Sustainability Report – Social Information

Material Impacts, Risks and Opportunities Related to Workers in the Value Chain

Continental assessed its actual and potential negative and positive impacts as well as abstract and tangible risks and opportunities related to workers in the value chain according to the regulatory requirements, as described in the General Disclosures (ESRS 2) section. The general disclosures include an overview of the assessment of all identified impacts, risks and opportunities (IROs), including the time horizons considered.

In this IRO assessment, the material impacts, risks and opportunities related to workers in the value chain were identified. Together, they form the following IRO cluster:

• Workers in the value chain

The descriptions of potential negative impacts and abstract risks are presented from a business-inherent perspective. They outline general impact potentials and risk exposures based on structural aspects such as business activity, geographical aspects, business model and product characteristics. This does not take into account mitigation through the management approach of Continental described in the respective IRO cluster. Actual negative impacts, tangible risks, positive impacts and opportunities are described from a company-specific perspective and consider the outcomes of the management approaches. A detailed definition of the IRO types can be found in the Impact materiality and Financial materiality subsections in the General Disclosures (ESRS 2) section.

The description of IROs are to be considered as self-contained, which may result in repetitions.

The following pages provide detailed descriptions of the IROs within the IRO cluster. They also outline the management approach developed for the cluster, which manages the identified impacts, risks and opportunities. In addition, the associated targets, actions and metrics are explained (where available).

Workers in the Value Chain

Material impacts, risks and opportunities in the workers in the value chain IRO cluster

ID		Short description	Type of IRO		Primary time horizon			Explanation
56		Negative impacts related to working conditions, equal treatment and other human rights of workers in the supply chain	Potential negative impact		Short-term			Continental’s supply chain spans a wide range of industries, employing workers at various stages of the value chain across diverse regions and markets. Across these regions, legal frameworks, market practices and general societal norms regarding working conditions, anti-discrimination and other human rights differ. This results in a region- and industry-inherent potential for negative impacts on workers in the value chain, particularly in the areas of discrimination, occupational safety and health, fair payment, freedom of association, child labor, forced labor and general working conditions.
57		Sanctions in connection with violations of labor and human rights in the supply chain	Abstract and tangible risk		Medium-term			Continental’s supply chain spans a wide range of industries, employing workers at various stages of the value chain across diverse regions and markets. Across these regions, legal frameworks, market practices and general societal norms regarding working conditions, anti-discrimination and other human rights differ. This results in an inherent exposure to possible effects that may arise from existing regulations, significant tightening or new requirements. If severe violations were to occur within the supply chain and were linked to Continental, this could lead to fines and penalties or remediation costs under current or tightened regulations as well as contractual requirements. In the unlikely event of such a severe incident, a tangible risk would already arise under current regulations.
58		Higher costs for materials/ services in connection with human rights and working conditions in the supply chain	Abstract risk		Medium-term			Continental’s supply chain spans a wide range of industries, employing workers at various stages of the value chain across diverse regions and markets. Across these regions, legal frameworks, market practices and general societal norms regarding working conditions, anti-discrimination and other human rights differ. This results in an inherent exposure to possible effects that may arise from existing regulations, significant tightening or new requirements. If requirements are tightened significantly, such as across multiple regions simultaneously and affecting fundamental work organization, additional due diligence requirements or the need to select alternative suppliers could lead to higher cost for materials or services.

 

Management approach for workers in the value chain

As Continental’s value chain spans a wide range of industries, countries and markets worldwide, the company has established a management approach to address material impacts on workers in the value chain and the associated material risks.

Continental is convinced that global value chains must be built on business ethics and respect for human rights. We support the principles and objectives of the United Nations (UN) Guiding Principles on Business and Human Rights and commit, in our sustainability ambition, to responsible business practices and business ethics as well as to safe, healthy, fair and inspiring working conditions. We also foster these practices along our value chain. The responsible value chain due diligence system (RVCDDS) implemented for this purpose aims to protect both human and environmental rights along the value chain. It defines responsible value chain commitments (RVC commitments) in the areas of labor standards, occupational safety and health, environment, security practices and land rights, which also apply to Continental’s direct suppliers.

The management approach encompasses all purchasing activities of Continental and its subsidiaries worldwide in which the Continental Group exercises a controlling influence. The focus is on direct suppliers, such as those providing the materials and components used, as well as service providers like security or waste management services. Indirect suppliers and deeper tiers of the supply chain are considered on a case-by-case basis. Specific elements of the RVCDDS, in particular the integrity system, are aimed at workers along the entire value chain. This is described in more detail in the Business Conduct (ESRS G1) section. Further specifics of the management approach apply to the natural rubber supply chain.

Overall responsibility for the RVCDDS, including the RVC commitments, lies with the Executive Board. The latter has appointed a human rights officer to oversee the system and delegate responsibility for the supply chain-related framework to the purchasing functions. Tasks and processes defined in the system are implemented by the respective purchasing departments.

