Significance of sustainability for the Vossloh business model
Vossloh offers products and services that enable better and more widespread rail use. The aim is to increase the availability of existing tracks, facilitate efficient and trouble-free operation, and reduce infrastructure lifecycle costs.
Group-wide sustainability strategy
In keeping with its guiding principle “enabling green mobility”, Vossloh is a driving force behind customer- focused, innovative and sustainable products and services for rail transport. This motto is also reflected in Vossloh’s sustainability strategy. Since the 2021 fiscal year, Vossloh has pursued a revised Group-wide sustainability strategy in order to centrally align and focus sustainability activities within the Group, to further improve Vossloh’s positive impact on the environment and society, and to improve the transparency of the Group‘s sustainability performance. Vossloh AG‘s Executive Board adopted the sustainability strategy and the guideline supporting it in 2021. Vossloh‘s sustainability commitment, with which the Executive Board underlined and reaffirmed Vossloh‘s motto and focus, was published on the company‘s website.
Sustainability commitment by the Executive Board of Vossloh AG
Group-wide sustainability program
The sustainability guideline provides the Group-wide organizational framework and sets out the principles for all Vossloh’s sustainability measures and initiatives. The guideline defines in particular the scope of action, as well as organization, responsibility and processes. The direction and focus of sustainability measures were set by a materiality analysis in order to determine the sustainability topics relevant to Vossloh. Specific sustainability goals are then set in relation to these key topics. These goals are pursued through sustainability initiatives and the integration of environmental and social aspects into the company’s business and decision-making processes. Vossloh is using internal and external communication to make its sustainability performance transparent and also to further strengthen the commitment of its employees on the way to becoming a sustainable company.
Vossloh has divided its sustainability activities into eight areas of action, which enable a targeted and efficient pursuit of the material topics identified in the materiality analysis.
The overarching area, “Sustainability strategy and management“, provides the framework for the seven other areas as well as for the Group’s future approach.
The Group’s Executive Board bears overall responsibility for all sustainability topics and ensures that Vossloh lives up to its ecological, economic and social responsibilities and makes a positive contribution to the environment and society. In operational management, sustainability is the responsibility of the Chief Operating Officer (COO). In addition, Vossloh AG has the Corporate Sustainability department. Created in 2020, the role of head of Corporate Sustainability, who reports directly to the Executive Board, is responsible for the development and implementation of the sustainability strategy as well as for the management of Group-wide sustainability initiatives. In addition, the Executive Board has established a Group Sustainability Committee to centrally manage all sustainability measures within the Group. The committee is run by the head of Corporate Sustainability. Its members include the division heads of key central offices at Vossloh AG as well as the managing directors and sustainability officers of the business units. In addition, each business unit has appointed a sustainability, health and safety officer.
Ratings underpin Vossloh’s sustainability performance
For many years, rating agencies have assessed and recognized Vossloh’s sustainability performance on a regular basis. Among other things, the company currently has a “prime status” according to Institutional Shareholder Services (ISS) ESG, which places Vossloh in the top 10 percent of its sector. EcoVadis has also awarded Vossloh silver status, and the score obtained means the company ranks among the top ten percent of all companies assessed. MSCI ESG Research upgraded Vossloh‘s rating from A to the second-best rating of AA (on a scale from AAA to CCC) in the reporting year 2022. Such rankings play a special role for Vossloh: the company was one of the first companies in Germany to place a sustainability-oriented hybrid note at the beginning of 2021. The redemption amount of the note is linked to the company’s sustainability performance as measured by ISS ESG and MSCI ESG Research ratings.
Another criterion for the assessment of Vossloh’s sustainability performance is certification in accordance with internationally recognized norms and standards. The great majority of Vossloh units have certifications in at least one of the international quality, environmental, energy efficiency or occupational health and safety standards such as ISO 9001, ISO 14001, ISO 50001, ISO 45001 or its predecessor standard OHSAS 18001, or a comparable national standard and have corresponding management systems in place. As in the previous year, 98 percent of Vossloh employees were employed at a site with one or more of these certifications as of December 31, 2022. 97 percent of operating companies have at least one of these certifications.
Sustainability topics, goals and initiatives
Reporting on nonfinancial topics
In order to identify the relevant sustainability topics, Vossloh conducted a materiality analysis in 2021 with the participation of representative external and internal stakeholders as well as the Group Sustainability Committee and the Executive Board. To this end, a total of 38 potentially relevant sustainability topics were divided into seven areas of action. As part of the materiality analysis, 198 representative stakeholders were surveyed, including 53 external participants. The ranking and prioritization of the sustainability topics were determined by linking stakeholders’ expectations to the relevance for Vossloh in each focus area. The Executive Board and Group Sustainability Committee identified a total of seven focus topics to guide the company‘s further sustainability efforts, each of which was assigned a specific sustainability target. There was no need for any changes or additions with regard to the selection of topics and targets in 2022. For this reason, the report below once again covers 23 individual topics in seven areas of action.
This statement also reports on how the Group implements the ten principles of the UN Global Compact.
The nonfinancial statement covers Vossloh’s global activities. The companies considered correspond to the scope of consolidation of the consolidated financial statements. The management report contains supplementary and/or more detailed information regarding a number of the nonfinancial topics and these are cross-referenced accordingly. The company’s risk reporting covers all major risks associated with Vossloh’s business activities. It also includes the major nonfinancial risks to which Vossloh may be exposed.
Group-wide sustainability goals and initiatives
The table below indicates the seven areas of action with the relevant Group-wide sustainability goals assigned to sustainability factors in accordance with Section 289c HGB:
Key performance indicators are defined for all of the above goals, which can be used to measure the degree to which they have been achieved. At the end of 2021, the company also launched a Group-wide sustainability initiative for each goal. These initiatives were continued in 2022 and have produced some initial results, which are covered in the respective sections. Reports on all activities were prepared for the Group Sustainability Committee and the Executive Board on a regular basis.
In addition to these areas of action and sustainability goals, which apply to the entire Group, a wide range of other sustainability initiatives are being implemented in the various business units and at the company’s sites. As of December 31, 2022, there were a total of 44 ongoing sustainability initiatives.