Schaeffler : 2023 Sustainability Report

Contents

NAVIGATION HELP & FURTHER INFORMATION FOR THE

SUSTAINABILITY REPORT

Information required by the CSR Directive Implementation Act Sections 289, 315 of the German Commercial Code

FURTHER INFORMATION IN OUR

ANNUAL REPORT

Download PDF

It takes innovation to make the world more sustainable. Global challenges such as climate change, resource scarcity, poverty, and demographic change require new and innovative technologies.

We need solutions that will help protect our natural resources, secure competitiveness, and maintain quality of life and prosperity.

Within the Schaeffler Group, sustainability and innovation have been a firmly established part of our corporate culture for years. Schaeffler is a leading global provider of technologies that determine and enable motion in various ways, and a company characterized by innovative strength and technological expertise. As a result, we provide our customers with sustainable solutions for the mobility and energy systems of the future. Our spectrum ranges from electric mobility and renewable energy production to the production and use of hydrogen.

The planned merger with Vitesco Technologies Group AG gave us the opportunity to announce an important strategic step last year to make the Schaeffler Group even more future-oriented. Together, we want to create a Motion Technology Company that builds on the existing strengths of both companies.

Sustainability is and remains an integral part of our corporate strategy. It is particularly important to us to understand and shape sustainability as a comprehensive and overarching topic. We assume environmental and social responsibility along the entire value chain. That is why we have defined ten action fields which cover all three ESG dimensions - environmental, social, and corporate governance - taking into account the company's core areas of focus and the requirements of our external stakeholders. These action fields were further substantiated in the 2023 reporting year. This also includes defining key figures and targets as part of our remuneration system.

Our efforts to implement our comprehensive sustainability strategy are currently focused on seven key ESG targets. These include climate-neutral production as of 2030, a climate-neutral supply chain as of 2040, and an average reduction of 10 percent annually in the Lost Time Injury Rate (LTIR) by 2024. These targets may be ambitious, but achievable. It is important for us to exchange ideas with independent experts outside the company and to obtain their assessment of our progress. In this respect, the review of our climate targets by the Science Based Targets initiative (SBTi) has encouraged us to continue on our chosen course. The SBTi has classified our targets as scientifically founded. These targets are further supported by a clearly defined path - inspired by our Climate Action Plan - to reduce greenhouse gas emissions. After all, we plan to do our part to achieve the targets of the Paris Agreement. When it comes to our production and product portfolio, we at Schaeffler are committed to these targets as well as to the ten principles of the United Nations Global Compact.

To further integrate sustainability into our corporate and leadership culture, we have incorporated ESG targets into the remuneration system for the Managing Directors and management. After all, we can only achieve our ambitious targets if we at Schaeffler continue to increase our awareness of sustainable operations and continuously expand and improve our expertise in the area of sustain- ability. We understand that our sustainability goals can only be achieved together with strong partners. I am especially thankful to all our customers and suppliers as well as our employees who support us on our journey. Their willingness to break new ground, continuously improve and see fresh momentum for innovation is essential when it comes to shaping the sustainable transformation.

Like innovation, sustainability is closely linked to transparency. Transparency is the basis for credible and responsible communication and a decisive prerequisite for understanding and communicating the environmental, social, and economic impact of our actions. Transparency creates trust, promotes dialog, and supports the necessary ongoing improvements in the area of sustainability. This is why we publish our sustainability report and communicate our progress. We are guided by our management principles of "Transparency, Trust, and Teamwork."

On behalf of the entire Executive Board, I hope you enjoy reading this report and would like to thank you for your interest in our sustainability activities.

Yours sincerely,

Klaus Rosenfeld

Chief Executive Officer

About the report

About the report

This Sustainability Report was approved by the Board

of Managing Directors of Schaeffler AG and refers to Schaeffler AG and its material subsidiaries (also referred to as the "Schaeffler Group"). It contains the combined separate non- financial report of Schaeffler AG and is publicly accessible on the company website and a dedicated microsite. The Sustainability Report 2023 was published on March 5, 2024.

This reporting is conducted with reference to the Global Reporting Initiative (GRI) standards from 2021. The Sustainability Report also takes into account the United Nations Sustainable Development Goals (SDGs) as well as the recommendations

of the Task Force on Climate-Related Financial Disclosures (TCFD). The report structure incorporates the ten action fields of the Schaeffler sustainability strategy, grouped by the dimensions of environment, social, and governance.

This report is available in German and English. In case of discrepancies, the German version is binding.

The Schaeffler Group website is available at: Schaeffler Group

The Sustainability Report 2023 microsite is available at:

Schaeffler Sustainability Report 2023

The online GRI index is available at: GRI index 2023

The contribution to the Sustainable Development Goals is available at: Sustainable Development Goals

More information on the TCFD index can be found on page 73.