The system comprises many processes, such as strategy development and implementation, the management of regulations, impact and risk management, case management (including the integrity system) and training. A multi-level process based on the Three Lines Model has been set up to monitor the effectiveness of the system. For the supply chain, the first line is made up of individual purchasing functions that implement operational tasks in accordance with the RVCDDS. The second line, represented mainly by non-operational purchasing functions and roles, as well as the human rights officer, oversees the system as well as its appropriateness and effectiveness. The third line is Group Internal Audit, which independently assesses the adequacy and effectiveness of the compliance management system.

Specific prevention and remediation measures regarding the supply chain include adjusting procurement strategies and practices, setting contractual agreements, introducing control mechanisms and training managers, purchasers and suppliers on the RVCDDS and the RVC commitments. Continental also employs a supplier selection process based on criteria such as quality standards, financial stability, production capacity, sustainability criteria and compliance with legal and ethical standards, in addition to price and availability. Selected suppliers are continuously assessed using self-assessment questionnaires, which Continental collects via the generally accepted sustainability platform EcoVadis. Selective on-site audits or other checks are also carried out, for example to verify the implementation of ESH management systems.

As part of an annual review process with the Executive Board, the entire RVCDDS, including the specific processes for labor standards, is evaluated in terms of effectiveness, adequacy and potential for improvement. The RVCDDS is additionally integrated into Continental’s overarching internal control system, risk management system and compliance management system.

To raise awareness of the integrity system, the Business Partner Code of Conduct also contains a section on complaint mechanisms. Furthermore, the channels of the integrity system are mentioned in supplier training on the topic of responsible value chains. Continental does not explicitly analyze the awareness and trust of workers in the value chain in these channels. The integrity system is described in detail in the Business Conduct (ESRS G1) section.

The described processes are formalized in a dedicated group rule on the RVCDDS and additional purchasing-specific rules that define how these processes apply to supplier relationships. Direct suppliers are guided by the binding Business Partner Code of Conduct (BPCoC), which refers to the RVC commitments. For suppliers of natural rubber, an additional rule on the purchasing of sustainable natural rubber applies. The management approach for workers in the value chain is based on the same international standards and obligations and established international human rights standards as the management approach for labor standards in the Own Workforce (ESRS S1) section.

Stakeholder interests are a key consideration in shaping the RVCDDS. To gain insights into the interests of workers in the value chain, Continental maintains partnerships and is involved in associations such as econsense, the Responsible Business Alliance (RBA), Rubberway, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Global Platform for Sustainable Natural Rubber (GPSNR). These interests are incorporated into the system via the respective specialist functions, such as purchasing.

Continental communicates its management approach through its externally published RVC commitments and Public Policy Statement. Supplier training initiatives are carried out to further promote shared responsibility along the entire value chain. In addition, direct suppliers are requested to sign the Business Partner Code of Conduct. The communication is therefore aimed at both the affected stakeholders as well as stakeholders involved in the implementation.

Metrics related to workers in the value chain

Continental continued its assessment of selected suppliers in the reporting year based on self-assessment questionnaires submitted via the EcoVadis sustainability platform. The number of available valid supplier self-assessment questionnaires amounted to 946 at the end of the year (PY: 1,534). The change compared with the previous year is primarily attributable to the spin-off of the former Automotive and Contract Manufacturing group sectors. At the level of the group sectors, both Tires and ContiTech recorded increases in the number of self-assessment questionnaires compared with the previous year.

With regard to tangible incidents of severe human rights violations related to workers in the value chain, Continental did not receive any substantiated information during the reporting year.

No fines, penalties or compensation for severe human rights violations related to workers in the value chain were paid in the reporting year.

Metrics related to workers in the value chain	2025	2024
Number of available valid supplier self-assessment questionnaires (as of December 31)	946	1,534
Total number of known incidents of severe human rights violations related to workers in the value chain of Continental	0	0
Total amount of fines, penalties and compensation for severe human rights violations related to workers in the value chain of Continental, in € millions	0	0

Definitions, assumptions and calculation methods:
Number of available valid supplier self-assessment questionnaires

• Includes valid supplier self-assessment questionnaires submitted via the EcoVadis sustainability platform that were published during the reporting year.
• The metric is entity-specific.

Total number of known incidents of severe human rights violations related to workers in the value chain of Continental

• The severity of incidents is assessed regularly as part of case management in the RVCDDS.
• The data is collected through the various complaint mechanisms of the Continental Group. Includes severe incidents related to human rights that were reported in Continental’s systems during the reporting year and that involve a person belonging to Continental’s value chain.
• This information represents Continental’s current state of knowledge and includes incidents for which Continental has substantiated information regarding the specific incidents.
• The metric is entity-specific.

Total amount of fines, penalties and compensation for severe human rights violations related to workers in the value chain of Continental

• The severity of incidents is assessed regularly as part of case management in the RVCDDS.
• The data is collected by the entities of the Continental Group. Includes severe incidents related to human rights that were reported in Continental’s systems and that involve a person belonging to Continental’s value chain.
• Fines, penalties and compensation paid during the reporting year are included.
• Related expenses within the meaning of the ESRS are reported in the Consolidated Statement of Income of the Consolidated Financial Statements under “Other expenses”.
• The metric is entity-specific.