The EU Taxonomy is a classification system for determining sustainable economic activities in the real economy. The following disclosures are the mandatory disclosures of the Continental Group in accordance with Art. 8 of EU Taxonomy Regulation 2020/852.
Specific Information on the Implementation of Disclosure Requirements in Accordance with the EU Taxonomy Regulation
Since January 1, 2023, companies in the real economy have had to provide information on Taxonomy eligibility and Taxonomy alignment with regard to the two climate objectives of the Climate Delegated Act under EU Taxonomy Regulation 2021/2139. In June 2023, the Environmental Delegated Act under EU Taxonomy Regulation 2023/2486 was published, containing the activities and technical assessment criteria for the four remaining environmental objectives. The six environmental objectives of the EU Taxonomy are:
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
Publication of the Environmental Delegated Act under EU Taxonomy Regulation 2023/2485 was accompanied by the introduction of amendments to the Climate Delegated Act, comprising changes to the existing activities for the two climate objectives as well the inclusion of new economic activities for the two climate objectives. This affects, among others, the two economic activities of category 3.18 (“Manufacture of automotive and mobility components”) and category 3.19 (“Manufacture of rail rolling stock constituents”). Furthermore, the EU Commission made it explicit in Recital 10 of Delegated Regulation 2023/2485 (amending Delegated Regulation 2021/2139) that the activity of tire manufacturing, because of its potential to reduce greenhouse gas emissions in the transport sector, is a Taxonomy-eligible activity that is currently to be allocated to category 3.6 (“Manufacture of other low-carbon technologies”).
While the amendments to the Climate Delegated Act do clear up some existing ambiguities in terms of how the regulation is to be interpreted when it comes to the Taxonomy eligibility of Continental’s economic activities, reporting pursuant to the EU Taxonomy Regulation remains fraught with uncertainty for Continental. This is mainly because unclear wording continues to be used in the regulations and notes on determining Taxonomy eligibility and in particular Taxonomy alignment, as well as the calculations for key performance indicators for turnover, capital expenditure and operating expenditure as they pertain to the economic activities relevant for Continental. As a result, these regulations and notes are still open to interpretation.
From Continental’s perspective, there is also uncertainty about the interaction between the various regulations, delegated acts and official answers to frequently asked questions. Furthermore, the short implementation period granted by the delegated act published in 2023 means that many questions of interpretation related to implementation have not yet been conclusively clarified. In interpreting the regulation, we also take into consideration the assessments of industry associations in the supplier and automotive industries, the reporting practices of European suppliers for 2022 and unofficial assessments by various experts.
Taxonomy-eligible Economic
Activities As part of our sustainability ambition, we strive for carbon neutrality and emission-free mobility and industry by 2050 at the latest (see also the sections on carbon neutrality and on emission-free mobility and industry in this combined non-financial statement) and thus for the expansion of clean and carbon-neutral mobility. With this in mind, we have introduced performance indicators at a corporate level as part of our sustainability scorecard, with the aim of monitoring our progress. In the previous year, we used this scorecard to classify the allocated business with emission-free mobility and industry as the indicator that comprises all economic activities to be disclosed for Continental as Taxonomy-eligible with respect to the environmental target of climate change mitigation in accordance with the EU Taxonomy Regulation. It consisted of allocated business with zero-tailpipe-emission vehicles and allocated low-carbon business beyond business with zero-tailpipe-emission vehicles. This business was therefore classified under category 3.6 (“Manufacture of other low-carbon technologies”) of the Delegated Regulation for Climate Change Mitigation (EU 2021/2139, Annex I) in the previous year, since at the time no general regulations or specific upstream economic activities were provided for. The introduction of category 3.18 (“Manufacture of automotive and mobility components”) and category 3.19 (“Manufacture of rail rolling stock constituents”) coupled with the updated approach to the activity of tire manufacturing resulted in the reclassification of various Continental economic activities reported as Taxonomy-eligible in the reporting year compared with 2022, as well as a significant increase in sales, capital expenditure and operating expenditure.
In the reporting year, we allocated all economic activities involved in the manufacture of automotive and mobility systems and components for road vehicles – with the exception of tires, but also extending beyond components for zero-tailpipe-emission vehicles – to category 3.18. Continental is of the opinion that the manufacture of all components, irrespective of the drive system, is Taxonomy- eligible for all vehicles belonging to the vehicle classes listed in the category. This classification is based on the fact that, from Continental’s perspective, the activity designation does not entail any restrictions in terms of components, for example in relation to function or drive system, and the corresponding components, parts and systems are intended for use in road vehicles. The unclearly defined qualification characteristic (criterion) of activity 3.18 – essential contribution to environmental performance – is, in Continental’s view, part of the assessment of Taxonomy alignment and not Taxonomy eligibility. Alternative interpretations were examined but they were found to be unsuitable by Continental.
