Development of Material Topic Areas

Carbon Neutrality

Our ambition

As set out in our sustainability ambition, we strive for 100% carbon neutrality along our entire value chain (products, operations and supply) by 2050 at the latest, together with our partners along the value chain.

Of central importance for our ambition are the requirements and speed of transformation of our customers, industries and markets as well as the resulting transformation opportunities and risks.

Concept

We have set ourselves the corporate target of achieving carbon neutrality throughout our production processes. In terms of Scope 1 and market-based Scope 2 CO2 emissions in accordance with the Greenhouse Gas (GHG) Protocol, we aim to be carbon-neutral by 2040 (2040 climate goal).

The corporate target of carbon neutrality throughout our production processes is managed by the Group Environmental and Climate Protection group function as part of the corporate roadmap for decarbonization. The group sectors are each responsible for the implementation of appropriate programs and must report on this internally on a regular basis.

Together with the group sectors, the “Decarbonization Roadmap 2040” group project team has set clear interim targets for each group sector and defined two key steps:

• 100% procurement of electricity from renewable sources (Scope 2), which has already been implemented since 2020.
• 100% carbon neutrality for remaining energy consumption by 2040 (Scopes 1 and 2), through
• the reduction of CO2 emissions by means of energy efficiency projects
• the substitution of fossil fuels
• and the neutralization of unavoidable CO2 emissions.

We have set ourselves the interim target of reducing our own emissions to 0.7 million metric tons of CO2 by 2030. This represents a further reduction of more than 20% compared with 2023.

Continental has introduced an internal CO2 pricing system for decisions regarding investments that affect Scope 1 and Scope 2 emissions. This shadow price has been set on the basis of current and projected future market prices for CO2 and a comparison with other prices. It is reviewed on a regular basis. The goal of this mechanism is to support the group sectors in achieving their CO2 reduction targets and further improve our environmental performance. The shadow price applies worldwide to the entire Continental Group. Scope 1 and market-based Scope 2 CO2 emissions have also been part of the LTI plans for the members of the Executive Board and global managers since fiscal 2020. For more information, see the remuneration report on our website under Company/Executive Board.

In terms of Scope 3 CO2 emissions in accordance with the GHG Protocol, we aim to achieve carbon neutrality by 2050 at the latest in line with our sustainability ambition. To this end, we have identified various levers throughout the value chain. These relate to the use phase of our products, coupled with the global shift toward emission-free mobility and industry; product design and the conversion of materials used to renewable and recycled materials; as well as a general transition to circular processes.

For more information on our concepts in this respect, see the sections on emission-free mobility and industry and circular economy in this combined non-financial statement.

It will also be necessary to increase the use of green electricity along the supply chain. The Business Partner Code of Conduct was expanded accordingly with a view to carbon neutrality in 2021 and reviewed in fiscal 2023. The implementation of carbon neutrality throughout the value chain is managed in the individual group sectors, each of which is responsible for taking appropriate measures. In addition, achieving carbon neutrality throughout our value chains requires joint sustainability efforts with customers, suppliers and other partners.

The Continental Group’s 2040 climate goal and ambition for 2050 were reviewed by the Science Based Targets initiative (SBTi) in 2020. On the basis of the method used, the linear derivations for 2030 were validated and confirmed as being compliant with the Paris climate agreement. The derived absolute emission reductions for Scope 1 and Scope 2 are set to keep us on track for the 1.5°C pathway.

With Net|Zero|Now – our immediate action program for climate change mitigation – we also offer customers and the Continental group sectors an additional building block to support their individual climate strategies. The program is offered for the business with emission-free and combustion-engine vehicles as well as the industrial business, and is also used internally, for example, at events. Continental is working with partners on certified ecosystem restoration, especially on reforestation projects, to remove CO2 from the atmosphere and ease the global CO2 budget by means of negative emissions. To this end, Continental has defined its own quality criteria, beyond the requirements for the respective register. The defined CO2 removals are calculated individually within the group sectors. The amount of negative emissions used under Net|Zero|Now is determined and documented accordingly within the group sectors. Continental has purchased a quota of certified projects. Appropriate certificates are issued to Continental in stages and subsequently deleted from the register. A systematic process is then in place at corporate level to ensure that appropriate issued and deleted certificates are available for the amount used by the group sectors in the respective fiscal year and that these are not used more than once in the internal allocation across fiscal years and group sectors.

