Continental AG's Statement in Adherence to the UK Modern Slavery Act 2021

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Continental Corporation – Continental Modern Slavery Statement for the Financial Year 2020

Information on Reporting

The following statement constitutes the Modern Slavery Statement for the Continental Group submitted by Continental AG as the par-ent company. The statement covers all subsidiaries and minority holdings where Continental exercises management control (herein-after collectively referred to as “Continental” or “Continental Corpo-ration”). This statement has been prepared in consultation with Continental AG subsidiaries explicitly subject to mandatory report-ing obligations in the United Kingdom and Australia. (pls. refer to annex) The statement covers the 2020 fiscal year from January 1 to December 31, 2020. 1.

Company Profile

Continental develops pioneering technologies and services for sus-tainable and connected mobility of people and their goods. Founded in 1871, the technology company offers safe, efficient, in-telligent and affordable solutions for vehicles, machines, traffic and transportation. In 2019, Continental generated preliminary sales of €44.5 billion and currently employs more than 233,000 people in 59 countries and markets.

Organizational Structure

The Continental Group is divided into the group sectors Automo-tive Technologies, Rubber Technologies and Powertrain Technolo-gies. These sectors comprise five business areas with a total of 21 business units (as of January 1, 2021). A business area or business unit is classified according to product requirements, market trends, customer groups and distribution channels. The business areas and business units have overall responsibility for their business, in-cluding their results.

Business Responsibility

Overall responsibility for managing the company is borne by the Executive Board of Continental Aktiengesellschaft (AG). Each busi-ness area is represented by one Executive Board member. To en-sure a unified business strategy, an Automotive Board was estab-lished in the Automotive Technologies group sector, with the CEO of Continental AG serving as chairman. With the exception of Group Purchasing, the central functions of Continental AG are rep-resented by the chairman of the Executive Board, the chief financial officer and the Executive Board member responsible for Human Relations. They take on the functions required to manage the Conti-nental Group across business areas. These include, in particular, fi-nance, controlling, compliance, law, IT, human relations, sustainabil-ity, as well as quality and environment.

Companies and Locations

Continental AG is the parent company of the Continental Group. In addition to Continental AG, the Continental Group comprises 563 companies, including non-controlled companies. The Continental team is made up of 236,386 employees at a total of 561 locations in the areas of production, research and development, and admin-istration, in 58 countries and markets. Added to this are the distri-bution locations, with 955 company-owned tire outlets and a total of around 5,000 franchises and operations with a Continental brand presence.

Sustainability Management and Strategy

In 2020, the Executive Board adopted a new sustainability to drive the transformation process of the company in the area of sustaina-bility. For the four focus areas of sustainability, we are committed to visionary and strong ambitions, which we intend to achieve by 2050 at the latest and together with our partners along the value chain.

  • 100% carbon neutrality
  • 100% emission-free mobility and industries
  • 100% circular economy, and
  • 100% responsible value chain

The new Continental sustainability ambition relies on existing programs and processes and complements and develops them successively. Continental is a signatory to the UN Global Compact since 2012. The Executive Board member for Human Relations and Sustainabil-ity serves as chief sustainability officer (CSO). The Sustainability group function overseen by the CSO is responsible for sustainabil-ity management, including management of an interdepartmental committee. Sustainability organization is further supplemented by dedicated coordinators in the group sectors and business areas. Some of these organizational units also have their own interdepart-mental sustainability committees.

Policies in Relation to Fighting Modern Slavery and Human Trafficking
Continental has incorporated its commitment to human rights and the ILO core labor standards into its global codes of conduct in line with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines. Our Continental Code of Conduct , which was expanded early 2019 mandates the respect for human rights and fair working conditions for every employee and executive free-dom of association, the prohibition of child labor and forced labor as well as freedom from discrimination. The Business Partner Code of Conduct (BPCOC) , established by Continental's Executive Board, requires all of Continental's suppliers to respect human rights. This includes the prohibition of forced labor and human traf-ficking. As one of the largest producers in the world, natural rubber is a raw material for business success. Continental therefore launched and published a Sustainable Natural Rubber Policy in 2018, which specifically includes standards and expectations for suppliers regarding human rights, e.g. regarding land rights, forced labor, child labor as well as the rights of migrant workers and ethi-cal recruitment practices. The respect for human rights is at the core of a responsible value chain. Therefore, among other topics, our publicly communicated sustainability ambition of 2020 stipu-lates that we strive to achieve full, 100%, responsible business part-nerships and sourcing - by 2050 at the latest and together with our partners along the value chain.

