiscal 2023.129Risk Management.130Policy.130Risk Management System.130Responsible Executive and Framework .131Basic Framework.132Education and Enlightenment for Our Employees.135Reporting/whistleblowing mechanism(external and internal).135Policies on BCM and BCP.135Business Ethics.137Policy.137Responsible Executive and Framework .138Internal Communication and Training .138Whistleblowing System.138Performance Evaluation.139Compliance Programs.140Compliance Risk Assessments.142Ensuring Transparency of Political Contribution Funds.142Trade Compliance.142Tax Policy .142Cyber Security and Data Protection.143Cyber Security.143Data Protection.144External Recognition.146Independent Assurance Statement by LRQA Limited.148GRI Standard Contents Index.150Contents2contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20233Corporate ProfileCompany Name:Panasonic CorporationCompany Headquarters:1006 Oaza Kadoma,Kadoma City,Osaka 571-8501,JapanTel: 81-6-6908-1121Incorporated:December 15,1935Founded:March 7,1918President:Yuki KusumiCommon Stock:259.3 billion yenFY2022 Financial ResultNet sales 8,378.9 billion yenOperating profit 288.6 billion yenProfit before income taxes 316.4 billion yenNet profit attributable to Panasonic Corporation stockholders 265.5 billion yenNumber of Employees 233,391Main Products and ServicesThe Panasonic Groups major products and services,by segment,are as follows:LifestyleRefrigerators,microwave ovens,rice cookers,washing machines,vacuum cleaners,personalcare products,air-conditioners for residential,and commercial use,heat pump-type hot water heaters,ventilation,perflation and airconditioning equipment,air purifiers,air purifier/sterilizers,freezing or refrigerating showcases,lighting fixtures,lamps,wiring devices,solar photovoltaic systems,fuel cells,compressors,bicycles,nursing care services AutomotiveAutomotive-use infotainment systems,head-up displays,automotive speakers,automotive switches,advanced driver assistance systems(ADAS)and related devices,systems and devices for xEVs,Interior rearview mirrorsConnectAircraft in-flight entertainment systems and communications services,electroniccomponents-mounting machines,welding equipment,projectors,professional AV systems,PCs and tablets,solutions for various industries,installation/operation/maintenance services,supply chain management softwareIndustryRelays,switches,power supplies,touch panels,motors,sensors,laser markers,capacitors,inductors,resistors,circuit board materials,semiconductor device materials,molding compounds,LCD panelsEnergyCylindrical lithium-ion batteries for in-vehicle use,dry batteries,primary/secondary lithium batteries,nickel-metal hydride batteries,lithium-ion batteries,storage battery modules/systemsOther(businesses not included in reportable segments)TV,digital camera,video equipment,audio equipment,telephone,intercom,kitchen&bathroom fittings,interior products,exteriors as of March 31,2023Lifestyle 44%Energy 12%Industry 14%Connect 14%Automotive 16%(FY2023)China Asia Europe Americas Japan (FY2023)39$%Japan China and Northeast AsiaSoutheast Asia and PacificEuropeCISNorth America(FY2023)36.9.5%7.6%Latin America 1%4.9.9.2%India,South Asia,Middle East and AfricaSales by Segment Sales by RegionEmployees by Region3contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20234Our Approach to Sustainability ManagementPanasonics Sustainability ManagementThe Panasonic Groups mission is to realize an ideal society offering material and spiritual affluence.This stems from the notion of achieving prosperity both in matter and mind,which is the ideal state of society that our founder,Konosuke Matsushita,envisioned and pursued throughout his life.In 1932,Konosuke Matsushita defined 25 years as one phase and declared the companys resolve to help realize an ideal society over 10 phases or 250 years.Since then,in pursuit of this mission,we have been dedicated to peoples well-being and material abundance and worked to solve social challenges by offering a wide variety of products to the world.However,todays society falls short of the ideal state that our founder aspired to.Many societies,especially those in developed nations,are replete with material goods.Nevertheless,we face various serious social issues,including rapidly worsening environmental destruction and depletion of natural resources,shifts in demographics such as worldwide population growth,and a declining birthrate and aging population in advanced countries.Therefore,there is great concern that our children and grandchildren,and our descendants,including those in 2181,the final year of the Groups 250-year plan,may not be able to enjoy lives of affluence both in matter and mind.In order for us at Panasonic to continue contributing to the achievement of a sustainable society,we must ensure our continued existence as a company.Therefore,from the perspective of the effect on our finances as well as society,we have identified important opportunities and risks related to sustainability as priority issues(materiality).Based on this approach,we will work to enhance sustainability management both by creating new business opportunities and reducing risks.The Panasonic Group has also defined the following two highest priorities as a Group-wide strategy.In order to accomplish the first task of contributing to solving global environmental issues,we have been promoting initiatives under Panasonic GREEN IMPACT,a long-term environmental vision established in the fiscal year that ended in March 2023.The second task involves helping our customers stay healthy,safe,and comfortable throughout their lives,for which we will demonstrate the Groups collective strengths with the aim of becoming a Lifestyle Solutions Provider that can propose value tailored to each of its diverse customers.The ideal society we at Panasonic pursue cannot be achieved through our efforts alone.We can realize it only through engagement with our stakeholders,including customers,business partners,shareholders,employees,and communities.As a public entity of society,the Panasonic Group believes that achieving growth and development alongside all stakeholders is the only way to reach this goal.This idea persists unchanged to this day,even as time has passed and society has progressed.In fact,we believe that this back-to-basics management approach will gain further significance as a multitude of global social issues worsen,and the international community strives to achieve a sustainable society through initiatives like the SDGs(Sustainable Development Goals).The Panasonic Group will continue providing value to society and customers into the future through its business activities to help all stakeholders live their best,thereby enhancing the Groups value.Yuki KusumiGroup CEO4contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20235The Promotion Structure of Sustainability Management(as of Aug.2023)The Advancement of Sustainability ManagementIn April 2022,the Panasonic Group transitioned to an operational company system(holding company system)in order to thoroughly implement autonomous responsible management and strengthen the competitiveness of our business from a medium-to long-term perspective.Each Operating Company,which will be spun off as a result of the transition to an operating company system,will be able to make decisions quickly in response to changes in the external environment and flexibly design systems according to business characteristics,etc.,with greatly expanded authority and responsibilities,thus significantly strengthen our competitiveness.The holding company monitors non-financial indicators,or competitiveness KPIs,to enhance the competitiveness of each Operational Company.In addition,various committees were set up to deal with the groups major issues,and in these committees,we openly discuss and set the direction for specific measures,actively support the strengthening of the competitiveness of each Operational Company,and develop growth strategies from a Group-wide perspective.Through those activities,we strive to improve corporate value as a group.The Promotion of Sustainability ManagementBoard of DirectorsOperating Companies and other group companiesGroup CEOGroup Management Meeting/PHD Strategy MeetingSupervision/Decision-makingControl and empowermentDiscuss/set the direction/report on Groups mid-to long-term strategy,important initiatives implemented by the Company and Operating Companies,and material risksGroup CxOGovernance,Group Strategy,Business Support by functional axis of Accounting&Finance,HR,Legal Affairs,etc.Sustainability Management Committee,Group DEI Promotion Council,PHD ERM CommitteeReportReportReportControlControl Group Management Meeting:Chaired by Group CEO,consisting of about 20 Executive membersincluding the presidents of Operating Companies,heads of each function(held monthly in principle)PHD Strategy Meeting:chaired by Group CEO,consisting of ca.10 Executive members,including thehead of functions such as HR,accounting,legal,and others(held twice a month in principle)PHD:Panasonic Holdings Corporation ERM:Enterprise Risk Management5contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20236MaterialityPurpose of identifying materialityWe have identified important opportunities and risks related to sustainability as priority issues(materiality)from the two perspectives of“financial effects on the Company”and“impact on society.”We aim to improve our sustainability management by promoting materiality initiatives,creating new business opportunities,and lowering risks.Materiality will be reviewed as appropriate based on changes in the business environment and dialogues with stakeholders.Process of identifying materialityFrom a list of items that included demands from society and foreseeable future challenges,we selected issues that could represent opportunities and risks for the Group.Next,we assessed them from the two perspectives of the Group and its stakeholders,and 11 priority issues were extracted.We confirmed the validity of these analysis processes and the priority issues we extracted through dialogue with external experts.The materiality was identified after deliberation at the meetings of the Groups Sustainability Management Committee,the Group Management Meeting,and the Board of Directors of the Company.Materiality assessment resultsWe assessed the level of importance of each item from the perspective of the Group and its stakeholders and identified 11 material issues.Note:Some of the materiality items are similar to the names of“Group Major Risks/PHD Major Strategic Risks”determined by risk management activities;however,due to different objectives and identification processes,their corresponding initiatives are partly different.For more details,see“Risk Management”chapter(on page 130).Extract sustainability-related itemsAmong current and future sustainability issues,selected issues that could represent opportunities and risks for the Group(based on analysis of trends in international standards and regulations,stakeholder concerns,megatrends,etc.)Assess importance of itemsAssessed the level of importance of“financial effects on the Company”and“impact on society”for each selected issue from the perspectives of the Group and its stakeholdersSelect priority issuesBased on the assessment results in STEP 2,extracted 11 priority issuesValidate processes and resultsConsulted sustainability experts on the validity of the analysis processes and the priority issues we extractedDeliberate and identifyIdentified materiality after deliberation at the meetings of the Sustainability Management Committee,the Group Management Meeting,and the Board of Directors of the CompanySTEP1STEP2STEP3STEP4STEP5Importance of impact on societyPreparedness forinfectious diseases andpandemicsGlobal warming andresource depletionBusiness integrityCorporategovernanceEmployee well-beingSupply chain managementRespect forhumanrightsPreparedness forgeopolitical risksPreparedness fornatural disastersHighestpriority issuesPriorityissuesCyber securityEach customerslife-long health,safety and comfortImportance of fnancial effects on the Company6contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20237MaterialityMain initiatives TargetsReporting on related itemsHighest priority issuesGlobal warming and resource depletionPanasonic GREEN IMPACT Expansion of automotive batteries for EVs,Air to Water heat pump(hot-water and heating system with heatpump),and hydrogen fuel cells Environmental energy technology innovation(water electrolysis,perovskite solar cells,DERMS)Reduction of in-house CO2 emissions(expansion of zero-CO2 factories,expansion of energy-savingequipment)Expansion of circular economy businesses and products CO2 reduction impact of 300million tons(by 2050)Net-zero CO2 emissions from allfactories(by 2030)Waste recycling ratio of 99%ormore(by 2024)Sustainability Data Book 2023 Environment P9Sustainability site EnvironmentEach customers life-long health,safety and comfort As a“lifestyle solutions provider”that delivers value tailored to each customer,we combine our diverse customer touchpoints with digitaltechnology to contribute to each customers life-long health,safety and comfortBusiness integrity Promoting understanding of and confirming compliance with the Panasonic Group Code of Ethics&Compliance and internal rules,andcomplying with relevant laws Dissemination and appropriate operation of the whistleblowing system Protection and utilization of our intellectual property and respect for the intellectual property of third partiesSustainability Data Book 2023 Business Ethics P137 Intellectual Property P121Supply chain management Elimination of waste and stagnation in the supply chain Strengthening of supply chain by promoting multiple suppliers and review of manufacturing sitesSustainability Data Book 2023 Risk Management P130Employee well-being Creating a safe,secure,and healthy workplace(thorough implementation of safety and compliance,promotion of health initiatives)Encouraging employees self-motivated endeavors and supporting their self-determined career formation(Allowing side jobs and provide opportunities for skill development,providing wider options for working timeand place to work remotely,and personnel exchanges in the Group through open recruitment)Promoting DEI(Diversity,Equity&Inclusion)(top management commitment,creating an inclusive work environment,support for each individual)Eradication of serious workplaceaccidents and injuries Global top level in the EmployeeOpinion Survey score categoriesof employee engagement andemployee enablement(by 2030)Sustainability Data Book 2023 Employee Well-being P80Corporate governance With the transition to a holding company system,significant authority was delegated to the operating companies,with officers of thePanasonic Holdings Corporation participating in the management of the operating companies as directors Linkage of non-financial KPIs to executive remunerationCorporate information site Panasonic Holdings Corporation“Corporate Governance”Respect for human rights Promoting initiatives based on the Panasonic Group Human Rights and Labour Policy Implementing human rights due diligence based on global standards for the Groups own operations and in the supply chain Promotion of engagement with stakeholders and appropriate disclosure of informationSustainability Data Book 2023 Respect for Human Rights P74 Responsible Supply Chain P102 AI Ethics P112Cyber security Centralization of common cyber security functions across manufacturing,information systems,and product areas to strengthen countermeasuresduring normal times and incident responses during emergencies Gradual expansion of scope of cyber security countermeasures,including to supply chainsSustainability Data Book 2023 Cyber Security and Data Protection P143Priority issuesPreparedness for geopolitical risks Monitoring of international situation and trends in policies,laws,and regulations in each country and geographic region to ascertain the impacton the Groups business and respond in a timely manner Closely monitoring and responding to changes in the business environment caused by economic security policies in each country in terms ofbusiness threats and opportunitiesSustainability Data Book 2023 Risk Management P130Preparedness for infectious diseases and pandemics Formulating Group policies for each country based on analysis of its government policies,regulatory trends,infection conditions,etc.,and settingand implementing detailed rules at each business sitePreparedness for natural disasters Enhancement of stockpiling and drills during normal times and establishment of a safety confirmation system;establishment of a GroupwideEmergency Response Headquarters system in the event of an emergencyExamples of initiatives to address priority issuesIncrease positive impact Mitigate negative impact7contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityAbout the Sustainability Data Book 2023Sustainability Data Book 2023 ContentsCorporate ProfileOur Approach to Sustainability ManagementThe Promotion of Sustainability ManagementExternal RecognitionIndependent Assurance Statement by LRQA LimitedGRI Standard Contents IndexBasicsSustainability Data Book 20238Promoting Initiatives Based on Dialogues with StakeholdersPanasonic Group conducts dialogues with its wide range of stakeholders around the worldincluding customers,investors,suppliers,governments,industry bodies,NPOs,NGOs,local communities,and employeeson various aspects of its business.The company incorporates the opinions it receives into its business activities and product creation.Respecting Applicable Legislation,Global Standards,Norms,Guidlines,and Initiatives.Panasonic Group conducts its business based on applicable legislation,as well as global standards,specifications,norms,guidelines,and various initiatives.The Panasonic Group signed the United Nations Global Compact.These concepts are reflected in the Basic Business Philosophy and the Panasonic Group Code of Ethics&Compliance that form the guidelines for the companys business activities.In addition,Panasonic Holdings Co.,Ltd.has joined the Responsible Business Alliance(RBA)as the Panasonic Group in order to strengthen CSR procurement initiatives in the supply chain.PanasonicGroupCustomersInvestorsLocalcommunitiesEmployeesSuppliersNationalgovernmentsIndustryorganizationsNPOs/NGOsMajor StakeholdersGlobal Standards,Norms,Guidelines and InitiativesOECD Guidelines for Multinational Enterprises on Responsible Business ConductISO26000UN Global CompactCode of Conduct of RBA(Responsible Business Alliance)Japan Business FederationCharter of Corporate BehaviorGlobal Reporting Initiative(GRI)StandardsTCFD(Task Force on Climate-related Financial Disclosures)RE100Race To ZeroUniversal Declaration of Human Rights ILOCore Labour StandardsUNGuiding Principles on Business and Human Rights8contentshomenextpageprevbackHuman RightsEnvironmentEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 20239Contributing to society has been the management philosophy for the Panasonic Group ever since its founding,and we have been taking measures against pollution since the 1970s.We announced the Environmental management basic policy in 1991,and the Environmental Statement in 1993,clarifying our approaches to address global environmental issues as a public entity of society.Since then we have been carrying out initiatives including matters on global warming prevention and resources recycling corporate-wide,aiming to attain a sustainable,safe,and secure society.After the completion of the Green Plan 2010 which was established in 2001,the Green Plan 2018 was established in 2010 to clarify our targets for fiscal 2019(from April 1,2018 to March 31,2019)as well as an action plan for all employees in order to achieve the targets.The Green Plan 2018 will continue our initiatives in five areas:CO2 reduction,resources recycling,water,chemical substances,and biodiversity.In 2013,we introduced a new brand slogan,“A Better Life,A Better World,”aiming to realize a better life for all its customers,and is promoting environmental initiatives as an important element in achieving that goal.Based on this,the Green Plan 2018 was revised in 2013,followed by the newly-established Environmental Action Guideline.Furthermore,in response to rising demand by the society for CO2 reductions following the 21st session of the Conference of the Parties(COP21)of the United Nations Conference on Climate Change,and to the need to make changes to our business structure,including growth in the automotive and B2B businesses,the Plan was revised again in 2016.Additionally,we formulated the Environment Vision 2050 in 2017 to achieve“a better life”and“a sustainable global environment,”aiming for a society with clean energy and a more comfortable lifestyle.Under the Vision,through the development of products,technologies,and solutions relating to energy creation,storage,saving,and management,we will work towards creation and more efficient utilization of energy which exceeds the amount of energy used.Policy9contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202310Environmental PolicyEnvironmental StatementFully aware that humankind has a special responsibility to respect and preserve the delicate balance of nature,we at Panasonic acknowledge our obligation to maintain and nurture the ecology of this planet.Accordingly,we pledge ourselves to the prudent,sustainable use of the earths resources and the protection of the natural environment while we strive to fulfill our corporate mission of contributing to enhanced prosperity for all.Environmental Action GuidelineToward achieving a sustainable society,we will strive to develop our business through the creation of environmental value.For this purpose,we will address environmental challenges through our business activities and will expand our environmental initiatives based on collaboration with stakeholders.(1)Initiatives to address environmental challenges-We will reduce CO2 emissions through production activities and products/services.-We will work to efficiently use resources by pursuing Recycling-oriented Manufacturing.-We will conserve water resources through efficient use of water and prevention of contamination.-We will reduce the impact of chemical substances on human health and the environment.-We will consider and conserve biodiversity.(2)Initiatives based on collaboration with stakeholders-We will provide products and services that create environmental value for customers with our technical strengths.-We will expand our environmental contributions with our partner companies.-We will deepen communications with local communities and work as a team to address environmental challenges.Environmental Action PlanGREEN IMPACT PLAN 2024(see pages 12-13)We strive to grow and develop our business through the creation of environmental value for customers with our technical strengths while each and every employee follows the Environmental Policy to address environmental challenges.Therefore,collaboration with stakeholders including our partners is essential.We will continue to sincerely work on environmental sustainability management through further collaboration with stakeholders.We announced Green Plan 2021 in 2019,following completion of Green Plan 2018,with a focus on key issues for achieving the Panasonic Environment Vision 2050,and we have been working on the issues.On January 2022,we announced Panasonic GREEN IMPACT,our long term environment vision,founded based on Panasonic Groups belief that the top priority action for the entire Group should be focused on global environment issues including climate change,which is a pressing task for the entire world.The Panasonic GREEN IMPACT is the result of a shift from the Panasonic Environment Vision 2050,with the aim of achieving carbon neutrality together with creating impacts from actions(ACT)that reduce CO2 emissions from Panasonic Group as well as from various sectors of the society.To achieve Panasonic GREEN IMPACT,we are working on initiatives under our newly developed GREEN IMPACT PLAN 2024.10contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202311What we should be in the future as the Panasonic Group and solution for global environmental issuesThe true mission of the Panasonic Group is to achieve both of material and spiritual prosperity,in other words an ideal society with affluence both in matter and mind.that is pursued by our founder Konosuke Matsushita in his entire life.Roughly 90 years ago in 1932,the founder declared his ambition to create an ideal society over a span of 250 years,across ten generations.Since then,we have carried on his ambition and made our contribution through businesses to solve the social issues of the times and to work for the happiness of each customer.At present,the biggest challenge that prevents us from achieving our mission is against global environmental issues.We must avoid the situation at any cost where our planet is no longer habitable in approx.160 years which is the year of reaching our goal for achieving our mission,far from bringing happiness to our descendants.In order to hold back environmental pollution,depletion of finite resources,and the most serious and urgent issues of global warming as early as possible,we must achieve net zero total CO2 emissions throughout society as a whole,as soon as possible.In our determination to play a major role in contributing to this goal and lead to solve the issues without fail,we announced“Panasonic GREEN IMPACT(PGI)”,the Groups long-term environmental vision in January 2022,and we have been accelerating our initiatives to contribute to reduction of emissions from our business activities,as well as from our customers and from society.Panasonic GREEN IMPACTPGI was established with the following thoughts to stop global warming.Addressing the scale of both of the Panasonic Groups responsibility that is to reduce emissions from our business activities and opportunity that is to contribute to avoiding emissions for society,by accumulating each of our diligent efforts(Act),we aim to achieve carbon neutrality(CN)through reducing CO2 emissions from our business activities and from society and working in concert with society.With the aim of creating a carbon neutral society by 2050,we have developed a strategy for each of our business fields backcasted from the social reforms to be implemented by 2030.In April 2022,with a classification of PGI into OWN IMPACT,signifying fulfillment of own responsibilities,CONTRIBUTION IMPACT,referring to opportunities to contribute,and FUTURE IMPACT,along with INFLUENCE( )that means the positive ripple effects on our customers and society,we announced our plan to create an impact by 2050 from our emissions reductions of more than 300 million tons*2 in total for,and:that is approx.1%of the global CO2 emissions of 31.7 billion tons*1 today.This was followed by our milestone announcement in July 2022,to achieve net zero emissions for all of our operating companies(Scope 1 and 2 in)and to create avoided CO2 emissions of approx.100 million tons(initiatives in),together with establishment of“the GREEN IMPACT PLAN 2024”,our action plan for 2022-2024.*1 2020 energy-derived CO2 emissions(Source:IEA)*2 The emissions factor for the size of our contribution to reducing CO2 is based on the 2020 emissions level.Mid-term to Long-term Environmental Vision OWN IMPACTWe plan to achieve net zero emissions from all of our value chain(110 million tons*3),as well as a decarbonization effect on society*4.Net zero will be achieved for total emissions from our business activities(Scope 1,2,and 3),including from our factories(Scopes 1 and 2)by fiscal 2031,for emissions in parts and materials production(Scope 3,Category 1),and for emissions in product use(Scope 3,Category 11).Efficient reduction of emissions can become the driving force behind our competitiveness.*3 Fiscal 2021 actual results*4 CO2 emissions factor for electricity can be turned positive through advances in decarbonization at various electric power suppliers.CONTRIBUTION IMPACTIn our present business fields,we plan to contribute 100 million tons or more in avoided emissions from society and our customers.We plan to visualize avoided emissions by each product and service,for example,by promoting wider use of environmentally friendly vehicles through improvements in the performance and cost of automotive batteries,by replacing fossil fuels in towns and at homes with heat pump water heaters that use electricity,and by providing optimized solutions for inventory and transport to business flow of customers from material procurement to market supply.This visualization of emissions will be employed as a benchmark shared with society at large.Additionally,we plan to make investments in fields where contributions can be made and to boost our competitiveness,in order to grow our business and increase our contribution.FUTURE IMPACTWe plan to achieve avoided emissions of 100 million tons or more by creating new technologies and business fields. INFLUENCEThrough communications related to PGI initiatives,we plan to have positive ripple effects on reforms in the energy supply and demand for the society as a whole and decarbonization through changes of demands and behaviors of customers,other business operators,as well as governments and investors.Although the direct impact on reduction cannot be calculated at present,we will move forward in this direction,being convinced that this is part of our mission to build a carbon neutral society as quickly as possible.Panasonic CO2 emissions across the Groups value chain:110 million tonsYear 2020Year 2050OWN IMPACT:110 million tonsCONTRIBUTION IMPACT:100 million tons FUTURE IMPACT:100 million tonsTo realize a better life and a more sustainable global environment,the Panasonic Group will strive to achieve carbon neutrality together with society,by increasing impacts from various actions that will contribute to reduce CO emissions of our own and of various fields of society.INFLUENCEINFLUENCE11contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202312Environmental Action Plan“GREEN IMPACT PLAN 2024”As milestones in reaching the 2050 targets set in“the Panasonic GREEN IMPACT”,our long-term environmental vision,we set out the fiscal 2031 target linked to our groupwide business strategy,and formulated“the GREEN IMPACT PLAN 2024(GIP 2024)”,the three-year environmental action plan from fiscal 2023 to fiscal 2025,for which we are working on.Under GIP 2024,we have set out the fiscal 2025 targets for OWN IMPACT:CO2 emissions reduction across our entire value chain(VC)(Scopes 1,2 and 3),CONTRIBUTION IMPACT:contribution to avoided CO2 emissions in society and the resource/circular economy(CE)as our materiality issues.In OWN IMPACT,we plan to cut down CO2 emissions from our entire VC of 110 million tons in fiscal 2021 to 16.34 million tons in fiscal 2025 and to 31.45 million tons in fiscal 2031 respectively with our business growth.In our plan to achieve net zero CO2 emissions in our factories(Zero-CO2 factories)for all of our operating companies by fiscal 2031 under the drive to achieve net zero emissions from our business activities(Scopes 1 and 2),we are planning to achieve net zero CO2 emissions at 37 factories by fiscal 2025.In CONTRIBUTION IMPACT,we plan to achieve avoided emissions of 93 million tons*in fiscal 2031 and 38.3 million tons in fiscal 2025*.It must be noted that international standardization of the method to calculate the avoided CO2 emissions for which the Panasonic group is involved,is underway.If the calculation method to be standardized is different from the method our Group has adopted,we plan to explain the difference and at the same time revise our targets accordingly to achieve them.There are three areas of resources/CE activities.One is maintaining the global waste recycling rate consistently at 99%or more,aiming at reaching zero emissions for factory wastes.The second is the amount of recycled resin used that we would double the quantity in three years to 90,000 tons over the result of the preceding medium-term plan(GP2021;43,300 tons from fiscal 2020 to fiscal 2022).The third is the CE business model aimed at effective utilization of resources and maximization of customer that will be rolled out in a total of more than 13 businesses by fiscal 2025.Additionally,we plan to continue working on the issues of biodiversity,water,chemical substances,local communities,and compliance,paying attention to the scale of social issues and empathy with our customers and society and corresponding to our business fields and regional characteristics and needs.*Calculated with emissions factor at the time of the PGI establishment(IEA 2021)Status of the first year of GIP 2024CO2 emissions for our entire value chain(VC)increased to 129.21 million tons(negative in OWN IMPACT)with increase of 21.70 million tons from 107.51 million tons in fiscal 2021.For the Scopes 1 and 2,there had been progress in both energy conservation and energy recycling,with 31 Zero-CO2 factories and CO2 reduction of 0.36 million tons.For the Scope 3,the reduction volume increased for product use(increase of 9.1 million tons)and other categories,thanks to expansion in the scope of business fields.On the other hand,avoided emissions for our customers and society increased to 37.23 million tons,because of,in part,progress of new visualization of CO2 emissions.In the area of resources/CE,the waste recycling rate was maintained at 99.1%globally,with recycled resin use at 12,400 tons.As four new CE business models were started up,total 10 CE business models are now in operations.GREEN IMPACT PLAN 2024(Fiscal 2025,2031 targets and Fiscal 2023 actual results)ItemFiscal 2023 actual resultsFiscal 2025 targetsFiscal 2031 targetsMaterial issuesCO2/EnergyOWN IMPACTEmissions reduction in our own Value Chain*2*6 21.70 Mt(9.39 Mt)16.34 Mt*731.45 MtScopes 1&2*1Zero-CO2 factoriesTotal 31 factories Total 37 factoriesCO2 reductions0.36 Mt0.26 MtScope 3*1(Category 11)CO2 reductions in use of our products by customers 9.1 Mt16.08 MtCONTRIBUTION IMPACTAvoided Emissions for society*337.23 Mt38.30 Mt93.00 Mt Resources/CE*Circular EconomyFactory waste recycling ratio*499.1.0%Recycled resin used*5(Fiscal 2023 to 2025 total for GIP2024 targets)12,400 tonsFiscal 2023 to 2025 total90,000 tonCircular economy business models and products(Total)10 businesses13 businessesContinuing challengeBiodiversityReducing and restoring the impact of business activities on the ecosystem to become nature positiveProcurement of sustainable raw materials,businesses that contribute to biodiversity green spaces,and products and services that contribute to biodiversityWaterReduce water consumption in business activities and products/servicesChemical substancesReducing the environmental impact of chemical substances business activities and productsLocal communitiesPromote environmental initiatives to contribute to local communities and educate the next generationComplianceEnsure compliance with environmental laws and regulationsGREEN IMPACT PLAN 2024*1 Classification according to the GHG protocol(Accounting and Reporting Principles).