Results of the concept

Total own CO2 emissions (Scopes 1 and 2) amounted to 0.89 million metric tons of CO2 in fiscal 2023 (PY: 0.99 million metric tons of CO2). These are calculated as the sum of Scope 1 and market-based Scope 2 CO2 emissions. The decrease in direct CO2 emissions (Scope 1) in fiscal 2023 is attributable, among other things, to energy efficiency and substitution measures aimed at reducing fossil fuel consumption and to some degree also to a decline in production volumes. CO2 emissions here correspond to CO2 equivalents (CO2e).

Following the switch to green electricity for reported energy consumption in fiscal 2020, Continental’s total CO2 emissions (Scopes 1 and 2) have been reduced by 70% compared with fiscal 2019, as this green electricity produces no CO2 emissions. Appropriate green energy attribute certificates were purchased for the full volume of reported purchased electricity not already covered by other instruments (such as green electricity contracts, power purchase agreements or self-generated electricity from renewable sources). Due to national register processes, not all deletions of energy attribute certificates were available for small residual quantities at the time the report was prepared. The reported market-based Scope 2 emissions were as a result of purchased steam and district heating.

1 Definitions in accordance with the GHG Protocol. Scope 1 includes emissions from the burning of fossil fuels as part of Continental’s own processes, and Scope 2 includes emissions from purchased electricity, steam and heat. CO2 emission factors correspond to CO2 equivalents (CO2e).

2 Contains a small amount of imputed data for parts of the Continental Group that did not report data directly.

3 Excluding emissions from refrigerants.

4 Calculated using the market-based calculation method of the GHG Protocol. Where contract-specific emission factors were not available, the standard emission factors from Defra (September 2023) were used.

5 The location-based calculation method of the GHG Protocol (without taking green electricity into account) produces a value of 1.46 million metric tons of CO2 for Scope 2 emissions.

Negative emissions were used again within the Net|Zero|Now program in 2023. Their volume declined to 1.6 thousand metric tons of CO2 in the reporting year (PY: 27.6 thousand metric tons of CO2) in the wake of significantly lower demand. The negative CO2 emissions used took the form of voluntary carbon credits. These certificates were obtained solely from reforestation and afforestation projects and in fiscal 2023 and in previous years were deleted exclusively for Continental in the Gold Standard, VCS, American Carbon Registry and Climate Action Reserve registries.

In February 2024, global non-profit organization CDP (formerly operating as the Carbon Disclosure Project) raised Continental’s climate change mitigation rating from A- to A based on its reported data.

For more information on carbon neutrality, including reporting on indirect CO2 emissions along the value chain (Scope 3 of the GHG Protocol), see the integrated sustainability report on our website at www.continental-sustainability.com.

Emission-free Mobility and Industry

Our ambition

As set out in our sustainability ambition, we strive for 100% emission- free mobility and industry by 2050 at the latest, together with our partners along the value chain. “Emission-free” refers to zero emissions of greenhouse gases and nitrogen oxides (NOx), for example. It does not include harmless emissions such as steam, non-toxic, biodegradable particle emissions or minimal noise emissions.

Of central importance for our ambition are the requirements and speed of transformation of our customers, industries and markets as well as the resulting transformation opportunities and risks.

Concept

Continental is shaping the transformation toward emission-free mobility and industry with customer-oriented solutions, such as for electric mobility, emission-free railway engineering, bicycles and wind turbines. In doing so, we rely both on new product developments and on the further development of our existing product portfolio. Components, software and products from Continental can be found in a wide range of electric vehicles, for example – from tires to high-performance computers and interior surfaces. For current examples of innovative products and systems from Continental, see the Research and Development section of this annual report.

The respective group sectors and business areas are responsible for implementing this sustainability ambition, particularly with regard to portfolio development, product strategies and business models, and are supported by the group functions of the Continental Group. To this end, relevant aspects have been and will continue to be incorporated in portfolio analyses, and are included in the strategy and business development processes for the group sectors and business areas.

For the implementation of our concept with respect to emissionfree mobility and industry, we record our allocated business with zero-tailpipe-emission vehicles as a performance indicator. Clearly allocated sales are recorded. In terms of vehicles, these include sales of tires, displays, sensors, electronic control units, artificial leather and hoses for emission-free passenger cars and trucks, as well as air springs for emission-free trains and trams.

