Our CR Management: Responsibility in Practice

We live up to our responsibilities. To put its principles into practice, MAN has not only integrated CR into its relevant business processes and current management systems, but has also launched new initiatives.

Responsible corporate governance

In managing and providing oversight of the Company, our focus is on ensuring appropriate profitability and the sustained creation of value in accordance with the principles of the social market economy. MAN’s management complies with all applicable laws and regulations — in particular with corporate law, our Articles of Association, and internal policies — as well as with internationally and nationally recognized standards of good and responsible corporate governance.

MAN is guided by the laws governing publicly traded corporations set out in the German Corporate Governance Code (DCGK). The Code requires the Executive Board to manage the Company in a far-sighted manner and to accept monitoring by and advice from the Supervisory Board. The Executive Board must consult the Supervisory Board on important decisions and has a duty to inform the Supervisory Board at regular intervals.

In December 2010 we became a signatory to the United Nations Global Compact, confirming our commitment to its ten principles concerning human rights, labor, environmental protection, and anti-corruption. This CR report represents our third Communication on Progress in line with the Global Compact.

Integrity and compliance

MAN does not tolerate illegal or irregular conduct. The MAN Code of Conduct outlines standards of behavior that are binding for all our employees in their daily work. Our compliance policy also provides concrete instructions for handling ambiguous situations. Our code of conduct for suppliers and business partners regulates relationships with our associates and requires them to comply with basic principles of corporate responsibility, transparency, fairness, and data protection.

At the beginning of 2010, we introduced a compliance program that applies across the Group. It assists us in combating corruption as well as preventing violations in the areas of antitrust law and data protection, detecting noncompliance at an early stage, and responding quickly, effectively, and consistently.

In our companies in Germany, four data protection officers work to ensure that personal data are secure. In the reporting period, additional data protection coordinators were appointed in more than 90 of our companies outside Germany.

Violations of our compliance policy are examined on a case-by-case basis. The Disciplinary Sanction Committee is the body responsible for imposing internal sanctions in the event of compliance violations. It meets on an ad hoc basis and is made up of the Chief Compliance Officer and the Chief Human Resources Officer of MAN SE, as well as the Chief Executive Officer and the Compliance Officer of the subgroup in question. The findings of misconduct investigations — as well as the results of regularly conducted compliance risk assessments — are used to fundamentally improve our compliance program and introduce selective compliance measures. The Chief Compliance Officer reports to the Executive Board as well as to the Audit Committee of the Supervisory Board.

In addition to its ongoing membership in Transparency International, in the reporting period MAN joined the Partnering Against Corruption Initiative (PACI) and the German Institute for Compliance (DICO). Offering a platform for discussing measures to minimize compliance risks, PACI is a global anticorruption initiative of the World Economic Forum.

CR organization

At MAN, corporate responsibility is a managerial function. For this reason, the Management Board of MAN SE serves as the steering committee for corporate responsibility. Jochen Schumm, Chief Human Resources Officer of MAN SE and MAN Truck & Bus, is ultimately responsible for CR at MAN. In the reporting period, CR topics were discussed at three meetings of the Executive Board of MAN SE. The Corporate Responsibility function is in charge of the ongoing development and coordination of the CR strategy. It is supported by the CR Excellence Team, which is made up of experts from the Human Resources, Investor Relations, Public Affairs, and Corporate Communications functions, as well as representatives of MAN Truck & Bus, MAN Diesel & Turbo, and MAN Latin America. Each year, the CR Excellence Team prepares the data for CR reporting and monitors the implementation of the CR strategy. The team met twelve times in 2012. Its key tasks included steering MAN’s Climate Strategy, preparing for the annual CR rankings and ratings, evaluating the results of stakeholder dialogs and deriving follow-up measures, and holding discussions with experts at guest lectures and similar events. Our Climate Expert Team, comprising product, production, and customer experts from the subgroups, is responsible for driving the implementation of the Climate Strategy.

The MAN CR Organization

The MAN CR Organization

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Our values and MAN’s CR principles aim to interpret corporate responsibility as a continuous management process, facilitate its implementation across the Company, and ensure regular progress reports. In their role as CR ambassadors within the Company, all members of the CR Excellence Team and the Climate Expert Team are committed to furthering these principles.

To live up to the increased expectations of our stakeholders, a new CR organizational structure will be introduced in the second quarter of 2013.

Supplier management

MAN spends over €9 billion annually on raw materials, goods, and services. We hold not only ourselves but also our suppliers to high standards when it comes to environmental protection, employee rights, and preventing corruption. MAN’s code of conduct for suppliers and business partners requires the prohibition of forced or child labor, compliance with internationally recognized human and employee rights, and adherence to environmental standards and anti-corruption regulations. We have made compliance with these principles mandatory. They are based on the labor standards outlined in the conventions of the International Labour Organization (ILO) and the ten principles of the UN Global Compact. We do not do business with suppliers and business partners who fail to comply with these requirements, and we do not tolerate illegal behavior.

Our supplier selection standards include not only quality, innovative capability, and reliability, but also occupational safety and environmental protection. We aim to build long-term relationships with our suppliers.

Environmental and occupational safety management

Environmental management is part of our integrated management system, which covers environmental protection, occupational safety, fire safety, hazard abatement, quality management, and information security management. In addition, environmental protection and safety are embedded in our vocational training and continuing professional development programs.

MAN Truck & Bus evaluates environmental performance using its own capability maturity model, which assesses the status quo and defines goals and actions to be taken in all its production sites (except India). It is already being applied to energy management, and in the future it will be expanded to include occupational safety management.