*2 Amount obtained by subtracting the amount of emissions in the relevant fiscal year from the amount of emissions in fiscal 2021.*3 Amount calculated by subtracting the lifetime CO2 emissions after introduction from the lifetime CO2 emissions assuming that the Groups products and services do not exist,using the IEC 2021 value as the emission factor.*4 Amount of resources recycled/(Amount of resources recycled Amount of landfill).*5 Mass of recycled materials contained in the recycled resin used in our products.*6 Includes Scope 1,2 and Scope 3 Category 11,plus increases or decreases in Category 1(procurement),Category 12(disposal),and other indirect emissions.Figures in parentheses indicate the case where fiscal 2021(starting point)is calculated with the same boundary as the fiscal 2023 target.*7 The CO2 emissions factor for electricity calculated with the IEA World Energy Outlooks 2 C scenario.12contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 2023131.84 Mt(Compare to fscal 2021 Minus 360 Kt)【Scope1,2】CO2 emissions&reductions in our own value chain(tons)Avoided CO2 emissions for society(tons)Procurement21.55 Mt(100.11 Mt)(FY)2021(2022)20232025*2 Includes avoided emissions by replacement of purchased products.(10.99 Mt in FY2021,11 Mt in FY2023,&6.3 Mt in FY2025).(26.60 Mt)Existing subject products(28 to 26)Total 34.62 MtNew subject products(23)Total 2.61 Mt(49 products)*1 Calculated by the subjects businesses for fscal 202321.70 Mt【Scope1,2,3】23.47 MtProducts and services(Energy used by customers)(33 products)【Sc3:Cat11】85.93 Mt138.60 Mt*19.39 Mt9.39 Mt129.21 Mt(28 products)OWNIMPACTCONTRIBUTIONIMPACTOWN IMPACTCONTRIBUTION IMPACTScope3Scope1,2EnvironmentalAction PlanGIP2024TargetsLighting equipment Household/Commercial air conditionersVentilation fans Bathroom ventilation dryersHousehold refrigerators,other 33 products(Existing 33 products)Minus13.07 Mt【Sc3:Cat1】72.86 MtIncrease in purchasing cost by increase in salesShowcases(Hussmann Corporation)Hot-water heating with heat pump(A2W)Blowers Absorption refrigerators,etc.Refrigerants leakage(products in use)-Showcases(Hussmann Corporation)-CCS products(excluding Hussmann Corporation)-HVAC products 【Sc3:Cat11】Refrigerants emissions(in disposal)-Showcases(Hussmann Corporation)-CCS products(excluding Hussmann Corporation)-HVAC products【Sc3:Cat12】37.23 MtCylindrical rechargeable batteries for electric vehiclesReplacement of the products(34 products)Photovoltaic power generationHot-Water Heating with Heat Pump(EcoCute,A2W)Solutions(Energy Recovery Ventilation(ERV)system,BEMS/HEMS,reducing electricity usage of air conditioners by ceiling fans)Others(Fuel cells,Storage batteries,etc.)Products/Services(Energy used by customers)【Sc3:Cat.11】69.86 Mt38.30 MtRefrigerants15.81 MtNew16.34 Mt(New 17 products)13.14 Mt107.51 MtOthers2.82 MtProcurement16.56 Mt【Sc3:Cat1】Factories and offces2.2 Mt【Scope1,2】NewEnergy conservation,increasing and decreasing in sales,and refnement of the calculation method Total Minus7.86 MtImprovement of the emission factorsMinus5.21 Mt*2GIP2024:Points of change in fiscal 2023CO2 emissions(upper part of the figure)The CO2 emissions in product use(Scope 3,Category 11)that accounts for approximately 80%of total value chain emissions,decreased from 85.93 million tons for 33 products in fiscal 2021 to 72.86 million tons(reduction of 13.07 million tons)in fiscal 2023,thanks to the improved energy efficiency of our products,increase and decrease in sales,refinement of the calculation method,and the emissions factor turning positive.On the other hand,to expand the scope of our responsibilities and contributions of the Panasonic group,we newly visualized 13.14 million tons in the CO2 emissions from 17 more businesses.Regarding Refrigerant related equipment of HVAC Company and Cold Chain Solutions Company aiming to reduce CFC emissions of their product use by wider use of refrigerants with low environmental impact(CO2 refrigerant/propane)and wider-scale recovery of refrigerants disposed of by customers,we have added estimated refrigerant-related emissions after their visualization(total of 15.81 million tons).Together with an increase in procurement amount(increase of 5 million tons),the CO2 emissions of 107.51 million tons in fiscal 2021 rose to 129.21 million tons in 2023,i.e.an increase of 21.70 million tons(negative in OWN IMPACT).However,if the new emissions boundary for fiscal 2023 is applied to the fiscal 2021,the volume indicates an improvement of 9.39 million tons from the point of the new emissions boundary.We will continue to actively work to improve accuracy by reviewing the boundary and method of calculation for Scope 3.Avoided CO2 emissions (lower part of the figure)For avoided emissions()to society and customers,the number of visualization of the subject business has increased from 28 businesses in fiscal 2021 to 49 in fiscal 2023.Total reached 37.23 million tons is approaching the fiscal 2025 target of 38.3 million tons.Contributions have hugely increased from 26 businesses that have been visualized up to now(28 as of fiscal 2021).At the same time,new 23 more businesses have been visualized(total 2.61 million tons)and their PDCA cycle based activities have begun.The Panasonic GREEN IMPACT(PGI)serves as a benchmark for achieving carbon neutrality through the accumulation of each diligent effort(ACT)together with society,by addressing both our responsibility and opportunity in the urgent need to stop global warming.Since CO2 emissions and avoided CO2 emissions differ in its concept and objectives,our responsibility(CO2 emissions)cannot be canceled out by contribution to customers(avoided CO2 emissions).We believe that firstly we should understand their relationship is inextricable as they linked to each other and,then,should accelerate respective initiatives.In particular,as for the avoided CO2 emissions,the flexibility of conditions for its calculation is high,and it has not been internationally standardized as of now.Although there are so many practical issues that need to be addressed before the avoided CO2 emissions can serve as a social benchmark,we plan to report on the progress of the PGI as a whole,employing the avoided CO2 emissions as an indicator to show the acceleration in reform and growth,by enhancing our competitiveness in electrification,energy conservation,energy conversion,resources recycling,etc.,and contributing to the early achievement of the decarbonization scenarios.GREEN IMPACT PLAN2024(GIP2024)Points of change in fiscal 202313contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202314CONTRIBUTION IMPACT Unit:tonCategoryTop 20 businesses in FY 2023ElectrificationCylindrical Rechargeable Batteries for EVsHot-Water and Heating Systemswith Heat Pump(A2W)Electric-assist BikesHot-Water Systems with Heat Pump (EcoCute)Total 4 businesses:17.79 millionReplacements(Home appliance)Household Air ConditionersLED LightingsHousehold RefrigeratorsElectric Showers/Electric Water HeatersCommercial Air ConditionersWashing and Drying machinesProjectorsLCD TVsCO2 FreezersDryersTotal top 10 businesses:10.29 millionSolution Heat Exchange SystemCeiling FansBEMS*1/HEMS*2Total top 3 businesses:2.31 millionOthers Photovoltaic Power Generation SystemsFuel CellsCreation and Storage Collaboration System(Storage batteries)Total top 3 businesses:5.96 millionTotal all 49 products and services:37.23 million*1 Building Energy Management System*2 Home Energy Management System9.70 million in FY 20214businesses17.79 million10.99 million in FY 202134businesses11.00 million4businesses2.42 million7businesses6.01 millionAvoided CO2 EmissionsThe CONTRIBUTION/FUTURE IMPACT of Panasonic GREEN IMPACT,commonly referred to as the avoided emissions,is an indicator of the value of the amount of CO2 emissions contributed to the reduction of CO2 emissions by customers and society by introducing our group products and services,compared to the amount not introduced(baseline).In fiscal 2023,CONTRIBUTION IMPACT totaled 37.23 million tons in 49 businesses covering products and services sold in the same year.Most of this is in the living business,which includes air conditioners and lightings,and the energy business,which includes EV rechargeable batteries,accounting for about 50%of Group sales.Our groups main business is to provide electrified products and services(electrical and electronic equipment)by converting to electric appliances that are more efficient in energy use than those that use fossil fuels,we are able to reduce CO2 emissions.The widespread use of electric appliances will increase demand for electricity,but by continuously increasing the efficiency of energy use in appliances and spaces,and by controlling and optimizing demand through energy storage and energy management,we will reduce the load on grid power in each region and promote renewable energy.On the other hand,although there is no internationally uniform standard for the avoided emissions(as of August 2023),our company has participated in WBCSD*1,IEC*1,and the GX League*1,and has worked with like-minded government departments and companies to promote dialogue on the need for the avoided emissions.In March 2023,the WBCSD and the GX League released guidance and guidelines on the avoided emissions*2,and we are working on a calculation based on these guidelines in conjunction with discussions at the IEC*3,which aims to achieve international standardization.The baseline(comparison target)is the period of use(durable life,etc.)of our group products and services compared to the market average condition expected for each business,and the annual electricity consumption in terms of design and calculated rationally under conditions judged to be objectively reasonable after discussions within the Panasonic Group.The basic structure of the calculation formula is as follows:activity volume(sales volume,etc.)annual reduction per activity volume(difference in energy consumption compared to baseline,etc.)duration(lifespan,etc.)CO2 emission factor.This calculation method and the data on which it is based have been verified by a third party,and this is our groups first disclosure in this report.The concept and purpose of use of these two indicators are very different.The emissions cannot be offset by“avoided emissions(reduction contribution to customers)”.The emissions reduction is the companys responsibility.Our mid-term to long-term reduction targets are certified as SBTs 1.5 degree targets*4 in May 2023.Panasonic group aims to realize a decarbonized society early by accelerating the PDCA cycle of both responsibility and contribution.*1 World Business Council for Sustainable Development(WBCSD),International Electrotechnical Commission(IEC),GX League is a forum for cooperation between a group of companies,the government and academic institutions in order to meet greenhouse gas reduction targets and increase industrial competitiveness by using Japans goal of carbon neutrality by 2050 as an opportunity for economic growth.*2“Avoided Emissions Guidance”by WBCSD,“Basic Guidelines for Disclosure and Evaluation of Opportunities for Climate Change”by GX League*3 IEC63372(“Avoided CO2 emissions”international standard to be issued in 2024.)*4 Companies play their part in combating climate change by setting GHG emissions reduction targets that are aligned with reduction pathways for limiting global temperature rise to 1.5C or well-below 2C compared to pre-industrial temperatures.These targets are termed science-based targets(SBTs).For further examples of our avoided emissions products that contribute to CO2 reduction for consumers and society,see the following website.WEBhttps:/holdings.panasonic/global/corporate/sustainability/environment/vision/product.html(Vacuum Insulated Glasses)(Home Delivery Communication Boxes):See the following pages for further examples.CalculationexampleCalculationexampleCalculationexampleCalculationexampleCalculationexampleCalculationexampleCalculationexample14contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202315Hot-Water and Heating Systems with Heat Pump(EcoCute,A2W*1)ElectrificationProduct life stages subject to avoided CO2 emissionsOverviewA heat pump is equipped with electrification technology that captures heat energy from the ambient air and transfers it to heat water or air utilizing the characteristic that temperature changes when gas is compressed or expanded.With the technology,the equipment with heat pump is 2.4 to 4.3 times more energy-efficient compared to the equipment uses heat energy from fossil fuel combustion.*2 Furthermore,on the premise that the ratio of renewable energy use in each energy sources will increase year by year as the electrified equipment with heat pump is spread,whereas CO2 is always emitted from gas equipment in combustion of city gas,we will contribute to accelerate the transition to a decarbonized society.*2 Our own calculation based on information in METIs Top Runner Program.WEBhttps:/www.enecho.meti.go.jp/category/saving_and_new/saving/enterprise/equipment/Avoided CO2 emissions mechanismCompared to the average hot-water and heating systems with gas combustion type that are water heaters widely available in markets,our heating equipment with heat pump with equivalent capacity emit less CO2 from the electricity used throughout their lifetimes,therefore,the difference of CO2 emissions becomes avoided emissions.Calculation formula of avoided emissions Sales regions:Japan for EcoCute,and Europe for A2WBaseline(Subject to comparison)CO2 emissions from gas combustion to capture heat energy required for heating the same amount of water or air.Conventional gas by gas combustion is predominantly used in Europe where there are many cold climate areas.(Transformation of an A2W to its electrification is possible by using gas pipe used for the existing gas heating equipment.)Coverage of quantification(Way of thinking and its rationalization)When the heating equipment with heat pump is in use.We deemed that CFP*4 of the equipment when it is in use can be ignored because both of a heating equipment with heat pump and a gas heating equipment show a relatively greater CFP when they are use.*5*4 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).*5 79.9%for in use of CO2 emissions in the value chain(VC)of the Panasonic heating equipment with heat pump.(FY2020 Panasonic actual result)*4 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).Amount of activitiesEcoCute:The number calculated by the following equation:the annual sales volume in Japan x 70%*6 which is the replacement ratio of gas heating equipment with heating equipment with heat pump.(Unit)*6 Data from a Japanese industrial association.The calculation excludes the number of replacements of an end-of-life EcoCute with a new unit.A2W:The number of annual sales of A2W in Europe(Unit)*7*7 We deemed that replacement ratio of old A2Ws with new ones can be ignored as the sales started in 2013.Avoided CO2 emissions per unit of amount of activities(Basic unit)Regarding the annual energy consumption used for the same amount for heating water or air,which was converted to CO2 emissions,difference between those of heating equipment with heat pump and gas heating equipment.Period(Flow method:Include entire lifetime CO2 emissions of the product in its first sales year)The holding years for repair parts CO2 emissions reduction effect continues during that period.Amount of activitiesAvoided emissions for a given amount of activitiesCO2 emissions-related values and factorsPeriodAmount of activities(Units)The number of units that replaced existing gas heating equipment in the total annual sales volume*3 Electric power CO2 emission factor:Japan-0.487 kg/kWh,and Europe-0.277 kg/kWh(Source:IEA 2021)City gas CO2 emission factor:2.240 kg/m3(Source:Document by Ministry of the Environment)*3 Japan:Approximately 70%of sales are heating equipment with heat pump replacing gas heating equipment.(Source:Industrial association data).Europe:100%of sales are heating equipment with heat pump replacing gas water heaters.(We deemed that the replacement of existing A2Ws can be ignored as the sales started in 2008.)Annual power consumption per unit of the heating equipment with heat pump(kWh)Electric power CO2 emission factor per sales region(kg CO2/kWh)）PeriodAnnual city gas consumption per gas heating equipment(m3)City gas CO2 emission factor(kg CO2/m3)（*1 A2W:Air to WaterDisposal/RecycleUseRaw materialsManufacturingTransportationHeating equipmentwith heat pumpGas heatingequipmentCO2 EmissionsavoidedemissionsAnnual avoided emissions by one heating equipment with heat pump replacing a gas heating equipment.Gas water heaterCO2A2W bound for A2W bound for EuropeEuropeHot water Hot water storage tankstorage tankCO2In use(Approx.80%of VC)Heating equipmentwith heat pumpGas heating equipmentRaw materials/Manufacturing/TransportationDisposalIn useavoided emissionsHeat pumpHeat pumpAverage CO2 emissions from water&air heating energy by one gas heating equipment and one heating equipment with heat pump(A2W)15contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202316Cylindrical rechargeable batteries for electric vehicles(EV)ElectrificationProduct life stages subject to avoided CO2 emissionsOverviewTransition of use from internal combustion engine vehicles(ICEVs)to electric vehicles(EVs)is expected to bring decarbonization of transportation sectors in the world as EVs do not directly emit CO2,in addition to their better energy efficiency*1.EVs,which does not use internal combustion engine,use a motor driven by electricity supplied from a rechargeable battery.Hence,it is recognized that the rechargeable battery that is equivalent to the fuel tank of an ICEV is one of the most important components in an EV.*1 Energy efficiency:The percentage of consumed energy that reaches to the wheels;EV:8791%ICEV:1625%.Source:Yale Climate Connections.August,2022“Electrifying transportation reduces emissions and saves massive amounts of energy”Avoided CO2 emissions mechanismIn the case that an EV and an ICE drives the same distance,the difference between the fuel consumption of an ICEV converted into CO2 emission and the amount of electricity charged and discharged in an EV converted into CO2 emission because of the high energy efficiency of the EV is avoided emissions.Calculation formula of avoided emissionsSales regions:North AmericaBaseline(Subject to comparison)CO2 emissions from driving an ICEVCoverage of quantification(Way of thinking and its rationalization)Difference in CO2 emissions between from ICEV and EV while driving.This case refers only to EV driving.CFP of the battery*2 is calculated separately.*2 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).Amount of activitiesCO2 emissions converted from the number of EVs for the capacity of cylindrical rechargeable batteries for EVs sold per year.(unit)Avoided CO2 emissions per unit of amount of activities(Basic unit)Difference in CO2 emissions between from an ICEV and an EV while driving 1km.Period(Flow method:Include entire lifetime CO2 emissions of the product in its first sales year)Lifetime mileage of an EV(to indicate reduction effects of driving EVs)Lifetime mileage of an EV=Average annual mileage respectively in Japan,U.S.and Europe x Vehicle life(10 years)Avoided CO2 emissions in fiscal 2023:14.17 million tonsAmount of activities(Units)The CO2 emissions converted from the number of EVs of the battery capacity sold per yearDisposal/RecycleUseRaw materialsManufacturingTransportationEVICECO2 EmissionsCO2 EmissionsCO2 EmissionsCO2 EmissionsCO2 EmissionsCO2 EmissionsavoidedemissionsavoidedemissionsMinus70%Average CO2 emissions from an ICEV and an EV(U.S.)(EVs use the power grid)CO2 emissions per 1 km by an ICEVCO2 emissions per 1 km by an EV（）Annual avoided emissions by one EV replacing an ICEV(kg CO2/km)(kg CO2/km)Lifetime mileage*Average annual mileage respectively in Japan,U.S.and Europe x 10 yearsCO2CO2ICEEVIn use(Approx.80%of VC)Heating equipmentwith heat pumpGas heating equipmentRaw materials/Manufacturing/TransportationDisposalIn useProduct beforereplacementRaw materials/Manufacturing/TransportationDisposalProduct afterreplacementVaries perproduct1020%of Value Chain(VC)1020%of Value Chain(VC)In store without installation of thesystemIn useWithout installation of the controller systemCPF*3 of equipment that constitute the centralized controller system for storesIn use(Less than 1/10,000 of CO2 avoided emissions)Store afterinstallation ofthe systemIn useControl the outputuseRawmaterialsDisposal/RecycleDisposal/RecycleDisposal/RecycleDisposal/RecycleuseUseCFP*2 of a house with single-pane or Low-E multi-pane glass windowsCFP*2of a residentialhouse with VIG windowsCFP*2 of VIGCFP*2 of single-pane or Low-E multi-pane glassUseManufacturingTransportationRaw materialsCourierHouse with installed home deliverycommunication boxAvoided emissions from avoidedredelivery(fossil fuel combustion by avehicle per redelivery)203 kg/vehicleZero inuseSituation where redeliveryis avoidedThe CO2 emissions occur additionally(Approx.20%of the avoided emissions)Deducted from theavoided emissionsCFP*1 of a home delivery communication box 37.0 kg/boxavoided emissionsavoided emissionsavoided emissionsCO2avoided emissionsavoided emissionsavoidedemissionsUse:8090%of VCUse:8090%of VC28.5 kg/box3.1 kg/box0.2 kg/box5.1kg/boxEVDisposalDisposalICETrans-portationRaw materialsRaw materialsIndirect CO2 emissions from the power networkDirect CO2 emissions from fuel combustionUseUseManu-facturingTrans-portationManu-facturingAmount of activitiesAvoided emissions for a given amount of activitiesCO2 emissions-related values and factorsPeriod16contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202317Energy-saving effects from replaced home appliancesReplacementsProduct life stages subject to avoided CO2 emissionsOverviewImproving efficiency of energy consumed by a large number of home appliances now widely used throughout society will reduce the load of local grid power for the use of appliances,lower the hurdle to transform to use renewable energy as their energy source.This facilitates transition to decarbonization society from demand sides.One of the characteristics of home appliances with high durability is that their dominant stage of CO2 emissions(CFP*1)in the life cycle is from energy use through the whole period in which product are used by customers and in society.This accounts for 80 to 90%of large home appliances such as lighting and refrigerators.Replacing the product used enough of the life with a new product that has equivalent function and performance in use together with improved energy efficiency will cause effect of reducing CO2 emissions both from users and power suppliers.Avoided CO2 emissions mechanismRegarding the home appliance whose life is passed and replaced with a new product with equivalent functions,the difference between CO2 emissions equivalent to the energy saved in the products lifetime use before and after its replacement is avoided emissions.Calculation formula of avoided emissions Sales regions:Japan,China,North America,Central and South America,Europe,Southeast Asia,Middle east,etc.Baseline(Subject to comparison)CO2 emissions converted from lifetime power consumption of the average product in markets at the penetration rate of the product with functions and performance equivalent to the new product per sales region*3.*3 Example:LED penetration rate per country,and the like.Coverage of quantification(Way of thinking and its rationalization)When LED is in use.The average CFP of home appliances are dominant*4 in use.We deemed that we can ignore the impact from the CO2 emissions difference between those from the products before and after the replacement.*4 in use accounts for approx.80 to 90%of CO2 emissions in the home appliances value chain.Amount of activitiesThe number of annual sales depending on the status(penetration rate,etc.)per sales region for the new product.Avoided CO2 emissions per unit of amount of activities(Basic unit)Difference between CO2 emissions converted from lifetime power consumption*5 between those from the products before and after replacement in each sales region.*5 Example:Rated power in design x annual time in use etc.Period(Flow method:Include entire lifetime CO2 emissions of the product in its first sales year)This was set by product,which can maintain holding a spare parts(710 years),optimum operational period for basic performance etc.CO2 emissions reduction effect continues during the period.We deemed that 7 to 10 years for holding spare parts is a conservative estimate as the life of home appliances can be extended with appropriate use and maintenance.With the extended product life,further CO2 emissions reduction effects are also expected because of efficient utilization of resources*1 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).Amount of activities(Number of units)The number of units sold per year*2*2 Before replacement refers to the average penetration status of existing products that can be replaced with a new product with equivalent functions and performance at the time of the sale,per region.The amount of activities was broken down according to each situation and then totaled.Disposal/RecycleUseRaw materialsManufacturingTransportationLEDConventional lampComparison of our linear LED lamp and linear fuorescent lampCO2 EmissionsCO2 EmissionsCO2 EmissionsCO2 EmissionsCO2 EmissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsMinus70%Minus15%Example Average lifetime CO2 emissions from consumed power before and after single unit replacementExample of lighting equipmentApprox.60%less energy consumed by a new product with higher brightness compared to those of conventional fluorescent lamps.CO2 emission factors for electricity(Source:IEA2021)Unit:kg/kWhAnnual power consumption of the product before replacement(kWh)Annual power consumption of the product after replacement(kWh)（）CO2 emission factor for electricity per sales region(kg CO2/kWh)Period(7 to 10 years depending on the product)Annual avoided emissions from energy-savingeffect by one replaced productFSA42001F VPN9Integrated LED Base Light iD SeriesGeneral facilities General-purpose model (Energy-saving light bar)Direct mount XLX450DHNU LE9 Daylight white(5000 K)WEBhttps:/www2.panasonic.biz/jp/lighting/facilities/baselight/id/general.htmlProduct beforereplacementRaw materials/Manufacturing/TransportationDisposalProduct afterreplacementVaries per product1020%of Value Chain(VC)1020%of Value Chain(VC)In store without installation of thesystemIn useWithout installation of the controller systemCPF*3 of equipment that constitute the centralized controller system for storesIn use(Less than 1/10,000 of CO2 avoided emissions)Store after installation of the systemIn useControl the outputuseRawmaterialsDisposal/RecycleDisposal/RecycleDisposal/RecycleDisposal/RecycleuseUseCFP*2 of a house with single-pane or Low-E multi-pane glass windowsCFP*2 of a residential house with VIG windowsCFP*2 of VIGCFP*2 of single-pane or Low-E multi-pane glassUseManufacturingTransportationRaw materialsCourierHouse with installed home delivery communication boxAvoided emissions from avoided redelivery(fossil fuel combustion by a vehicle per redelivery)203 kg/vehicleZero inuseSituation where redelivery is avoidedThe CO2 emissions occur additionally(Approx.20%of the avoided emissions)Deducted from the avoided emissionsCFP*1 of a home delivery communication box 37.0 kg/boxavoided emissionsavoided emissionsCO2 avoided emissionsavoided emissionsavoidedemissionsUse:8090%of VCUse:8090%of VC28.5 kg/box3.1 kg/box0.2 kg/box5.1 kg/boxThermalloss fromventilationCO2 emissions equivalent to energy consumed by air conditioning in a residential house with installed air conditioner with conventional ventilation methods(volume of thermal loss)CO2 emissions equivalent to energy consumed by air conditioning in a residential house with installed air conditioner with the heat exchange system(volume of thermal loss)Trans-portationRawmaterialsTrans-portationRaw materialsManufacturingTrans-portationDisposal/RecycleDisposal/RecycleRaw materialsCFPs*2 difference from single-pane glass is 31%of avoided emissions,and from Low-E multi-pane glass 19%.DisposalDisposalManu-facturingTrans-portationManu-facturingManu-facturingTrans-portationManu-facturingManu-facturingAmount of activitiesAvoided emissions for a given amount of activitiesCO2 emissions-related values and factorsPeriodSpecific energy consumption efficiency(Luminous efficacy):193.9 lm/WPower consumption:26.3 WLuminous flux:5100 lmLEDConventional light source(fluorescent tube)RegionsFactorsJapan0.487Europe0.277North America0.383China0.623India0.723Asia and Pacific0.386Latin America0.252Middle East&Africa0.61617contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202318Heat Exchange SystemSolutionProduct life stages subject to avoided CO2 emissionsOverviewTo achieve decarbonization in the consumer and business sectors,it is important to reduce environmental impact from air conditioning at living spaces in houses and offices.The heat exchange system reduces heat loss from the interior of buildings and provide comfort maintaining appropriate air quality at the same time.The heat exchange system exchanges heat of indoor and outdoor with a heat exchange element during ventilation and either heat or cool the air before being taken into the building,which reduces air conditioning load.Moreover,the system is equipped with air purifier that is a high performance system.Therefore,the exchange heat system is used in wide areas in residential,commercial,and office buildings,where high air tightness is required including Japan,the U.S.,Europe,and China.Avoided CO2 emissions mechanismCO2 emissions converted from the reduced amount of power or fuel consumption by adopting this heat exchange system in room spaces under the same conditions compared to those from average ventilation method for ventilation in the market.Calculation formula of avoided emissions Sales regions:Japan,China,North America,and EuropeBaseline(Subject to comparison)CO2 emissions converted from power and fuel consumption per each sales region from the use of air conditioners in a residential house where the current average ventilation systems in the market is installed.Coverage of quantification(Way of thinking and its rationalization)Difference in use.in use account for the dominant(approx.80%)of the CFP*1 of ventilators,and effects from other than in use are equivalent with other ventilators.Hence,we deemed that their CFPs when not in use can be ignored.*1 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).Amount of activitiesThe number of annual sales of heat exchange units,which is the core function of the system.Avoided CO2 emissions per unit of amount of activities(Basic unit)We calculated the average air conditioning load from an average ventilation method in the living space of a residential house in Japan using our simulation for each sales region.We then determined the difference in the volume of energy consumed by system operation for air conditioning in living spaces between the conventional ventilation method and the energy exchanged method,and multiplied it by the CO2 emission factors for electricity or fuel*2 by each sales region.*2 Kerosene was used as the fuel.Period(Flow method:Include entire lifetime CO2 emissions of the product in its first sales year)Design life of the heat exchange system CO2 emissions reduction effect continues during the period.Amount of activitiesAnnual system installation volume(The number of heat exchange systems)Disposal/RecycleUseRaw materialsManufacturingTransportationHeat exchangesystemSimulation by Panasonic(Reduction rate in Tokyo,Sendai,and Sapporo)Conventionalventilation methodsCO2 EmissionsCO2 EmissionsCO2 EmissionsCO2 EmissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsMinus70%Minus15%CO2 emission factor for electricity:0.487 kg/kWh in Japan,0.623 kg/kWh in China,0.383 kg/kWh in North America,and 0.277 kg/kWh in Europe(Source:IEA 2021)CO2 emission factor for kerosene:2.49 kg/liter(Source:Data from Ministry of the Environment)Annual energy consumed by air conditioning in a residential house with conventional ventilation methods(volume of thermal loss)(kWh or liters)CO2 emission factors by electricityor fuel type in each sales region(kg CO2/m3)（Annual energy consumed by air conditioning ina residential house with a heat exchange system(volume of thermal loss)(kWh or liters)CO2 emission factors by electricity or fuel type in each sales region(kg CO2/kWh or liters)）PeriodAnnual avoided emissions by installed one heat exchange systemOutdoor temperature0Indoortemperature20Heat exchangerelementIndoorFreshairThermal energycollectedDischargingto outdoorOutdoorairHeatexchangerelementUnclean air141618Ventilationgrill*Efficiency varies according to model.WEBhttps:/sumai.panasonic.jp/air/kanki/kodatekicho/WEBhttps:/sumai.panasonic.jp/air/kanki/kabekakefan/In use(Approx.80%of VC)Heating equipmentwith heat pumpGas heating equipmentRaw materials/Manufacturing/TransportationDisposalIn useProduct beforereplacementRaw materials/Manufacturing/TransportationDisposalProduct afterreplacementVaries per product1020%of Value Chain(VC)1020%of Value Chain(VC)In store without installation of thesystemIn useWithout installation of the controller systemCPF*3 of equipment that constitute the centralized controller system for storesIn use(Less than 1/10,000 of CO2 avoided emissions)Store after installation of the systemIn useControl the outputuseRawmaterialsDisposal/RecycleDisposal/RecycleDisposal/RecycleDisposal/RecycleuseUseCFP*2 of a house with single-pane or Low-E multi-pane glass windowsCFP*2 of a residential house with VIG windowsCFP*2 of VIGCFP*2 of single-pane or Low-E multi-pane glassUseManufacturingTransportationRaw materialsCourierHouse with installed home delivery communication boxAvoided emissions from avoided redelivery(fossil fuel combustion by a vehicle per redelivery)203 kg/vehicleZero inuseSituation where redelivery is avoidedThe CO2 emissions occur additionally(Approx.20%of the avoided emissions)Deducted from the avoided emissionsCFP*1 of a home delivery communication box 37.0 kg/boxavoided emissionsavoided emissionsavoided emissionsCO2 avoided emissionsavoided emissionsavoidedemissionsUse:8090%of VCUse:8090%of VC28.5 kg/box3.1 kg/box0.2 kg/box5.1 kg/boxCFP*1 of the equipment with conventional ventilation systemThermal loss from wallsThermal loss from wallsIn use(approx.80%)In use(approx.80%)Both systems ventilate same amount of air using a fan(i.e.CFPs*1 are equivalent)Thermal loss fromventilationCFP*1 of the equipment with heat exchange systemThermalloss fromventilationCO2 emissions equivalent to energy consumed by air conditioning in a residential house with installed air conditioner with conventional ventilation methods(volume of thermal loss)CO2 emissions equivalent to energy consumed by air conditioning in a residential house with installed air conditioner with the heat exchange system(volume of thermal loss)Trans-portationRawmaterialsTrans-portationRaw materialsManufacturingTrans-portationDisposal/RecycleDisposal/RecycleRaw materialsCFPs*2 difference from single-pane glass is 31%of avoided emissions,and from Low-E multi-pane glass 19%.DisposalDisposalManu-facturingTrans-portationManu-facturingManu-facturingTrans-portationManu-facturingManu-facturingCO2 emissions converted from energy consumption with adjusted heat loss from ventilationHow the heat exchange system works(winter)Amount of activitiesAvoided emissions for a given amount of activitiesCO2 emissions-related values and factorsPeriod18contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202319Vacuum Insulated GlassOthersProduct life stages subject to avoided CO2 emissionsOverviewOne effective means of achieving decarbonization in the consumer and business sectors is through reducing the air conditioning load at spaces in residential houses and offices by maintaining stable room temperatures through improvement of building insulation.According to our estimation,heat loss through the windows in all heat loss in an average detached house in Japan accounts for 30 to 40%.Our vacuum insulated glass(VIG)achieves high insulation while at the same time maintaining its thinness,that can be adopted for existing openings(windows)in buildings as they are.Therefore,VIG has a potential to offer high applicability to a wide range of room spaces in different types of both new and older buildings.Avoided CO2 emissions mechanismVIG shows significantly higher thermal insulation compared to those of single-pane glass and Low-E multi-pane glass.