see. think. act.
GlobalCompanySustainability
GlobalCompanySustainability
Next Generation Sustainability
CompanySustainability

Next Generation Sustainability

A balanced observation of social, ecological, and economic aspects is a matter of course for ZF as a foundation company. Thus, we have become one of the world’s leading automotive suppliers with over 100 years of experience that actively designs the mobility of the future.

As a globally active technology company, we take on responsibility along our entire value chain – for our employees and our locations, as well as in our supply chain and for our products. Thanks to intensive and focused investment in research and development, ZF promotes the topic of sustainable mobility in general.

ZF has been a signatory of the United Nations Global Compact since 2012. As part of this initiative, more than 13,000 organizations work toward ensuring a more sustainable future – by exchanging ideas and strategies and by engaging in cooperative measures. Over the past few years, we have been continuously working on our contribution toward ensuring sustainable development. Even so, everyone involved has to make enormous efforts to overcome the numerous environmental and social challenges with which they are confronted on their journey toward sustainable development.

Today, sustainability is an integral part of the Group’s strategy. With “Next Generation Mobility,” ZF is pursuing an agile and integrated approach to shaping the fundamentally changing mobility needs of tomorrow. The overarching goal is to harmonize society’s mobility needs with the requirements of a healthy ecosystem. Humanity must ensure that all its activities respect ecosystem boundaries while also bringing about sustainable and future-oriented solutions. Following the clear vision of being part of the solution, ZF is stepping up its efforts to embrace these ecological and social challenges.

This is why ZF has drawn up a climate strategy – ZF aims to be climate neutral by 2040 for all three scopes of the Greenhouse Gas Protocol. This means that by 2040, all of the roughly 270 ZF locations will not generate any CO2 emissions either on their own or through the purchase of electricity (Scopes 1 and 2). At the same time, we will reduce emissions across our entire supply chain in order to minimize the environmental impact of our products (Scope 3). Please see the latest version of the ZF Sustainability Report 2020 for reports on further goals and our progress.

"Our plan is to cut our carbon emissions by 80 percent by 2030 as compared to 2018 – and we’re confident that we can meet this goal."

Wolf-Henning Scheider

Has the EU’s Green Deal from December 2019 affected ZF’s business?
"I don’t see that it’s brought about a fundamental change of direction, but it has accelerated things through its even more ambitious targets. Climate-friendly solutions for sustainable traffic have guided our actions for a long time already, though. As we see it, it would be a good idea for market objectives to be defined for the long term and validated by scientific evidence – to make them both plannable and transparent.”
Wolf-Henning Scheider, Chief Executive Officer (CEO)
Read the complete interview with the Chief Executive Officer

Are your sustainability activities already yielding a competitive edge for you?

"We’re witnessing a significant increase in sustainability criteria demanded by customers. What’s more, the pandemic has proved that swift and effective solutions are possible when necessary. This must also apply to traffic if we want to meet the Paris climate targets. This realization is playing into our hands, because we’re offering solutions for more efficient traffic in all areas of mobility and are successful in doing so.”

How far are you on your journey towards becoming climate neutral?

"We can contribute to climate neutrality in two ways: through our products, which reduce emissions in street traffic, and through our production. In our strategy, we’ve firmly anchored the goal of becoming climate neutral by 2040 – that’s ten years ahead of the deadline set by the Paris Climate Agreement. This year, we’ll continue to refine our plan of measures and lay down concrete intermediate steps on our path towards becoming carbon neutral.”

How important is the supply chain for your company’s ability to meet its sustainability goals?

"The supply chain has traditionally been an important element in any sustainability strategy. For a company of our size, compliance with human rights and employee rights along with climate neutrality at every stage of the value chain is an indispensable building block when it comes to enhancing worldwide acceptance and reputation. For us at ZF, these aspects have always played an important role. Which is why we’re also fully committed to the UN Global Impact, which we joined in 2012, as well as the UN Sustainable Development Goals (SDGs), set in 2015.”

Are there any sustainability areas where you feel you have some catching up to do?

"Sustainability is multi-faceted process. Which is why it’s not about catching up but instead, about a continuous need to act. In 2021, a major focus of ours will be diversity. We already began working on several projects in this field last year. Another topic where we still see great potential is the circular economy. We’re also placing great hope for sustainable development on digitalization, which we see as a major driver of the green transformation. In this area, however, we’re largely dependent on a modern and future-oriented infrastructure."