Reportable material topics

The results of the materiality analysis conducted in the reporting year form the basis for the combined separate non- financial report of Schaeffler AG. The requirements of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) were incorporated as a form of guidance for the assessment methodology. For the Sustainability Report 2023, topics were viewed as material if they were essential for understanding the course of business, business results, and the company's situation, and if they had a significant impact from an inside-out perspective ("impact materiality"). This fulfills the requirements of the Commercial Code (Sections 289c to 289e in conjunction with 315c). The framework applied is the Global Reporting Initiative (GRI) standards from 2021.

More information on the results of the materiality analysis can be found on page 17.

Guidelines for data collection and presentation

The reporting period corresponds to the 2023 fiscal year, from January 1 to December 31, 2023. All of the relevant data provided by the editorial deadline on February 20, 2024, was taken into account.

When preparing the report, it is necessary in some instances to make appropriate estimates/projections, which are documented internally, to present the complete reporting period. Actual values may differ from these estimates and will be corrected in the following year's reporting. Methodical and structural changes are corrected in principle. Comments are provided for deviations greater than 5 %. Differences may occur due to commercial rounding of amounts and percentages.

Environmental and energy data

Key data on greenhouse gas emissions, energy consumption, freshwater withdrawal, waste generation, and recycling rates in the field of environment and energy include the 72 plants described in the EnEHS management manual as well as material R&D sites, and the warehouse in Kitzingen. Coverage of plants with certifications based on the ISO 14001, ISO 50001, and ISO 45001 standards as well as entries in the EMAS location register can be found in the report. Accordingly, the environmental and energy data presented do not include Ewellix plants, as these are not yet integrated into the scope of the EnEHS management manual. In comparison to the key figures reported for the Schaeffler Group, consumptions at Ewellix plants do not have a significant impact on the values indicated.

A detailed description about how greenhouse gas emissions are calculated can be found in the report. Any information about carbon emissions in this report refers to CO2 equivalents (CO2e).

The reporting date for key figures relating to environmental and energy data is generally December 31, 2023. Comments are provided for any deviations.

More information on the coverage rate of certifications can be found on page 25.

More information on calculating greenhouse gas emissions can be found on page 20et seq.

About the report

Employee data

Key employee data include all material Schaeffler AG subsidiaries in Germany and abroad (also referred as the "Schaeffler Group"). If the details and representations of concepts pertain to other entities, this is pointed out accordingly.

The persons referred to as employees in this report are members of the internally defined "workforce" category. Temporary staff, apprentices, trainees, and contract workers as well as inactive employees are not included in all of the key figures, which is indicated accordingly. The reporting date for key figures relating to employees is generally December 31, 2023. Comments are provided for any deviations.

EU Taxonomy reporting

The Sustainability Report 2023 contains a separate section with the information to be published in conjunction with Article 8 of EU Taxonomy Regulation 2020/852 in accordance with Article 5 (2) of Delegated Regulation 2023/2486.

Key data referring to EU Taxonomy reporting comply with

the Schaeffler Group scope of consolidation used for financial reporting.

More information on EU Taxonomy reporting can be found on page 57et seq.

Combined separate non-financial report

In this Sustainability Report, Schaeffler AG discloses the required non-financial information for the 2023 fiscal year for both the Schaeffler Group and Schaeffler AG in accordance with Sections 289, 315 of the German Commercial Code. The company exercises the option, in accordance with Section 315b (3), to produce a combined separate non-financial report (also referred as "NFR") apart from the group management report. The NFR was thereby combined with the separate non-financial report of the parent company in accordance with Section 315b (1) (2) and integrated into the Sustainability Report. The corresponding

passages are marked with . References to information outside of these icons are to be understood as additional infor- mation. These are not mandatory components of the NFR. In accordance with Section 289d HGB, Schaeffler AG uses the 2021 universal standards of the Global Reporting Initiative (GRI) in the option "with reference to" in order to prepare the non-financial declaration.

The combined separate non-financial report for the 2023 fiscal year for the Schaeffler Group and Schaeffler AG was reviewed by the Supervisory Board of Schaeffler AG and by the accounting firm KPMG AG on behalf of the Supervisory Board with respect to the legally required information in accordance with Sections 315b, 315c in conjunction with 289b to 289e of the German Commercial Code for the purpose of obtaining limited assurance (as part of a limited assurance engagement). This follows the International Standard on Assurance Engagements (ISAE) 3000 (Revised): "Assurance Engagements other than Audits or Reviews of Historical Financial Information" issued by the International Auditing and Assurance Standards Board (IAASB).

