Continental Modern Slavery Statement for the Financial Year 2023
Introduction
The statement is made pursuant to Section 54 of the UK Modern Slavery Act 2015 and covers the 2023 fiscal year with respect to actions taken by the reporting entities during the year ending December 31, 2023. The statement covers all subsidiaries and minority holdings where Continental exercises management control (hereinafter collectively referred to as “Continental” and “we”). This statement has been prepared in consultation with members of Continental AG subsidiaries subject to mandatory reporting obligations in the United Kingdom (pls. refer to annex), of our respective group sectors and of the Continental Group. As part of a global company, we have a role to play in efforts to promote respect for human rights in business activities, and we are pleased to provide insight into the actions we have taken to understand, prevent and reduce the risk of forced labor and child labor in our operations and supply chain.
Corporate profile
Continental consists of Continental Aktiengesellschaft (AG) and its worldwide subsidiaries (collectively, “Continental” or “Continental Group”) and is divided into four group sectors: Automotive, Tires, ContiTech and Contract Manufacturing. As of the end of 2023, the Continental Group comprised a total of 16 business areas. A group sector or business area with overall responsibility for a business, including its results, is classified according to product requirements, market trends, customer groups and distribution channels. Overall responsibility for managing the company is borne by the Executive Board of Continental AG. The Automotive, Tires and ContiTech group sectors are each represented on the Executive Board. The group functions of Continental AG are represented by the chairman of the Executive Board, the chief financial officer, the Executive Board member responsible for Human Relations and the Executive Board member responsible for Integrity and Law. Such group function comprise the functions required to manage the Continental Group across the group sectors and include, in particular, Finance, Controlling, IT, Human Relations, Sustainability, Law and Intellectual Property, Internal Audit, Quality Management, and Compliance. The Group Purchasing group function is represented by the Executive Board member responsible for the Tires group sector. With a 64% share of consolidated sales, the automotive industry— with the exception of the replacement business—is Continental’s most important customer group. This industry is particularly important for the growth of the Automotive group sector. In the Tires group sector, sales to dealers and end users represent the largest share of the tire replacement business. In the ContiTech group sector, the customer base is made up of the energy, agriculture and construction industries, interior design, and the automotive and replacement businesses. In the Contract Manufacturing group sector, Vitesco Technologies constitutes the sole customer.
Sustainability management
Sustainability is a driver of innovation for Continental during the current transformation of mobility and industry and is thus firmly anchored in its corporate strategy in the cornerstone of “turning change into opportunity.” Sustainability is also a key component in Continental’s vision of “CREATING VALUE FOR A BETTER TOMORROW.” In Continental’s sustainability ambition, Continental describes how it wants to shape this transformation in the relevant topic areas with respect to sustainability in order to seize transformation opportunities and mitigate transformation risks. Along with the relevant guidelines, this sustainability ambition brings together existing strategies, programs, and processes, as well as their further development. Continental is a signatory to the UN Global Compact since 2012. For the four focus areas of sustainability, Continental is committed to visionary and strong ambitions, which it intends to achieve by 2050 at the latest, 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 entire ambition can be found at www.continentalsustainability.com. Within the Executive Board, the Executive Board member for Group Human Relations (director of Labor Relations) and Group Sustainability is responsible for sustainability. Sustainability management within the Continental Group is regulated by a dedicated internal sustainability policy. The Group Sustainability group function is further supplemented by sustainability functions in the group sectors as well as Continental 2023 UK Modern Slavery Statement 2 coordinators in several business areas and countries. The sustainability functions in the group sectors and in the Continental Group were further expanded and strengthened over the course of 2023. The Group Sustainability Steering Committee is responsible for assessing interdepartmental issues, weighing up opportunities and risks and discussing relevant Executive Board decisions in advance. In fiscal year 2023, it consisted of the entire Executive Board, the heads of the sustainability functions at group level and group sector level as well as the heads of other relevant group functions. The committee is chaired by the Executive Board member for Group Human Relations (director of Labor Relations) and Group Sustainability and managed by the head of the Group Sustainability group function. Our group sectors, Tire and ContiTech, also have their own interdepartmental sustainability committees, which are coordinated by the relevant sustainability functions.