*1 CO2 emissions converted from the reduced amount of power of electricity required for operation of air conditioning equipment by installation of the VIG for glass material of buildings.Calculation formula of avoided emissions Sales regions:JapanBaseline(Subject to comparison)CO2 emissions converted from electricity consumed by air conditioning operations in the entire space of a residential house in Japan.For the installation of VIG,it is set that VIG replaces single-pane glass when reforming a house,and replaces Low-E multi-pane glass when building a new house.Coverage of quantification(Way of thinking and its rationalization)In use:CO2 emissions derived from electricity consumed by air conditioning in an entire residential house.Glasss CFP*2:VIGs CFP*2 is greater than that of single-pane or Low-E multi-pane glass,however,there are no CO2 emission from the glass in use.The difference between the CFPs*2 from VIG and single-pane glass is 31%of avoided emissions,and the difference between VIG and Low-E multi-pane glass is 19%of avoided emissions.These differences were subtracted from the avoided emissions,instead of ignoring them.Amount of activitiesAmount of VIG sold per year(m2)Avoided CO2 emissions per unit of amount of activities(Basic unit)In use:Differences in electricity consumed by air conditioning in residential houses per different type of glass.*Annual power consumption was calculated by us,using a simulation of a two-story wooden house with a floor space of 120 m2 based on standard weather data from the Architectural Institute of Japan using air conditioning heat load computing software.CFPs*2 for glass:Calculated by ourselves,per type of glass based on data from the Flat Glass Manufacturers Association of Japan.Period(Flow method:Include entire lifetime CO2 emissions of the product in its first sales year)Design life of VIG.CO2 emissions reduction effect continues during the period.We deemed that the CO2 emissions effects over the design life of VIG are conservative estimates as the glass could be used as long as the life of a residential house in Japan,which is generally longer than the glass life.*2 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).Amount of activities (m2)Amount of VIG sold per year*3 Calculated based on our simulation using data from the Architectural Institute of Japan.*4 Calculated based on data from the Flat Glass Manufacturers Association of Japan,by Panasonic.*1 The overall heat transfer coefficient,or U-valueVIG:0.7 w/m2kMulti-pane glass:2.9 w/m2kVacuum insulated glass structureCO2 emission factor for electricityJapan 0.487 kg/kWh(Source:IEA 2021)Annual avoided emissions achieved by installation of 1 m2 of VIGDisposal/RecycleUseRaw materialsManufacturingTransportationWith installation of the productWithout installation of the productEnergy consumed by air conditioning in a living spaceVIGs CFP*2CFP*2 of multi-pane glassCO2 EmissionsCO2 EmissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsavoidedemissionsMinus70%Minus15%Minus15%Minus81%Minus 1113%Minus 1113%）Power consumed by air conditioning in a residential house with single-pane or Low-E multi-pane glass*3 per year(kWh/m2)Power consumed by air conditioning in a residential house with VIG*3 per year(kWh/m2)（）VIGs CFP*2,*4(kg CO2/m2)Single-pane or Low-E multi-pane glasss CFP*2,*4(kg CO2 kWh/m2)（CO2 emission factor for electricity(kg CO2/kWh)Period(Design life)Vacuum Insulated Glass(VIG)1/4 of multi-pane glassGas absorbentPillarLow-EcoatingLow-E glassFloat sheet glassSealing materialuseRawmaterialsDisposal/RecycleDisposal/RecycleDisposal/RecycleDisposal/RecycleuseUseCFP*2 of a house with single-pane or Low-E multi-pane glass windowsCFP*2 of a residential house with VIG windowsCFP*2 of VIGCFP*2 of single-pane or Low-E multi-pane glassUseManufacturingTransportationRaw materialsCourierHouse with installed home delivery communication boxAvoided emissions from avoided redelivery(fossil fuel combustion by a vehicle per redelivery)203 kg/vehicleZero inuseSituation where redelivery is avoidedThe CO2 emissions occur additionally(Approx.20%of the avoided emissions)Deducted from the avoided emissionsCFP*1 of a home delivery communication box 37.0 kg/boxavoided emissionsavoided emissionsavoided emissionsCO2 avoided emissionsavoided emissionsUse:8090%of VCUse:8090%of VC28.5 kg/box3.1 kg/box0.2 kg/box5.1 kg/boxTrans-portationRawmaterialsManufacturingTrans-portationDisposal/RecycleDisposal/RecycleRaw materialsCFPs*2 difference from single-pane glass is 31%of avoided emissions,and from Low-E multi-pane glass 19%.DisposalDisposalManu-facturingTrans-portationManu-facturingManu-facturingTrans-portationManu-facturingComparison of CO2 emissions from energy consumed by air conditioning in a residential house with/without VIG windows,taking account of the glasss CFP.*2Amount of activitiesAvoided emissions for a given amount of activitiesCO2 emissions-related values and factorsPeriod19contentshomenextpageprevbackHuman RightsEmployeesSupply ChainQuality/SafetyAI EthicsCustomerAdvertisementIntellectual PropertyCommunityRisk ManagementBusiness EthicsCyber/Data SecurityEnvironmentPolicy Mid-term to Long-term Environmental VisionEnvironmental GovernanceEnvironmental Management Systems Environmental Risk Management Response to TCFD Strategic Resilience through Scenario Analysis Our Businesses Contribution to Carbon NeutralityEnvironmental Information Systems Overview of Environmental Impact and Environmental Accounting Eco-conscious Products and Factories Reducing CO2 Emissions in FactoriesResource Biodiversity Conservation Water Resource Conservation Chemical Substance ManagementCollaboration Across the Supply Chain History of Environmental Activities EnvironmentSustainability Data Book 202320Home Delivery Communication BoxOthersProduct life stages subject to avoided CO2 emissionsOverviewIn the household business sector in Japan,because of increase in e-commerce trading and increase in the time when none is at home along with changes in lifestyle,load for distribution on couriers is on increase as the number of redelivery of goods increases.Installation of a home delivery communication box at home can avoid redelivery of goods,lowers the burden for the parcel receivers,and decreases the working hours of couriers workers.At the same time,it reduces CO2 emissions from energy consumption such as fuel for deliveries,which contributes to reduction of load in local distribution networks and decarbonization.Avoided CO2 emissions mechanismReduction of CO2 emissions from energy consumption(combustion of fossil fuel such as gasoline)required for courier workers to redeliver goods,by avoiding redeliveries.Calculation formula of avoided emissions Sales regions:JapanBaseline(Subject to comparison)CO2 emissions converted from the average energy consumption from redelivery of goods by courier workers,in the case that the receivers of the goods did not receive the goods at the first delivery as they were not at home where a home delivery communication box is not installed.Coverage of quantification(Way of thinking and its rationalization)When the box is in use(avoided emissions from avoided redelivery by installation of a home delivery communication box).Although the box emits no CO2 when it is in use,the CFP*1 of the box itself is 20%of entire avoided emissions(by our estimation).However,this was not included in the avoided emissions as it is an additional effect.Amount of activitiesThe number of home delivery communication boxes sold per yearAvoided CO2 emissions per unit of amount of activities(Basic unit)Avoided emissions per redelivery:0.46 kg(Source:Verified data by MLIT)The number of redeliveries:29.5 times/year(Source:Verified data by Panasonic;actual measurement results obtained from 103 households in Awara City,Fukui Prefecture over 4 months)Period(Flow method:Include entire lifetime CO2 emissions of the product in its first sales year)Design life of a home delivery communication box.CO2 emissions reduction effect continues during the period.We deemed that the design life of the home delivery communication box is a conservative estimate for CO2 emission effects as the boxs life can be extended further with appropriate use and maintenance.*1 CFP(Carbon Footprint of Products):CO2 emissions converted from GHG emissions throughout the entire product life cyclefrom raw material procurement to disposal and recycling of a product and service(per one unit).Amount of activities(Units)The number of home delivery communication boxes sold per year.Disposal/RecycleUseRaw materialsManufacturingTransportationHeating equipmentwith heat pumpGas heatingequipmentEVICELEDConventional lampComparison of our linear LED lamp and linear fuorescent lampHeat exchangesystemSimulation by Panasonic(Reduction rate in Tokyo,Sendai,and Sapporo)Conventionalventilation methodsAfterinstallationBeforeinstallationBased on actual store measurementsWith installation of the productWithout installation of the productEnergy consumed by air conditioning in a living spaceVIGs CFP*2CFP*2 of multi-pane glassWith a home delivery communicationboxWithout a home delivery communicationboxCFP*1 of the
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KPMG.Make the Difference.The journey continues:Navigating the road to readinessKPMG ESG Assurance Ma.
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Samsung Electronics Global Human Rights PrinciplesFebruary 2023Global Human Rights PrinciplesHuman r.
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Environmental,Social,and Governance ReportEnvironmental strategy and governanceSolidly promoting carbon neutralityConserving and restoring natureCompany IntroductionLetter from our Chairman and CEOReport InstructionsExecutive Summary01020301020304010201020102030102030401020304Building corporate trustBuilding social trustAppendices Developing responsible technologies Building markets,business capabilities and business ecology for MSMEsCreating and enabling Inclusive employmentPromoting responsible production and distribution029-029030-052053-064002003005007190-198199-207208-239110-116117-131132-139140-146 067-072073-076077-081082-087 148-165166-173090-094095-101102-104105-107 176-179180-182183-187Establishing a diverse,equitable,and inclusive culture and systemEstablishing fair and competitive remuneration with heartwarming benefitsOffering abundant learning and development opportunitiesCreating a work environment conducive to improving employee health and vitalityRural revitalization through digital development Community resilience through digital technologyDiverse consumptionTrustworthy ConsumptionInclusive ConsumptionResponsible ConsumptionPhilanthropic participation of all employeesTechnological innovations for social challengesConnecting ecological forces to empower charitiesRestoring Our Green PlanetFueling Small BusinessesBuilding TrustSupporting Our PeopleEnhancing Community Inclusion and Resilience Enabling a Sustainable Digital LifeFacilitating Participatory PhilanthropyContents2Company IntroductionOur mission To make it easy to do business anywhere.Our visionWe aspire to be a good company that will last for 102 years.Company IntroductionOur mission:To make it easy to do business anywhere.Our founders started our company to champion small businesses,in the belief that the Internet would level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in domestic and global economies.We believe that concentrating on customer needs and solving their problems whether those customers are consumers,merchants,or enterprises ultimately will lead to the best outcome for our business.In the digital era,we are staying true to our mission by helping our customers and business partners harness the power of digital technology.We have developed an ecosystem powered by technology infrastructure that enables participants to create and share value on our platforms.Our decisions are guided by how they serve our mission over the long term,not by the pursuit of short-term gains.Our vision:We aspire to be a good company that will last for 102 years.For a company that was founded in 1999,lasting for 102 years means we will have spanned three centuries.Our culture,business models,and systems are built to last so that we can achieve sustainability in the long run.As we continue to expand our businesses,Alibaba has evolved into an ecosystem that is unique,energetic,and innovative.Letter from our Chairman and CEO3Action Is More Important Than ConsensusWe hope to foster more“good companies”and leaders in sustainable development by effectively implementing our ESG strategy.Letter from our Chairman and CEOI am pleased to share Alibaba Groups annual Environmental,Social and Governance(ESG)Report.Last summer,we released Alibaba Groups first comprehensive ESG report and outlined seven long-term strategic directions,named“Alibabas seven-petal ESG flower.”We were humbled by the widespread recognition and support for the report and our strategy from different stakeholders across the community.Fiscal year 2023 was the first year we systematically implemented our complete ESG strategy.Despite challenges in the macro environment,geopolitical uncertainties in the post-pandemic era,and new trade-offs between sustainable development and economic growth,we achieved notable progress in our ESG initiatives.We are committed to environmental protection.Over the past year,we have worked to deliver high-quality achievement of our established carbon neutrality goals.By transitioning to renewable energy,encouraging technological innovation and building a participant ecosystem,we achieved our goal of“double reduction,”where we reduced carbon emissions from our own operations and carbon intensity across our value chain.In our first year of driving ecosystem carbon reduction,where we had to design and implement everything from scratch,we reduced our carbon emissions by 22.907 million tons.We have focused on three main areas to transform the value chain and ecosystem of our cloud computing infrastructure so that we are part of a green,low-carbon circular economy,which are:(1)building a clean cloud,(2)replacing traditional IT with cloud computing to boost efficiency,and(3)empowering intelligent transformations.Our self-built data centers power utilization efficiency(PUE)level continued to improve and reached 1.215,maintaining its leadership in Asia.We continued to successfully increase our transition to clean energy,which reached 53.9%of total energy consumption.As a commerce and technology platform connecting billions of consumers and nearly ten million enterprise customers,we pioneered the“Scope 3 ”concept to encourage decarbonization across our platform ecosystems last year.We hope to build consensus with partners on carbon reduction standards and promote sustainable progress of more enterprises.We are incredibly honored by the World Business Council for Sustainable Developments invitation to join as the first Internet company from Asia.We have started collaborating with them on the Scope 3 emission reduction standard and leveraging this opportunity to introduce innovative carbon reduction solutions to the world.Letter from our Chairman and CEO4We are delivering on our social responsibilities using our unique capacities and ways.We believe that a diverse and healthy working environment not only helps to attract and retain the best talent,but also stimulates the enthusiasm and creativity of our employees.This past year,we continued to focus on our employee welfare and protection programs,fostering a fair,diverse and inclusive culture,and creating an open and transparent work environment.We are also actively giving back to the broader community,supporting various areas such as education,aging,accessibility,and rural revitalization.Over this past year,the Alibaba ecosystem has directly or indirectly facilitated over 70 million job opportunities.Taobao and Tmall Group has served over 320,000 visually impaired users.Amaps wheelchair navigation feature has been used for travel planning more than 900,000 times.The“Cloud for Youth”Program has deployed“cloud computing rooms”to 102 schools,serving over 60,000 teachers and students.We are partnering with the UNESCO Chair on Artificial Intelligence in Education to bring more cutting-edge computing resources to students in Chinas rural areas.Over the last few years,we have dispatched 27 rural revitalization commissioners and over 220 rural revitalization technology officers to rural areas across China.We were humbled by the recognition of these collective activities and initiatives by the“2023 Philanthropic Enterprise of the Year”award and inclusion in the“Forbes Best Employers in the World 2022”ranking.We continued to improve our corporate governance.On March 28th,Alibaba Group announced a new“1 6 N”organizational and governance structure,the most important and far-reaching transformation since our establishment.The new governance structure empowers our businesses to become more agile,enhance decision making and therefore,better positioned to capture future growth opportunities.In the future,based on the ESG goals of Alibaba Group,each major business group and various businesses will also define their own ESG goals and priorities according to their development status and situations.Some things will never change,which is our commitment to ESG.ESG will continue to be one of Alibaba Groups cornerstone strategies and the goal of creating value beyond business through ESG remains unchanged.Alibabas three-tiered ESG governance structure remains unchanged,and each business group will continue exploring ESG action strategies according to its characteristics.ESG will become a governance mechanism and value linkage between Alibaba Group and the major business groups and various businesses,helping Alibaba to continue to be agood companyand a leader in sustainable development.Alibaba Groups board level compensation committee has elevated governance mechanisms by incorporating ESG targets to business and compliance targets in the performance measurement of the CEOs of the major business groups and various businesses,and linking it to compensation.We hope to foster moregood companiesand leaders in sustainable development by effectively implementing our ESG strategy.We are pleased that sustainable development has become a mainstream goal in this era.In less than 20 years,ESG has become a global initiative and reality,increasingly compulsory instead of optional.More than 70 stock exchanges have introduced ESG disclosure requirements,and more and more companies are starting to publish their own ESG reports voluntarily.We hope that more and more peers will explore the future of sustainable development together,create value beyond business,and jointly build a healthy,comprehensive,and mutually prosperous sustainable ecosystem.Alibaba is a company that fundamentally believes in truth,kindness,and excellence.From our birth to the present day and well into the future,we want to share our innovations in business and technology and our approach to engaging with the world.If our annual financial report reflects Alibabas business operations and performance,then through the annual ESG report which is essentially a yearly survey conducted reflecting the actions of over 230,000 Alibaba employees-we hope to help more people understand and appreciate our business philosophies,values and behavior principles,thoughts and plans for the future,and ambitions for social responsibility.Some of these philosophies and principles have been in place since the companys birth.Many were forged during our development.And many more will emerge as we move and dance with the times and society.We believe this report reflects on the past and gives our commitments to the future.We know that actions speak louder than words,and that action is more important than consensus.Only through concrete,step-by-step action can we fulfill our responsibilities and truly create lasting,far-reaching,and meaningful value for our customers,employees,shareholders,and stakeholders.Alibaba Group Chairman and Chief Executive OfficerCloud Intelligence Group Chairman and Chief Executive OfficerJuly 2023Daniel Zhang5Report InstructionsReport InstructionIn this report,Alibaba we the Group and the company all refer to Alibaba Group Holding LimitedThis report mainly covers the environmental,social,and governance(hereinafter referred to as ESG)progress of the business directly operated and controlled by the Group from April 1,2022,to March 31,2023.Some parts of the report also cover prior years as well as give forward-looking statements.Unless specified,the monetary amounts shown in this report are all presented in RMB.The report is prepared in accordance with the ESG Reporting Guide from the Hong Kong Stock Exchange.It also refers to selected guidelines from the United Nations 2030 Sustainable Development Goals(SDGs),the Global Reporting Initiative(GRI)Standards,the standards issued by the Sustainability Accounting Standards Board(SASB),and the framework suggested by the Task Force on Climate-related Financial Disclosures(TCFD).This report is presented in electronic versions in the ESG section of the Groups official website(https:/ Chinese version,an English version,and printer-friendly versions are available.In case of conflicts between the two languages,the Chinese version shall take precedence.We value any feedback and opinions,which can be e-mailed to us at ESGalibaba-.Additional disclosures can be found in our appendices.Appendix 1:ESG Key Performance Metrics TableAppendix 2:List of ESG Related Ratings and AwardsAppendix 3:ESG Data Verification StatementAppendix 4:Greenhouse Gas Inventory and Carbon MethodologyAppendix 5:Climate-related Risks and Opportunities Assessment ReportAppendix 6:Stakeholder Engagement and Materiality AssessmentAppendix 7:Progress of United Nations Global CompactAppendix 8:Report Indicator IndexAppendix 9:Important Legal InformationESG is the bridge to the futureExecutive Summary7Our corporate responsibilities and opportunities in an era of global challengesSince the United Nations adopted the historic Transforming Our World:The 2030 Agenda for Sustainable Development in 2015,addressing shared challenges such as climate change and inequality has become a consensus for humanity,but we remain far away from realizing these goals.Under the combined impact of the COVID-19 pandemic,geopolitical conflicts,and climate change,the past year has seen a systemic setback in global development.The Human Development Index(HDI)declined for two consecutive years for the first time in over three decades,and inequalities have been widening both among and within countries and regions(UNDP,2022).This situation is further complicated by global ecological degradation that shows no clear sign of easing,greenhouse gas emissions still on the rise,and the pace of emission reductions lagging significantly behind the Paris Agreement targets.These grim realities highlight that a wide array of stakeholders need to be involved in sustainable development challenges,with their demands for different sustainable development goals intertwined.To truly alleviate such challenges,in addition to clear policy guidance,effort should be made to give full play to scientific and technological innovation.This should be done in close conjunction with market mechanisms which all parties are willing to participate in and benefit from.This defines the social responsibility that Alibaba,as a digital technology and platform company,should undertake.We believe that clearly defining and prioritizing social responsibilities,leveraging technological innovation,and promoting our stakeholder ecosystem serve as the indispensable building blocks for mitigating these challenges at scale.By giving full play to these three pillars,businesses can pool the strengths of many parties to explore collaborative solutions that are systematic,scalable,and aligned with the public interest.From this,we will see opportunities to overcome the cyclical impacts of these challenges and to create greater value for business and beyond.Alibaba is well positioned to synergize these three building blocks to create commercial and lifestyle ecosystems that are driven by cutting-edge technologies and responsible to society.Social ResponsibilityStakeholder EcosystemStrength of TechnologyExecutive Summary8ESG strategic positioning and planning at AlibabaAlibaba was born with the mission to make it easy to do business anywhere.Our growth has come from addressing social challenges,and this ethos is etched in our DNA.Alibabas history of development has been forged by constant technological innovations and new forms of business created along with our numerous stakeholders.We have tens of millions of MSMEs(micro,small,and medium-sized enterprises)active in our business ecosystem,serving consumers worldwide to help them enjoy a better life.This ecosystem also serves as the most fertile soil for us to jointly practice our social responsibility.At the end of 2021,ESG was formally established as one of our cornerstone strategies-dedicated to being a good company,and a high-tech business committed long-term to improving human well-being and protecting the planet we live on,so that man and nature can develop together in harmony.To ensure the implementation of the ESG strategy,we have put in place a three-tier sustainability governance structure,comprising the Sustainability Committee at the Board level,the Sustainability Steering Committee at the Group management level,and the ESG Working Group that connects all business units.In FY2022,we conducted extensive communication with various stakeholders including consumers,employees,shareholders and investors,governments,partners,and communities.After considering the most pressing social challenges,and our own strengths and capabilities,especially in fully leveraging the unique advantages of a platform company,we identified seven long-term strategic directions for core social responsibilities.These are represented in the Alibabas seven-petal ESG flower.They are closely aligned with the UNs 17 Sustainable Development Goals(SDGs)and closely fit within Chinas goals for its modernization.Executive Summary9We are moving to plan,implement,and deepen our ESG strategic goals via a five-step approach,which includes determining positioning and targets,integrating sustainable development into business design,actively promoting the coordinated transformation of the business ecosystem,amplifying impact through platform technology,and implementing public welfare and charity programs that complement sustainable development,with FY2023 being the first year that we systematically implemented this approach.1.Positioning and targetingWith the Seven-Petal framework orienting our core ESG strategy,we continually identify the most critical issues in our own operations,value chain,and platform ecosystem through diverse communication and information gathering.We set specific and ambitious strategic goals towards high-priority issues,considering the realities of technology and business.We have been extending the scope and depth of our ESG strategic focus and ambitions,from proposing emission reduction targets for our own operations,the value chain,and the platform ecosystem in 2021,to vigorously facilitating diversity and independence in the composition of our Board of Directors in 2022.2.Integrating sustainable development into business designFor the past year,based on our strategic positioning and organizational commitments,we kept striving to integrate sustainable development into business design:we used multiple channels to help our employees worldwide understand our ESG strategy and actions so that each of them can be an ESG embracer and practitioner.Our management team has integrated ESG into their Objectives and Key Results(OKRs),so that high-standard ESG objectives are prioritized in core business units with the proper assessments;established an ESG data management system to measure and manage progress towards relevant objectives;closely integrated core issues such as the achievement of emission reduction targets,privacy protection and data security,and technology ethics into our business,seeking to make our ESG strategy a new driver of Alibabas business development;respected the distinctive characteristics and developmental stages of the different business units and industries in our complex and diverse business ecosystem,and define ESG priorities for their actions accordingly;established cross-departmental working groups for collaborative assessment and planning for high-priority integrated issues(such as climate risks and opportunities).3.Promoting coordinated transformation of the related business ecosystemWe team up with partners across the value chain to promote sustainable innovation and transformation of the business ecosystem.We introduce higher sustainability standards into our business,from greener,safer,and more trusted cloud computing,AI,and logistics services to more diverse,inclusive,and reliable consumer experiences,providing more sustainable options for customers and partners.We also continued to promote the implementation of the Alibaba Supplier ESG Code of Conduct and to encourage more suppliers to join us in sustainable practices.4.Amplifying impact through platform technologyDigital platforms stand out with their distinct capability to reach and connect a vast array of diverse stakeholders.We can use the power of technology to help all stakeholders in fulfilling their own social responsibilities,thereby promoting the systematic transformations essential to social progress.Given our capabilities,it is both our indispensable responsibility and a key opportunity to strive to be a sustainable business leader.Through building our inclusive and efficient platforms,we help create and support tens of millions of jobs.We also drive hundreds of millions of consumers and MSMEs towards emission reduction and build a green and circular economy by establishing measures and goals through platform-based solutions such as Scope 3 .We share our experiences and innovations with diverse stakeholders across industries and regions to initiate collective actions such as standards setting and policy initiatives,to drive sustainable transformation across the world.5.Implementing charity for sustainabilityEstablishing broad and mutual goodwill,among people and between people and nature,is the foundational basis of sustainable development.We strive to harness the power of technology and platforms to connect a broad ecosystem of participants,and evolve along the way into an integral part of rural revitalization and our sustainability goals from earlier focus on environmental protection to poverty alleviation and beyond.We incorporate philanthropy into business design to shoulder social responsibility beyond business.Executive Summary10Progress and highlights of core ESG issues in FY2023The past year saw our efforts lead to blooms and fruits on all the seven petals of the ESG flower.Below is a summary of progress and highlights on some core issues.In 2021,Alibaba set ambitious targets of achieving carbon neutrality in our own operations and halving the energy intensity across our value chain by 2030 and driving emission reduction of 1.5 gigatons over 15 years in our platform ecosystem.Over the past year,not only have we made solid progress towards meeting these emissions reduction targets,but even more important has been the quality methods used to achieve this progress.We strived to apply our strengths in technological innovation,energy transformation,and a participatory ecosystem to all aspects of sustainability,from energy efficiency and clean energy to recycling and recovery.We further extended our focus from emissions reduction to the preservation of the entire ecosystem,represented by water conservation,plastic reduction,and waste elimination,so as to facilitate transforming Chinas largest consumer ecosystem and its supporting businesses into a truly digital circular economy.1.Advancing in the high-quality delivery of carbon neutrality targetsEmission reduction in our own operations(Scopes 1 and 2)We have taken measures such as smart energy management,clean energy sourcing,and solar panel deployment.Net