Governance\n\nThe Board of Directors of EMS bears responsibility for sustainability and climate protection as well as climate-related risks and opportunities; the Board of Directors decides on strategy and targets. The environmental, social and ethical performance is overseen by a Sustainability Committee formed by the Board of Directors.\n\nClimate-related initiatives and measures are planned in the business units and approved and defined by Executive Management as part of the planning process.\n\nImplementation takes place in line management. More information on how EMS manages sustainability risks, can be found in the TCFD report.\n\nStakeholders and risk management\n\nEMS meets the needs of business partners, employees and the environment through responsible economic, social and environmental behavior. The demands of the various stakeholders are recorded within the framework of the integrated quality management system and objectives, measures and priorities are defined and implemented at the levels of quality, safety, environment and health. All these objectives and measures are planned in the business units and approved and defined by Executive Management within the framework of annual planning. Implementation takes place in line management.\n\nEMS has developed a comprehensive risk management system which is integrated into the planning and management process. The risk assessment by EMS management is discussed twice a year with the Audit Committee and the Board of Directors. A distinction is made between strategic, operational, legal and financial risks.\n\nThe objective of risk management is to:\n– systematically identify special risks before they occur\n– establish processes to monitor, reduce and, at best, prevent risks, and\n– find a balance between risks and opportunities.\n\nEthics and compliance\n\nInternal Audit and the Chief Compliance Officer (CCO) are responsible for monitoring compliance with applicable laws, policies and principles of global business ethics. The CCO reports directly to the CEO.\n\nEmployees are also required, and business partners are encouraged, to report potential violations to the CCO via a special (anonymous) compliance channel or to contact the head of the legal department. The Group Directive defines how employees must report such violations and regulates the conduct of the recipients. Sanctions are imposed in the event of proven misconduct.\n\nCompliance training courses are held under the direction of the CCO at the individual Group companies. The following training courses were held:\n– combating corruption and bribery;\n– antitrust/competition law;\n– export controls/sanctions;\n– data protection (in particular the EU General Data Protection Regulation, GDPR);\n– human rights.\n\nThe training program is continuously developed. Employees are required to undergo initial training when they start working for EMS with further training every two years. Employees are also provided with general and specific legal advice or individual training where necessary.\n\nCombatting corruption\n\nAs a member of the United Nations Global Compact, EMS is committed to a clear and strict stand on anti-corruption. Corruption is categorically rejected. There are clear guidelines for prevention and employees are trained in this regard. According to audits by the internal audit department, there were no cases of corruption at EMS worldwide in 2023.\n\nCompetition\n\nEMS is committed to fair competition with no price fixing, cartels or other competition-distorting activities. EMS handles its operational and commercial knowledge with care. In particular, EMS consistently protects its technical and commercial knowledge from loss or access by unauthorized persons.\n\nAudits and inspections\n\nThe internal audit department, the compliance department as well as the external auditing body support the Board of Directors or the Audit Committee in the exercise of its monitoring and control functions. Audits and inspections make a significant contribution towards this. They also present management at Group (Executive Management), business unit and local company levels with an assessment that is independent of line management. This is done to determine whether the activities concerned comply with external, statutory and EMS internal guidelines and requirements (compliance aspect) and whether the processes and controls designed are effective.\n\nIdentified deficiencies and potential for improvement are presented in reports with measures and implementation dates. Implementation of the defined measures is assessed in follow-up audits.\n\nAudits and inspections are carried out by various functions within the EMS Group.\n\nThe EMS internal audit department is independent of line organization and carries out group-wide audits of key processes. Focus is on the structure of internal control systems and the effectiveness of internal controls.\n\nIn addition, internal specialists from line organization carry out inspections regarding product quality, the environment, occupational safety, health, cleanliness and orderliness at business unit level and at the individual companies. The main results of such inspections are included in the systematic reporting process to Executive Management.\n\nAs a supplier, EMS itself is regularly audited by customers, in particular from the automotive and industrial sectors. These audits ensure compliance with international labor norms and standards in the areas of quality, environment, safety and health.