Sustainability Strategy

Employees

Training and Education: Aiming to continuously contribute to improve the organization in order to achieve a global learning culture of innovative learning and development
Safety at work and health protection: Striving to improve safety performance by conducting professional incident management, Safety Leadership and Behavior Based Safety actions as well as improving functional safety areas

Products

Sustainable Product Portfolio: Gradually increasing the share of revenue from sustainable products and services
Product Safety: Zero accidents and zero fatalities through smart product solutions and highest quality
Material efficiency of products: Reducing the use of raw materials and realizing a circular economy

Production

Emissions of plan operations: Reduce CO2 emissions caused by plant operations
Water: Saving water resources and supporting clean water quality
Waste: Supporting recycling management and reducing hazardousness of waste

Supply Chain

Standards in the supply chain: Aiming for an implemented supply chain sustainability management
Upstream and downstream emissions: Slowing down climate change and working towards healthier environment

Sustainability is not about appeal or social acceptance. It will be a decisive parameter for the existence of companies.

How is the objective of sustainability anchored in the company?
"Sustainability is essential for our future competitiveness and, consequently, for the success of our company. We no longer see sustainability as a “soft skill” but as a core competency. This is why in 2020, we visibly included climate neutrality as a key performance indicator in our corporate management and strategy. With this, we clearly underline our commitment to achieve these ambitious goals and follow up on the progress at any time."
Sabine Jaskula Member of the Board of Management, responsible for sustainability
Read the complete interview

How does the defined sustainability strategy benefit your customers?

"Many of our customers pursue targets similar to ours and are therefore just as demanding in terms of their sustainability orientation. Further, not only are we committing ourselves to meeting the highest sustainability standards, but also our partners in the supply chain. ZF, for example, set essential targets in the supply chain already at an early stage. The selection of our suppliers also increasingly depends on whether they meet CO2 targets and attribute the necessary attention to other aspects of sustainability as well."

Why are ZF’s sustainabilty targets also important for investors?

"Investors are also increasingly focusing on sustainability KPIs. Meeting these criteria is also a prerequisite for receiving optimal refinancing conditions. Just like our customers, investors are also demanding more and more information and details about sustainability performance. Based on this information, portfolios in the markets are restructured and conditions are defined. This makes sustainability a key success factor for our financial independence. That’s another reason why we attribute great importance to extensive reporting on our standards, measures and targets in the context of sustainability."

What are the specific targets on greenhouse gas emissions for 2030 and 2040?

"We have defined a stringent roadmap. On the one hand, our approach to reducing direct CO2 emissions is to increase the efficiency of our locations by two percent every year. Further, we will source more power from renewable sources or generate them at our locations, with the aim to source 100 percent renewable energies at ZF by 2030. In sum, we want to reduce our Scope 1 and Scope 2 emissions – i.e. the direct emissions from our own production including purchased energy – by 80 percent compared to 2018. By 2040, ZF is to become fully climate-neutral, i.e. including Scope 3 emissions that occur in the upstream supply chain and in the utilization phase. We have no direct influence on these sectors, which is why achieving complete climate neutrality is an enormous challenge. It depends on the cooperation with our supply chain partners as well as on technological paradigm changes, such as CO2-neutral steel and aluminum production."

What do the ZF targets mean for competitiveness?

"Low-emission products give a clear competitive edge. Achieving the sustainability targets will be a decisive parameter for the existence of a company."

How does ZF stand out from other companies in its field with regard to sustainability?

"For one thing, ZF offers a unique product portfolio. We don’t just provide highly efficient systems for the electrified automotive powertrain, but also products that actively contribute to sustainable energy generation, such as wind power turbine gearboxes. What’s more, we don’t simply set top sustainably standards for ourselves – we oblige our supply chain partners to comply with these standards, too. The SDGs serve as our benchmark."

What topics are you currently focusing on?

"Climate protection is what we’re currently attaching great importance to. Achieving climate neutrality by 2040 is an ambitious goal and in doing so, we’ve intentionally opted for a credible approach based on technical measures. Which is why we’re currently re-sharpening our climate strategy and uniformly aligning the different divisions’ activities throughout the Group. This requires embedding sustainability targets in all operative business processes. Like this, sustainability isn’t just the responsibility of the various departments, but rather encompasses our entire business model."

What opportunities do you associate with sustainability management?

"We’d like to assume a growing degree of responsibility to society and bring it to the outside world. As I see it, successful sustainability management is the foundation upon which we can build societal as well as economic viability. Being awarded customer orders already hinges on meeting sustainability goals today. Due to ever more restrictive emission legislation as well as carbon taxation, low-emission products yield a clear competitive edge. This trend is going to gain even more momentum in the future. Not least, I personally find that a consistent focus on sustainability also increases ZF’s attraction as an employer. Often people apply for jobs with us because they are motivated by their desire to make a contribution to sustainable development."