emissions totaled 4.681 million MtCO2e in FY2023,a year-over-year decrease of 12.9%.Annual operational emission reduction reached 1.419 million MtCO2e,a prominent increase of 128.9%over emission reduction of 0.62 million MtCO2e in the previous fiscal year.We made significant progress in the following three areas,Driving emission reduction in the ecosystem(Scope 3 )We worked on initiatives including efficiency improvements across our supply chain,electrification of ground transport,use of clean energy,and encouraging low-carbon business travel among our employees,with a total of emission reduction of 0.40 million MtCO2e throughout the value chain.In addition,coupled with carbon removal and avoidance projects,our value chain carbon intensity1 reduced from 9.2 MtCO2e per million RMB in FY2022 to 8.7 MtCO2e per million RMB.Based on these steps,we are achieving success towards our goals in terms of both reducing emissions from our own operations and decreasing carbon intensity across our value chain.Emission reduction throughout our value chain(Scope 3)First,in terms of science-based measurement,we cooperated with multiple professional institutions to publicly announce an analytical framework for scientific measurement of emission reduction under the Scope 3 methodology,and defined two implementation paths,i.e.,Engaged Carbon Abatement(digitalization to drive emission reduction)and Embedded Carbon Abatement(leveraging platforms to engage more stakeholders in decarbonization).Second,regarding actual reduction practices,with 1 Value chain carbon intensity is defined as the net value chain emissions per million RMB of revenue.no prior standard for the Scope 3 concept,we have now developed emission reduction methodologies for specific scenarios while implementing practical carbon abatement actions.During this first year of implementing Scope 3 emission reductions,we accomplished emission reductions of 22.907 million MtCO2e,and determined a preliminary road map towards achieving long-term emission reduction goals.Finally and meaningfully,through our Carbon88 ledger platform and Low-carbon Friendly Products Program,we had 409 brands,1.91 million products and 187 million consumers participating in emission reduction.This is one realization of our original intention of giving full play to the power of the platform ecosystem and driving the transition to a digital circular economy for both suppliers and consumers.Executive Summary112.Creating a clean cloudCloud computing serves as a vital and fundamental infrastructure for the growth of the digital economy.We focus our work on three directions,namely building our own clean cloud,replacing traditional IT to boost efficiency and reduce emissions,and empowering the green and intelligent transformation,all striving to realize the value of these green foundational capabilities in the transition to a digital circular economy.As a global cloud industry leader,we are motivated to pioneer green and low-carbon cloud computing.Since we set our goal in 2021 to achieve carbon neutrality in our cloud operations and value chain(Scope 1,2,and 3)by no later than 2030,we have been working to define and build our own green and low-carbon cloud computing across our operations and value chain,by means of extensive self-initiated technology innovation,steady transition to clean energy,and proactive decarbonization of the supply chain.Over the past year,we have made encouraging progress both in intensity and quality of emission reductions.Creating a clean cloudEnergy conservation and efficiency improvement using data intelligenceWe have continued to focus on our hardware and software co-design model,energy-saving server architecture,and liquid-cooled server technology to continuously improve computing utilization and energy efficiency;improving resource utilization efficiency through intelligent O&M(Operation and Maintenance),power management optimization,digital use and management of resources,and other means.In FY2023,overall average PUE(power utilization efficiency,the lower the better)of our self-built data centers continued to decline from 1.247 in FY2022 to 1.215,maintaining a leading level in Asia.Enhancing resource efficiencyWe have continuously intensified the purchase and trading of clean energy and deployment of solar panels in eligible sites,making a breakthrough increase in the proportion of clean energy consumption in overall energy consumption in our self-built data centers from 21.6%in FY2022 to 53.9%,a year-over-year rise of 1.5 times and taking a leading position in the industry in China.During the same period,we extended the life of warranty servers amounting to 25.73 million cores and recycled 49,747 servers for continued service.Green transformation of the value chainWe have actively promoted the decarbonization of our suppliers through periodic assessments and evaluations of their low-carbon practices;meanwhile,we share our standards and technologies,and coordinate clean energy resources,to help operators of our leased data centers boost their efficiency and cut emissions.In FY2023,suppliers collectively reduced carbon by 0.363 million MtCO2e through clean energy and RECs.Executive Summary12According to the Carbon Trusts report,Alibaba Clouds Carbon Benefits,Alibaba Cloud users in China can avoid 85.5%of emissions by switching from the traditional mode of locally deployed data centers and servers.Based on our methodology,our cloud computing for client empowerment reduced 6.863 million MtCO2e of emissions in FY2023.We combine the digital and intelligent capabilities powered by our green cloud computing to boost the digital circular economy transformations of MSMEs across many industries.Replacing traditional IT with cloud computing to boost efficiency and reduce emissionsEmpowering the green and intelligent transformationPartnering with the power industryThe construction of new power systems,connection of renewable sources to the grid,coordination of power sources,loads,grids,and storage,and the building of a unified market all pose great challenges to the industry.In February 2023,Alibaba Cloud signed a memorandum of understanding(MoU)with China Southern Power Grid to deepen cooperation on an AI-enabled Cloud in power dispatching,jointly working towards the goal of safe,reliable,and green development in this space.In March 2023,Alibaba advanced our comprehensive strategic partnership with the State Power Investment Corporation Limited,joining our complementary capabilities to give the electricity users like Alibaba access to more and cleaner power(New Energy )and to help the power industry become smarter and more efficient(Green Digital Intelligence ).Empowering export-oriented MSMEsEnergy Expert,launched by Alibaba Cloud,is an energy consumption and carbon management platform to assist enterprise clients in saving energy and improving efficiency.Energy Expert can intelligently generate carbon footprint inspection and analysis reports for products,which can be uploaded to authoritative certification bodies for one-stop certification and carbon labeling.This helps these enterprises,especially export-oriented MSMEs,to maintain low-carbon competitiveness at home and abroad.As of March 31,2023,Energy Expert had served 2,580 enterprises worldwide.Executive Summary133.Supporting our employeesWe uphold the concept of supporting employees in bettering themselves,and make effort to create an environment that supports the mutual growth of employees and the company.Over the past year,under a challenging macroeconomic environment,we strived to embrace change.First,we continued to build and improve upon a diverse,fair,and inclusive culture,enhance our compensation and benefits systems,and create a great working environment to be a company that employees like working for.Beyond these,we provide employees with abundant learning and development opportunities,maintained an open channel for their information and communication,and work together with employees to jointly address diverse challenges and ensure growth.Our employees come from more than 60 countries and regions.Women account for 49.1%of all employees.Women make up 41.9%of our management,25%of our executive management and 30%of the board of directors of the Group.We create an open and transparent working atmosphere,establish a fair and equitable performance evaluation system,and inspire employee enthusiasm and creativity.Provide heart-warming benefits to every employee,including protections such as health insurance to employees and their families for peace of mind,and enable employees to enjoy a variety of holidays and leave such as companionship leave.In FY2023,a total of 62,138 employees enjoyed companionship leave,in addition to their annual leaves.Alibaba was awarded Forbes 2022 Global Best Employer,ranking among the Top 5 Chinese enterprises,and awarded with MostIn Global Attractive Employer by LinkedIn China.Adhering to the concept of supporting employees to better themselves”,we have provided diverse learning Giving top priority to the health and safety of every Alibaba employee,we spare no efforts in creating a healthy,safe,dynamic,and caring work environment.In FY2023,we initiated a systematic review and system of occupational health and safety management.On the basis of improving the existing emergency management system,we have performed systematic review with reference to ISO14001 and ISO45001 standards,and established the EHS(Environment,Health,and Safety)Committee of Xixi Headquarter Campus on a pilot basis.There are a total of 5,723 emergency responders in all campuses across China,and a total of 138 automatic external defibrillators(AEDs)are equipped.The Cloud Valley,Alibabas Cloud Campus in Hangzhou opened in September 2022,has been certified by ISO14001 and ISO45001 standards,with its experience to be steadily extended to other campuses.In FY2023,satisfaction with the office environment has passed 91%for 4 consecutive quarters.Building Diversity,Equity and Inclusion(DEI)culture and systemEstablishing fair and competitive remuneration and heart-warming benefitsProvide extensive learning and development opportunitiesPromoting employee health and vitalityopportunities and resources for employees at different career and life development stages to assist them in achieving personal growth and career development.In FY2023,a total of 62,383 training sessions have been performed,and the training hours per employee are 51 hours.A total 33,437 new learning materials have been added for employees,especially diverse professional knowledge lectures and training on ESG.Executive Summary144.Promoting inclusive,trustworthy,and responsible consumptionBased on the United Nations Sustainable Development Goals,we promote sustainable consumption in four dimensions of being diverse,inclusive,trustworthy,and responsible.Some highlights of our progress are as follows.We pay special attention to accessibility and age-friendly issues.As of March 31,2023,all of Alibabas major APPs have completed accessibility and age-friendly upgrades.Taobao,Ele.me,Idle Fish,Amap,and Youku have been rated and recognized in the first batch of Excellent cases of age-friendliness and accessibility in online applications by the China Academy of Information and Communications Technology.We have also released 11 free patents to the public that cover accessibility and age-friendly features to promote the sharing of information about accessibility and age-friendly technologies.Accessibility:We make every effort to understand and remove the barriers of the disabled community in using digital technology,so they too can enjoy the benefits of digital technology.Inclusive consumptionBarrier-free consumption:The Taobao and Tmall APPs convert text into speech via optical character recognition(OCR)technology.In FY2023,we helped more than 320,000 visually impaired people to shop with voice-overs that describe items photographed.Visually impaired users are able to order food on Ele.me APP and shop on the Freshippo APP by using a screen-reading guide.Alibaba Health has released medicine box supporting Braille-Chinese conversion,enabling the visually impaired to use medicines safely and conveniently.Barrier-free travel:In Wheelchair Navigation mode,Amap automatically navigates around potential obstacles such as underground passages or pedestrian bridges that are not accessible to wheelchair users.As of March 31,2023,“Wheelchair Navigation”was available in 6 cities,providing accessible navigation for over 900,000 times.Barrier-free communication:DingTalk has rolled out a barrier-free work platform to support the hearing-impaired from over 80 cities across the China Association of the Deaf with Hearing Disabilities system in their study and work through such functions as speech-to-text conversion and real-time AI captioning.Barrier-free cultural entertainment:Youku has been processing audiovisual works using barrier-free supporting technologies,by narrating cinematic scenes without dialogue to assist visually impaired people in understanding the content.In December 2022,Youku Barrier-free Theater added a visually impaired authentication function,and we have seen more than 330,000 content views from its launch to March 31,2023.Age-friendly:We make continuous efforts to provide well-designed,convenient,and efficient digital services for senior consumers.In online communities,we strive to build an age-friendly community under the Special Action Plan for Aging and Barrier-free Transformation of Internet Applications;Our major APPs have all introduced a Senior Mode to be more age-friendly and bridge the digital divide.In offline retail,we have steadily laid out and retrofitted our physical sites in an age-friendly manner,and we are progressively increasing the“Senior Service Ambassadors”in Freshippo stores to help senior shoppers find what they want,check out,carry items,and provide after-sales services.Amap strives to help seniors solve their travel difficulties through a number of age-friendly initiatives.As of March 31,2023,Amap has built more than 3,300 WeCare stations for the elderly in 33 cities across China,with a year-over-year increase of more than 2,000 WeCare stations.Executive Summary15Consumer privacy protection and data security are the bedrock for consumers to enjoy a better life.We integrate the three principles of minimized data collection,ensured user awareness and choices and enhanced user data protection into every part of our products and services,and make full use of privacy technology and secure computing to ensure that consumer privacy and data security is fully protected,so they can shop with trust.We provide users with privacy management features to fully respect and protect their rights to make informed decisions on their data and privacy.Users can check what personal data is being collected by APPs via the Settings-Privacy menu,and choose to deauthorize any private data.For ads and search recommendations,users can disable the use of personal data for certain functions as appropriate.In terms of recommendation optimization,a user feedback mechanism has been established to ensure users decision-making power over algorithm-based results.Protect consumer information through full-link encryption and consumer privacy number protection while continuously improving security capabilities.Taobao has encouraged third-party partners to upgrade their privacy protection systems to better protect the sensitive information of tens of millions of vendors and billions of users.As of the reporting date,the virtual phone number service adopted by Taobao has covered 100%of active consumers on the platform.During the past year,we worked on two fronts to promote responsible consumption to minimize the impact of consumption on the environment and society.Guiding and facilitating green consumption transition:The Carbon88 ledger platform covers various consumption scenarios including online shopping,travel,food delivery,and second-hand transactions.The system uses carbon points to Trustworthy consumptionResponsible consumptionmake consumers aware of behavior that is low-carbon,encouraging and guiding consumers to adopt green consumption habits.In FY2023,a total of 187 million users practiced low-carbon actions through the Carbon88 ledger platform.Shaping a healthy consumption climate:Provide positive guidance away from harmful searches2 to minimize their risks to society.As of March 31,2023,around 80 million potentially harmful searches have been automatically guided to educational content.2 Harmful searches cover keywords related to wildlife,suicidal searches for harmful products,gaming addiction,and even crimes,which may bring harm and risks to society.Executive Summary165.Fueling small businesses for growth and employmentIn the context of digital transformation,MSMEs face three major challenges,namely access to technology,market opportunities,and business competitiveness.As a technology platform company,Alibaba recognizes its responsibility to integrate digital technology with the real economy to provide more capabilities for MSMEs to achieve sustainable development in the digital transformation.In this process,we also contribute to large-scaled and high-quality employment across the society.Access to cutting-edge technologies is the foundation of MSMEs development.While steadily developing leading technologies,we lead in promoting the integration of technology and business by enhancing technologys accessibility and affordability.We also strive to build an open technology ecosystem,so that MSMEs can better benefit from the dividends of innovation.Technological innovation is inherently inclusive.Over the past decade,through technical innovation and large-scale deployment,we have delivered an 80%reduction in the cost of cloud computing power and a nearly 90%reduction in the cost of cloud storage,thus enabling more MSMEs and developers to access affordable computing power.The integration of technology and business has also made technical applications more accessible.Tens of millions of micro,small,and medium merchants on our e-commerce platforms,such as those on Taobao and Tmall have already been operating their businesses on our efficient cloud computing.This integration of the latest cutting-edge technology and the business of MSMEs is a defining feature of the fusion of digital technology with the real economy made possible by our digital platforms.In addition,we are providing cloud computing services to over 4 million clients worldwide.Making technology more availableAlibaba has been a firm believer and advocate of open-source technology and open ecosystems.We directly build and support the largest open-source community in China.In 2022,we remained first among Chinese enterprises in both the OpenRank impact and project activity,and were awarded the Outstanding Open-Source Innovation Company in the 2022 China Open-Source Cloud League(COSCL)Awards.We were especially excited to launch the AI model community ModelScope in FY2023 to meet the needs of model customization,which has often been difficult for MSMEs due to high development thresholds.ModelScope released over 300 models in its first batch,among which over one-third were Chinese models,and covering major AI fields like vision,speech,natural language processing,and multi-modality.Executive Summary17Our platform is a shared ecosystem jointly built by millions of MSMEs and over one billion consumers.On the one hand,we power marketplaces that bring users and growth opportunities to MSMEs;on the other,we continuously deliver and upgrade an array of tools for business operations,decision-making,collaboration,and management based on the integration of cloud,data,and intelligence,so that digital business capabilities can be accessible enough to help MSMEs truly grow and compete.Digital business operation:On Taobao and Tmall,we have built a one-stop platform called Qianniu for merchants,providing a full suite of digital business services together with third-party service providers.In FY2023,more than 10 million merchants managed their stores through Qianniu.Data-driven intelligent decision-making:Intelligent decision-making is becoming an increasingly critical capability for MSMEs to compete in digital business.We have comprehensively upgraded Business Advisor,a data tool used by approximately 6.5 million merchants by the end of March 31,2023,to make core data clearer and structurally simpler,improving the level of understanding of the consumers.To serve a wider range of enterprises on our platforms and beyond,we established Lingyang in FY2023,a service brand focusing on data intelligence services for enterprises to assist them in making data applicable,relying on data,and making decisions based on data.Smart collaboration and management:As of March 31,2023,there were more than 600 million users,in more than 23 million mostly MSME businesses and organizations on DingTalk.DingTalk was recognized by the General Office of Chinas Ministry of Industry and Information Technology as the 2022 National Model Platform for SME Public Services.DingTalk builds a digital ecosystem for merchants and developers with a PaaS(Platform as a Service)platform low-code development toolkit as its base.It provides rich API connectors and Boosting MSMEs with growth opportunities and digital competitivenessa professional low-code development toolkit that supports external developers and in-house employees to build various applications such as ERP,project management,and collaborative office in a lower-cost and higher-efficiency way,dramatically facilitating the digital transformation of MSMEs while spurring innovation and entrepreneurship in software development.As of March 31,2023,there are over 5 million low-code applications and over 3.8 million developers on DingTalk.With the boom in AI technologies,as the leading business services platform in China,DingTalk is in the process of building its intelligence functionality.We are in the process of integrating Tongyi Qianwen,Alibabas latest AI language model,to further enhance the intelligence of instant message(IM),documents,low-code design,video and audio,thus helping countless MSMEs realize their digital and smart transformation as soon as possible.Digital business skills training:To achieve digital transformation,MSMEs need not only access to but also mastery of the new digital tools.In FY2023,we provided free e-commerce introductory courses for MSMEs,with more than 17 million class attendances,and we developed the online learning system Cloud Classroom for corporate clients,with over 6 million learners.Executive Summary18The empowerment of MSMEs with technology naturally yields opportunities for large-scale and high-quality employment.As a digital platform,our contribution to employment can be measured by what we call the three rings.The first ring consists of staff we directly employ;the second ring is jobs arising directly from the platform ecosystem,including entrepreneurial employment in MSMEs and new employment forms;the third ring includes more indirect jobs arising across the supply chains and service providers.According to the latest estimate by a research team from Renmin University of China,the Alibaba ecosystem created or supported,directly or indirectly,a total of more than 70 million jobs in 2022.The growth of the digital economy can bring about a rise in job opportunities and incomes,and stimulate more workers to start their own businesses or choose new forms of employment.As of March 31,2023,the number of digital occupations marked in China has reached 97,including knowledge-intensive jobs such as artificial intelligence trainers and blockchain application operators.We have targeted the building of training platforms to help more people find high-quality employment opportunities in the digital transformation.In March 2020,DingTalk and the China Employment Training Technical Guidance Center of the Ministry of Human Resources and Social Security jointly launched the new career online learning platform,focusing on new career digital resource training.As of March 31,2023,the learning platform training has helped 2.3 million person-times obtain digital manager certification.Creating and promoting large-scale,high-quality employmentExecutive Summary19We continue to expand e-commerce to less developed rural areas in China to boost local economies.In FY2023,the sales of 832 counties previously categorized as impoverished in China have exceeded RMB130 billion on Alibabas platforms,and the total sales of 160 key counties for rural revitalization in China exceeded RMB4.3 billion.We assist rural villages in building fundamental business capabilities in direct procurements,logistics,and digitalization to make agriculture more professional and digital.These efforts are coupled with brand building and developing tertiary service industries,to upgrade the entire rural value chain.Expanding rural e-commerce marketsUpgrading the rural value chainsFreshippo has facilitated the upgrade of agricultural production and business models and incomes through the direct purchase model,buying from rural sellers.It plans to establish 1,000 Freshippo Villages in ten years.As of March 31,2023,more than 140 Freshippo villages/counties have been established in 25 provincial-level regions across China.In rural logistics,Cainiao has set up more than 1,460 county-level shared distribution centers across China.It has also built nearly 50,000 posts in villages and towns to improve distribution efficiency3 and enable consumers in rural areas to more conveniently enjoy e-commerce.Moreover,Cainiao launched accessible supply chain projects4 for agricultural products in 264 counties across 28 provinces in China.In rural branding and cultural tourism development,Alibaba designers have crafted distinctive branding solutions for 13 villages;Fliggy launched a program called Digital Strategy of Discovering Beauty with Philanthropy which has been selected into the Cultural Tourism Marketing Boutique Promotion Case Industry List of the China Association of Travel Services.6.Propelling inclusive rural development through digitalizationThe urban-rural gap remains a great inequality challenge in China.Alibaba has persistently worked in four directions to help bridge the urban-rural gap and promote rural revitalization.We help by boosting the rural economy through inclusive digital platforms,upgrading the rural value chain,nurturing rural talent development,and facilitating vibrant rural communities.3 The projects refer to promoting the efficiency of express delivery in rural areas.4 The projects utilize the logistic technology and the supply chain capacities to sell agricultural products from rural areas across China.Executive Summary20We introduce talents to rural areas to spur rural development,while also making an effort to attract back and retain people in their rural hometowns by providing favorable job opportunities and training.On top of that,we contribute in such areas as elementary education,culture,medical care,and public health to build more dynamic and resilient rural communities.Bringing digital talent to the rural areaWe have dispatched a total of 27 rural commissioners and over 220 rural technology officers.We run programs that promote digital education,cultivate rural talent,create local jobs,and improve schools and healthcare facilities.Our team of rural commissioners was awarded the honor of Outstanding Team for Contributions to Sannong(Agriculture,Rural areas,and Farmers)in 2022 by the General Office of the Ministry of Agriculture and Rural Affairs and the Policy and Regulations Department of the National Rural Revitalization Administration.Nurturing rural talents development and facilitating energetic rural communitiesProviding training on digital skills for rural residentsAs of March 31,2023,we had built 77 regional digital talent training bases jointly with regional governments,enterprises,and specialized industrial parks,offering over 1,200 classes attended by over 190,000 attendances.Strengthening and broadening rural primary educationAs of March 31,2023,through the Cloud for Youth Program,we have deployed cloud computer rooms to 102 schools,serving over 60,000 teachers and students.Recently,we have partnered with the UNESCO Chair on Artificial Intelligence in Education to explore the AI learning space in the future and leverage on the experience in China,to contribute to developing a pathway for globally minded AI education.Executive Summary21We inspire and empower employees to engage in philanthropic actions.In FY2023,the volunteering hours of employees totaled 250,144 hours.More than 110 company Hugs and Help groups were active in over 1,000 philanthropic activities,covering topics of environmental protection,animal protection,and education.We help improve operational efficiency and establish better solutions to social challenges by leveraging our expertise and technology.We further share our technical solutions with philanthropic organizations and volunteers to boost the development of philanthropy across society.In FY2023,we joined hands with the Beijing Illness Challenge Foundation to release the first-ever Rare Disease Map in China,providing more comprehensive and professional information to improve the convenience and accuracy of care for patients.DAMO Academys self-developed smart screening tool for Alzheimers disease with AI technology has helped screen 118,746 seniors with over 600 volunteers.Our Green Code platform has attracted more than 370 philanthropic organizations and supported the digitalization of over 100 of them.We are building an extensive philanthropic ecosystem backed by our platform,engaging more people in the participatory philanthropy more efficiently and conveniently.In FY2023,Alibaba Group donated a total of RMB399 million to the Alibaba Foundation,mainly to philanthropic programs for COVID-19 relief,education,and environmental protection.More than 2.04 million merchants and 470 million consumers took part in philanthropy on our Taobao and Tmall platforms in programs such as Goods for Good,whose funds have helped more than 9 million person-times in projects assisting those in need cumulatively.Building a culture of participatory philanthropyEmpowering philanthropy with technologyShaping the philanthropic ecosystemWe connect with a wide philanthropic ecosystem through the advantages of platforms in aggregating people and organizations and leverage the power of technology to address diverse social challenges.Starting with our employees,we extend to those across our entire ecosystem through smart mechanisms,aiming to promote extensive social involvement and make it easy to do good,anywhere.In FY2023,Alibaba was honored with the 2023 Philanthropic Enterprise of the Year Award in the 7TH China Annual Conference on Philanthropy held by China Philanthropy Times.7.Facilitating participatory and sustainable philanthropyExecutive Summary22In terms of orientation,we prioritize the privacy and security protection of user data as foundational.Alibaba Cloud advocates and follows three principles of data security:you own your data;you manage your data;your data is protected.In terms of governance mechanisms,Alibaba Group has established a structure for data security management at the group level,led by our Risk Management Committee.This effort is replicated within each business unit with a dedicated Personal Information Protection Officer(PIPO),reporting directly to the president of each business line.Alibaba has so far formulated and released over 10 institutional norms on data security and privacy protection.Guided by the Data Security Standards(General Outline),they cover the entire lifecycle of data and personal information,including data collection,flow,storage,use,and destruction.Employees are required to participate in data security training and obtain related certifications.In FY2023,the total coverage of“Security Red Line Certification”is 100%.In terms of technological capabilities,we keep strengthening our privacy protection and data security capabilities to the highest standard.Following the three top-notch technical routes of multi-party secure computing,federated learning,and trusted execution environment,we are able to deliver business results with the absence of sensitive information,striking the balance between data flow efficiency and data security.The Dataphin privacy computing technology of Lingyang currently holds 19 patents on cryptography algorithms,and has been certified with ISO27001/27018,and awarded the Leading Technology Achievement of the Year at the 3rd China Digital Economy Technology Conference.The rise of applications represented by generative AI technologies has presented both new opportunities for business and social development.Meanwhile it also faces numerous challenges in security,trust,and ethical risks.In terms of orientation,the parallel development of AI technologies and science and technology ethics are the twin engines driving the sustainable development of technologies.In FY2023,we established and released six basic principles to define ethical technology:people-oriented,inclusiveness and integrity,privacy protection,security and reliability,trustworthiness,and openness and co-governance.We are implementing these principles in specific business practices.In terms of governance mechanisms,in January 2023,we formally released the Technology Ethics Review Management Norms,as guidance for how technology ethics review should be implemented in business.In terms of practical actions,we have focused on the establishment of a risk management process and technology.To take algorithm governance as an example,we actively respond to the Regulations on Administration of Algorithm Recommendation in the Internet Information Services(IISARM)by developing a series of management specifications,focusing on promoting algorithmic fairness and transparency to build an information flow recommendation system that serves multiple parties.In terms of exploring technology solutions:In response to the emerging threats of attacks against AI,we have developed a testing and defense system to enhance the robustness of technical models,and we open-sourced the industry-first robust learning framework for visual models,so as to expedite the development of robust technologies by others in the industry.Privacy protection and data securityScience and technology ethics8.Building secure and ethical digital trustAs digital technology brings unprecedented breadth and depth of collaboration,and transforms both work and life at an accelerating pace,trust remains the cornerstone of business development and a