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2019 Annual Report

 

TRANSFORMATION

2019 Annual Report

Continental Corporation - 2018 Annual Report
 

Development of Other Sustainability Topics

1 2 3 4 5

Green and safe factories

Our concept
Our corporate policy for environment, safety and health protection (ESH) defines guidelines for green and safe factories. The Environment and Safety & Health group functions are responsible for the related management process, and are supplemented by corresponding ESH functions at various levels of the corporation. At the locations, local ESH managers coordinate operational environmental protection and occupational safety and health on site under the responsibility of location management.

Both the concrete organizational and technical guidelines for the locations are defined in the ESH management manuals.

All persons in our company are to be protected against accidents and work-related illnesses. New targets were defined in 2019 for operational environmental protection. In addition to reducing CO2 emissions at our locations (see also “Climate protection” on page 49) and increasing the waste recycling rate (see also “Circular economy” on page 50), these include reducing energy use and increasing energy efficiency, as well as reducing water consumption and waste generation.

Local management systems are designed to support the implementation of environmental protection, energy efficiency and occupational safety on site.

Results of the concept
In 2019, the majority of our employees were covered by local management system certifications in the areas of environmental protection (according to ISO 14001 or similar standards), energy efficiency (according to ISO 50001 or similar standards) or occupational safety (according to ISO 45001 or similar standards).

The accident rate – i.e. the number of accidents per million working hours – improved to 3.03 accidents (PY: 3.41).

Key figures for green and safe factories
  Dec. 31, 2019 Dec. 31, 2018
Environmental protection management system certifications (ISO 14001 or similar)
Employees covered in %
82 > 801
Energy management system certifications (ISO 50001 or similar)
Employees covered in %
49 - 501
Occupational safety management system certifications (ISO 45001 or similar)
Employees covered in %
69 - 671
Number of accidents per million working hours2, 3, 4 3.03 3.41

1 In 2018, not reported as key figures but as indicative, rounded statement in the text.
2 Permanent staff only (own employees).
3 Counted from more than one lost day, i.e. with at least one lost day beyond the day of the accident.
4 Excluding Continental Tire Sales (approx. 2% of the total workforce).

For more information on green and safe factories, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Good working conditions

Our concept
Our vision is to become one of the most attractive and progressive employers in order to meet our future staffing requirements in terms of both quality and quantity.

Continental’s Code of Conduct sets out the cornerstones for good working conditions as the basis of our global collaboration. It was expanded at the start of 2019 to include the topics of human rights and fair working conditions.

The strategic goals of HR work are focused on efficiently and effectively bringing together the right people and positions (“Industrialize Best Fit”) and at the same time shaping the transition to digitalization, new technologies and new forms of collaboration (“Enable Transformation & Leadership”). Strategic workforce planning, talent selection and development (in particular in the areas of software and IT) on the basis of comprehensive diagnostics, the promotion of employee diversity and lifelong learning, the further development of the management culture and the flexibilization of working hours are therefore essential strategic HR activities. On the topic of human rights and fair working conditions, several pilot projects and training sessions have already taken place within the corporation.

Those responsible for the projects’ implementation are the HR functions at the company and business area level, which work together in a global network.

Results of the concept
To evaluate employee satisfaction and therefore also our HR work, for example, we use the results of our employee survey OUR BASICS Live 2019. The “Sustainable engagement” category, which measures the level of motivation and sense of belonging among our corporation’s employees, rose to 81% (PY: 80%), which was once again a very good result in spite of the economic situation.

The corporate-wide sickness absence rate was on a par with the previous year at 3.37% (PY: 3.27%). Unforced fluctuation, which measures the voluntary departure of employees from the Continental Corporation, amounted to 6.00% and was likewise similar to the previous year (PY: 6.25%).

According to a preliminary analysis, up to 20,000 jobs worldwide are expected to be affected by changes under the Transformation 2019–2029 structural program over the next 10 years. We are preparing the employees affected for the technological changes and associated professional and personal challenges that they will face through structured retraining measures that are conducive to employment. In addition, we will meet our social commitments based on our company values by offering employees – where necessary and feasible – prospects in other companies within the corporate network, including through an internal job market, within the scope of the general legal framework.