Policies in relation to fighting child labor, forced labor & modern slavery in own operations and in supply chains
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 defined and published its commitments toward a responsible value chain (hereinafter Responsible Value Chain Commitments, “RVC Commitments” for short) in the areas of labor standards, occupational safety and health, security practices, environment and land rights: RVC Commitments. We have adopted the RVC Commitments as part of the Continental Group. Three of our RVC Commitments focus on rejecting child labor and forced labor and fostering respect for human rights throughout the value chain. These commitments apply to our own operations with Continental in the United Kingdom and in particular to our direct suppliers. Amongst others, the system focuses on forced labour and human trafficking. This covers both Continental’s own operations and in particular those of direct suppliers. For this purpose, responsibilities, rules and processes are clearly defined, including control mechanisms. The management system is guided by specific commitments in the areas of labor standards, occupational health and safety, the environment, safety practices and land rights. With respect to forced labor and modern slavery Continental’s commitment is as follows: No forced labor & modern slavery: Continental firmly rejects any form of forced labor, modern slavery, debt bondage, trafficking, or any other form of labor not conducted voluntarily or noncompliant with the International Labor Organization’s standards. This includes any form of oppression in the vicinity of the workplace, be it economically or of any other kind. Workers must be provided with documented employment terms or an offer of employment in a language the person should be able to understand. Migrant workers need to be treated with special diligence and shall receive the relevant work-related information prior to their departure from their country of origin and must always have access and full control over their identity or immigration documents. Supply Chain. Continental collaborates with its business partners to foster respecting adequate standards throughout the value chain. Continental expects its suppliers to respect human and environmental rights as referenced in the RVC Commitments and applicable laws. Furthermore, Continental’s suppliers are required to implement adequate due diligence processes. These are dedicated to identify, prevent, and mitigate risks of negative impacts on human and environmental rights in their operations and supply chains, including appropriate grievance mechanisms and reporting. Continental is committed to support its business partners and especially its suppliers, e.g., through but not limited to adequate monitoring systems, corrective action plans, and training. These commitments address the defined risk categories and formulate what is expected of Continental’s business units and employees globally, as well as of its direct suppliers. On top of this, Continental has anchored further prevention measures in its own business units and with respect to direct suppliers. Within Continental’s responsible value chain due diligence system (RVCDDS), our Code of Conduct defines the fundamental requirements for our employees, while the Business Partner Code of Conduct defines the fundamental requirements for our suppliers and their suppliers with regard to human rights, working conditions, environmental protection, conflict minerals and anticorruption. 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.
Management system
Continental has established a comprehensive management system to ensure our RVC Commitments with regard to human and environmental rights, including our rejection of child labor, forced labor and modern slavery. This system enables us to identify, address and mitigate associated risks within our own business operations and our supply chain. Within the management system, responsibilities (including the appointment of a human rights officer for Continental), rules and processes are clearly defined, including risk mitigation measures and control mechanisms. The management system will continue to evolve as the dynamic economic, social and environmental conditions develop further. Continental has established a system that ensures a controlled escalation through hierarchy, a so-called “three lines of defense” model. In this model, principles and processes cover the functional areas of:
› Strategy development and implementation
› Management of regulatory requirements
› Risk management
› Incident management (including whistleblower system) Continental 2023 UK Modern Slavery Statement 3
› Training
› System monitoring
› Reporting
The internal responsibilities are defined within the framework of a corporate policy (Group Policy Responsible Value Chain). This policy defines the areas of responsibility of the Executive Board, the business areas, Continental’s human rights officer and relevant functions, and represents the binding framework for the management system to ensure due diligence in a responsible value chain. It includes due diligence within our own business operations, for direct suppliers and in relation to indirect suppliers. The persons relevant for implementation receive general, positionrelated and risk-specific training. The Executive Board of Continental AG is informed at least once a year by the human rights officer on the current status, effectiveness, appropriateness as well as on measures for improvement and potential advancement of the management system. Suitable improvements to the management system as a whole and to selected elements thereof are defined on this basis. The management system is part of Continental’s overarching risk, compliance, and control system.