prerequisite for Alibaba to fulfill our social responsibilities.In this light,we focus on building secure and ethical digital trust in two ways:1)ensuring privacy protection and data security and 2)science and technology ethics.We do so with regards to our positioning,governance mechanism,and technology,while continuously improving our corporate governance mechanism.This is the only way to truly harness technology for good.Our goal is not only to pursue advances in technology,but also to strive to be a leader in safe and ethical data intelligence trust.Executive Summary23Employees hail from more than 60 countries and regions.Taobaos number protection strategy has covered 100%of active users.Women account for 49.1%of Alibabas total employees.The GreenNet Program automatically guided a total of around 80 million potentially harmful searches to educational content.Women account for 41.9%of Alibabas management.The case of social co-governance of network catering of Ele.me was awarded the Contribution Award of GFSI China Technologies Food Safety Case StudiesAverage training duration of 51 hours per person.Amap provided accessible navigation over 900,000 times.Net emissions from our own operations(Scopes 1&2)were 4.681 million MtCO2e,a year-over-year decrease of 12.9%.Emission reductions throughout our own operations were 1.419 million MtCO2e,a year-over-year increase of 128.9%.The value chain carbon intensity was 8.7 MtCO2e/million RMB,a year-over-year decrease of 5.7%.Enabling and engaging the platform ecosystem(Scope 3 )to reduce 22.907 million MtCO2e of emissions in total.Our self-built data centers achieved a decrease of PUE to 1.215.Among Top 5 Chinese enterprises in the“Forbes 2022 Global Best Employers.”The Taobao and Tmall APPs have served over 320,000 visually impaired usersWe hold more than 17,000 global patents,and the year-over-year growth was over 20%Chapter 1 Restoring our green planetChapter 2 Supporting our peopleChapter 3 Enabling a sustainable digital lifeESG Performance SummaryChapter 4Fueling small businesses12.90I.1A.980%5.7GFSI China Technologies Food Safety Case Studies1.419million MtCO2e60Overhours511.215Top5million MtCO2e22.907On A,over 0.2 million sellers across 190 countries and regions sourced business opportunities from or completed transactions with over 47 million buyers.Overmillion47Over17,000DingTalk was awarded the 2022 National Public Service Demonstration Platform for Small and Medium Enterprises.2022 National Public Service Demonstration Platform for Small and Medium EnterprisesWe continue to be ranked first in open-source activity and influence among Chinese enterprises.No.1Alibaba ecosystem created or supported,directly or indirectly,a total of over 70 million jobs in 2022.70Over Overtimes900,000Over320,000million times million AroundExecutive Summary24The total number of employee voluntary service hours is 250,144.Alibaba Health released the first rare disease access map in China.Alibabas self-developed smart screening tool for Alzheimers disease using AI technology has helped screen 118,746 seniors.The Daily Positive Energy program,with ten years of devotion,has given positive recognition and encouragement to 11,722 people.Alibaba was awarded the 2023 Philanthropic Enterprise.2023 Philanthropic EnterpriseThe first rare disease access map The percentage of independent directors has increased to 60%.The percentage of female directors has reached 30%from 20%.The exams on the Alibaba Group Code of Business Conduct，the compliance and risk awareness examination，and theSafety Red Line Certificationlaunched with 100%employee coverage.Six basic principles for science and technology ethics governance of the Group people-oriented,inclusion and integrity,privacy protection,security and reliability,trustworthiness,openness and co-governance.Alibaba Cloud won the highest Titanium Award for Digital and Trustworthy Cloud,awarded by the British Standards Institution.The six basic principlesTitanium Award for Digital and Trustworthy CloudCounties previously categorized as impoverished under Chinas national standards increased sales on our platforms to more than RMB130 billion.Cainiao has enhanced rural logistics efficiency and built over 1,460 country-level smart logistics centers,along with nearly 50,000 posts in villages or towns.The Cloud for Youth program has implemented in 102 schools serving over 60,000 teachers and students.Rural medical expertise learning platform has provided trainings for a total of 14,002 local doctors.Cainiao inked a global logistics cooperation agreement with the United Nations World Food Programme(WFP),becoming a global logistics partner of WFP.Global logistics partner Chapter 5 Enhancing community inclusion and resilienceChapter 6 Facilitating participatory philanthropyChapter 7 Building trust250,144hours118,746seniors11,722people130Over RMBbillion1,460102schools14,002doctors6000%ESG Performance SummaryOverExecutive Summary25Outstanding Team for Contributions to Sannong(Agriculture,Rural areas and Farmers)in 2022Alibabas rural commissioner team was awarded honor.Fortune ChinaListed in China ESG Influence Ranking Amaps Green Travel Carbon Inclusion Project was selected by the Ministry of Ecology and Environment of China and the Office of National Spiritual Civilization in the Beautiful China,I am a practiser 2023 Action Plan to raise citizens awareness of ecological civilization.Top 10 Public Participation CasesThe green and low-carbon practice of Alibaba data centers was selected by the China Energy Research Society and the Organizing Committee of the CREC2022.Top 10 Typical Carbon Neutrality Cases in China in 2022Caijing Dual Carbon Leadership Ranking of Public Companies.1stAmong the Gartner Supply Chain for 2023.Top 25Forbes 2022 Global Best Employers.Top 5 Chinese Enterprises1stInternet platform enterprise in the China Corporate Social Responsibility Development Index,awarded by the China Social Responsibility 100 Forum.Cainiao won the Gold Award for Innovation inTransportation and Logistics in the Asia-Pacific Stevie Awards.Executive Summary26The nature of our social responsibilities is ever changing.Since the past year,the global post-pandemic economic recovery still lacks stability,while new opportunities and challenges face the new high-quality growth model that is needed to emerge.We see both the accelerated deployment of renewable energy around the world potentially heralding the beginning of the end of the fossil energy era(Ember,2023),and also the governance challenges posed by breakthroughs in generative AI technologies.These changes are continuing to reshape the social aspirations and demands of all of society,and we are constantly aligning our strategic goals with the ever-changing environment as well as the shifting needs of our key stakeholders.We believe that however the world may change,clearly defining our social responsibility around our stakeholders interests,leveraging the power of technology,and engaging the stakeholder ecosystem will always be the three pillars of our ESG framework.This is the social responsibility that a technology platform-based enterprise should assume,as well as an opportunity.Our goal is to keep innovating technologies and practicing social responsibilities for the social good.On March 28,2023,Alibaba announced a new organizational and governance structure,with six major business groups consisting of the Cloud Intelligence Group,Taobao and Tmall Group,Local Services Group,Alibaba International Digital Commerce Group,Cainiao Smart Fresh startWe are justbeginning this new journey.Logistics Network Limited,and Digital Media and Entertainment Group,in addition to a number of other business companies.Importantly,the restructuring will not change our ESG strategy or commitments.Instead,it will enable Alibaba to better leverage the strengths of our diverse advantages,to become more agile in reacting to external changes and seizing opportunities,both at the market and industry levels.We will build on our existing ESG commitments and experiences,further integrate social objectives into our business strategy and business design,especially for continuously exploring the connotation,objectives and realization of social responsibility with the characteristics of platform enterprises.We will engage more stakeholders in tackling critical social challenges in a nimbler way.Joining hands with our partners,we aspire to build a sustainable future.27Restoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Facilitating Participatory Philanthropy Building Trust Appendices I I I I I I I Restoring ourgreen planetThe worlds continued ecological degradation starkly represented by ongoing climate change and biodiversity loss poses an increasingly severe threat to humanity.To flip around this trend and preserve a secure operating system for humans,we need both targeted technological innovations and the involvement of all stakeholders.The digital circular economy brings new possibility to this resolution.Together with our ecosystem partners,we seek to practice digital circular business and do our utmost to aid in restoring our green planet.Our environmental actions focus on:Solidly promoting carbon neutrality P30Conserving and restoring nature P5328Restoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Facilitating Participatory Philanthropy Building Trust Appendices I I I I I I I Overall progress in carbon neutralityConserving and restoring natureCreating a green and low-carbon cloud Net emissions from our own operations were 4.681 million MtCO2e,a year-over-year decrease of 12.9.9%million MtCO2e1.419Carbon intensity of our value chain was 8.7 MtCO2e per million RMB,a year-over-year decrease of 5.7%5.7%We have engaged and enabled the platform ecosystem(Scope 3 )to reduce 22.907 million MtCO2e of total emissions million MtCO2eOperational emissions reductions were 1.419 million MtCO2e,a year-over-year increase of 128.9.907Self-built data centers achieved a decrease in PUE(Power Usage Effectiveness)from 1.247 in FY2022 to 1.215,maintaining a leading position in Asia 1.215 Digital Platform Assists in Biodiversity Protection program was selected into the Business Biodiversity Conservation Cases at the 2022 UN Biodiversity Conference(COP 15)Business Biodiversity Conservation Cases 53.9%of energy consumption of self-built data centers was clean energy,a significant progress compared to 21.6%in FY2022,maintaining a leading position in ChinaS.9Assisting more organizations in reducing their reliance on locally deployed data centers and servers by migrating to the cloud,empowering clients to reduce emissions by 6.863 million MtCO2emillion MtCO2e6.863Restoring our green planetBuilding circular logisticsMaking innovation in low-carbon transportationXiaomanlv(little donkey)has completed over 29 million orders 29Overmillion ordersThe proportion of electric vehicles used in the intra-city distribution fleet used by Cainiao Direct Delivery(Cainiao Express)reached 333%We worked to achieve intelligent optimization of the ordering and transportation routes for direct retail sales,effectively reducing over 28,771.7 MtCO2e of emissions 28,771.7MtCO2eWorking towards circularity in packagingOver 23.82 million cartons were recycled and reused in Cainiao Posts 23.82million29Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Environmental strategy and governanceWhen we apply Alibabas three pillars of“Technology,Social responsibility,and Stakeholder ecosystem”to our environmental responsibilities,we arrive at our capacity to bring about a“Digital-Circular-Economy”.Following this principle,we have continuously deepened efforts in environmental fields.We have defined four ESG issues related to the environment on top of our explicit carbon targets proposed in 2021,namely reducing packaging,water conservation,reducing and recycling waste,and protecting ecosystems.To develop an effective governance mechanism that secures our strategic ESG objectives,we have set up the sustainability committee at the board level,the sustainability steering committee and the ESG Strategy and Operation Department at the Group level,and the ESG working group that connect all business units,with a Group-wide ESG indicator management system in place.We present our recent developments in two domains:solidly promoting carbon neutrality and conserving and restoring nature.Environmental strategy and governance30Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Progress in carbon neutralityGreening our operations and value chain Engaging and enabling decarbonization through our platform ecosystem Solidly promoting carbon neutralityIn FY2023,we followed the“Digital-Circular-Economy”principle to explore opportunities of cutting carbon pollution while still promoting economic growth.In addition to energy transformation,we have adopted a variety of efficiency-enhancing and emission-reducing methods.Particularly,we have been making solid progress towards emission reduction via innovations in digital technologies and platform mechanisms.Solidly promoting carbon neutrality31Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Progress in carbon neutralityIn 2021,we made three pledges as follows:Decarbonize Alibaba(Scopes 1 and 2):By 2030,we will achieve carbon neutrality in our own operations.Green the value chain(Scope 3):By 2030,we will collaborate with our upstream and downstream value chain partners to cut emission intensity by 50%from the base year of 2020.Alibaba Cloud will achieve Scope 3 carbon neutrality during the same period.Enable a low-carbon circular digital ecosystem(Scope 3 ):Beyond our own operations and direct value chain,Alibaba pledges to leverage our digital platforms to encourage even broader participation by stakeholders that our efforts can reach.By 2035,we will facilitate 1.5 gigatons of GHG(greenhouse gas)emission reduction over 15 years across Alibabas digital ecosystem.In FY2023,we took substantial steps toward meeting our three pledges,based on the principle of direct carbon reduction takes precedence over carbon removal,and carbon removal takes precedence over offsets.In FY2023,direct net GHG emissions(i.e.,Scope 1)from Alibaba accounted for 0.926 million MtCO2e,including stationary combustion(such as the use of natural gas),direct fugitive emissions(such as refrigerant leakage),and mobile combustion(company-owned transportation in our retail operations).Indirect net GHG emissions(i.e.,Scope 2)from purchased electricity and heat were 3.755million MtCO2e,mainly used for operating cloudcomputing data centers,retail stores,offices,andwarehouses.Net emissions from our own operation(the sum of Scope 1 and 2)were 4.681 millionMtCO2e,a decrease of 0.691 million MtCO2e,or 12.9%year-over-year.The inspection was completed by theChina Environmental United Certification Center(CEC)and audited by Bureau Veritas.Through intelligentoptimization for energy conservation and higherefficiency,clean energy sourcing,and distributedPV,we achieved reductions of 1.419 million MtCO2ein our operations(Scope 1 and 2)in FY2023,a year-over-year increase of 128.9%.Net emissions in operations and related emission reduction32Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Carbon intensity along value chain and low-carbon efforts(Scope 3)In FY2023,indirect GHG emissions intensity within Alibabas value chain(i.e.,Scope 3),which was calculated based on the carbon inventory principle of accuracy and accessibility,were lowered from 9.2 MtCO2e per million RMB in FY2022 to 8.7 MtCO2e per million RMB.We have achieved a reduction of 400,000 MtCO2e in our value chain through promoting digital optimization and energy transition in our logistics services,enhancing energy efficiency and utilizing clean energy in our leased data centers,and encouraging employees to adopt low-carbon business travel behaviors.Combining these efforts with our projects on carbon removal and carbon offsets,we have achieved a year-over-year decrease of 5.7%1 of our carbon intensity throughout the value chain.So far,we have made solid progress in FY2023 in maintaining business growth while marching towards our operational and value chain carbon neutrality goals.Further cutting carbon pollution while promoting business growth will be a persistent long-term challenge.We will continue to accumulate experience during this process,including exploring relevant cutting-edge investments2 from the beginning of 2022 to the present,combining short-to long-term planning,and incorporating carbon reduction targets and methods into business design,to promote the high-quality achievement of our ultimate goals.Engaging and enabling decarbonization through our platform ecosystem(Scope 3 )FY2023 marks the first,groundbreaking year of our Scope 3 target of reducing 1.5 gigatons of carbon emissions in 15 years in our ecosystem.Unlike with Scope 1,2,and 3,advancing Scope 3 requires establishing new scientific,and credible standards while advancing carbon reduction goals.We focused on three directions.First,we published our Scope 3 methodology,which clarifies definitions and measurements.Second,we prioritized our low-carbon actions in eight areas,i.e.,low-carbon travel,low-carbon dining,low-carbon products,reuse of idle items,low-carbon cloud,low-carbon offices,low-carbon logistics and low-carbon production,achieving an emission reduction of 22.907 million MtCO2e in Scope 3 ,along with an emission reduction path to accomplish our long-term goals mapped out.Third,and more significantly,in terms of involving stakeholders,our Carbon88 ledger platform and Low-carbon Friendly Products Program have amplified decarbonization through bringing 409 brands,1.91 million products,and 187 million users to participate in emission reductions.In this way we achieve our initial goal of giving full play to the power of the platform ecosystem to drive the transformation to a digital circular economy from the supply and consumption sides.1 The year-over-year decrease in this case is calculated based on actual data,rather than equal to the decrease between 8.7 and 9.2.2 From the beginning of 2022 to the present,we have continued to invest in low-carbon in two areas,namely green technology and digital energy management.For green technology,investment projects include Zhejiang Noah Fluorochemical Co.,Ltd.which focuses on the research,development,and manufacturing of immersion cooling fluids applied in low-carbon data centers and efficient and environment-friendly fire extinguishing agents.For digital energy management,investment projects include EQuota Energy,an AI and big data driven company that provides energy and carbon-related products and services.These offerings empower enterprises,industrial parks and the government to effectively manage GHG emissions,set emission reduction objectives and forecast emission trends,hence promoting sustainable development.33Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Greening our operations and value chain To attain operational carbon neutrality and halve the carbon intensity of the value chain,we have integrated carbon goals and technological innovations into our business processes,and shaped four high priority emission reduction scenarios by applying digital intelligence for lower energy consumption and higher efficiency,transforming the way we use resources,and influencing the stakeholder ecosystem.These four scenarios are sustainable campuses,green and low-carbon cloud,smart circular logistics,and sustainable retail stores.Based on these,we have extended our influence from ourselves to the larger value chain.Sustainable office campusesOur low-carbon efforts start from our own operations and work spaces.We provide a green,healthy,safe,and vibrant work environment for our employees while promoting a green and low-carbon mode of working.We have developed systematic principles of sustainable campus construction.During the early construction of a campus,we adopt more eco-friendly and sustainable designs,as well as low-carbon construction and renovations.During regular operations,we continuously explore digital intelligence to save energy and boost efficiency,thus effectively promoting energy transformation and the recycling of various resources.Meanwhile,we continue to engage our employees and suppliers in low-carbon practices.Overall,we achieved 21,409.4 MtCO2e reduction throughout the operation(Scope 1 and 2)of our campuses and 8,067.9 reduction throughout the value chain(Scope 3).Sustainable office campuses Green and low-carbon cloudDigital and intelligent circular logistics Sustainable retail stores Decarbonizing the value chain Solar power in Alibaba campus3 QinCheng Intelligent Space is a brand that provides smart campus services for various business groups/companies/units of Alibaba Group.34Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Through IoT(Internet of Things)and digital technology,comprehensive digitization of campus infrastructure has been achieved,and an intelligent decision-making engine for campus facilities and equipment has been implemented by combining pedestrian flow,weather,and environmental parameters to achieve intelligent management of campus facilities and equipment.This has optimized energy use in campuses,with a reduction of 2,866.2 MtCO2e in Zones A and B of Xixi Campus in FY2023.We have also gone paperless in the office,replacing paper signing with electronic signing of legal contracts,making the process efficient,secure,and low-carbon.In FY2023,the number of electronic contracts signed accounted for 93.9%of the total number of signed contracts.To accelerate the energy transition,we deploy distributed solar panels on rooftops and source clean energy.In FY2023,the clean energy consumption of self-operated campus totaled 27.858 million kWh and reduced 18,543.2 MtCO2e of emissions.Our clean energy sourcing also covers properties for external rental.Our properties for external rental in Zhejiang Province,as the first pilot,consumed over 4.477 million kWh of clean energy in FY2023,resulting in 3,149.4 MtCO2e reduction.To recycle assets,office furniture and other assets are managed online,and we optimize the processes of moving,transferring,scrapping,and disposing of assets.A total of 62,000 pieces of furniture were put back to use in FY2023.To engage employees in low-carbon practices,we have developed a digital management platform that covers 18 types of low-carbon office behaviors3,and encourages more employees to participate in low-carbon practices.In FY2023,over 110,000 employees completed 3 million instances of low-carbon office behaviors.Besides,over 70,000 employees completed 1.18 million instances of four types of low-carbon business travel behaviors4,resulting in 4,918.5 MtCO2e reduction.Green construction:All the new campuses built from 2022 onwards are benchmarked to LEED Gold standards,with various low-carbon considerations in the use of materials,construction,and other aspects.As of March 31,2023,a total of 131,000 square meters of our campuses had been certified as LEED Gold.Low-carbon renovation:We cut emissions from renovations through the extensive use of assembled components.Taking Gaoqiao Campus as an example,standardized construction parts such as implanted assembled walls,assembled bathrooms,and modular conference rooms reduce construction solid waste by over 80%compared with conventional renovations,equivalent to a 28%reduction in life-cycle emissions.Moreover,over 60%of these materials are recyclable.Design for low-carbon commuting:We encourage employees to use public transit for daily commutes and set up metro station shuttle buses in some campuses in China.At the same time,we widely deploy charging stations in our self-operated campuses so as to encourage employees use of EVs for low-carbon commutes.Design for biodiversity:Respecting the environmental attributes of each campus,we actively preserve and plant native vegetation,regularly monitor and maintain ecological spaces,and make use of roof spaces that can be used for roof greening to increase biological habitat space.Design against extreme weather:We follow the sponge city concept to ensure drainage and prevent flooding in our campuses.We enable fire prevention,seismic resistance,evacuation design for civil defense and UPS(uninterruptible power supply)under special circumstances.Design for water conservation:We design rainwater collection and purification facilities in our campuses to maximize the recycling of rainwater,and reuse it for garden irrigation and other purposes.Meanwhile,we install water-saving devices,tap water systems and wastewater recycling devices,among others,to save water.Sustainable design Green construction and low-carbon renovationSustainable and participatory operation 3 18 types of low-carbon office behaviors:turning off the air conditioner timely,switching off the lights timely by scanning QR codes,packaging food without using cutlery,recycling plastic bottles,packaging food without using plastic bag,Clean Your Plate Campaign,recycling cardboard boxes,climbing stairs,bringing your own water cup,using centralized office when work in campus at weekend,making the best use of notebook materials,low-carbon relocation,Hitchhiking,applying for mini business cards,turning off the lights timely,turning off the TV timely,double-sided printing,picking up express delivery for colleagues.4 4 types of low-carbon business travel behaviors:taking the train instead of the plane,carpooling with multiple people,taking the company bus,and taking the subway.35Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Green and low-carbon cloudCloud computing serves as a vital and fundamental basic facility for the development of the digital economy.Ensuring computing power becomes more efficient and low-carbon has grown even more important today as the AI revolution speeds up.As the world-leading cloud computing service provider,we strive to be a leader in low-carbon cloud computing.To achieve this,we need not only to build our clean cloud,but also to enable other organizations to meet their data processing and storage needs by transitioning to the cloud with less reliance on local data centers and servers.In addition,we provide cloud-based digital tools for other enterprises to achieve both digital transformation and emission reduction.In this way,we can truly leverage these green fundamental capabilities to boost the digital and circular economy transformation.million MtCO2eAlibaba Clouds self-built data centers emission reuction from clean energy transition1.105Alibaba Clouds leased data centers emission reuction from promoting consuming clean energy and trading RECs0.363million MtCO2eFor more details：Please refer to Chapter 1 Creating a clean cloud P36For more details：Please refer to Chapter 1 Engaging and enabling decarbonization through our platform ecosystem P46For more details：Please refer to Chapter 1 Engaging and enabling decarbonization through our platform ecosystem P4636Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy We have become an industry leader in promoting new energy consumption through collaborative scheduling of computing power and electric power.In June 2022,Alibaba Clouds data centers cooperated with North China Electric Power University to jointly undertake the research project based on flexible load scheduling.We conducted validation experiments in Alibabas data centers in Zhangbei and Nantong,achieving the first co-scheduling of data centers and electric power systems5 for the common goal of promoting new energy consumption.This is regarded as the first step towards cross-regional scheduling optimization validation experiments in China.Promoting new energy consumption by collaborative scheduling use of electric power and computing powerWe pledge that clean energy will account for 100%of the total energy supply for cloud computing as of 2030.In FY2023,we continued to increase the use of clean energy and lead the industry,significantly increasing the proportion of clean energy in total energy consumption in our self-built data centers from 21.6%in FY2022 to 53.9%.This resulted in emission reduction of 1.105 million MtCO2e,leading the industry.Specifically,our self-built data centers in Guangdong Province have taken the lead in achieving carbon neutrality,with clean energy accounting for 100%of the total energy consumption and a small amount of carbon removal and offsets.We also conducted the collaborative scheduling of our data center and the electric power system for the common goal of promoting new energy consumption in FY2023 for the first time in the industry.We have steadily improved the equipment recycling and circulation,and built our own recycling centers for testing,refurbishment,dismantling,and maintenance of servers and spare parts,with an aim to extend the lifecycle of servers.In FY2023,we had 25.73 million cores of warranty-extended servers,piloted a five-to-six-year warranty for servers,and made cyclic utilization of 49,747 servers through refurbishment.Resource usage transformationPromoting green transformation of the supply chainBy enhancing the monitoring,measurement,and analysis capabilities of energy consumption and emissions of leased data centers,we motivate more suppliers to continually step up their green efforts,with an assessment mechanism in place to regularly evaluate their low-carbon performance.Meanwhile,we provide resources our suppliers need,share standards and technologies of our self-built data centers to help them optimize the PUE of leased data centers,and impel them to consume clean energy and trade RECs.In FY2023,the emission reduction brought by the latter was 0.363 million MtCO2e.Six of our leased data centers in Guangdong achieved a clean energy consumption rate of 100%.5 The essence of collaboration of computing power and electricity power refers to the flexible adjustment of the spatiotemporal distribution of electricity load in data centers in the power grid by optimizing and scheduling massive computing tasks and resources in the computing power network.This technology can reduce the energy cost and GHG emissions of data centers,enhance the renewable energy consumption capacity of the power system,support the sustainable development of digital networks and the safe,economical,and low-carbon operation of the power system,and assist in achieving carbon neutrality goals.PUE of self-built data centers1.215Self-built data centers percentage of clean energy consumption in total energy consumption53.9%We have further reduced PUE through scientific and technological innovation and intelligent operation and maintenance in a low-carbon way.In FY2023,our self-built data centers witnessed a decrease in PUE from 1.247 in FY2022 to 1.215,continuing to maintain a leading position in Asia.In terms of scientific and technological innovation,we focus on exploring and developing efficient software and hardware collaboration modes,energy-saving servers,liquid-cooling server technology,high-performance power supplies,digital resource management platforms,and other cutting-edge technologies for the purpose of energy conservation and efficiency improvement in all aspects of operations.In terms of intelligent operations and maintenance,our multi-disciplinary teams with expertise in electrical engineering,HVAC,and automation have developed a digital O&M strategy management platform,which designs 20 kinds of standard strategies,enabling real-time management of the data centers across China.In addition,we have optimized O&M strategies with intelligent algorithms,and built coupled system models grounded on water cooling systems and physical cores of each device,while continuing to study massive historical data to improve models and fine-tune O&M.As of March 31,2023,after deploying intelligent algorithm O&M strategies in our seven large-scale data centers,the energy consumption of cooling systems had reduced by 5-11%.Energy conservation and efficiency improvement via digital intelligence37Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Green and low-carbon scientific and technological innovation in data centersSoftware and hardware collaborationCollaborative innovation of software and hardware on computing,storage,and interconnecting components has further improved data processing performance and efficiency.We developed the proprietary Yitian 710 chip and the M series of Panjiu servers,which have enhanced the overall cost-effectiveness of cloud computing in such core scenarios as database,data intelligence,video codec,and web server by over 30%,while reducing the energy consumption per terabyte of data by 14%.The cloud-native service of AURORA heterogeneous computing platform enables cross-location and cross-chip operation,and improves computing energy utilization and energy efficiency by 30%.Energy-saving servers Our dominant server architecture is designed based on the principles of modularity and standardization to achieve flexible configuration,high density,and high compatibility.Compared with traditional architectures,it improves system cooling by 10%while reducing energy consumption by more than 30%.Meanwhile,it supplies power as per actual server loads,allowing power sources to keep working at the optimal efficiency,which in turn lowers energy consumption and emissions.Digital resource management platformOur dominant digital resource management platform,Faraday,efficiently manages resources used in data centers around the world,providing core functions such as digital inspection of GHG emissions,energy management,and planning for carbon neutrality.In FY2023,we consolidated the integrated management of water,electricity,and diesel into the Faraday platform,enabling full coverage of on-site Operations and Maintenance(O&M)data.With this,we are able to provide our clients with accurate GHG emission bills for our cloud products and services.Liquid-cooling server technologyOur dominant immersive liquid-cooling architecture with consolidated infrastructure and IT equipment abandons mechanical cooling elements such as fans and air conditioners,enabling an average annual PUE of less than 1.09 and energy savings of 36%compared to the industry average.The real-time precise temperature control across all scenarios enabled by the liquid cooling technology unleashes the computing potential of chips to better serve the demand for higher-performance computing in the future.High-performance power supply Our dominant high-performance Panama power solution,featuring improved power efficiency from a shortened power supply path and uninterrupted DC,has been fully deployed in our new self-built data centers.As of March 31,2023,366 sets have been applied nationwide in China,with a capacity of over 800 MW.In July 2022,the Panama Power Industry Standard(YD/T 4006-2022),DC Uninterruptible Power Supply System with 10kV AC Input for Information Communication,was officially released and implemented and opened to the world at large.Liquid-cooling server technologyPanama power solution38Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Low-carbon model:Alibaba Clouds self-built data center in ZhangbeiSince its establishment in 2016,Alibaba Cloud Zhangbei Data Center has contributed to local high-quality sustainable development.Energy transitionZhangbei Data Center has joined the four-party wind energy trading scheme in Zhangjiakou,Hebei Province since 2018,and was among the first to participate in Chinas green energy market,sourcing a total of 540 million kWh of clean energy in FY2023,a 94.2%year-over-year increase.To facilitate smart energy conservation and efficiency improvementZhangbei Data Center has continued to implement an efficient energy-saving strategy and fully utilized advanced energy-saving technology,with its PUE decreasing to 1.19 as of March 31,2023.To facilitate waste heat recovery and water conservation&purificationZhangbei Data Center recovered waste heat from its servers to supply heat to the production and living areas in parks,as well as to empower green agriculture,with a cumulative supply of 15,250 GJ in FY2023.Zhangbei also recycles and purifies its wastewater for reuse,having cumulatively treated 12,482 tons of wastewater in FY2023,of which 6,234 tons were reused.39Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy Digital and intelligent circular logistics Logistics is a vital driver for social and economic operations,but also a key challenge for global emission reduction,especially for emerging and developing economies.Through long-term efforts and capacity building,we aspire to become a builder and leader in digital and intelligent circular logistics.Together with our consumers and suppliers,we are exploring five major links in the logistics chain-order,packaging,transport,warehousing,and recycling-to promote planned emission reductions and system transformation in logistics through digital optimization,energy transition,and packaging improvement.According to auditing,by deploying solar panels on rooftops and sourcing clean energy,Cainiao reduced emissions by a total of 21,003.2 MtCO2e.By intelligent optimization of the ordering and transportation processes,Alibabas digital supply chain team has helped reduce emissions throughout the value chain by 28,771.7 MtCO2e.We have started intelligent optimization of three typical measures,such as multi-order consolidation,replenishment of perishable foods,and reducing reverse logistics.In the order fulfillment process represented by direct retail sale,these measures effectively decreased 19,080.9 MtCO2e of emissions in FY2023.Multi-order consolidation:Multiple product orders with the same address and placed at similar times will be merged in the direct retail backend to reduce the overall transportation volume,thereby decreasing unnecessary emissions during the packaging and transportation processes.Replenishment of perishable foods:The conventional mode relies on manual judgment to decide replenishment.But we have upgraded this judgment process to effectively reduce losses and waste of perishable foods by using intelligent algorithms,thereby decreasing unnecessary emissions.Reducing reverse logistics:We adopt intelligent algorithms to identify and locate orders that are more likely to be cancelled,and methods are taken to retain them in the direct retail backend for a short period to prevent them from entering the actual order fulfillment process quickly,thereby decreasing unnecessary emissions in subsequent warehouse operations and reverse logistics.OrderFor more details：Please refer to Chapter 1 Minimizing packaging materials P55We continuously explore the various aspects of packaging reduction,packaging optimization and packaging recycling,and inspire the value chain and platform ecosystem partners to work towards the same goal.We have developed simple packaging solutions tailored to specific industries,continuously increased the use of original boxes during shipment,and used reusable delivery bins in both warehouses and transport.PackagingCainiao recycled boxes40Restoring Our Green PlanetRestoring Our Green PlanetSupporting Our People Enabling a Sustainable Digital LifeFueling Small Businesses Enhancing Community Inclusion and Resilience Building Trust Appendices I I I I I I I Facilitating Participatory Philanthropy We continue to drive energy transition in warehousing,primarily via deploying distributed solar panels on the rooftops of logistic warehouses.As of March 31,2023,we have instal