Information about personnel expenses in fiscal 2019, i.e. wages and salaries, social security contributions and pension and post-employment benefit costs, can be found in Note 9 of the notes to the consolidated financial statements on page 148. Employee benefits such as pensions, post-employment benefits and long-term bonus payments are broken down in Note 27 of the notes to the consolidated financial statements starting on page 168.

Key figures for good working conditions
  2019 2018
OUR BASICS Live Sustainable Engagement in % 81 80
Sickness absence rate in % 1 3.37 3.27
Unforced fluctuation in % 1 6.00 6.25

1 Permanent staff only (own employees).

For more information on good working conditions, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Product quality

Our concept
We strive to be recognized by our customers as a benchmark in quality. Product recalls, product liability claims and proceedings as a result of quality defects must be avoided in order to prevent losses of sales and of customer and market acceptance. Warranty and product liability claims pose risks to the business. Detailed reporting in this respect is included in the report on risks and opportunities starting on page 90.

The decisive factor in becoming a benchmark in quality is a quality-oriented company culture. Our quality policy sets out guidelines for product and process quality at Continental. The Quality and Environment group function as well as the quality functions at various levels in the corporation, which work together in a global network, are responsible for the quality policy and its implementation.

The achievement of a quality-oriented company culture is supported by the establishment and certification of quality management systems in accordance with recognized standards such as ISO 9001 or IATF 16949 at our production locations.

Results of the concept
In 2019, the majority of our employees were covered by a local management system certification in the area of quality according to ISO 9001 or similar standards.

Information about the scope of warranty and product liability claims in fiscal 2019 can be found in Note 35 (Litigation and Compensation Claims) of the notes to the consolidated financial statements.

Key figures for product quality
  Dec. 31, 2019 Dec. 31, 2019
Quality management system certifications (ISO 9001 or similar)
Employees covered in %
86 -901

1 In 2018, not reported as key figures but as indicative, rounded statement in the text.

For more information on product quality, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Corporate governance

Our concept
Good, responsible corporate governance geared toward sustainable, long-term value creation and in the interests of all stakeholder groups is the measure that governs the actions of the Executive Board and Supervisory Board of Continental AG. Further information on corporate governance can be found in the corporate governance report and in the corporate governance declaration pursuant to Section 161 AktG on pages 16 and 17 of this annual report.

Employee diversity, in particular with regard to internationality and a balanced gender ratio, is a key aspect of our corporate governance. We have set ourselves the target of increasing the proportion of women in management positions at the executive and senior executive level to 16% by 2020, and to 25% by 2025. Further information on our diversity strategy can be found on page 21 of this annual report.

To prevent corruption and antitrust violations in particular, the Executive Board has established the global compliance organization together with the Compliance group function and regional subfunctions. This structure is supplemented by compliance coordinators in the countries and at the locations. The fundamental principles of compliance management are set out in the central compliance handbook. Continental has a compliance management system, which is based on a comprehensive analysis of potential compliance risks for the core areas of antitrust law and corruption prevention. Further information on compliance can be found in the detailed compliance report on page 22 of this annual report.

Results of the concept
In 2019, Continental increased its proportion of women in management positions to 15.8% (PY: 14.8%).

The effectiveness of the compliance management system was confirmed in 2016 in accordance with the IDW PS 980 audit standard.

Key figures for corporate governance2,3
  Dec. 31, 2019 Dec. 31, 2018
Proportion of women in management positions in % 15.8 14.8

1 Based on the employees recorded in the HR data system (approx. 97%).
2 Relates to executives and senior executives.

For more information on corporate governance, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).


Information on the development of other key sustainability topics

More information on innovation and digitalization, safe mobility and sustainable profits can be found in the Research and Development and the Corporate Management sections of this annual report, on pages 46 and 47 and pages 43 and 44, respectively.

For more information on these topics, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).

For information on corporate citizenship, see the integrated sustainability report at www.continental-sustainability.com (under Downloads).