Risk management and risk analysis
Continental operates in complex global value chains in which a variety of risks relating to infringements of protection rights may arise. In this context, a risk is always related to a potential negative impact on humans and the environment. The main goal of risk management is the mitigation of these risks. Continental has therefore set up a specific risk management within its management system, which includes appropriate, regular risk analyses in order to determine the human rights and environmental risks in our own business operations and with regard to direct suppliers. As part of the risk analysis, Continental uses dedicated risk categories identified in a multi-stage process, evaluated, weighted and prioritized - especially based on the requirements of the German Supply Chain Act and other relevant legal requirements. The defined risk categories refer to the risks of potential violations of protected rights in relation child labor and forced labor among others. The risk analysis of our own business operations in the United Kingdom and of the supply chain in relation to direct suppliers follows a systematic and standardized method in order to ensure comparability and take special organizational features into account on an equal basis. In particular, factors such as business models, ability to intervene, contribution and probability of occurrence as well as severity are taken into account. Along defined steps, the relevant risks are identified, assessed, weighted and prioritized. Not only are the gross risks taken into consideration, but also the existing preventive measures and the net risks derived from them. Thanks to extensive preventive measures, the net risks are significantly lower than the gross risks. The latter arise from the global footprint of the business activities and supply chains, the broad range of the product portfolio and the various business models and value chain levels. Prioritized risks are then analyzed and evaluated in greater detail in order to derive targeted priority prevention measures. Based on the risk analysis carried out in fiscal 2023, certain risk categories including equal treatment / anti-discrimination, environmental impacts and working conditions were formally prioritized by Continental Group, as well as risk categories for the supply chain in relation to direct suppliers. An analysis of risks in relation to indirect suppliers is carried out on an ad hoc basis in cases of substantiated knowledge. Regardless of the prioritization, all risk categories are part of the risk management. Preventive measures As a central prevention measure at the group level, Continental has adopted its RVC Commitments and communicated them publicly. These address the defined risk categories, which were confirmed as part of the risk analysis, and the associated expectations regarding our own business operations and employees, as well as direct suppliers. In addition, further groupwide prevention measures were anchored in our own business operations and towards direct suppliers. The group-wide prevention measures apply to all Continental companies, including its subsidiaries in the United Kingdom, are the subject of the annual system monitoring and include in particular:
› The integration of the management system into the essential corporate control processes and frameworks; › The Policy Statement of Continental AG on compliance with human rights and environmental due diligence obligations in supply chains 2023;
› The RVC Commitments, which explicitly include our rejection of child labor and forced labor within our human rights and environmental commitments;
› The Continental Code of Conduct, which includes, among other things, explicit rejection of any form of child labor or forced labor and the human rights and environmental-related expectations that we set for our employees;
› The Continental Business Partner Code of Conduct, which includes, among other things, the prohibition of child labor and forced labor and any forms of modern slavery as part of the human rights and environmental expectations that we place on our suppliers and require them to pass down to their own suppliers and subcontractors; and
› General and topic-specific training on the management system.
In addition, specific prevention measures have been implemented in our own business operations and in relation to the supply chain. These measures are improved on an ongoing basis, particularly based on the risk analysis. They include, among other things, environmental and occupational health and safety systems for our own business operations, appropriate procurement strategies and practices, contractual agreements and control mechanisms, as well as training measures in relation to the supply chain. In the case of substantiated and verified knowledge of risks from direct or indirect suppliers, appropriate preventive measures are agreed and tracked. Continental 2023 UK Modern Slavery Statement 4 The implementation of the management system also includes riskbased controls with regard to the preventive measures taken.
Responsible Sourcing
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. Sustainability aspects are taken into consideration at various points in supplier management. On the basis of various criteria, for example, selected suppliers are assessed with the help of selfassessment questionnaires and evaluations through sustainability platforms, which include questions regarding the management of human rights and working conditions, including child labor and forced labor, and the submission of supporting documentation. In addition to receiving assessment reports generated through this process, selective local audits or other audit activities—such as in relation to the existence of suppliers’ own management systems— are also carried out. As of December 31, 2023, 1,291 valid supplier self-assessment questionnaires and results 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 selfassessment 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 selfassessment questionnaires.
Responsible value chain performance indicator:
Number of available valid supplier selfassessment questionnaires (as at December 31)* 1291 in 2023 and 1009 in 2022
* Based on the self-assessment questionnaires via the sustainability platforms EcoVadis and NQC completed by suppliers selected for this process.
Communication and Training The Continental Code of Conduct describes the framework of Continental’s alliance for creating top value based on our shared vision and mission and our four corporate values: Trust, Passion To Win, Freedom To Act, and For One Another, as well as the sustainability of our actions. Amongst others, the Code of Conduct addresses the rejection of child labor and forced labor & modern slavery and the respect for human rights and fair working conditions. In fiscal 2023, 10,822 Continental employees completed e-learning training on the Code of Conduct (PY: 11,716). In addition, 21,180 participants were recorded taking compliance e-learning courses on anti-corruption and antitrust law (PY: 23,780), while 5,934 participants attended in-person training courses on anti-corruption and antitrust law (PY: 5,069), most of which were conducted virtually as webinars. Participants in in-person training events are selected on a risk based and target group-oriented basis. Compliance training sessions 2023 2022 Employees who have completed e-learning on the Code of Conduct 10,822 11,716 Participants in e-learning courses on anticorruption, antitrust law 21,180 23,780 Participants in in-person training courses on anti-corruption and antitrust law 5,934 5,069 In fiscal year 2023, Continental substantially completed development of RVC training modules targeted to Continental employees in purchasing and related functions and to Continental’s direct suppliers. The purchasing training covers the regulatory background, explains Continental’s Responsible Value Chain Due Diligence System (RVCDDS) and our RVC Commitments (including our rejection of child labor and forced labor), and communicates Purchasing’s core processes in the RVCDDS. The supplier training explains Continental's management approach to ensure the fundamental respect for human and environmental rights in our supply chain, educates the suppliers about their role in our system, and explains how Continental's requirements for a responsible value chain, including the prohibition of child labor and forced labor, can be met when working with us. These new RVC training modules are expected to be offered to purchasers and suppliers in fiscal year 2024. Complaints procedure Continental’s existing group-wide complaints procedure, the Continental Integrity Hotline, has been supplemented within the framework of the legal requirements of the German Supply Chain Act and is available to Continental employees and external parties. The Continental Integrity Hotline is open, among other things, for complaints regarding potential violations of human rights and environmental rights and lists these topics. The Continental Integrity Hotline and Integrity Platform are both publicly available and can be accessed, for example, via Continental’s website. The legally required rules of procedure are also stored there. Reports can be made both in writing and by telephone. Availability by telephone is ensured through national and international telephone numbers. Both options are available 24/7. The instructions for using the Integrity Platform can be found under the keyword “Step-by-step reporting” and are available in multiple languages. Instructions for using the telephone hotline are also available in multiple languages.