More information on the Limited Assurance Report of the Independent Auditor can be found on page 69et seq.

Forward-looking statements

This document contains forward-looking statements that reflect management's current views with respect to future events. Such statements are subject to risks and uncertainties that are beyond the Schaeffler Group's ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to integrate acquired businesses and achieve anticipated synergies, and the actions of government regulators. If any of these cases or other risks and uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements.

The Schaeffler Group does not intend or assume any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report.

Forward-looking statements and targets do not take the planned merger with Vitesco Technologies Group AG into account.

Editorial notes and references

This report contains references to the Annual Report and other online information, provided this is necessary for understanding.

The following symbols indicate additional information when reading:

Further information in the report

Further information on the internet

Further information on the microsite:

www.schaeffler-sustainability-report.com/2023

1

CONTENTS

STRATEGY

AND MANAGEMENT

The Schaeffler Group is a publicly listed family business with a strong foundation in its values that shape its entrepreneurial activity and corporate culture. Economic success, a sustainable company vision, and awareness of the social and environmental concerns of its own business are traditionally closely interlinked

in the Schaeffler Group. Just like innovation, excel- lence, and passion, sustainability is anchored in the Schaeffler Group's corporate culture, which is why sustainability is a central component of the Schaeffler Roadmap 2025. The sustainability strategy features ten material action fields associated with the dimensions environment, social, and governance. These action fields describe relevant topics such as climate neutrality. Dialog with stakeholders aims to promote the exchange of ideas and a shared understanding of sustainability in order to develop effective solutions.

At a glance

• The Schaeffler Group offers innovative product solutions in the Automotive Technologies, Automotive Aftermarket, and Industrial divisions
• Around 83,400 employees work together across divisions and countries at more than 200 locations worldwide

Business activities and organizational structure

The Schaeffler Group is a Motion Technology Company determined to drive forward and bring to market ground- breaking technologies. Employing a workforce of 83,400, the Schaeffler Group develops and manufactures components and systems for powertrains and chassis as well as rolling and plain bearing solutions for a large number of industrial applica- tions. Additionally, the company renders services in these areas and provides repair solutions in original-equipment quality for the automotive spare parts market worldwide.

The Schaeffler Group is characterized by a three-dimensional organizational and leadership structure which differentiates between divisions, functions, and regions. Thus, the Schaeffler Group's business is managed based on the three divisions - Automotive Technologies, Automotive Aftermarket, and Industrial. The corporate headquarters of the Schaeffler Group are located in Herzogenaurach. The Automotive Technologies division

is headquarted in Buehl. The headquarters of the Automotive Aftermarket division are located in Frankfurt. The Industrial division is located in Schweinfurt.

The planned business combination with Vitesco Technologies Group AG is one of the key steps in this transformation. It is aimed at broadening the Schaeffler Group's business and technology portfolio, particularly in the area of electric mobility, and organizing it into four focused divisions going forward.

Revenue of the Schaeffler Group in € millions

1. Prior year values according to the segment structure indicated in 2023. Rounding differences are possible.
2. The 2022 value has been adjusted.

More information on the organizational and management structure as well as on the legal structure of the Group can be found on page 2et seq. of the Annual Report 2023.

Production network and locations

The companies in the regions and countries represent the Schaeffler Group locally, and their proximity to the customer supports the company's growth. The company has a worldwide presence with more than 200 locations, 82 production facilities,

20 research and development centers, as well as a tight-knit sales and service network. A global production network, the 82 plants with approximately 64,000 employees form the operational core, managed based on uniform, cross-divisional principles. The global production system and the manufacturing technologies are key to the company's success.

The global production system and manufacturing technologies are continually enhanced in order to safeguard the future competitive ability of the Schaeffler Group.

More information on the sustainability certifications and environmental declarations of the individual locations can be found in the online report.

More information on the production network and locations can be found on page 17et seq. of the Annual Report 2023.

Group strategy

Further developed in 2020 to continue the Schaeffler Group's transformation with a forward-looking, targeted approach, the Group strategy pursues the vision of being the automotive and industrial supplier of choice that boasts innovation, agility, and efficiency. Digitalization and sustainability were also identified as essential topics for success. The "Roadmap 2025" provides a summary of the Schaeffler Group's holistic strategic focus based on a conceptual framework containing three material elements:

• The "Strategy 2025" defines the strategic approach and the course of action
• The "Execution Program 2025" defines seven specific subprograms
• The "Mid-termTargets 2025" provide a financial objective and correspond with the overarching aim of generating sustainable value

The Schaeffler Group has refined its corporate profile within the strategic framework. It now positions itself as a Motion Technology Company. The term "motion" serves as the connecting element for the six newly defined product families.