Due Diligence - Risk Management Integration

Continental takes its responsibility to respect human rights seri-ously and reviews are measures to address human rights and mod-ern slavery risks regularly. Our understanding of a responsible value chain relates to our supply chain and our customer relation-ships as well as to our own locations. Group Sustainability together with the respective business area sustainability functions hold the responsibility to continuously monitor and improve measures re-lated to human rights due diligence requirements. In line with this approach, several group functions such as from human relations and purchasing, have been trained and deployed to integrate hu-man rights topics into their core functions.

Own Operations

Production and sales in Automotive Technologies and Powertrain Technologies as well as in the ContiTech business area are orga-nized across regions. Tire production activities, in which economies of scale play a key role, are represented with major locations in the three dominant automotive markets in terms of production and ve-hicle numbers, namely Europe, the USA and China. Low production costs coupled with large volumes and proximity to our customers or high rates of regional growth constitute key success factors. Tires are sold worldwide via our dealer network with tire outlets and franchises, as well as through tire trading in general.

Supply Chain

Continental processes a wide range of raw materials and semi-fin-ished products. The purchasing volume in the reporting year was €24.4 billion in total, €16.7 billion of which was for production ma-terials. Automotive Technologies and Powertrain Technologies use primarily steel, aluminum, precious metals, copper and plastics. Key areas when it comes to purchasing materials and semi-finished products include electronics and electromechanical components, which together make up about 45% of the Continental Group’s pur-chasing volume for production materials. Furthermore, mechanical components account for nearly a quarter of production materials. Natural rubber and oil-based chemicals such as synthetic rubber and carbon black are key raw materials for Rubber Technologies. The total purchasing volume for these materials amounts to around a sixth of the total volume for production materials.

Communication and Training

New employees of Continental are informed about Continental's Code of Conduct when hired. Continental provides online training on the Code of Conduct and regular classroom compliance training sessions at various locations worldwide. With the update of the COC a module on human rights and good working conditions was included in 2019 and continuously rolled-out in 2020. These train-ing sessions are mandatory for new employees. In total, 24.904 employees participated in trainings on the Code of Conduct (PY: more than 98.483). In Australia, as well as in other Continental countries, specific online trainings took place on case management with Human Relations Staff. Due to the situation caused by COVID-19 pandemic most trainings were held in virtual formats. Continen-tal suppliers are continuously informed on our expectations stipu-lated in our BPCoC and are expected to meet these requirements throughout their own processes as well as their supply chains.

We are further developing our approach in dialog with external stakeholders and support the development of industry-wide standards, including: through our active participation in the Industry Dia-log of the German Federal Government on Human Rights in the Au-tomotive Industry and the Global Platform for Sustainable Natural Rubber (GPSNR), as well as active participation in industry associations.

Compliance Hotline and Case Management

Continental operates a global Compliance and Anti-Corruption Hot-line, where submissions can be made on any topic of concern in re-lation to Continental’s business, including concerns in relation to the ethical rights such as forced labor or human trafficking. The hotline process is available through Continental’s website and is broadly accessible, including to all Continental employees and any third parties such as suppliers and their employees. Submissions can be made anonymously and without fear of salvation. Any sub-mission to the hotline is followed-up by a defined process involving different group departments at Continental. Group wide policies are complemented by local policies such as whistleblower policies in Australia.

Hanover, March 24, 2021

For and on behalf of the Executive Board:

Dr Ariane Reinhart Executive Board member for Human Relations and Sustainability, Continental AG

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