Responsibility in the supply chain

A large part of the added value comes from cooperating with our suppliers, including large corporations but also small family businesses. ZF thus relies on universal standards so as to ensure that the products are of a consistently high level of quality and can be delivered reliably. At the same time, we expect our business partners to respect and promote our values.

When it comes to the selection of raw materials and components, ZF uses a wide range of solutions that protect human rights and the environment and combine safe mobility and economic viability.

Environmental protection within the company

Conserving natural resources is the foundation of our global environmental strategy. The essential areas of activity include climate protection, reducing the effects of our production on the environment, and environmentally sustainable product design. In order to take a coherent approach toward pursuing this strategy, all of the locations have ISO 14001 energy management certification.

In addition, ZF applies the latest methods and technologies to reduce negative impacts on humans and the environment. In product development, ZF relies on the careful selection of materials and uses life cycle analyses to improve the ecological aspects of products with every generation.

As a longer service life makes a significant contribution toward the consumption of fewer resources, ZF has been focusing on the industrial reconditioning of used parts for many years now. ZF recognized early on that the recycling of products can save a great deal of energy and materials, and has expanded its capacities accordingly. Meanwhile, 15 ZF locations worldwide contribute on an industrial scale to reconditioning a wide range of vehicle components such as brakes, transmissions, steering systems or torque converters, and making them available in OE quality. This extends the service life of the products and therefore reduces the energy and resources required in comparison with producing a new component by up to 90 percent.

Product responsibility

To find sustainable answers to the most urgent environmental and traffic problems, ZF is treading the most diverse paths thanks to its power of innovation. In product development, ZF takes care to select materials carefully and to use life cycle analyses to improve the design of products with every generation.

ZF’s unique technological competence is expressed in a nutshell with its motto "see – think – act“. Using the operating principle of intelligent networking, sensors ("see") are connected to control units ("think"), whose signals are issued only to reliable actuators in the drive, braking, steering and occupant safety systems ("act"). This intelligent interplay between all components and systems helps vehicles not only become safer, but is also a prerequisite for autonomous driving.

The existing product range helps to ensure environmental sustainability by reducing fuel consumption and therefore emissions, for example. In addition, ZF continues to adopt the integrated system solutions approach, is consistently driving forward the electrification of vehicles, is increasing the effectiveness of conventional transmissions, and is focusing on modular, hybrid-compatible transmission kits. With the EVplus, ZF shows that plug-in hybrid electric vehicles (PHEV) can be considered as genuine electric vehicles. This is because this model can drive distances of over 100 kilometers under real conditions and powered solely by electricity. With just one battery charge, most drivers will be able to travel to and from work as well as use the car in their day-to-day lives. The EVplus concept vehicle is based on a series-produced passenger car with an 8-gear plug-in hybrid transmission from ZF. The technology group also offers a wide range of hybrid and solely electric drive solutions for series production in almost every vehicle segment. This also includes mobility solutions such as autonomous electric shuttles for city centers.

Employees – ready for the future

As an attractive employer, ZF wants to be an inspiring force worldwide. And it is succeeding! This is demonstrated by the fact that alone in Germany several hundred young people start an apprenticeship at ZF every year. The company has for many years attached a great deal of importance to providing innovative and future-oriented training programs. Students come to ZF from numerous international university cooperations and programs.

In order to ensure that we have a sufficient number of skilled workers for the digital transformation, ZF is constantly providing its management staff and employees in every role within the company with further training. ZF encourages its employees to think in terms of achieving results, to play a role in shaping their own professional development and to further expand their personal skills. At the same time, ZF supports them through its flexible work hours, active health management and competitive remuneration.

Working together day-to-day, cooperation in a trusting atmosphere is important to us. We firmly believe that diversity has a positive impact on society and on how people work together. As a member of the Diversity Charter, we promote a balanced gender ratio among our employees and an international workforce with broad experiences and levels of expertise. To promote diversity and equal opportunity, ZF offers a broad range of mentoring programs and career modules.

Helping and supporting people

Corporate social responsibility is an integral part of ZF’s corporate culture. The Group and its employees are committed to numerous national and international projects, with an emphasis on education, community and art and culture. Also the company’s owners – the Zeppelin Foundation and the Dr. Jürgen und Irmgard Ulderup Foundation – support science and research, art and culture, children and youth projects, the education and training of young people as well as nature and land conservation.

In addition to international corporate volunteer activities under the umbrella initiative "we>care", ZF employees in Germany are generous when it comes to making financial donations, thus considerably supporting their local communities. To distribute funds donated by the employees so they have the greatest possible impact, the company founded the non-profit organization „ZF hilft." in 2005.