In fiscal 2022, Continental reported the performance indicator of allocated low-carbon business beyond business with zero-tailpipe-emission vehicles. The highest share of this indicator was accounted for by the replacement business with highly efficient tires with low rolling resistance. In view of the ongoing uncertainty about how tires and various industrial businesses can be classified as low-carbon business under the various regulations (e.g. EU Taxonomy), Continental decided to discontinue reporting on allocated low-carbon business beyond business with zero-tailpipe-emission vehicles in fiscal 2023 and to develop a new reporting approach going forward.

Results of the concept

In fiscal 2023, the allocated business with zero-tailpipe-emission vehicles amounted to €2,244 million (PY: €1,657 million). The year-on-year growth is attributable in particular to the growing market success of electric mobility, since Continental’s products can now be found in many mass-produced models.

1 Definition: allocated business with zero-tailpipe-emission vehicles comprises all business with products for vehicles transporting goods and people.

2 The business can be allocated via the vehicle manufacturer, the vehicle platform or the product specification, for example. The data includes both pure business and attributable business, such as in the case of combined vehicle platforms. For the Tires, ContiTech and Contract Manufacturing group sectors, the sales reported at the end of the year were included. In the case of the Automotive group sector, a calculation was carried out for passenger cars and light commercial vehicles using internal, vehicle-specific planning data for sales and external data for production quantities, and for medium and heavy commercial vehicles this was based on the relevant customer portfolio.

For more information on emission-free mobility and industry, see the integrated sustainability report on our website at www.continental-sustainability.com.

Circular Economy

Our ambition

As set out in our sustainability ambition, we strive for 100% closed resource and product cycles by 2050 at the latest, together with our partners along the value chain.

Of central importance for our ambition are the requirements and speed of transformation of our customers, industries and markets as well as the resulting transformation opportunities and risks.

Concept

The switch to a circular economy is a profound and complex transformation process for Continental, which at the same time is highly relevant for the achievement of other topic areas of the company’s sustainability ambition. The group sectors are responsible for implementing circularity, in particular with respect to product design, business models, material use and material procurement. They have each started to design and/or implement specific initiatives and projects that are aimed at improving the use of product-related, technological and biological cycles. In addition, work is continuously being done on the durability, recyclability and adaptability of products. To cite some examples:

• In the reporting year, the Automotive group sector become a partner of the international CIRC-UITS project (Circular Integration of independent Reverse supply Chains for the smart reUse of IndusTrially relevant Semiconductors). The aim of the project is to develop sustainable methods based on innovative technologies that can be used in the circular model to manufacture new components and products with high added value and an improved environmental footprint, as well as to provide solutions for the reuse of semiconductors and mechanical parts.
• Together with partner Pyrum Innovations, the Tires group sector is currently developing various processes to further optimize and expand the recycling of scrap tires through pyrolysis. Since September 2023, the carbon black recovered in this process has been used at the Korbach tire plant for solid tires fitted primarily on forklift trucks. It is also set to be used in more and more of Continental’s rubber compounds in the future.
• The ContiTech group sector has launched skai rPET PureLux, a plain-colored furniture film made from 100% recycled PET polymer, which conserves natural resources.

For more information, see the respective press release on our website under Press.

With regard to operational waste management, as a further key component of the circular economy, we have set ourselves the corporate target of increasing the waste for recovery quota to 95% by 2030. Waste for recovery includes material recycling, thermal recovery or any other form of recycling or reuse. This objective gives priority to recycling over disposal. The implementation of the corporate target is managed by Group Environmental and Climate Protection as part of operational environmental management.

For more information on the organization of operational environmental management, see the section on green and safe factories in this combined non-financial statement. The waste for recovery quota has also been part of the LTI plans for the members of the Executive Board and global managers since fiscal 2020. For more information, see the remuneration report on our website under Company/Corporate Governance/Executive Board.

Results of the concept

The waste for recovery quota was at 87% in fiscal 2023 (PY: 85%). This was mainly due to the successful implementation of local projects as well as to market conditions, which allowed for increased waste recovery.

1 Definition: proportion of waste that has been sent for material recycling, thermal recovery or any other form of recycling or reuse.

2 Contains a small amount of imputed data for parts of the Continental Group that did not report data directly.

For more information on the circular economy, see the integrated sustainability report on our website at www.continental-sustainability.com.

Responsible Value Chain

Our ambition

As set out in our sustainability ambition, we strive for 100% responsible sourcing and business partnerships by 2050 at the latest, together with our partners along the value chain.