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CrossroadsSustainability report 2023Contents03 Foreword by the board of management 06 strategy and management07 Bosch Group profile09 Sustainability management20 Environment 23 Climate action38 Circular economy47 Water52 social 53 Bosch as an employer69 Complying with due diligence obligations relating to human rights and the environment79 Responsibility to customers 82 Governance 83 Compliance88 Political lobbying94 annex 95 List of graphics and tables97 GRI content index106 Independent auditors report109 About this report110 Publication detailsSustainability report 2023EnvironmentGovernanceSocialAnnex02Strategy and managementForewordDear readers,Anyone looking at our world today can see that it is by and large in a state of permanent crisis.But seeing only problems is not a basis for shaping the future.If we want to flip the switch and encourage action that will safeguard our lives and the lives of future genera-tions on Earth,we need to broaden our horizons and see the positives,too.The present is not just a time of major challenges,it also offers much cause for encour-agement and optimism.The number of people living in poverty is steadily declining,for example,and we are prevailing in the fight against hunger.Global health is continuously improving and life expectancy along with it.People are living longer around the world and despite all the current crises.This is not least thanks to technological achievements.We are even making progress in how we deal with one of the greatest challenges facing humanity:mitigating climate change is now a global objective for all nations.DR.StefAn HARtunG Sustainability report 2023EnvironmentGovernanceSocialAnnex03Strategy and managementThe need to move away from fossil fuels,which have driven our mobility and our prosperity for centuries,is no longer up for debate.Are the decisions and mea-sures already taken sufficient?Definitely not,but we are making progress.And there is a lot more we can do.Industry has a major role to play here it is part of the problem but also part of the solution.As an innovation driver and technology provider,industry must preserve our existing achievements,strive for further progress,and also transform itself.More than 20 percent of global CO emissions are attributable to industry to factories that form the basis for the ecological trans-formation of all sectors of the economy.This is where technologies are being developed for generating,storing,and distributing energy,for promoting careful use of resources and recycling,for electrifying mobility and alternative powertrains.The ecological transfor-mation will only work if we start here.It hinges on industry on technology companies like Bosch.Sustainability is an integral part of corporate culture for Bosch.With its more than 400 locations world-wide,the Bosch Group has been carbon neutral overall since 2020(scope 1&2).1 Bosch creates technology that is“Invented for life.”Our solutions aim to fascinate,improve quality of life,and help conserve natural resources.Our operations must be ecological,economical,and socially sustainable.For us,sustain-ability is a non-negotiable part of doing business.Bosch is continually striving for improvement in all its areas of activity as part of its commitment to the environment and climate.For example,we aim to 1 For terms and details see the“Environment|Climate action”section.StefAn GRoSCHSustainability report 2023EnvironmentGovernanceSocialAnnex04Strategy and managementincrease the proportion of recycled materials in household appliances.Our ambition is to use,repair,and reuse products and materials for as long as possible.We also focus on sustainability in the use phase of our products such as in manufacturing,where innovative solutions such as connected hydrau-lics are enabling increased energy efficiency.There,for example,our variable-speed drive solutions have the potential to reduce energy consumption by up to 80percent.At the same time,Bosch is investing in new technolo-gies with an increasing focus on green tech for the ecological transformation.Taking energy generation as an example,by 2030 we plan to spend more than a billion euros on heat pump technology.Hydrogen is also a strategically important market where Bosch is playing a leading role.Few companies can offer such a broad portfolio:We are developing technologies for water processing as well as for the production,com-pression,storage,and use of hydrogen in a variety of sectors.Bosch is undertaking up-front investments in this regard:Between 2021 and 2026,we will invest roughly 2.5 billion euros in hydrogen technologies.Our electromobility business is beginning to bear fruit.In 2022,we were able to increase production of compo-nents for electric driving by a good 50 percent com-pared with the previous year,while our customer Stefan Grosch Member of the board of management and director of industrial relationsDr.Stefan Hartung Chairman of the board of managementnumbers doubled in the period from 2019 to 2023.In 2026,Bosch plans to generate sales of 6 billion euros with electromobility solutions.We are on the right track.Key factors for sustainable action and establishment of new technologies include a sense of conviction,a clear strategy,practical implementation,and persistence.Under the right conditions,companies can thus successfully transform and even occasionally reinvent themselves,while helping to build interdependence between ecology and economy,and reconcile the discord between humans and our environment.At Bosch we want to play our part in creating a more climate-friendly world.We wish you an enjoyable read and thank you for your interest.Sustainability report 2023EnvironmentGovernanceSocialAnnex05Strategy and managementstrategy and managementSustainability report 2023EnvironmentGovernanceSocialAnnex06strategy and managementstrategy and management By acting in an economically,environmentally,and socially responsible manner,we want to improve peoples quality of life and safeguard the livelihoods of present and future generations.Bosch Group profileThe Bosch Group is a leading global supplier of technology and services.It employs roughly 429,000 associates world-wide(as of December 31,2023).The company generated sales of 91.6 billion euros in 2023.Its operations are divided into four business sectors:Mobility,Industrial Technology,Consumer Goods,and Energy and Building Technology.Uni-versal trends such as automation,electrification,digitaliza-tion,and connectivity,as well as an orientation to sustain-ability,are increasingly determining the groups business operations.In this context,Boschs broad footprint as a global and diversified technology company strengthens its innovativeness and robustness.Bosch uses its proven expertise in sensor technology,soft-ware,and services to offer customers cross-domain solu-tions from a single source.It also applies its expertise in connectivity and artificial intelligence in order to develop and manufacture user-friendly,sustainable products.With technology that is“Invented for life,”Bosch wants to help improve quality of life and conserve natural resources.Sales revenueBosch Group 2023 by region,in billions of eurosAmericas 16.9Asia Pacific(including other countries,also in Africa)27.9Europe 46.891.6Sales revenue structureSales revenue Bosch Group 2023 by business sectorIndustrial Technology8.1%Mobility 61.3%Consumer Goods including other 22.2%Energy and Building Technology8.4%G 02G 01Sustainability report 2023EnvironmentGovernanceSocialAnnex07strategy and managementBosch Group profileWith its more than 400 locations worldwide,the Bosch Group has been carbon neutral overall(scope 1&2)since 2020.As part of this,residual emissions of some 581,000met-ric tons of CO were offset with carbon credits in 2023.Year on year,this is a decrease of roughly 136,000 metric tons of CO,or 19 percent.2The Bosch Group comprises Robert Bosch GmbH and its roughly 470 subsidiary and regional companies in over 60 countries.Including sales and service partners,Boschs global production,engineering,and sales network covers nearly every country in the world.Boschs innovative strength is key to the companys further development.At 136 locations across the globe,Bosch employs some 90,000associates in research and development,of which nearly 48,000 are software engineers.You will find further details on research and development at Bosch online and in the 2023 annual report,page 90 et seq.The company was set up in Stuttgart in 1886 by Robert Bosch(18611942)as“Workshop for Precision Mechanics and Electrical Engineering.”The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial free-dom of the Bosch Group,making it possible for the company to plan over the long term and to undertake significant up-front investments in the safeguarding of its future.Ninety-four percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH,a charitable founda-tion.The remaining shares are held by Robert Bosch GmbH and by a corporation owned by the Bosch family.The major-ity of voting rights are held by Robert Bosch Industrietreu-hand KG.Further information on the organization of the Bosch Group,the activities of the business sectors and the companys economic situation can be found in the current annual report.Bosch supports the Sustainable Development Goals(SDG)of the United Nations.2 Scopes 1,2,and 3 are used in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.For further details about the Bosch Groups carbon neutrality(scope 1&2),see the“Environment|Climate action”section.Sustainability report 2023EnvironmentGovernanceSocialAnnex08strategy and managementBosch Group profileSustainability managementTo us,sustainability means striking a balance between the economic,environmental,and social dimensions of our busi-ness activities as part of responsible corporate governance.Back in 2018,we summarized the focus areas of our sustain-ability management in a vision that describes six dimensions.Each of these is specified and continually enhanced by refer-ence to two focus activities with clearly defined,medium-term targets.Derived from market and competitor analyses,they set the framework for our actions.Our sustainability activities consider the entire value chain from materials and goods purchasing or manufacturing operations at Bosch sites to the use phase of products sold and right through to their end of life.sustainability as a growth driver We are convinced that sustainability can make a significant contribution to Bosch achieving its growth objectives.We therefore continually strive to create win-win situations by achieving economic success while enhancing sustainability at the same time.Our target vision for sustainability with its six dimensions defines the strategic focal points in this respect.Compliance with legal parameters,social values,and norms,as well as good positioning on the market create the“license to operate”for our company,so to speak.Topics such as cli-mate action,circular economy,and water offer further po-tential to stand out positively from the competition.Exam-ples of this are energy-efficient or water-conserving products as well as recyclable packaging or repairable products.This is how our“Invented for life”mission statement becomes a reality:Bosch products aim to fascinate,improve quality of life,and help conserve natural resources.Bosch uses value driver analysis as a methodology to sys-tematically identify and assess the potential available on the market.Individual sustainability measures can thus be ana-lyzed and their impact simulated for example,substitution of natural gas with electricity from renewable sources and the resulting reduction in CO emissions.Because the analy-sis not only describes the physical relationships such as between energy sources,energy consumption,and the re-sulting CO emissions but also the financial effects of the measures,a comprehensive financial and non-financial eval-uation can be produced.This means that we can create mea-surable economic,ecological,and social added value using just a limited number of levers and associated measures(see the“Environment”section).Sustainability report 2023EnvironmentGovernanceSocialAnnex09strategy and managementSustainability managementNew DimensionsSustainability 2025target visionCircular economy1|Materials efficiency2|Second lifeBosch is reducing its ecological footprint and striving to create social benefit.In this endeavor,Bosch takes its lead from the circular economy principle.Climate action1|Reducing Co2 emissions2|energy efficiency and renewable energiesIt is Boschs ambition to become a climate action pioneer advancing the expansion of renewables and striving continuously for energy efficiency.Human rights1|Responsibility2|transparencyBosch takes on responsibility and is sensitive to human rights being respected along the entire value chain.Diversity1|equity2|InclusionFor Bosch diversity,equity,and inclusion are key to long-term success in business.In addition,Bosch contributes to the common good in the communities at its locations.Water1|Water scarcity2|Water qualityFor Bosch,water is a resource to be treated sparingly.Regions in which water is scarce are a special concern.Health1|occupational health and safety2|Substances of concernBosch contributes to peoples health with innovative products and services and by ensuring that people and the environment do not come to harm through its production processes.our ambition:By acting in an economically,environmentally,and socially responsible manner,we want to improve peoples quality of life and safeguard the livelihoods of present and future generations.G 03Sustainability report 2023EnvironmentGovernanceSocialAnnex10strategy and managementSustainability managementdimensionGoals2023 status UN sdGsClimate actionIt is Boschs ambition to be a climate action pioneer advancing the expansion of renewables and striving continuously for energy efficiency.reducing Co emissions Operating carbon neutral in scopes 1 and 2 and continuously improving the mix of measures by 2030With its more than 400 locations worldwide,the Bosch Group has been carbon neutral overall since 2020(scope 1&2).3 Four levers were used to achieve carbon neutrality:increasing energy efficiency,generating our own energy from renewable sources(new clean power),purchasing electricity from renewable sources(green electricity),and as the last resort using carbon credits to offset residual CO emissions.In 2023,residual emissions of some 581,000 metric tons of CO were offset by carbon credits.This represents a decrease of 19percent on the previous years level(see the“Environment|Climate action”section).Lowering absolute scope 3 CO emissions by 15 percent by 2030(baseline year 2018)Since 2018,we have cut our scope 3 emissions by around 23 percent,down to 353 million metric tons of CO in 2022.In this process,we are focusing on the categories that make up around 98 percent of our scope 3 emissions:Upstream emissions in the Bosch value chain primarily concern purchased goods and services as well as logistics.Downstream emissions are mainly caused by the use of our products(see the“Environment|Climate action”section).Energy efficiency and renewable energiesSaving 1.7 TWh through increased energy efficiency by 2030Increasing own renewable generation at our sites to 400 GWh and 100 percent green electricity by 2030 Since 2019,we have initiated around 6,000 energy-efficiency projects worldwide,with roughly 1,300 new projects added in 2023 alone.With them,we have so far captured savings potential of 984 GWh in total.This corresponds to a goal achievement level of 58 percent.In 2023,we generated 149 GWh of power from renewable sources in-house at our company sites.Accordingly,we have already reached 37 percent of our target value.In addition,around 99 percent of the Bosch Groups global electricity requirement was covered by green electricity(electricity purchased from renewable sources)(see the“Environment|Climate action”section).WaterFor Bosch,water is a resource to be treated sparingly.Regions in which water is scarce are a special concern.Water scarcity Reducing absolute water withdrawal at company locations in regions with water scarcity by 25 percent by 2025 Since 2019,we have launched more than 260 projects and reduced water withdrawal by 25.6 percent com-pared with 2017 at company locations in regions with water scarcity.The company locations were identified using the Water Risk Filter of the World Wildlife Fund for Nature(see the“Environment|Water”section).Water quality Improving the quality of wastewater flowsIn 2023,Boschs wastewater volume decreased to 15.46 million m(prior year:16.98 million m3).We have established standard processes in the company for monitoring local wastewater quality requirements and standards(see the“Environment|Water”section).Goals and goal achievementT 01Sustainability report 2023EnvironmentGovernanceSocialAnnex11strategy and managementSustainability managementdimensionGoals2023 status UN sdGsCircular economyBosch is reducing its ecological footprint and striving to create social benefit.In this endeavor,Bosch takes its lead from the circular economy principle.Materials efficiencyImproving materials efficiency For years,materials efficiency has been a fixed criterion in the Bosch product development process,where it is anchored in our Design for Environment(DfE)principle(see the“Environment|Circular economy”section).second lifeExtending product life cycle and reusing materials and componentsOur activities range from reusing products and their components to repairs and right through to remanufactur-ing in each case with the objective of extending product and component life cycles.The individual divisions of Bosch each have their own objectives in this regard,depending on market and product-specific framework conditions(see the“Environment|Circular economy”section).diversityFor Bosch diversity,equity,and inclusion are key to long-term success in business.In addition,Bosch contributes to the common good in the communities at its locations.Equity Ensuring equitable opportunities and increasing the proportion of female executives to 25 percent by 2030Globally,the proportion of female executives rose to 20.0 percent in 2023(prior year:19.2 percent)across all management levels(see the“Social|Bosch as an employer”section).InclusionPromoting inclusion at Bosch and in the communities around company locationsIn 2023,the Bosch Group donated 26.6 million euros to charitable causes worldwide(prior year:27.4 million euros).Some regional companies have established their own charitable institutions to carry out their CSR activities(see the“Strategy and management|Sustainability culture”section).Human rightsBosch takes on responsibility and is sensitive to human rights being respected along the entire value chain.responsibilityEnsuring human rights are respected along the value chainWe contribute to improving human rights conditions worldwide by implementing due diligence obligations concerning human rights in our operational processes.At the same time,we actively demand respect for human rights in our global supply chains as well and take appropriate remedial action in the case of violations(see the“Social|Complying with due diligence obligations relating to human rights and the environment”section).TransparencyIncreasing transparency about compliance with environmental and social standardsBy the end of 2023,we had assessed around 76 percent of our relevant direct materials suppliers(excluding BSH Hausgerte GmbH)for compliance with our requirements.We also assessed 85 percent of indirect mate-rials suppliers who are particularly relevant in terms of country risk and field of materials risk(see the“Social|Complying with due diligence obligations relating to human rights and the environment”section).Sustainability report 2023EnvironmentGovernanceSocialAnnex12strategy and managementSustainability managementdimensionGoals2023 status UN sdGsHealthBosch contributes to peoples health with innovative products and services and by ensuring that people and the environment do not come to harm through its production processes.occupational health and safetyReducing the accident rate to 1.45accidents per 1 million hours worked or less by 2025The accident rate was reduced to 1.49 accidents per 1 million hours worked(prior year:1.62)(see the“Social|Bosch as an employer”section).substances of concernContinuously upgrading materials data managementBosch handles substances of concern responsibly.To efficiently manage prohibitions and restrictions on materials,we are continuously upgrading our IT-based Material Data Management for Compliance and Sustainability(MaCS)system(see the“Environment|Circular economy”section).3 Scopes 1,2,and 3 are used here in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.We have taken into account the effects of CO and of other greenhouse gases,as well as climate-relevant substances,to the extent that these are of relevance for the analysis.To enable comparability between the climate impact of the various greenhouse gases and substances of relevance for the climate,emissions are presented in CO equivalents.For ease of reading,we use the terms CO and CO equivalents synonymously.Sustainability report 2023EnvironmentGovernanceSocialAnnex13strategy and managementSustainability managementResponsibilities and regulationsDefined as a group-wide task within the Bosch Group,sus-tainability is coordinated by the Sustainability and EHS(En-vironment,Health,Safety)corporate department.The busi-ness sectors pursue the jointly set goals on the basis of systematic sustainability management.The contents,tasks,and related controlling are anchored in the companys pro-cesses.Internal company regulations define the organiza-tion and responsibilities for sustainability and EHS in the Bosch Group.At Bosch,the highest technical committee for sustainability is the Corporate Sustainability Board(CSB)under the aegis of the chairman of the board of management of Robert Bosch GmbH and the board of management member responsible for sustainability.The Sustainability and EHS corporate de-partment is responsible for the organizational and functional management of the CSB,which convenes twice a year.The CSB members are the heads of the corporate depart-ments responsible for the relevant matters:Research and Advance Engineering,Purchasing and Logistics,Real Estate and Facilities,HR,Legal,Compliance,Finance,as well as Corporate Communications and Governmental Affairs.The CSB also includes the executive management of various divi-sions and the presidents of the individual regions.Further members are included when required.The committees main tasks are to define the sustainability strategy and targets for the Bosch Group,to adopt sustainability activities,to pro-vide transparency and decide in the event of conflicting ob-jectives,to monitor implementation of the sustainability strategy and activities,and to coordinate group-wide posi-tion papers on sustainability topics.Goal agreements and management reviews for all sustain-ability-related issues are the responsibility of the chairman of the board of management and the board of management member responsible for sustainability.For information on Robert Bosch GmbHs board of management and supervi-sory board,see the 2023 annual report from page 10.How sustainability is organized at BoschBoard of managementGoal agreements and management reviewCorporate sustainability BoardStrategic alignment and controlsteering committeesEnhanced development of sustainability strategysustainability and EHs corporate departmentHigher-level coordination and governanceCorporate departmentsGovernance according to area of responsibility(horizontal management)divisions/regionsCompliance with requirements(vertical management)GovernanceGovernanceCoordinationParticipationParticipationG 04Sustainability report 2023EnvironmentGovernanceSocialAnnex14strategy and managementSustainability managementThe Sustainability and EHS corporate department is respon-sible for sustainability management,which mainly entails setting and tracking goals,designing and accompanying pro-grams,preparing concepts for further development,and sustainability reporting.It is accountable for governance in all matters concerning sustainability and EHS and coordi-nates implementation of regulatory requirements through-out the group.The Corporate Communications and Govern-mental Affairs corporate department is responsible for sustainability communications and interaction with stake-holders around the world.Our global sustainability management is summarized in a central process that is based on the ISO standard process definitions,especially ISO 31000.The competent officers at corporate headquarters and in the divisions are responsible for implementing the sustainability strategy worldwide and for monitoring the achievement of goals.Coordinators offer professional support to the divisions,for example for imple-menting strategies and establishing processes and rules.In addition,we review the effectiveness of the respective mea-sures.The associates responsible in the regions and at the Bosch sites worldwide are tasked with ensuring that the relevant requirements are observed locally and that the defined framework conditions are complied with by means of estab-lished processes.In parallel,corporate headquarters regu-larly performs internal sustainability and EHS audits.Steering committees,supported by topic-specific compe-tence centers,have been established within the company for key sustainability topics.The steering committees are made up of experts from various corporate departments,divisions,and regions.They are responsible for the enhanced develop-ment of the sustainability strategy.Risk managementThe dimensions of the sustainability strategy are replicated in the Bosch Groups risk management system.Risk manage-ment encompasses the entire company,including all essen-tial operations,functions,divisions,and business sectors.The Bosch Groups risk management system is based on the ISO 31000 and COSO III(ERM)standards,as well as IDW PS 340.It comprises the systematic detection and tracking of relevant risks and,where necessary,identification and moni-toring of measures to manage these risks.In this context,the corporate coordinating office for the risk management sys-tem is responsible for continuously refining the system.For further information and a description of material risks,see the 2023 annual report(page 104 et seq.).The material antitrust and legal risks are also described there.Sustainability report 2023EnvironmentGovernanceSocialAnnex15strategy and managementSustainability managementMateriality analysisAs a leading global supplier of technology and services,Bosch operates in a large number of markets around the world.Directly or indirectly,our operations affect the inter-ests of a wide range of stakeholders.To parse out what these interests are and take account of them in our activities,we actively seek to enter into dialogue with our stakeholders.We address issues that are brought to our attention via the different communication channels and seek dialogue on those issues that we ourselves want to raise in the social discourse.As a result,we hold a continuous exchange on a broad range of highly diverse topics from which all partici-pants benefit(see T 02).Commitment and cooperation We want to make a relevant contribution to overcoming global social challenges,which is why we are involved in nu-merous initiatives.For instance,Robert Bosch GmbH has been a member of the United Nations Global Compact since 2004 and is committed to its globally applicable principles concerning human rights,labor standards,environmental protection,and anti-corruption.With this publication,we satisfy the related requirement to report on relevant prog-ress we made in 2023 in these areas.Bosch is also a found-ing member of UN Global Compact Netzwerk Deutschland e.V.We are active in a large number of further sustainability-related initiatives though memberships including Trans-parency International Deutschland e.V.which we have been supporting as a corporate member since 1995.In addition,we are active on the executive board of econsense Forum Nachhaltige Entwicklung der Deutschen Wirtschaft e.V.