Further Information

Climate Strategy

In early 2020, ZF adopted an ambitious climate strategy, the goal of which is to become climate neutral by 2040 in terms of Scope 1 to 3 emissions. Compared to 2030, production-related emissions are planned to be reduced by 80 percent by 2030 already. At the same time, ZF is working on reducing emissions from its entire supply chain and minimizing the environmental impact of its products. This way, ZF is actively supporting the goals of the Paris Climate Agreement, which aims at reducing global warming to 1.5 °C. The company is also contributing to the implementation of the European Green Deal. This pursues the goal of making Europe a frontrunner in terms of sustainable technologies and, by 2050, the first continent to become climate neutral. The goals that ZF has set for itself have been aligned with the Sustainable Development Goals (SDGs), the Science Based Targets initiative (SBTi), CDP Climate and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

To coordinate the various initiatives, measures and effects for the entire company, ZF has established a steering group. This is made up of representatives from expert committees from the areas of sales and customer development as well as innovation and technology, along with the responsible executive board members for sustainability, materials management, production and finance.

Partnership for Climate Protection

The entire industry still has a long way to go before fully rising to meet the many ecological and social challenges of sustainable development. The complexity of these challenges means they cannot be solved by individual companies but only through collaboration and partnerships. To underline its engagement in this field, ZF has joined the CEO Climate Leaders initiative of the World Economic Forum. Its position is that the private sector must take responsibility and actively engage in efforts to reduce greenhouse gas emissions, thereby helping to shape the global transition to a low-carbon, climate-resistant economy. The members of the Alliance of CEO Climate Leaders pledge to

  • publish their emissions data, ideally via CDP;
  • publicly lay down a net zero target for 2050 at the latest, which implies their commitment to a 1.5 to 2 degree Celcius compliant reduction path for all areas of the Greenhouse Gas Protocol (Scopes 1, 2, 3) including an emission reduction target for 2030 in line with this path, and
  • report their progress in terms of emission reduction goals.

Beyond this, the Alliance is implementing the TCFD recommendations regarding disclosing climate related data and ensuring that the guidelines for effective controlling climate risks are implemented and monitored by the company management.

Guidelines, Principles, and Management Systems

At ZF, questions of sustainable governance are firmly anchored in the company guidelines. More than just part of every individual’s behavior, they’re a central aspect of all business activities in every day’s decision processes. Yet sustainability can-not simply be dictated from the top down – it must be filled with life throughout the entire organization. EHS management as a longstanding globally established approach has served ZF as its basis for this and has been implemented at all ZF locations.

Guidelines such as the principles of social responsibility, environmental policy, respect for human rights policy statement and the code of conduct for employees serve as guardrails worldwide. Step by step over the past two years, the Group has further developed its ZF Enterprise Risk Management. This included defining and regulating clear roles and responsibilities along with Group-wide standardized risk management processes. A further significant addition to the reviewed Enterprise Risk Management (ERM) is an integrated governance, risk management and compliance (GRC) approach, characterized by improved interfaces between control systems, compliance, corporate audit and corporate risk management. As part of the Group’s ISO 14001 certified environmental management system, the respective risks and opportunities are evaluated at both the location and the Group level and reported as part of the management review. This procedure was adjusted to the new corporate risk management norm in 2020.

Organizational Anchoring of Sustainability

The sustainability department is located in the occupational health and safety, environmental protection and sustainability division, whose head reports to the executive board member for HR and legal. The sustainability department is responsible for sustainability reporting, serves as the internal contact point for all sustainability-related questions, advises the Board of Management and manages stakeholder dialogue. In coordinating sustainability topics within the company, the sustainability department is supported by a 15-member steering group. Comprised of representatives from all relevant departments, this group meets on a quarterly basis.

To gain an overview of newly arising company topics and to elaborate first starting points for dealing with them, the steering committee may establish working groups that will then address specific tasks in depth.

Current publications

Annual Report 2020

In the Annual Report, you will find important data and facts from the 2020 fiscal year.

Sustainability Report 2020

What does sustainability mean for ZF? The Sustainability Report provides the answer to this question.

Further Information

Added Value Through Sustainability

Sustainability plays an extremely important role in the ZF business model. After all, the Group’s products and innovations contribute to safer and greener mobility.

Powered by Sustainability

"Our products consume as little energy as possible”: that’s the ZF promise. The Group also ensures that sustainability is part of the manufacturing process.

EU OSHA Health Workplaces

ZF Friedrichshafen AG is an official campaign partner of the EU OSHAS Health Workplaces Campaign "Lighten the Load".

Human Rights in the Supply Chain

Declaration of Principles Concerning the Respect of Human Rights: The respect of dignity and personal rights of every individual are the utmost priority for ZF.