Our understanding of a responsible value chain thus refers to our supply chain and customer relationships and to our own locations.

Of central importance for our ambition are the requirements and speed of transformation of our customers, industries and markets as well as the resulting transformation opportunities and risks.

Concept

Continental operates in complex global value chains that are exposed to a variety of risks associated with the violation of protected rights. Risks within this context are always related to the potential negative impact on people and the environment.

Continental has therefore established a comprehensive management system for ensuring its due diligence obligations, in order to identify risks in connection with defined protected rights within its supply chain and in its own business units. For this purpose, responsibilities, rules and processes have been clearly defined for this purpose, including risk-mitigation measures and control mechanisms. The responsible value chain due diligence system (RVCDDS) focuses on the protected rights defined by us and will be developed further in line with the development of dynamic economic, social and environmental requirements. The RVCDDS applies to Continental AG and to all subsidiaries in which the Continental Group exercises a controlling influence.

The Executive Board of Continental AG is updated on the current status by the Continental Group’s human rights officer at least once a year and decides on the system’s effectiveness, appropriateness and potential for improvement. It then proposes any suitable improvements to the RVCDDS where necessary, either to the system as a whole or to selected elements. The RVCDDS is additionally integrated into Continental’s overarching internal control system, risk management system and compliance management system. As a key prevention measure at corporate level, Continental has adopted responsible value chain commitments (RVC commitments) that are accessible online at www.continental-sustainability.com. These commitments address the defined risk categories and formulate what is expected of the company’s own business units and employees, as well as of its direct suppliers. The RVC commitments surpass the minimum legal requirements, especially when it comes to working conditions. On top of this, Continental has anchored further prevention measures in its own business units and with respect to direct suppliers.

Within the RVCDDS, our Code of Conduct defines the fundamental requirements for our employees, while the Business Partner Code of Conduct defines the fundamental requirements, among others for our suppliers as well as their suppliers, with regard to human rights, working conditions, environmental protection, conflict minerals and anti-corruption. The Business Partner Code of Conduct is updated regularly, most recently in fiscal 2023, to reflect changes or adjustments to relevant legislation. For suppliers of natural rubber, our sourcing policy for sustainable natural rubber additionally applies.

The existing corporate-wide whistleblower system within Continental AG, the Continental Integrity Hotline, was expanded as part of the legal requirements under the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz) and is available both to employees within the Continental Group as well as persons outside the company. The Integrity Hotline is open for information on potential violations of human rights and environmental rights, among other issues. Alongside the whistleblower system, a range of other resources are used to investigate potential protected right violations and implement preventive and remedial measures, where necessary.

The RVCDDS additionally defines the framework for taking remedial measures within the company’s own business units, as well as toward direct suppliers and, should the situation arise, also toward indirect suppliers. Sustainability aspects are also taken into consideration at various other points in supplier management. For example, selected suppliers are evaluated based on various criteria using self-assessment questionnaires, which we collect via the generally accepted sustainability platforms for our industries, such as EcoVadis and NQC. These questionnaires are reviewed annually at the corporate level. Selective local audits or other audit activities are also carried out, for example in relation to the existence of management systems.

We also continue to develop our approach for the responsible value chain in dialogue with external stakeholders and support the development of industry-wide standards, for example through our participation in industry dialogue with the German government on human rights in the automotive industry. Here, we have worked in particular to cultivate a shared understanding of industry risks and due diligence requirements. We are also involved in initiatives and associations such as econsense, the Responsible Business Alliance (RBA) and the Global Platform for Sustainable Natural Rubber (GPSNR).

Responsible sourcing is the responsibility of the relevant purchasing organizations, which are established at Continental by group sector, product group and country, for example. A corporate purchasing network regularly deals with responsible sourcing topics as well. The Group Quality group function coordinates the management of conflict minerals, including the corresponding reporting processes.

Results of the concept

The completed risk analysis was used to formally prioritize the risk categories of harmful environmental impacts, equal treatment/anti-discrimination and working conditions (including working time) for the company’s own business units, as well as all risk categories for the supply chain as they pertain to direct suppliers.

As part of the RVCDDS rollout, training on the RVC commitments and on the RVCDDS itself was provided to employees worldwide, in particular to staff in management positions and to those performing special functions.