MAN Diesel & Turbo has created an integrated HSE-Q handbook of management principles. This handbook combines health, safety, environmental, and quality aspects and — together with the guidelines for occupational and product safety — serves as a reference tool to guide employees in their daily work.

To protect the health and safety of our employees, we conduct systematic workplace hazard assessments and regularly hold internal occupational health and safety audits and inspections. We are currently developing a Group-wide health management system. The health services at our plants act independently to address specific concerns with appropriate measures. In addition, many facilities have concluded their own works agreements on health and safety and set up working groups. They have developed programs ranging from sports clubs to medical examinations and training courses in health protection.

Risk and crisis management

Our employees are active around the world. This calls for a preventive, global security management system. To meet this challenge, we have been coordinating security measures across the Group since 2011.

Innovative products and processes are essential to maintaining our competitive advantage — and are therefore key to MAN’s success. In the year under review we launched a campaign to protect our confidential data against corporate and industrial espionage. Twenty-two onsite training sessions were conducted in Oberhausen, attended by some 950 employees. The program will be rolled out in Munich and Augsburg in 2013.

Worldwide, more than a thousand MAN employees travel on Company business each day. A travel tracking tool was launched in the year under review to help ensure their safety. It allows employees on business trips and overseas assignments to be tracked and provides them with specific information on safety and health risks before and during their travel.

In the year under review we also worked on introducing a Group-wide crisis management system. To this end we developed a management model for implementation at site, subgroup, and Group level. The aim is to create a crisis management organization that is capable of successfully handling negative events. Various crisis groups and teams are being set up at the different levels to serve as a crisis response instrument.

Zero Accident Initiative

In 2012 the Zero Accident Initiative was launched at MAN Diesel & Turbo. Its goal is to continue to significantly reduce the number and severity of workplace accidents. In addition to attending safety training courses and workshops to discuss best practices and lessons learned, employees are called upon to take the initiative. The aim is to create a culture in which every individual feels responsible for their own safety – and for that of their colleagues.

Examples of Zero Accident Initiative programs at our sites include:

  • Augsburg: Accident analysis and lessons learned
  • Oberhausen: Training course aimed at reducing crush injuries
  • Zurich: Safety course to build risk awareness
  • Denmark: Reporting and analysis of narrowly averted accidents and dangerous situations

Human resources management

Dedicated, responsible, and competent employees are essential to the continuing success of our innovative products and technologies. To this end, our HR management must look to the future. As a globally active corporation, the prevailing social parameters in the locations where we operate can vary greatly — educational systems and population structures, for instance, differ from country to country. That is why our HR management is decentralized, with each subgroup working within the framework of the Group HR strategy to develop measures that best suit the cultural and demographic challenges encountered at its sites.

The Corporate Center initiates Groupwide strategy processes, coordinates the various measures, and ensures that the subgroups learn from each other’s experience.

MAN guidelines for management hiring were introduced in 2010 to promote diversity and the placement of qualified women. We keep pace with science and research through our close contacts and partnerships with universities, colleges, and other institutions. This is not only important to the development of our products, but also facilitates the recruitment of top talent. Around the world, we collaborate with 110 universities, colleges, and research institutes.

Product development

The coming years will see a worldwide increase in the transportation of people and goods. To meet these challenges, MAN’s strategic product development is aimed at trends and scenarios for the years 2015 to 2050. MAN Truck & Bus utilizes its Trend Radar for the early identification, evaluation, and analysis of relevant trends for the Company. Worldwide megatrends — climate change, globalization, demographic change, and urbanization — will significantly influence the Company’s business activities. Because products manufactured by MAN have a life expectancy that often spans several decades, we plan and develop them with not only our customers’ current needs but also their future requirements in mind.

Our customers judge our products based on the total cost of ownership — from purchase and use to disposal. As a result, increasing efficiency is the top priority in the development of our products and services.

In both Commercial Vehicles and Power Engineering, on average over 90% of greenhouse gas emissions are generated during the use phase of the product life cycle — through energy consumption, emissions, use of lubricants, maintenance, and servicing. Because most of our products have a very long service life — and are used intensively — we reduce the environmental impacts as much as possible through forward-looking product development. Important criteria here are the efficiency and marketability of our products as well as their quality and safety.

The product engineering process (PEP) at MAN Truck & Bus describes the standard sequence of a new vehicle project, from project initiation through to vehicle market launch. In 2012 this process was reworked in a joint project with MAN Latin America. The employees responsible for PEP met more than 50 times at workshops and developed a standardized process sequence which involves production managers from the very beginning. Accordingly, the product engineering process at Commercia Vehicles breaks down into six stages:

  1. Initiation and definition
  2. Concept
  3. Development
  4. Pre-series engineering
  5. Series engineering
  6. Series production ramp-up

“Environmentally Compatible Product Development” is the name of the process guidelines which regulate environmental aspects, such as reducing pollutant and noise emissions, at MAN Truck & Bus. In addition, we concentrate on the safety of our products and the safety of road users.

At MAN Diesel & Turbo the product development process focuses on efficiency, weight, noise emissions, and the selection of materials. We also concentrate on the reliability and safety of our products. And of course customer requirements are considered as well. The process includes the following steps:

  1. Analyses of economic, market, competitive, and product situations
  2. Generation of ideas based on prognoses and customer dialog
  3. Evaluation according to technical and economic criteria
  4. Definition of product concepts
  5. Prioritization of projects