(Fo-rum for Sustainable Development of German Business).overview of key stakeholder groups,forms of dialogue,and topicsstakeholder groupsForms of dialogueMaterial topicsassociatesDialogue with associates and executives,surveys,internal media,Bosch Business Dialog Reducing carbon emissions across the value chain,particularly with regard to the Bosch Groups carbon neutrality (scope 1&2)and its scope 3 target Reducing water withdrawal in regions with water scarcity Closing product and materials loops,using secondary materials and raw materials Environmental and social standards in supply chains,particularly for high-risk raw materials Health,including occupational health and safety and substances of concern Diversity,equity,and inclusion Implications of the mobility transformation Responsible corporate governanceCustomersSurveys,social media,trade fairs,mediasuppliers and partnersSupplier days,training programs,supplier awards,supplier assessments,dialogue as part of industry initiatives associationsParticipation in committees and working groups,initiative and association mem-bershipsUniversities and research institutesPresentations,dialogue events,trade fairsPolicymakersContact for questions from policymak-ers;involvement in committees organized by governments or ministries;dialogue events;one-on-one talksMediaPress releases,site visits,information events,trade fairsLocal stakeholdersLocal community talks,plant visitsCivil society and NGosDialogue events,answering questionsT 02Sustainability report 2023EnvironmentGovernanceSocialAnnex16strategy and managementSustainability managementBosch also supports the United Nations Sustainable De-velopment Goals(SDGs)adopted in 2015.Accordingly,we regularly benchmark our sustainability activities against the 17 SDGs(see T 01).Boschs diverse activities also support other UN goals.Sustainability cultureThe Bosch value“responsibility and sustainability”has al-ways characterized our entrepreneurial activity and is an in-tegral part of our mission statement“We are Bosch.”For Bosch,it is key to involve as many associates as possible in sustainability management.Each and every one at Bosch is called upon to contribute and advance sustainability in their individual sphere of influence.The aim is for sustainability to become a shared mindset within the company shouldered by each associate through their conduct.Specific impetus is provided in seven action areas(see G 05).The following measures are examples of our activities in 2023:Sustainability multipliersAt Bosch,executives are role models and,as such,multipli-ers for sustainability.They are required to attend web-based training to familiarize themselves with the sustainability strategy and the targets set.Since the training programs launch in 2014,around 33,000 executives with and without team management responsibilities have already completed the course.Sustainability days at Bosch locations worldwide A live stream event entitled“Word Tour of Sustainability”was held for the first time in 2023.The one-day event focused on a total of 35 sustainability initiatives,activities,and proj-ects,which were promoted by teams from around the globe.Apart from project presentations and information on Boschs sustainability strategy,a special item featured on the agenda was the announcement of the winning teams of the“Sustain-ability,Environment,Health,and Safety Awards.”The award Providing impetus for associates personal commitmentGraphic based on:Network for Business Sustainability(2010)and Majka Baur(2016)Seven action areas for embedding sustainability cultureMake management“walk the talk”Engage in active internal communication about sustainabilitySupport internal change pioneers and facilitatorsRecognize and value commitmentLink sustainability to associates private livesCreate inspiring events within the companyKeep an open dialogue with associatesG 05Sustainability report 2023EnvironmentGovernanceSocialAnnex17strategy and managementSustainability managementhonors outstanding projects each year in the categories“CO and energy efficiency,”“resource efficiency,”“occupa-tional safety,”“sustainable products,”and“sustainability culture.”Events took place again at various locations in 2023 to put the spotlight on the topic of sustainability in the company.For example,Bosch Japan hosted a sustainability week in October during which around 900 associates took the op-portunity to find out about sustainability at Bosch by taking part in 18 online sessions.The event focused on sustainable mobility solutions such as battery electric and fuel cell elec-tric drives.On-site events and virtual sessions marked the“Sustainabil-ity and EHS Week”at the Mexican site in San Luis Potos,with an attendance of roughly 2,200 associates.The goal was to raise awareness of sustainable action among associ-ates.Attention focused primarily on topics ranging from oc-cupational health and safety to energy efficiency and envi-ronmental protection.Social involvementWe see ourselves as a corporate citizen and engage actively in society,also beyond the scope of our own business activi-ties.Through our charitable donations,for example,we chiefly support initiatives in the following areas:Living sustainably:Citizen projects promoting climate action in everyday life Education for the high-tech world:Projects to develop socially disadvantaged childrens and young peoples skills for technological change Social cohesion:Projects strengthening democracy and tolerance,especial-ly at Bosch sites Emergency aid in disaster situations:Donations to aid organizations and people on the ground,especially when catchment areas around Bosch sites are affected Our social involvement in the form of donations is handled by the operating units in the countries in question.In the re-porting year,the Bosch Group donated 26.6 million euros worldwide(prior year:27.4 million euros)to charitable causes,including donations in kind.Internal company regu-lations set out corresponding principles,assessment crite-ria,and responsibilities.Depending on the amount involved,either the management of the operating units or the mem-bers of Robert Bosch GmbHs board of management decide how the funds raised should be spent.All donation transac-tions must be documented in writing.In addition,the per-sons responsible keep an annual ledger of donations that is accessible for audit purposes.At a minimum,this ledger must indicate the group of recipients and the amount of the donation,along with the reasons for the donation and the date on which confirmation of receipt was received.One focus of global donation activities in 2023 was on emer-gency aid in the event of a disaster.This included aid for the people affected by the earthquake in Turkey and Syria.Robert Bosch GmbH provided one million euros to the German Red Cross in this instance.In addition,Bosch sup-ported the earthquake victims in Turkey with donations in kind and cash to the value of half a million euros.The Sustainability report 2023EnvironmentGovernanceSocialAnnex18strategy and managementSustainability managementTurkish subsidiary of BSH Hausgerte GmbH also donated home appliances worth in excess of one million euros for the people affected and for childrens aid organizations working locally.In view of developments in Israel and the Middle East,Bosch donated one million euros in emergency aid to the German Red Cross for humanitarian purposes to support its local sister organizations in the affected regions.Bosch is not only financially active at many of its locations,but also through the volunteer work of its associates locally.In some countries,dedicated non-profit institutions engage in corporate social responsibility activities.Such institutions are usually active in the vicinity of company locations and concentrate on country-specific priorities.As an independent,not-for-profit foundation,Robert Bosch Stiftung GmbH demonstrates its commitment to society worldwide by supporting or implementing innovative and lighthouse projects.Brazil:Instituto Robert BoschChina:Bosch China Charity CenterIndia:Bosch India FoundationRomania:Fundaia Bosch RomaniaThe U.S.:Bosch Community FundMexico:Fundacin Robert Bosch MxicoBoschs non-profit institutionsG 06Sustainability report 2023EnvironmentGovernanceSocialAnnex19strategy and managementSustainability managementEnvironmentSustainability report 2023EnvironmentGovernanceSocialAnnex20Strategy and managementorganization and responsibilitiesInternal company regulations define the principles and re-quirements for sustainability and EHS in the Bosch Group and specify the organization and responsibilities.Occupa-tional safety and environmental protection policy is framed in the publicly accessible Guidelines of Work Safety and En-vironmental Protection.Bosch has clearly defined environmental criteria for the de-sign,planning,and acquisition of facilities,machinery,and manufacturing equipment,for example with regard to energy efficiency,the use of renewable energy sources,and water consumption in regions with water scarcity.These criteria also play a role in the decision-making process when choos-ing new company locations.audits on environmental topicsRegular briefings,workshops,and internal audits are held at the company locations on topics of relevance for the environ-ment in order to verify compliance with requirements.Loca-tions are selected based on risks or specific events,while their size,measured by headcount or the proportion of re-sources consumed in the Group,also plays a role.Audit find-ings are documented in Boschs company-wide database.As EnvironmentBoschs activities should have as little impact on the environment as possible.We are working to fulfil this aspiration with a Group-wide environmental man-agement system and specific targets.In particular,we want to use targeted strategies to protect the climate,save water,especially where it is scarce,and strengthen the circular economy.4 The following applies to information on environmental and energy management systems:production locations and development locations(with material responsibility)with more than 50 associates that have been included in the scope of consolidation for more than three years.environmental and energy management systemsBosch Group 2023Production and develop-ment locations4247Environmental manage-ment system implemented according to ISO 14001240Environmental manage-ment system certified according to ISO 14001235Energy management system implemented according to ISO 5000166Energy management system certified according to ISO 5000160a result,it is also possible to track corrective actions in the event of deviations.Any deviations detected,their causes,and improvement opportunities identified are taken into ac-count in the following years audit program.The results of the analyses are also considered in determining the content and focus of our environmental protection campaigns.At production locations,relevant environmental issues are audited on a risk basis by company headquarters as part of corporate audits.The auditors have in-depth knowledge of ISO 19011 audit methodologies as well as external and inter-nal EHS requirements.In 2023,the EHS audit team per-formed a total of 94 corporate audits.In total,97 percent of our relevant production and develop-ment locations4 operate an environmental management sys-tem,which in most cases(98 percent)is certified to the ISO 14001 standard.Similarly,91 percent of the energy manage-ment systems used are certified to ISO 50001(also see T03).In general,we intend to have all relevant locations operating with certified environmental management sys-tems.T 03Sustainability report 2023EnvironmentGovernanceSocialAnnex21Strategy and managementCompetence development and trainingIn web-based training and classroom courses,we promote the methodological and technical competence of our associ-ates,thereby creating the conditions for safe and environ-mentally compatible work processes.We therefore ensure that those responsible for environmental protection,for in-stance,are specifically familiarized with the relevant regula-tions and standards in training programs that have been standardized worldwide.In supplementary training ses-sions,we address the specific requirements of individual business units,locations,and regions.In addition,we also train and brief associates of external companies and visitors to our locations on health,safety,and environmental protec-tion at Bosch.uniform sustainability methodology enables systematic controlIn the course of enhancing our sustainability methodology in 2023,we extended our systematic approach to achieving carbon neutrality(scope 1&2)by including additional sus-tainability topics and value creation stages(see the“Strat-egy and management”section).As a result,it has become apparent that the environmental dimensions of our vision for sustainability are underpinned by the same logic.This is characterized by three core levers:increasing efficiency,pur-chasing resources from renewable sources,and changing the technology used.The three core levers can be applied to all value creation stages from purchasing materials and goods(upstream)to subsequent processing at our plants(own operations)through to use of the products by our cus-tomers(downstream).In this way,we create transparency with regard to the impact of the different measures,we show the relationships and interactions between the various influ-encing factors and we thus provide the basis for in-depth scenarios in order to capture and control the effects of deci-sions in their entirety.This also reveals the additional differ-entiation potential of sustainability topics that will be of particular importance to Bosch in the future as illustrated by trend and market analyses.The next sections on the dimensions of climate,circular economy,and water already follow the new methodology.The assignment of the different measures and action fields to the relevant core levers and value creation stages is pre-sented uniformly to provide a complete picture of our activi-ties and our potential to exert influence.Sustainability methodologyCore levers for improving sustainability performance along the value chainUpstreamown operationsdownstreamCore lever 1:Increased efficiency in the use of resources Core lever 2:Use of resources from renewable sourcesCore lever 3:Changes in technology for sustainable transformationG 07Sustainability report 2023EnvironmentGovernanceSocialAnnex22Strategy and managementsomething that demands Boschs adaptability,for example,with respect to water and energy supply.To manage the re-spective risks and opportunities,the individual divisions use the results of the risk assessment for market forecasts and incorporate them in specific plans.The risks posed by climate change include water scarcity and extreme weather events,which are occurring with in-creasing frequency and causing ever greater damage.They can jeopardize production at our locations and the stability of the supply chain.Other risks include the shortage of raw materials and changes in the regulatory framework,such as bans on cer-tain technologies or the tightening of CO emissions stan-dards for vehicles.Also important in this context are the in-creasing variety of customer preferences,which can change rapidly often in response to political decisions.Increas-ingly,the focus is also on the processes upstream of our production and the use of materials.For example,we are in-creasingly receiving inquiries about the proportion of green electricity(purchased electricity from renewable sources)in our energy mix or recyclates in materials(see“Circular economy”).We address these challenges with our climate action strat-egy and systematic research and development.At the same time,we are convinced that we must work together if we are to successfully counter the effects of climate change.That is why we take an active role in the relevant associations and committees(see the“Governance”section).Climate actionopportunities and risks of climate changeCounteracting climate change is a task for society as a whole.We see this not only as an obligation for our company,but also as an opportunity to contribute to protecting the climate with innovative solutions and technologies.Boschs growing self-sufficiency and energy efficiency will also reduce its de-pendence on volatile energy markets and,in turn,its expo-sure to price fluctuation risks.When analyzing the opportunities and risks that climate change poses for Bosch,we are guided by the specifications of the Task Force on Climate-related Financial Disclosures(TCFD)to help us identify transitory and physical risks in particular.The time horizon for our analysis stretches to 2050.The focus is on both acute risks(such as those related to flooding)and permanent climate risks(such as those that arise on account of global warming).The analysis is based on the scenarios of the International Energy Agency and the energy scenarios of the Bosch corpo-rate sector for Research and Advance Engineering.A central role in this context is played by the internal climate change report:Prepared by our experts every two years,it highlights fundamental climate change developments and their signifi-cance for our company and for society.When assessing climate-related issues and suitable mea-sures,we distinguish between measures to mitigate impacts(mitigation)and activities that serve to adapt the company to the changed framework conditions(adaptation).We also in-clude our products in these considerations.Climate aspects also play a role in the choice of company locations.This is Sustainability report 2023EnvironmentGovernanceSocialAnnex23Strategy and managementClimate actionClimate action strategyBosch wants to make a contribution to climate action,an as-piration it has anchored in its sustainability vision.We sup-port the United Nations 2015 Paris Agreement on climate action and the goal formulated therein of limiting global warming to as close to 1.5 degrees Celsius as possible.By making our companys activities carbon neutral(scope 1&2)5,we are making a measurable contribution to this goal.As early as 2020,the Bosch Group with its more than 400lo-cations worldwide has been carbon neutral overall(scope 1&2).Four levers were used to achieve carbon neutrality:increasing energy efficiency,generating our own energy from renewable sources(new clean power),purchasing electricity from renewable sources(green electricity),and as the last resort using carbon credits to offset residual CO emissions.In 2023,residual emissions of around 581,000metric tons of CO were offset by carbon credits.5 Scopes 1,2,and 3 are used here in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.We have taken into account the effects of CO and of other greenhouse gases,as well as climate-relevant substances,to the extent that these are of relevance for the analysis.To enable comparability between the climate impact of the various greenhouse gases and substances of relevance for the climate,emissions are presented in CO equivalents.For ease of reading,we use the terms CO and CO equivalents synonymously.At the same time,we also want to reduce emissions pro-duced outside Boschs direct sphere of influence(scope 3),for example at suppliers,in logistics,or when our products are used.Our aim is to reduce these upstream and down-stream emissions by 15 percent in absolute terms by 2030,compared with the baseline year 2018 irrespective of our companys growth.As early as 2020,the Science Based Targets initiative(SBTi)endorsed our climate targets for the 1.5 degree pathway.6 Bosch now has science-based climate targets for the entire value chain from purchasing to the product use phase.6 Robert Bosch GmbHs entry in the SBTis target dashboardSustainability methodology,focus on climate actionMeasures for improving sustainability performance along the value chainUpstreamown operationsdownstreamIncreased efficiencyresources from renewable sourcesChanges in technologyGeneral target agreementsEnergy efficiencyEnergy efficiency of productsIn-house energy generation from renewable sourcesSwitching to electricity from renewable sourcesCarbon offsetsscope 3,upstream:Purchased goods and servicesscope 1&2:Carbon neutralityscope 3,downstream:Product useRange of topicsTransformation of product portfolio toward renewable energy sourcesGeneral target agreements,specific agreements for focus materialsG 08Sustainability report 2023EnvironmentGovernanceSocialAnnex24Strategy and managementClimate actionfour levers for carbon neutrality (scope 1&2)In 2023 also,we continued to improve the mix of levers by increasing energy efficiency,generating our own energy from renewable sources,and purchasing green electricity.This is reflected in the further reduction of CO emissions to be off-set.energy intensityin MWh/million euros of sales revenue20212022 2023Bosch Group102.287.382.3energy demandBosch Group 20212023,in GWh20212022 2023Bosch Group8,0427,6967,537Natural gas1,5871,3251,132Heating oil554957LPG393436Coke/coal98100101Renewable energy102128156Other(inter aliagasoline,diesel)451482512direct energy(own combustion)2,3322,1181,993Electricity5,4375,3345,323 thereof green electricity4,8175,0495,250District heat,steam,cooling energy273244221Indirect energy(purchased)5,7105,5785,544emissions intensityin metric tons/million euros of sales revenue,without carbon offsets20212022 2023Bosch Group11.538.136.34Greenhouse gas emissionsBosch Group 20212023,in 1,000 metric tons of CO2e20212022 2023Bosch Group with carbon offsets000Carbon offsets907717581Bosch Group907717581Manufacturing383328295Vehicle fleet109117129Volatile GHG767877scope 1569523501Electricity24811915District heat,steam,cooling energy907565scope 233819480Around 72 percent of the total energy demand stems from renewable energy sources including purchased green elec-tricity(prior year:67 percent).While the consumption of purchased energy(scope 2)accounts for most of our energy demand,the majority of CO emissions are generated by station ary combustion,primarily through heat generation(scope 1).Bosch requires energy primarily in the form of electrical power for manufacturing plants and machinery,and in the form of thermal energy to heat and air-condition buildings and to operate foundry furnaces.T 04T 05Sustainability report 2023EnvironmentGovernanceSocialAnnex25Strategy and managementClimate action2023 28 GWh Lever 1:Energy efficiencyBy 2030,we want to substantially increase our energy effi-ciency and implement measures at our company locations with savings potential totaling 1.7 terawatt hours(TWh).An annual budget has been available for this purpose since 2019.Overall,Bosch plans to invest one billion euros in in-creasing energy efficiency by 2030.Since 2022,we have been using part of the energy efficiency budget to fund CO reduction measures,such as the electrification of the heat supply or the use of district heating.An internal CO pricing mechanism is used to determine the rate of return of the indi-vidual measures.Already today we have achieved roughly 58 percent of our efficiency target:Since 2019,we have initiated around 6,000 projects worldwide,capturing savings potential of 984 GWh.In 2023 alone,more than 1,300 new projects with savings potential of 179 GWh were introduced.Goal achievement for energy efficiencySavings potential captured with measures to increase energy efficiency2030 target1.7 TWhBy2022 0.8 TWh Lever 2:New clean power By 2030,we want to generate 400 GWh of the annual energy demand in-house at our company locations from renewable sources.We are placing particular emphasis here on photo-voltaics(PV).A total of 114 Bosch sites were already using solar power for their energy supply at the end of 2023.We also operate a hydroelectric power station at our site in Blaichach,Germany.In total,we generated around 149 GWh of renewable energy at Bosch in 2023,which means that as of year-end we have already achieved 37 percent of the target.Locations in India accounted for around 28 percent of the volume of renewable energy generated at Bosch,followed by China(24 percent),and Germany(23 percent).Goal achievement for new clean powerIn-house energy generation from photovoltaics and hydroelectric power2030 target400 GWhBy2022 121 GWh 20230.2 TWh G 09G 1037hieved58hievedSustainability report 2023EnvironmentGovernanceSocialAnnex26Strategy and managementClimate actionand switched instead to electrical energy.The company generates some of this energy directly on site using around 6,000newly installed photovoltaic modules,which cover roughly 10 percent of the sites annual electricity demand.7Further increase in the use of solar powerBosch expanded its photovoltaic capacity in 2023 through a number of projects.In China,for example,the existing facilities at sites in Wuhan and Nanjing were extended by additional solar modules.This increased the capacity of the facility in Nanjing by 1.5 MWPeak to a total of 4.1 MWPeak,which means that roughly 23 percent of the sites annual electricity demand7 can be covered in the future.An addi-tional 3.89 MWPeak will be available in the future in Wuhan,thus increasing the capacity of the facility to 4.99MWPeak and covering around 17 percent of the annual electricity demand7 on site.Existing photovoltaic systems were also extended at vari-ous locations in Germany in 2023.For example,a total of 5,550solar modules with a capacity of 2.1 MWPeak were installed in Salzgitter,thus increasing the total output of the photovoltaic system locally to 4.85 MWPeak.In the future,around a quarter of the annual electricity demand7 locally will therefore be generated from solar power.7 Calculation based on electricity consumption in 2023.In 2023,we carried out a number of projects that allowed us to further increase energy efficiency at our company locations and improve the potential to generate our own energy from renewable sources.These are some examples.Worcester:Testing on site rather than in the lab and making direct use of the input energyEfficiency increases in qualitative endurance testing of gas heating appliances at the Worcester site in the UK have resulted in annual energy savings of more than 3 GWh and a corresponding reduction in CO emissions by 576 metric tons.The improvements were achieved on the one hand by shortening internal tests while,on the other hand,the majority of laboratory tests were replaced by field tests with a number of British households.The input energy will therefore no longer be consumed in the laboratory,but in the households for heating and hot water preparation.Braga:From natural gas to electricity from renewable sourcesIn the city of Braga in Portugal,a two-year decarbonization project was concluded in 2023,which involved substituting natural gas with electricity from renewable sources.The project involved the installation of a geothermal heat pump,efficient cooling units with heat recovery systems,and a comprehensive building management system.Since Novem-ber 2023,Bosch has ceased using natural gas in Braga Sustainability report 2023EnvironmentGovernanceSocialAnnex27Strategy and managementClimate actionLever 3:Green electricity Bosch has concentrated on purchasing green electricity from existing plants and has been greatly expanding its pur-chase volume from green electricity with corresponding guarantees of origin since 2019.In total,around 99 percent of the Bosch Groups global electricity demand was already covered using green electricity in the reporting year.We have therefore already reached our interim target for 2025 and are set to exclusively source green electricity by 2030.Bosch has already successfully made the transition in a number of countries Japan,Malaysia,Singapore,and South Korea followed in 2023.At the same time,we have been involved in long-term agree-ments with our energy suppliers(Power Purchasing Agree-ments,PPAs)since 2020 and in 2023 concluded new agree-ments in Germany and the Netherlands.All told,Bosch purchased around 426 GWh in 2023 through long-term power purchasing agreements.Goal achievement for green electricityGlobal electricity demand covered by green electricity2030 target100%By2022 95 23 4%Lever 4:Carbon offsets At present,we use carbon credits to offset residual CO emissions,such as those from combustion processes(heat-ing,process heat).In addition,we refer to carbon credits to offset electricity sourced in countries with only limited avail-ability of green electricity.As we make progress with levers 1 to 3,we want to further reduce the share that we offset to achieve carbon neutrality(scope 1&2)to no more than 15 percent by 2030(baseline year 2018).In 2023,we came another step closer to achiev-ing this target especially as a result of progressively switch-ing from gray to green electricity(gray electricity:electricity from fossil fuels).We cut the volume of emissions to be off-set to some 581,000 metric tons of CO in the reporting year.This is around 136,000 metric tons of CO or 19 percent less than in the previous year(see T 05).Climate action at Bosch the path to 2030CO emissions(scope 1&2)in millions of metric tonsEmissions without offsetsCarbon offsetsEmissions avoided compared with the baseline year 20183.320180.920200.920210.620230.720220.52030SBTi goalG 11G 1299hievedSustainability report 2023EnvironmentGovernanceSocialAnnex28Strategy and managementClimate actionWhen selecting carbon offset projects,we are guided by in-ternationally recognized and independent certifications,such as the Gold Standard.In the future we want to focus our carbon offset measures even more intensively on nature-based removals.The relevant projects involve sequestering CO in biomass,for example by afforestation.Bosch calculates the emissions it needs to offset using the standards of the International Energy Agency(IEA,Emission Factors 2022)and the Intergovernmental Panel on Climate Change(IPCC).In 2020,we switched to a market-based pre-sentation.Previously,we had used the location-based ap-proach(up to and including 2019).In the calculation,we fo-cus on the greenhouse gas CO as well as on emitted process gases and hydrofluorocarbons(HFCs).An internal analysis has shown that Bosch does not produce or emit any other greenhouse gases to any material extent that would be sub-ject to disclosure requirements.air emissions Air pollutants can affect peoples health and should there-fore be reduced.In 2019,Bosch launched a project to ana-lyze which air pollutants are produced and at what levels in the relevant business processes in manufacturing,such as surface treatment,foundry processes,and building heating.The results show that air pollutant emissions have no signifi-cant impact on people and the environment and are there-fore not subject to disclosure requirements.outlook:Climate action strategy extends beyond 2030Bosch has set itself clear climate action targets for 2030,but is already looking beyond this date.Since Bosch is aiming to use green electricity exclusively by then,the relevant poten-tial must be leveraged in particular through changes in tech-nology such as in the area of mobility and heating of build-ings.In addition,increases in energy efficiency and the measures pursued with the“New clean power”lever can deliver further climate action improvements.An analysis of all 430 locations in 2023 showed that further advances in climate action can still be achieved beyond 2030 with a wealth of relevant projects already in the pipeline.However,the fact that the cost effectiveness of the energy efficiency projects will decrease over time must be considered.In other words,further improvements will require increasing effort.We are therefore striving to enhance the cost-effec-tiveness of the projects in partnership with customers so that we can contribute as best as possible to climate action with the resources available to us.Goal management and implementationThe Corporate Sustainability Board is the central body for goal management in climate action and convenes twice a year.It makes decisions on implementing the climate action strategy(scope 1,2,3)and manages implementation of the adopted action plans(see the“Strategy and management”section).Sustainability report 2023EnvironmentGovernanceSocialAnnex29Strategy and managementClimate actionTo achieve the group-wide targets set for 2030,all Bosch di-visions are pursuing staggered annual targets.These targets are set based on energy demands and the savings achieved so far.Targets are cascaded down to individual company loca tions at the discretion of the respective divisions and the degree to which targets are met is tracked centrally.On this basis,those responsible at the divisions and company lo-cations make decisions to implement measures to improve energy efficiency or to initiate projects to generate their own energy.As the availability and quality of green electricity and the le-gal conditions for the expansion of renewable energy differ between countries,the regional organizations are responsi-ble for green electricity and new clean power projects.Car-bon offsets are regulated centrally to ensure the quality of projects.The sites themselves order and transact the mea-sures.upstream and downstream emissions(scope 3)We want to shape climate action beyond our immediate sphere of influence(scope 1&2)and also systematically re-duce upstream and downstream emissions(scope 3).We aim to cut these by 15 percent in absolute terms by 2030 compared with the baseline year 2018.In this process,we are focusing on the categories that make up around 98 per-cent of our scope 3 emissions:Upstream emissions in the Bosch value chain primarily concern purchased goods and services as well as logistics.Downstream emissions are mainly caused by the use of our products.Main scope 3 categories in baseline yearBosch Group 2018,in millions of metric tons of CO2scope 1&2:carbon neutral since 2020scope 3:458 mn t in total3.3Purchased goods and services34.1Transport and logistics2.6Product use421.4To improve data quality further,the calculation of scope 3 emissions was revised in 2023.In the process,we have included additional business activities in the calculation in the“product use”category and are using primary data increasingly in the“purchased goods and services”category.G 13Sustainability report 2023EnvironmentGovernanceSocialAnnex30Strategy and managementClimate actionAt 458 million metric tons of CO in the baseline year 2018,upstream and downstream emissions exceeded those in scopes 1 and 2 several times over(see G 13).Since 2018,we have cut our scope 3 emissions by around 23 percent,down to 353 million metric tons of CO in 2022(see G 14).The main challenge now is to mitigate future emissions relating to the anticipated sales growth by 2030.This is because the per-centage target value for reducing emissions was purpose-fully set independently of sales growth,which means that scope 3 categoriesCalculation baseKey levers for reducing Co2Direct IndirectUpstream emissionsPurchased goods and services(including machinery and equipment)Transport and logistics(also downstream)Purchasing volumeGoodscategoriesSourceregionModeoftransportrealign top-downrefine status quoTransform energy sectorSupplierselectionSourcingofsecondary raw materialsModeoftransport (sea,land,air)Supplier developmentRouteoptimizationGreen electricityHydrogenBiogasDownstream emissionsProduct useVolumeSalesrevenueEfficiencyEnergysourceEmissionsfactorsProductlifeEnergy efficiencyTransformation and portfolio optimizationIncreasedefficiencyDigitalizationOptimizeduseInvestmentingrowth areas(e-mobility,heat pumps)Phaseoutofproducts with lowest energy efficiencyKey levers for achieving the scope 3 targetCalculation base and main direct and indirect leversthe absolute amount to be mitigated will increase steadily as the company grows in future.We can directly influence the achievement of targets through more efficient products.On the other hand,there are also a large number of external fac-tors that Bosch can only influence indirectly,such as suppli-ers success in reducing CO emissions,the speed of trans-formation processes in the energy and mobility sector,or general economic development(see G 15).The corresponding scope 3 figures for 2023 were not available before publication of this report,but will be published without delay in the key figures tool at .Development of scope 3 emissionsBosch Group 20182022,in millions of metric tons of CO2420.12019380.42020458.12018383.02021Transport