To further increase transparency and sustainability in Continental’s natural rubber supply chain, the activities of the joint venture “Rubberway,” which was founded in 2019, were rolled out further for the digital risk analysis of the upstream supply chain. The joint project with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in the Indonesian province of West Kalimantan, which has been in place since 2018, was also further expanded. The aim of the project is to jointly drive forward the implementation of a digital system for the traceability of natural rubber from the project region. Optimizing the supply chain and offering training in the sustainable farming of natural rubber helps smallholders to increase the quantity, quality and yield of their produce, thus improving their income. In addition, a cultivation strategy designed around sustainability prevents clearing and deforestation, thereby conserving valuable resources. As part of a development project with Security Matters (SMX), Continental is working on testing a tamper-proof means of verification of the geographical origin of natural rubber using marker technologies. In 2022, field testing was successfully completed, and the marker substance could be verified beyond doubt throughout the entire tire production process.

As at December 31, 2023, 1,291 valid supplier self-assessment questionnaires were available via the two sustainability platforms EcoVadis and NQC (PY: 1,009). This corresponds to a completion rate of 71% of suppliers selected for this process (PY: 63%). The increase in the number of available valid supplier self-assessment questionnaires and the higher completion rate are due to the onboarding of ContiTech suppliers in EcoVadis and the follow-up activities with suppliers to update and renew their self-assessment questionnaires.

1 Based on the self-assessment questionnaires via the sustainability platforms EcoVadis and NQC completed by suppliers selected for this process.

We present further performance indicators for the implementation of a responsible value chain with regard to our own locations in the sections on good working conditions as well as green and safe factories in this combined non-financial statement.

For more information on the responsible value chain, see the integrated sustainability report on our website at www.continentalsustainability. com.

Good Working Conditions

Our ambition

As set out in our sustainability ambition, we provide inspiring, healthy and fair working conditions.

Concept

The Continental Group’s Code of Conduct sets out the foundation for good working conditions as the basis of our global collaboration, including respect for human rights and fair working conditions. Employees receive training on compliance with the Code of Conduct. The management system being rolled out for a responsible value chain also includes the company’s own activities (see the Responsible Value Chain section).

Our HR strategy is geared toward meeting staffing requirements in terms of both quantity and quality. The two HR strategy initiatives “Industrialize Best Fit” and “Enable Transformation” are therefore focused on efficiently and effectively bringing together the right people and positions as well as shaping the digital and technological transformation and cultural shift toward new forms of collaboration. Workforce planning, the search for, diagnostic selection and development of talent (in particular in the areas of software and IT), the promotion of employee diversity and lifelong learning, the further development of the management culture and the flexibilization of working hours are therefore essential action fields of strategic HR work.

We are tackling the impact of our Transformation 2019–2029 structural program and further measures introduced due to changing conditions with targeted training measures for the employees affected. New career prospects and employment opportunities are to be opened up on the internal as well as the external employment markets.

The HR functions at Continental Group, group sector, business area and country level, which work together in a global network, are responsible for HR. A special network of country coordinators for labor relations is also part of this organization.

We measure the success of HR work against the OUR BASICS Live Sustainable Engagement index, which is calculated on the basis of the annual employee survey. The index measures employee agreement on topics such as whether they personally support the company values and whether they are proud to work for Continental. We also use sickness rate and unforced fluctuation rate as performance indicators. The sickness rate measures sickness-related absence relative to contractual work time, and the unforced fluctuation rate measures the voluntary departure of employees from the company relative to the average number of employees.

The OUR BASICS Live Sustainable Engagement index has also been part of the LTI plans for the members of the Executive Board and global managers since fiscal 2020. The sickness rate is also part of this, although only for the plans launched in fiscal 2020. For more information, see the remuneration report on our website under Company/Corporate Governance/Executive Board.

Results of the concept

In fiscal 2023, the Sustainable Engagement index was 81% (PY: 80%), slightly above the prior-year level. The sickness rate fell to 3.2% in the reporting year (PY: 3.7%). The unforced fluctuation rate likewise decreased to 6.0% (PY: 7.8%).

Information about personnel expenses in fiscal 2023 (i.e. wages and salaries, social security contributions and pension and post-employment benefit costs) can be found starting on page 122 of the notes to the consolidated statement of income in this annual report. Employee benefits such as pensions, post-employment benefits and long-term bonus payments are broken down in the notes to the consolidated statement of financial position starting on page 124.