We allocated all economic activities involved in the manufacture of rail rolling stock constituents to category 3.19. This classification is based in particular on the fact that, from Continental’s perspective, the reference to activity 3.3 does not impose any restrictions on components in relation to the function or drive system of rail vehicles for which the components are manufactured, provided that the components and systems are necessary for the operation and functioning of rail vehicles. Furthermore, the activity designation does not entail any restrictions on components, for example in relation to function or drive system.
In contrast to the previous year, in the reporting year all activities involved in tire manufacturing were classified as Taxonomy-eligible under category 3.6. In Recital 10 of Delegated Regulation 2023/2485 (amending Delegated Regulation 2021/2139), the Commission made it clear that tire manufacturing has the potential to reduce greenhouse gas emissions in the transport sector and can contribute to a more circular economy. Until specific technical assessment criteria are defined for this activity, tire manufacturing shall remain a Taxonomy-eligible activity under category 3.6 (“Manufacture of other low-carbon technologies”). It is Continental’s opinion that this clarification for the purposes of Taxonomy eligibility refers to the manufacture of tires of all kinds, without any restrictions in terms of specific properties, label classes or drive system technologies. Based on this clarification, Continental has amended its approach compared with the previous year and now allocates the manufacture of tires of all kinds, without any restrictions in terms of specific properties, label classes or drive system technologies, to category 3.6. Alternative interpretations were also examined here but they were found to be unsuitable by Continental, particularly with regard to Recital 10.
In addition, various Continental industrial businesses will continue to be reported as Taxonomy-eligible, as they were in the previous year. In the reporting year, these primarily comprised the manufacture of components for wind turbines and the manufacture of materials for industrial plant insulation. Continental still allocates these businesses to category 3.6 (“Manufacture of other low-carbon technologies”), since the economic activities pursue substantial reductions and therefore make significant contributions to the expansion of renewable energies and energy saving, for example through insulation in industrial plants. For these classifications as well, Continental believes it is irrelevant which functions are fulfilled by the supplier technologies in the end products, as long as the end product facilitates the goals set out in Art. 10 (1) of the Taxonomy Regulation.
The activities mentioned are not identified as Taxonomy-eligible under Annex II to the Climate Delegated Act (climate change adaptation).
All other economic activities of the Continental Group that are not included in the aforementioned economic activities have been classified as Taxonomy-non-eligible for the reporting year. Accordingly, Continental currently has not allocated any economic activities to the other environmental objectives under Annex I: Sustainable use and protection of water and marine resources, Annex II: Transition to a circular economy, Annex III: Pollution prevention and control or Annex IV: Protection and restoration of biodiversity and ecosystems. We base the classification on the information publicly available at the time the report was prepared.
Taxonomy-eligible turnover
The information on turnover is prepared in accordance with section 1.1.1 of Annex 1 to the Delegated Regulation on Disclosure Obligations (2021/2178) and in compliance with IFRS accounting regulations (see tables at the end of this non-financial statement). The method of determination selected by Continental ensures that double counting is avoided.
The described first-time classification of all tire manufacturing activities as Taxonomy-eligible under category 3.6 and the first-time classification of all other economic activities involved in the manufacture of automotive and mobility systems and components for road vehicles as Taxonomy-eligible under category 3.18 resulted in a significant increase in Taxonomy-eligible turnover in the reporting year. Added to this was the first-time classification of other economic activities involved in the manufacture of rail rolling stock constituents as Taxonomy-eligible under category 3.19. In addition, various Continental industrial businesses were reported as Taxonomy-eligible under category 3.6, as they were in the previous year. A total sum of €35.9 billion was reported as Taxonomy-eligible turnover in the reporting year (PY: €2.8 billion), equivalent to 86.6% of total consolidated sales (PY: 7.1%). The breakdown of Taxonomy-eligible turnover by category is shown in the table on page 56.
Information on the Continental Group’s total turnover (the denominator of the key figure calculation) can be found in the consolidated statement of income of this annual report under “Sales.”
Taxonomy-eligible capital expenditure and operating expenditure
Taxonomy-eligible capital expenditure and operating expenditure have been recorded in accordance with the Delegated Regulation on Disclosure Obligations (2021/2178) and taking into account the clarifications made by the European Commission in October 2022.
The figures for Taxonomy-eligible capital expenditure and operating expenditure under category a are allocations based on the proportion of Taxonomy-eligible turnover. For reasons connected to the business model, the equipment, machinery and buildings of the Continental Group are thus used both for Taxonomy-eligible activities and for other activities. This applies both to capital expenditure and operating expenditure for assets or processes associated with Taxonomy-eligible activities (category a).