Continental uses the services of EQS Group AG, one of the leading providers in the area of IT-supported reporting channels, for both complaint channels. This secure and anonymous whistleblowing system protects the whistleblower through an encrypted reporting channel. All informants can remain anonymous if they wish. Confidentiality is ensured within the framework of the legal provisions in the case of non-anonymous reporting. The persons entrusted with carrying out the complaint procedure are obliged to maintain confidentiality within the framework of the legal requirements and act independently. The effectiveness of the Continental Integrity Hotline and Integrity Platform with regard torelevant reports is assessed at least once a year as part of the review of the management system. Business partners, the respective employees, other stakeholders and rights holders in general are encouraged by the Business Partner Code of Conduct to report complaints via the Continental Integrity Hotline and Integrity Platform. The Business Partner Code of Conduct contains Continental 2023 UK Modern Slavery Statement 5 a link to the Continental Integrity Hotline and Integrity Platform and is publicly accessible online. Continental protects persons who provide information and does not tolerate any retaliatory measures that could be directed against these persons. The procedural steps are explained in the rules of procedure. Receipt of a complaint will be confirmed and a discussion of the matter with the whistleblower on matters relating to the RVC Commitments is planned. Feedback is sent no later than three months after receipt of the notification has been confirmed. In addition to the complaints procedure, further sources are used to investigate suspected cases of potential violations of protection rights and, if necessary, to implement preventative and corrective measures.
Reviews of effectiveness
As part of the annual system monitoring, the respective group sector responsible value chain officers review the appropriateness and effectiveness of the management system. This review is based, among other things, on the relevant assessments within the business areas as well as on the assessment of the individual elements of the system by the group sector responsible value chain officer. The management system is designed as a learning system that is developed on an ongoing basis. This also includes membership in relevant associations and platforms, participation in multi-stakeholder dialogue formats as well as initiatives and industry dialogues.
Documentation, reporting and dialogue
The implementation of the management system is internally documented, archived, communicated and coordinated with relevant decision-makers. External reporting on a responsible value chain and the implementation of our due diligence obligations is part of sustainability reporting and other reporting formats including this one. The effectiveness of measures regarding the ambition of 100% responsible value chain including no forced labor is assessed al ong our own operations as well as along our value chains: for example, with supplier self-assessments and the reach of training programs. These measures are part of the general continuous improvement of our sustainability management. This statement was approved by the governing body of each of the Reporting Entities listed in the Annex on June 25, 2024. This modern slavery statement is signed by a responsible member of each of the Reporting Entities listed in the Annex. Continental 2023 UK Modern Slavery Statement 6 Annex Continental AG subsidiaries subject to this reporting in the United Kingdom: United Kingdom:
› Application Solutions (Electronics and Vision) Ltd.
› Bandvulc Tyres Ltd.
› BV Environmental Ltd.
› BV F1rst Ltd.
› CAS UK Holding Ltd.
› Continental Automotive Holdings UK Ltd.
› Continental Automotive Trading UK Limited
› Continental Automotive UK Ltd.
› Continental Engineering Services Ltd.
› Continental Investment Ltd.,
› Continental UK Group Holdings Ltd.
› Continental Teves UK Ltd.
› Continental Tyre Group Ltd.
› Continental Tyre Investment UK Ltd.
› Continental Tyres Ltd.
› ContiTech United Kingdom Ltd.
› Dunlop Oil & Marine Ltd.
› Granite Investments Ltd.
›IAV U.K. Ltd.
› Kim Holdings Scotland Ltd.
› Libra Associates (Properties) Ltd.
› Merlett Plastics UK Ltd.
› Phoenix Oil & Marine Ltd.
› R & J Strang Tyre Services Ltd.
› Semperit (UK) Ltd.
› Specialised Belting Supplies Ltd.
› TecAlliance Limited
› Tyre Maintenance Ltd.
› Vanvulc Tyres Ltd.
› Viking Tyres (UK) Ltd.
› Zytek Automotive Ltd.
› Zytek Group Ltd.