1 Definition: employee agreement on topics relating to sustainable engagement in the employee survey OUR BASICS Live.

2 This is based on the responses of 51,888 participants (PY: 46,199 participants) as a representative random sample across all Continental locations. The participation rate was 77% (PY: 75%).

3 Definition: sickness-related absence relative to contractual work time.

4 Excluding leasing personnel (i.e. permanent staff only).

5 Definition: voluntary departure of employees from the company relative to the average number of employees.

For more information on good working conditions, see the integrated sustainability report on our website at www.continentalsustainability. com.

Green and Safe Factories

Our ambition

As set out in our sustainability ambition, we conduct our business processes in a safe and responsible manner based on systematic management and the protection of people and the environment.

Concept

Our company policy for environment, safety and health protection (ESH) defines corporate-wide guidelines for green and safe factories. On this basis, we pursue ESH targets for the Continental Group as a whole: all persons in our company are to be protected against accidents and work-related sickness, and their health is to be actively promoted. CO2 emissions, energy use, water consumption and waste generation at the locations are to be reduced, and the waste for recovery quota and energy efficiency at the locations increased.

Local management systems drive forward the implementation of these guidelines. The concrete organizational and technical requirements can be found in the relevant ESH management manuals for the group sectors. Many locations have additionally undergone external certification audits. The certified business activities are assessed annually to determine how many employees are covered by environmental management, energy management, and occupational safety and health management systems. The accident rate – the number of accidents per million working hours – is used as an effectiveness indicator for occupational safety and health management. The accident rate has also been part of the LTI plans for the members of the Executive Board and global managers since fiscal 2020. Continental had set itself the goal of reducing the accident rate to 2.2 accidents per million working hours by 2030. For more information, see the remuneration report on our website under Company/Corporate Governance/Executive Board.

Group Environmental and Climate Protection and Group Safety and Health are responsible for the related strategic, corporate-wide ESH management process, and are supplemented by corresponding functions in the individual group sectors. Local operational environment, safety and health protection is the responsibility of the locations and is coordinated by local ESH managers in each case.

Results of the concept

As at December 31, 2023, the majority of our employees throughout the Continental Group were covered by the management systems of the certified business activities. The environmental management system certification covered 76% of employees, unchanged from the previous year. Coverage for the energy management system certification increased to 43% of employees (PY: 40%), while coverage for the occupational safety and health management system certification was also up at 64% of employees (PY: 62%) – thanks in both cases to optimized internal processes.

The accident rate fell in fiscal 2023 to 2.1 accidents per million working hours (PY: 2.5 accidents per million working hours), thus already surpassing the target of 2.2 accidents per million working hours set in 2030.

1 Valid certification and concluded recertification processes were counted, as well as ongoing recertification processes, if the achievement of recertification was considered highly probable.

2 Definition: number of accidents during working hours per million paid working hours. Counted from more than one lost day, i.e. with at least one lost day beyond the day of the accident.

3 Excluding leasing personnel (i.e. permanent staff only) and way-to-work accidents.

For more information on green and safe factories, see the integrated sustainability report on our website at www.continental-sustainability.com.

Benchmark in Quality

Our ambition

As set out in our sustainability ambition, we are recognized by our customers and society as being a benchmark in quality by ensuring safe and sustainable products.

Concept

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. Product recalls, product liability claims and proceedings as a result of quality defects represent a business risk that we want to avoid due to the resulting losses of sales, costs, and loss of customer and market acceptance. For more information, see the report on risks and opportunities in this annual report.

Local management systems drive forward the implementation of these guidelines. The concrete organizational and technical requirements can be found in the relevant quality management manuals for the group sectors. The extent of the certifications is assessed on an annual basis as to how many employees they cover with respect to quality management systems. The number of new field quality events is used as an effectiveness indicator for our quality management. A field quality event is a risk-minimizing measure for a product manufactured and/or sold by Continental on the basis of a safety-related defect and/or non-compliance with regulations that was initiated by Continental, a customer and/or an authority.

The Group Quality, Technical Compliance, Continental Business System (CBS) and Environment group function as well as the quality functions at various levels in the Continental Group, which work together in a global network, are responsible for the strategic, corporate- wide quality management process.

Results of the concept

As at December 31, 2023, certified quality management systems covered 85% of our employees throughout the Continental Group (PY: 83%). The improved certification rate was achieved thanks to optimized internal processes.