The allocation takes place at group sector level, and not according to the individual locations, in order to avoid double counting, take into account internal business and consolidation effects and reflect the Continental Group’s matrix structure. This allocation of turnover thus reflects the distribution of Continental’s production. The Platform on Sustainable Finance also recommends such an approach to allocation in its report to the Commission dated October 2022. This states, for enabling activities, that capital expenditure and operating expenditure should be reported on the basis of their proportion of turnover, provided the activities are Taxonomy-eligible and that they not do not include activities that are Taxonomy-non-eligible.
The expanded interpretation of economic activities classified as Taxonomy-eligible in the reporting year likewise led to a significant increase in Taxonomy-eligible capital expenditure. A total sum of €2,140.9 million was reported as Taxonomy-eligible capital expenditure in the reporting year (PY: €183.1 million), equivalent to 87.9% of total capital expenditure (PY: 7.5%). The breakdown of Taxonomy-eligible capital expenditure by category is shown in the table on page 57.
The information on capital expenditure is prepared in accordance with section 1.1.2 of Annex 1 to the Delegated Regulation on Disclosure Obligations (2021/2178) in compliance with IFRS accounting regulations. Information on the Continental Group’s total capital expenditure can be found in the notes to the consolidated financial statements in the segment reporting (Note 1) of this annual report. The information refers to capital expenditure in the intangible assets (Note 13), property, plant and equipment (Note 14), leases (Note 15) and investment property (Note 16) presented in the notes to the consolidated financial statements.
Operating expenditure is defined in accordance with section 1.1.3 of Annex 1 to the Delegated Regulation on Disclosure Obligations (2021/2178) and has been calculated on an imputed basis as described above. For the denominator of the key figure calculation for operating expenditure, Continental takes into account direct, non-capitalized costs incurred in the reporting year as a result of research and development (net), building renovation measures, short-term leasing, and maintenance and repairs.
The expanded interpretation of economic activities classified as Taxonomy-eligible in the reporting year likewise led to a significant increase in Taxonomy-eligible operating expenditure. A total sum of €3,571.9 million was reported as Taxonomy-eligible operating expenditure in the reporting year (PY: €220.1 million), equivalent to 90.5% of total operating expenditure (PY: 6.1%). The breakdown of Taxonomy-eligible operating expenditure by category is shown in the table on page 58.
When determining the Taxonomy-eligible capital expenditure and operating expenditure, for reasons of materiality the decision was made to forgo separate reporting of investments in individual measures and the acquisition of products from Taxonomy-eligible economic activities under category c, as well as reporting of the resulting operating expenditure in the reporting year.
Continental notes that, from its perspective, various interpretations with respect to the requirements concerning capital expenditure and operating expenditure, particularly for category c and for operating expenditure more generally, continue to result in uncertainty when determining Taxonomy-related information.
Taxonomy-aligned Economic Activities
As in the previous year, Continental did not report any economic activities as being Taxonomy-aligned.
For all economic activities that are reported under category 3.6, specific comparative life-cycle assessments are required in order to also report these as being Taxonomy-aligned. These must demonstrate substantial savings to life-cycle emissions compared with the highest-performing alternative technology or solution available on the market or the highest-performing alternative product available on the market. External verification of the life-cycle assessments must also take place in accordance with predefined standards. A simplified life-cycle consideration, as called for by the Taxonomy Regulation (2020/852) itself, is no longer sufficient in accordance with the Delegated Regulation for Climate Change Mitigation (2021/2139) for category 3.6. Continental did not have the corresponding life-cycle assessments at its disposal in the reporting year, meaning it is currently not possible to allocate Taxonomy-aligned economic activities. For this reason, the “Do No Significant Harm” (DNSH) criteria and the minimum protection requirements along the value chain were not assessed according to specific economic activities.
It was not yet mandatory in the reporting year to report Taxonomy-aligned economic activities if the economic activities are reported according to the categories 3.18 and 3.19 which have been newly integrated into the Climate Delegated Act.
Since Continental does not currently report any activities as Taxonomy- aligned, no Taxonomy-aligned capital expenditure or operating expenditure according to categories a and b has been reported. Since no Taxonomy-eligible capital expenditure or operating expenditure under category c was identified, no Taxonomy-aligned capital expenditure or operating expenditure under category c has been reported.
Information to Be Disclosed in Accordance with the EU Taxonomy Regulation
For the following overviews of Taxonomy information, it should be noted that these were prepared in accordance with the guidelines for the templates in Annex 2 to the Delegated Regulation on Disclosure Obligations (2021/2178).
Given the uncertainties and interpretations of the Taxonomy Regulation, this restriction is relevant since it means, for example, that the designations as environmentally sustainable or non-environmentally sustainable activities only relate to the assessment as per the EU Taxonomy Regulation and not more generally.
Continental has no economic activities according to the complementary Delegated Regulation for Gas and Nuclear Activities (2022/1214) and therefore does not provide the specific templates.
Templates in Accordance with the EU Taxonomy Regulation | PDF 