and logisticsPurchased goods and servicesProduct use352.52022389.42030SBTi goalG 14G 15Sustainability report 2023EnvironmentGovernanceSocialAnnex31Strategy and managementClimate actionIn order to achieve our goal,we are taking a step-by-step ap-proach.Having identified the main scope 3 categories,we increased the granularity of our calculations.This allows us now to identify significant drivers for emissions within pur-chasing and logistics as well as in the use of our products,and to derive measures that make a measurable contribution to climate action.scope 3,upstream:Purchased goods and servicesTo reduce upstream CO emissions in purchasing,we drew up a steering concept in 2022 that is mandatory for all divi-sions.The individual instruments fit seamlessly into Boschs higher-level sustainability methodology system.We want to make sure that suppliers can use their resources as efficiently as possible.With this in mind we do not influ-ence the measures they choose to reduce CO emissions,rather we aim to enter into target agreements with our sup-pliers.General target agreementsWe use general target agreements with suppliers to improve CO performance,based on valid and transparent data on carbon emissions and preferably in combination with a spe-cific SBTi commitment.8 More than 450 of our suppliers had already committed to specific CO targets by 2023(prior year:232suppliers)and are thus following the path Bosch has also taken with its climate targets(scope 1,2,3).8 The SBTi commitment refers to the voluntary commitment by companies to set science-based targets for reducing greenhouse gas emissions.Through this commitment,companies demonstrate their willingness to contribute actively to climate action and to align their business practices with the goals of the Paris Climate Agreement.Individual ambition levels were developed with all relevant Bosch divisions in 2023,which cover the period from 2024 to 2030.We are collaborating with our suppliers on this basis to obtain detailed information and data on group-wide CO emissions(scope 1,2,3)for around 80 percent of our pur-chasing volume by 2030.This figure stands at 60 percent at the moment.At the same time,we intend to source more than 50 percent of our purchasing volume from suppliers that have already committed to the Science Based Targets initiative(SBTi)and set themselves targets in line with the Paris Climate Agreement.We will track the progress made centrally in the coming years.Following the successful completion of a number of pilot projects,many of the Bosch divisions have taken account of the sustainability performance of potential suppliers in the purchasing process since 2023,in order to support the achievement of targets in the award process.Apart from the direct effects on our upstream CO emissions(scope 3),this approach gives Bosch a multiplier effect,which exceeds the effects in its own supply chain many times over.This is be-cause the improvements initiated by Bosch in the CO per-formance of the suppliers also impact their other products and business relationships.Specific agreements for focus materialsWe also use specific agreements with our suppliers for focus materials such as steel,aluminum,copper,and plastics as these materials are responsible for a significant portion of CO emissions in the supply chain.To purchase materials that are as low-carbon as possible in the future,we carried out a number of measures in 2023,including analyzing the specific CO reduction potential and identifying reduction paths,as well as launching initial pilot projects in some divi-sions.Results of surveys via the CDP platform2,0001,25320222,2001,75920235003502021Suppliers contactedResponsesSuppliers with SBTi commitment 129232450G 16Sustainability report 2023EnvironmentGovernanceSocialAnnex32Strategy and managementClimate actionapproach and methodology for improving scope 3 data qualityClear rules and targets require uniform definitions and calculation standards because this is the only way to make performance transparent and comparable.This is particu-larly true when it comes to advancing sustainability issues overall across supply chains.As there is still no internation-al standardization and the information currently available is sometimes of poor quality,we rely on a combination of approaches to obtain supply chain data and try in this way to improve the quality and comparability of the data collected.We prefer to use primary data that we request our suppliers to provide.Through these direct requests,for example via the CDP platform,we obtain specific data on our suppliers individual emissions profile and make their specific develop-ment transparent.If no primary data is available,we use secondary data from established databases.In that case,for example,emissions for specific products are recorded using industry averages that also take account of the tech-nology used in the manufacturing process and geographical factors.The corporate carbon footprint(CCF)is calculated on this basis.The CCF is the share of the suppliers emis-sions that is attributed to Bosch as the buyer on the basis of sales.At present,we mainly use secondary data that we obtain using input/output models at company level.This enables us to benchmark all suppliers based on comparable standards and to manage them strategically.We plan to use primary data largely in the future so that our calcula-tions are as precise as possible.We continued to follow this approach in 2023 too by carrying out a comprehensive CDP survey(see figure).The product carbon footprint(PCF)is a means for us to record those emissions caused during a products manu-facturing and production process.Here,too,primary data is preferable to secondary data because they are of greater informative value,as directly requested product-related information provides the greatest possible transparency and accuracy.A lack of international standards is still mak-ing data comparisons difficult at present.Bosch therefore supports cross-company standardization along the complex value chains in the automotive sector and is involved in ini-tiatives such as Catena-X.In addition,we are working with external partners on a software solution to obtain primary data on the PCF from our suppliers.At the same time,exist-ing database structures will continue in parallel for record-ing product-related primary data.Determining the corporate carbon footprint or product carbon footprint Improving data quality in two stages,scope 3,upstreamStage 1Stage 2secondary data(sources)Primary data(sources)Corporate carbon foot-print(CCF)DatabasesSupplier survey,e.g.via the CDP platformProduct carbon foot-print(PCF)DatabasesDevelopment of stan-dards,e.g.in initiatives such as Catena-XSustainability report 2023EnvironmentGovernanceSocialAnnex33Strategy and managementClimate actionscope 3,upstream:Transport and logisticsIn logistics,we primarily aim to reduce CO emitted during the transport of goods.We have a variety of instruments at our disposal here:Optimizing freightTransport management centers(TMC)have been estab-lished worldwide to manage shipments between suppliers,Bosch plants,and customers.We have already achieved a high degree of standardization in this area and can guarantee efficient transport also with respect to environmental cri-teria by pooling freight.To secure even higher capacity uti-lization,especially for road shipments,a new transport management system was introduced at Bosch in 2023.This system enables cyclical strategic planning of the transport network and short-term operational planning of routes,modes of transport,and load quantities.Our goal is to increase transport capacity utilization by truck from its current level of 65 percent to 80 percent in 2025 and thus reduce carbon emissions with this mode of transport by up to 10 percent.At the same time,we are working on moving freight transport from road to rail.BSH Hausgerte GmbH has been operating what it calls a“Vierecks-Zug”since 2023,which supplies the four locations in Giengen,d,Nauen,and Wrocaw with components and finished appliances.The annual reduction in carbon emissions compared with the previous road trans-port is around 1,200 metric tons of CO,which corresponds to a saving of 36 percent.Alternative drives and fuelsIn the future,alternative drives and fuels will play an ever-greater role in reducing carbon emissions.The availability of vehicles with alternative drives is increasing all the time.In ongoing projects,Bosch is already today evaluating further potential to curb CO in delivery traffic.Attention is focused here on strategic cooperation with logistics service provid-ers in a bid to achieve short-and medium-term CO emis-sions reductions by using biofuels or alternative drive tech-nologies.The first applications worldwide were launched in 2023.For example,Bosch is already using trucks powered by fuel cell technology in China.Meanwhile,battery-electric powered trucks are used for shuttle traffic at sites in Anderson in the USA and Wernau in Germany.In addition,some of our parcel services have been using battery-electric powered vans and have provided us with evidence of the CO savings compared with diesel vehicles.Following an initial successful pilot project for introducing HVO100(Hydrotreated Vegetable Oils)with two logistics service providers the previous year,in 2023 we managed to convince additional logistics service providers to use HVO100 and BioLNG(a mix of liquefied natural gas(LNG)and liquefied biomethane).As a result,we are now using al-ternative fuels on 20 routes in Europe and are thus saving around 1,500 metric tons of CO annually compared with the use of diesel fuel.We are counting on the fact that HVO100 will also be available on the open market in Germany from 2024,so that we can also switch further routes here from diesel to HVO100.Sustainability report 2023EnvironmentGovernanceSocialAnnex34Strategy and managementClimate action Reducing air transport Air cargo remains economically viable for parts such as elec-tronic components or smaller and lightweight parts and is practically irreplaceable for reducing turnaround times in international production networks.As a general rule,how-ever,we want to avoid air cargo and only use it in exceptional cases,since roughly 70 percent of all of Boschs transport-related CO emissions are attributable to this mode of trans-port.Whenever possible,we therefore switch shipments destined for Bosch from air to sea or rail freight.The corre-sponding potentials are reviewed continuously.Improving packaging design In a joint initiative with the divisions,work is also under way to increase packing density in a bid to use less packaging material,storage space,and transport capacity in turn,re-ducing CO emissions.Packaging design centers have been set up in Europe and North America to improve and stan-dardize packaging.At the same time,we want to use packag-ing material with a higher recycling content.In 2023,this led us to develop optimized packaging for around 350 components as well as the finished product for one of our future products,the mobile fuel cell.This was achieved as part of an interdisciplinary team under the lead-ership of one of the packaging design centers.Plastics with a 25 percent recycling content and steel with a 50 percent recycling content were chosen as materials for packaging the finished product.In addition,a comparative sustainabil-ity calculation was carried out to determine the lowest emis-sion packaging concept for each mode of transport(road,sea,air).Consistent use of the total cost of ownership(TCO)approachThe TCO approach considers all costs incurred when pur-chasing a component or a product.These costs include freight,customs,and packaging costs.In addition,risk and location factors are assessed,which likewise contribute to the decision to buy.An example of this is the proximity to our site.The corresponding potentials are reviewed continu-ously.reduction in transport-related Co2 emissionsA team made up of representatives from purchasing,central logistics,the divisions,and plants is working on developing key measures for reducing CO emissions.Moreover,the in-dividual divisions and plants devise local measures that are implemented on site.In 2023,the stabilization of supply chains led to a decline in the number of unplanned shipments,which in turn resulted in a significant reduction in CO emissions.Together with other transport optimizations and individual measures,such as the use of alternative drives and fuels,initial calculations show a decrease in transport-related CO emissions by 17percent compared with 2022.9 Since 2020,we have also been offsetting the CO emissions generated by the business air travel of all associates and are supporting climate action too with our worldwide principles on company car usage.In addition to reducing CO emis-sions,for example,through a defined CO cap or a bonus/penalty scheme linked to a vehicles CO emissions,the country-specific regulations also provide for a range of alter-native forms of mobility to the classic company car.9 The final scope 3 figures for 2023 were not available before publication of this report,but will be published without delay in the key figures tool at sustainabil-.Sustainability report 2023EnvironmentGovernanceSocialAnnex35Strategy and managementClimate actionscope 3,downstream:Product useAlthough energy efficiency in product development has a high priority for Bosch,around 90 percent of scope 3 emis-sions are generated during the product use phase.We cur-rently see the greatest potential for lowering CO emissions in those divisions in which products require a relevant amount of energy,that is above all mobility,thermotechnol-ogy,industrial drive and control technology,and household appliances.The focus is on three leverage points in each case:Boosting energy efficiencyThe energy efficiency of products can increase from one product generation to the next.That said,we keep an eye on the average energy efficiency of a product portfolio.For example,Bosch Rexroth leverages energy efficiency po-tential by improving design parameters(e.g.weight reduc-tion)and through the type and quality of the materials used.By offering more energy-efficient electric motors as part of active portfolio management,Bosch Rexroth was able to in-crease the proportion of electric motors with the highest ef-ficiency to roughly 50 percent of the total sales of electric motors in 2022.Market transformation and portfolio optimizationFar-reaching structural changes in markets or industries,for example as a result of technological innovations,changes in consumer patterns,regulations,or globalization,require fundamental adjustments to a companys strategies and business models.These transformation processes can be used to deliver improvements in climate action.A current example of this is the transformation of heat supply to renewable energy sources.The Home Comfort division is driving this development through expansion of the electric portfolio and is investing in particular in development and production capacity for heat pumps.This strategy is begin-ning to bear fruit in the form of higher sales figures in recent years and the resulting reduction in emissions from product use(scope 3).In the area of Home Comfort,these scope3 emissions were 21 percent lower in 2022 compared with the baseline year(2018),which is attributable largely to the shift in the portfolio from fossil fuel heating systems to electric solutions.As one of the largest suppliers to the automotive industry,Bosch is pressing ahead with the transition to electromobil-ity and utilizing the available opportunities.The company wants to generate sales of six billion euros in this area in 2026.Our customer numbers doubled in the period from 2019 to 2023.As early as 2022,Bosch was able to increase the production of components for electric cars by 50 percent year on year.By the end of 2023,Bosch had manufactured more than 4.5 million electric motors and more than four million inverters.Transformation of the energy sector through the use of green electricity,hydrogen,and biogasBecause many of Boschs products,systems,and facilities operate on the basis of electricity,an increased proportion of green electricity in the power grids has a direct positive effect on our carbon footprint downstream,so during the product use phase.The corresponding transformation of the energy sector is therefore highly relevant for achieving our scope 3 target even if it can only be influenced in a small way by Bosch.Sustainability report 2023EnvironmentGovernanceSocialAnnex36Strategy and managementClimate actionTo achieve the overarching SBTi target,the relevant divisions are pursuing specific CO targets and targeted action plans.The plans are based on currently available findings and mar-ket development scenarios in the coming years.The prog-ress toward goal achievement as well as the underlying sce-narios and framework conditions are reviewed annually.If any changes occur,we make adjustments accordingly.reduction in Co emissions in the product use phaseUp until 2022,we were able to significantly reduce scope3 emissions resulting from the use of our products from 421million metric tons of CO in the baseline year 2018 to 314million metric tons of CO.The main drivers underlying this reduction include the shift initiated within the product portfolio toward higher energy efficiency classes,more en-ergy-efficient motors and pumps,the supply of heat pumps and solar collectors,as well as the transformation toward e-mobility.Climate actionSustainability report 2023EnvironmentGovernanceSocialAnnex37Strategy and managementCircular economyAt the same time,we also avoid potential risks relating to compliance with environmental and social standards.Build-ing a closed-loop system for materials has the particular ad-vantage of eliminating parts of the value chain that are sub-ject to risks,such as extraction of raw materials.As with climate neutrality(scope 1&2),in our circular econ-omy strategy we use a model comprising levers that can be applied across the entire value chain and that is based on the core levers of our higher-level sustainability methodology(see G 17).Depending on the markets in which our divisions operate,however,the levers differ in their degree of effec-tiveness,are not equally applicable across the board,and Sustainability methodology,focus on circular economyMeasures for improving sustainability performance along the value chainUpstreamown operationsdownstreamIncreased efficiencyresources from renewable sourcesChanges in technologyscope 3,upstream:Purchased goods and servicesdesign for Environment and waste managementadjustment of product portfolioRange of topicsMaterials efficiency:Efficient use of material,analysis of the associated environmental and social effects Second life:Reuse,repair,and remanufacturing of products and componentsRecycled materials:Use of recycled materials and recovery of raw materialsWith our circular economy strategy,we want to enhance the sustainability of our products over their entire life cycle from procurement and production to use,return,and re-manufacturing,right through to recycling and reuse of mate-rials.To this end,we endeavor to either create loops directly within Bosch or close them outside the company using es-tablished recycling processes.This way,we reduce the amount of materials used and our products carbon foot-print10 and contribute toward achieving our scope 3 target.10 Unless otherwise stated,carbon footprint takes into account all greenhouse gas emissions ranging from raw material extraction to transport,production,sales,and use through to disposal of the product(cradle to grave)(see DIN EN ISO 14067).G 17Sustainability report 2023EnvironmentGovernanceSocialAnnex38Strategy and managementCircular economytherefore offer different development potential.This was evident from an analysis we carried out in 2022 of around 80product groups,which collectively account for roughly 80percent of Boschs sales revenue.It is therefore vital for Bosch to develop a market-specific circular economy strat-egy for each division and find the optimum mix of the three levers in each case.By organizing the material flows according to the concept of the circular economy,we also impact the corresponding CO emissions directly.This relationship is also illustrated by our new sustainability methodology.This means that by using material more efficiently and taking advantage of recycled material,fewer resources are consumed in general and the related CO emissions are also reduced.With remanufactur-ing of products and parts,the product is rebuilt and only defective parts are replaced.This extends the product life cycle.Life cycle assessmentsBased on the idea of a closed-loop or circular economy,we have been systematically conducting life cycle assess-ments(LCAs)for major product groups since 2017.This entails evaluating product-specific environmental aspects in each phase of the product life cycle from purchasing to production and use right through to disposal.Depend-ing on the use case,we distinguish between two assess-ment methods:the full-scale LCA,performed in compli-ance with ISO 14040 and 14044,and the streamlined LCA,allowing faster assessment of specific issues and drawing on standard database values.environmental aspects of Design for environmentdesign and purchasing Materials efficiency Ability to repair Upgradeability Secondary and recycled material Renewable raw materials Avoidance of high-risk raw materialsManufacturing Emissions Waste Substances of concern Hot spot processesPackaging Type and quantity of materials Recyclability Reuse and take-backTransport Mode of transport Transport capacity utilization Local purchasingEnd of life Reuse Remanufacturing RecyclingProduct life cycleUse Resource and energy consumption Emissions (including CO2,pollutants,noise)G 18Sustainability report 2023EnvironmentGovernanceSocialAnnex39Strategy and managementCircular economyLever 1:Materials efficiencyImprovements in materials utilization can reduce resource consumption and also cut the manufacturing cost of a prod-uct.Bosch can also directly influence the corresponding measures.For years,improvements in materials efficiency in produc-tion processes and the materials efficiency of our products have therefore been an essential element of our product de-velopment process,where it is anchored in an internal stan-dard via the Design for Environment(DfE)principle.Objec-tives such as the efficiency of powertrains are formulated here for the specific product and tracked using appropriate indicators if required.The environmental and social effects of using certain raw materials are also considered in order to keep the environmental impact of materials utilized as low as possible,while at the same time taking into account social aspects.A comprehensive web-based training program was estab-lished in 2023 to increase awareness among developers,in particular,of aspects of the circular economy.Split into four modules,the program provides training on sustainable product development,materials efficiency,second life,and recycling-compliant development.In addition,a document was prepared as a guide with design tips,example solutions,and background knowledge,in order to provide developers with specific information for developing products with greater awareness for the circular economy.Also in 2023,a cross-divisional and interdisciplinary project was launched with the central sustainability and research departments.Based on the example of a product group,the objective of the project was to develop specific strategies and implemen-tation options for developing products in line with the circu-lar economy.Bosch Green Collection fridge-freezer combination The new Bosch Green Collection fridge-freezer combina-tion not only has low energy consumption with energy efficiency class B but is also manufactured with more environmentally friendly materials.Low-CO steel is used for the side panels and other metallic paneling of the appliance which,in terms of its production,delivers a 70 percent reduction in CO emissions compared with the conventional steel used previously.11 In addition,bio-based,carbon neutral insulating foam and plastic are used in part during manufacturing.These measures have made it possible to reduce the carbon footprint of the appliances production materials by 33 percent to approximately 200 kilograms of CO.1211 Unlike conventional steel,low-CO steel is produced with low-CO raw materials and with the aid of biomethane.12 Comparison between the Bosch Green Collection fridge-freezer combination(KGN39OXBT)and a comparable fridge-freezer combina-tion with conventional production material(KGN39VXBT).Calculation of the carbon footprint of the production material(without packaging)based on ISO 14040.During manufacturing,the more eco-friendly material is mixed to an extent with conventional material but allocated to the Bosch Green Collection fridge-freezer combination according to the mass balance approach(ISO 22095).tree levers for circular economySustainability report 2023EnvironmentGovernanceSocialAnnex40Strategy and managementCircular economyLever 2:second lifeIn the second lever,we have grouped together those mea-sures that allow us to improve material flows or to close loops within the company.The concepts and activities of the divisions range from reusing products and their components to repairs and right through to remanufacturing in each case with the objective of extending product and component life cycles.Bosch can reduce negative effects which arise,for example,during the extraction of raw materials by clos-ing the materials and products loop.The effectiveness of the measures also depends on there being sufficient demand.This places strict requirements on product development.The individual divisions of Bosch each have their own objec-tives in this regard,depending on market and product-spe-cific framework conditions.Take,for example,the Mobility Aftermarket and Bosch Rexroth divisions,which each serve the Remanufacturing and Repair and Remanufacturing busi-ness lines.Both divisions are focused in this respect on suc-cessively extending their activities in these segments.Bosch eXchange For over 50 years,the Bosch eXchange program has been offering customers the option to have defective vehicle components replaced with remanufactured products at specialist workshops.13 Many customers take advantage of this offer,making the program a significant factor in Boschs automotive aftermarket product portfolio today.Around two million components are remanufactured here every year,thereby reducing the number of new products needed accordingly.This saves roughly 3,100 metric tons of material,which is the equivalent of around 8,600 met-ric tons of CO.14 At the same time,the program helps to reduce Boschs dependency on the international raw materials market.13 Bosch eXchange can be supplemented by new material,if necessary,in order to ensure a high degree of market coverage and delivery capability.14 Savings are calculated based on the avoided purchase of steel,aluminum,and copper using 2022 consumption values(source of COe-emissions factors:ecoinvent).Sustainability report 2023EnvironmentGovernanceSocialAnnex41Strategy and managementCircular economyLever 3:recycled materialsThe third lever of our circular economy strategy recycled materials covers all measures to close the loop by estab-lished recycling processes for materials such as steel,alumi-num,and plastics.This way,we can reduce the use of pri-mary materials and lessen our environmental impact as well as mitigate human rights risks associated with the ex-traction of raw materials.Our use of recycled materials also means that we are supporting the achievement of our scope 3 target.For this reason,two divisions have focused their activities on the use of recycled materials.For example,the Bosch Power Tools division has set quantitative targets for the use of re-cycled materials,which extend through 2025.By then,the division also wants to have life cycle assessments available for each product family.Specific targets have also been set for packaging materials.BSH Hausgerte GmbH is aiming to increase the proportion of recycled material used in all prod-ucts and at the same time improve the recyclability of the products.Key materials usedBosch Group 2023,in 1,000 metric tonsSteel 1,787Aluminum 233Plastics 408Key factors determining how effective the measures are in-clude whether high-quality materials are available,as well as whether the percentage of recycled materials used can be verified,and whether they can be purchased cost-effectively(see also“Scope 3,upstream:Purchased goods and ser-vices”).Across all our products,the average percentage of recycled steel used is around 56 percent.At 35 percent,the propor-tion of recycled aluminum matches the average level in the industry.For plastics,the percentage of recycled material that we purchase as raw material is around 5 percent.We intend to increase this share further in the coming years.G 192,427Sustainability report 2023EnvironmentGovernanceSocialAnnex42Strategy and managementCircular economyThe ways of achieving material recycling targets are as var-ied as the markets addressed by our divisions.The following are some examples:More sustainable design of measuring instruments in the dIY sectorThe Bosch Power Tools division is systematically working toward increasing the sustainability of the product portfo-lio of measuring instruments in the DIY sector.Experience gained during the development of the Quigo Green cross-line laser shows how this might work.The carbon footprint was reduced in this case by 35 percent compared with the predecessor product across the board from the product to the accessories through to the packaging.15In 2023,the division converted its portfolio of measuring instruments in the DIY sector to more eco-friendly packag-ing.This means,for example,that plastic bags are no longer used.At the same time,the instruction manuals are now made 100 percent from recycled paper.recovering platinum from fuel cellsBoschs fuel cell powertrain system has been in series production since fall 2023.This date also heralded the start of the Power Solutions divisions recycling plan.Platinum group metals16(PGM)are valuable raw materi-als processed in fuel cells.Circular economy models are particularly worthwhile for recovering these materials.For example,platinum can be recovered at a rate of at least 95percent from fuel cell stacks,the central element of the fuel cell system.Bosch is therefore planning to buy back stacks at the end of their operational life.This makes the stacks more economical and carbon emissions generated during the mining of platinum can be effectively reduced.Thats because more than 95 percent of carbon emissions caused by platinum mining can be eliminated by recycling platinum.Fully automated system for discharging battery modulesAs electromobility continues to gather pace,recycling of the raw materials contained in the batteries,such as lithium,cobalt,or nickel,is increasingly coming into focus.Bosch has developed special machinery,equipment,and software for this purpose.In 2023,Bosch Rexroth sup-plied Battery Lifecycle Company with one of the first fully automated systems for discharging battery modules in Europe,which is set to go into operation in 2024 and is thus supporting the development of a European recycling infrastructure with projects like this.Experts predict that by 2030,Europe will require recycling capacity for up to 420,000 metric tons of battery material each year(source:Fraunhofer ISI,2023).15 Comparison between Bosch Quigo Green cross-line laser(0.603.663.C00)and a current reference appliance(0.603.663.C02);calculated based on life cycle assessments(LCA)pursuant to ISO 14067:2013,cradle to gate(material,transport,production).16 The platinum group metals include platinum,palladium,rhodium,ruthenium,osmium,and iridium.Sustainability report 2023EnvironmentGovernanceSocialAnnex43Strategy and managementCircular economyWasteThe previously discussed instruments are also relevant for our own activities.This is especially the case with waste management.“Avoid,then reuse,then dispose”that is the principle we apply at Bosch with respect to waste management.As part of its circular economy strategy,Bosch continues to work systematically on reducing waste generation and,in particu-lar,on recycling.A guideline applicable group-wide ensures that the legal requirements for the transport and disposal of waste are complied with locally.All production locations have a clearly designated organizational unit responsible for sorting,classifying,and handing over waste to disposal companies.Ten incidents in which substances were re-leased were reported via our incident management system in 2023.Only a small number caused effects on the environ-ment,though these were categorized as low.In 2023,Bosch generated 666,028 metric tons of waste(prior year:678,260 metric tons),a decrease of 1.8 percent.Of the amount of waste,it was possible to recycle 86 per-cent.In relation to the development of sales revenue,the waste volume decreased by around 5 percent year on year(see also T 06).An analysis of waste at a number of production locations,which together account for around 80 percent of our total amount of waste,has shown that roughly 45 percent of our waste consists of metals,24 percent is packaging waste,and around 11 percent is hazardous waste.In addition,as the analysis also revealed,there is potential to lower the volume of hazardous waste and therefore not only reduce disposal costs,but make an important contribution to protecting Waste volume and disposalBosch Group 20212023,in 1,000 metric tons202120222023Bosch Group689.5678.3666.0Recycled waste602.0584.4569.9Waste for disposal87.493.996.1 thereof hazardous waste70.175.876.4 Material-based recycling30.935.436.7 Thermal recycling8.27.07.6 Other recycling7.97.77.9 Landfill disposal3.53.03.3 Disposal through incineration8.27.97.5 Other disposal11.314.813.4Waste intensityin metric tons/million euros of sales revenue202120222023Bosch Group8.87.77.3people and the environment.In 2019,we decided to pursue two priorities in response to these findings:reducing hazard-ous waste and minimizing the amount of waste going to land-fills.At Bosch,hazardous waste occurs mainly in the form of cool-ing lubricants,washing water,oils,and fuels.In 2023,their volume increased by 0.8 percent to 76,436 metric tons com-pared with the previous year(75,807 metric tons).Specific measures are being implemented at sites with relatively large quantities of
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