Twenty-nine new field quality events were identified in fiscal 2023 (PY: 30).

1 Valid certification and concluded recertification processes were counted, as well as ongoing recertification processes, if the achievement of recertification was considered highly probable.

2 Definition: a field quality event is a risk-minimizing measure for a product manufactured and/or sold by Continental based on a safety-related defect and/or non-compliance with regulations that was initiated by Continental, a customer and/or an authority.

Information about the scope of warranty and product liability claims in fiscal 2023 can be also found starting on page 211 of the other disclosures in the notes to the consolidated financial statements.

For more information on benchmark in quality, see the integrated sustainability report on our website at www.continental-sustainability.com.

Sustainable Management Practice

Our ambition

As set out in our sustainability ambition, we implement effective management processes, fair business practices and responsible corporate governance with a balanced view of different perspectives.

Concept

Group Compliance, which is divided into a central team and regional functions, is responsible for preventing violations in the areas of corruption, antitrust law, money laundering and data protection. This structure is supplemented by compliance coordinators in the countries and at the locations. The Compliance Manual sets out how the compliance management system is designed and implemented.

Continental strives for a holistic and proactive compliance management system based on a comprehensive and predictive analysis of potential compliance risks, followed by the implementation of appropriate policies and procedures, training, consulting, monitoring and controls that lead to ongoing lessons learned and system improvements. The Integrity Hotline is the primary tool for support with detecting violations.

When it comes to preventing violations in the area of technical compliance, responsibility lies with the Group Quality, Technical Compliance, CBS and Environment group function, together with the central functions for quality and technical compliance within the group sectors. The technical compliance policy as well as the technical compliance management system manual and other procedural standards set out how the compliance management system is designed and implemented.

A network of supporting roles in the various functions within the group sectors, business areas, segments and sites is being devised and expanded on an ongoing basis in order to support the identification of risks and other technical compliance considerations.

The appropriateness and effectiveness of the risk and compliance management systems are monitored and assessed as part of Continental’s overarching internal control system. On top of this, “Integrity Perception” is measured using a newly defined indicator. This new indicator was applied for the first time in 2023. It is based on specific questions asked within the context of the annual OUR BASICS Live survey and expresses employees’ perception of key aspects involved in implementing our integrity ambition within the organization. It is therefore characterized by subjective impressions and estimates that reveal whether the systems are having the intended impact among employees. The indicator will constitute a component of variable remuneration for the members of the Executive Board, senior executives and executives worldwide beginning in fiscal 2024. The aim is to make not only immediate but also sustained improvements to the indicator going forward – with the ultimate goal of enhancing perceived integrity.

As a further cornerstone for sustainable management practice, we are committed to promoting employee diversity, which we understand as internationality, a balanced gender ratio, and a range of experiences and age categories. We have set ourselves the corporate target of increasing the share of female executives and senior executives to 25% by 2025 and to up to 30% by 2030.

We intend to achieve this in particular by using objective diagnostics- assisted appointment procedures, by strengthening our inclusive culture, by expanding women’s networks and by holding diversity workshops and specific events. Gender diversity – the share of female executives and senior executives – has also been part of the LTI plans for the members of the Executive Board and global managers since fiscal 2020.

For more information on the remuneration system, see the remuneration report on our website under Company/Corporate Governance/Executive Board. For more information on sustainable management practice and our diversity concept, see the Corporate Governance section of this annual report. For more information on compliance, see the “Main characteristics of the internal control system” section in the report on risks and opportunities in this annual report.

Results of the concept

As at December 31, 2023, Continental had increased its share of female executives and senior executives to 19.9% (PY: 19.1%). The increase in the representation of women at management level proves that our initiatives and measures to promote gender diversity are having an effect. The share excluding the USA amounted to 19.8% (PY: 18.8%). For the long-term remuneration of executives, separate analysis of the key figure excluding the USA is necessary for legal reasons.

The “Integrity Perception” index, which was reported in this form for the first time in fiscal 2023, attained a score of 81% (PY: n.a.).

1 Definition: employee agreement on topics relating to sustainable engagement in the employee survey OUR BASICS Live.

2 This is based on the responses of 51,888 participants (PY: 46,199 participants) as a representative random sample across all Continental locations. The participation rate was 77% (PY: 75%).

For more information on sustainable management practice, see the integrated sustainability report on our website at www.continental.com/sustainability/reporting/reporting-and-downloads.