Corporate governance

We take responsibility

Sustainability strategy and organization

Aviation is on the threshold of fundamental change. As an engine manufacturer and key player in the sector, we want to actively drive these changes and help shape them. Climate action is a focus of our activities, especially in product development. Ultimately, our mission is to achieve to emissions-free flight. In addition, as a manufacturing company and employer of some 10,000 people, we aim to act responsibly in all key areas.


graphic

Emissions-free flight is our vision for a sustainable future for aviation. We want to develop the propulsion concepts that this will require. Alongside this technological focus, MTU also attaches great importance to social and ecological matters with regard to its activities.

Shouldering responsibility is simply part of our corporate identity. This sense of responsibility is reflected in every area of our business and extends to the entire value chain. A sustainability strategy and the corresponding management systems have been established throughout the Group. For over ten years, we have been driven by our vision of “We shape the future of aviation”—a vision that is more relevant now than ever. This future can only be a sustainable one—in harmony with ecological and social aspects.

Corporate responsibility (CR) at MTU: Our claim and fields of action

As a technology leader, we play a decisive role in making aviation sustainable and achieving emissions-free flight through innovative propulsion solutions. In doing so, we stand for responsible and environmentally friendly production, maintenance and procurement and offer a safe and attractive working environment.

CR fields of activity at MTU

graphic

We have set targets for each field of action: MTU’s Sustainability Program 2025+

UN Global Compact and Sustainable Development Goals

graphic graphic

The UN Global Compact is a unique sustainability initiative that we joined in 2011. As a signatory, we are committed to upholding the ten principles for respecting human rights, ensuring fair working conditions, protecting the environment and preventing corruption. We consider them important guidelines for responsible corporate governance. We strive to continuously improve the way in which we implement the principles. And through our Code of Conduct we also transfer them to the supply chain. This Sustainability Report also serves to outline progress made in accordance with the UNGC. Cross-references of the statements published here to the UNGC principles can be found in the GRI Index.

As a signatory of the UN Global Compact, we also want to contribute to the UN Agenda 2030. At the core of the agenda are 17 goals for sustainable development, or SDGs for short. These goals embrace the three dimensions of sustainability—economy, environment and society—in equal measure. We support the implementation of the SDGs and have identified eight that are particularly relevant for MTU:

Quality education
Gender equality
Decent work and economic growth
Industry, innovation and infrastructure
Responsible consumption and production
Climate action
Peace, justice and strong institutions
Partnerships for the goals

This was the result of a workshop in which the CR team considered all 17 SDGs and assessed their significance for MTU. In the process, the eight stated goals were prioritized. Our efforts for a sustainable future also have an impact on other SDGs; here we can make an indirect positive contribution, such as to SDG 10 on “Reduced inequalities.”

→ Learn more about our contribution to the SDGs

Standards and guidelines that we follow:

Paris Agreement

MTU is committed to the goal of limiting global warming preferably to 1.5 degrees Celsius by 2050, as set out in the Paris Agreement, and wants to play a part in paving the way for the decarbonization of the industry. We follow our technology roadmap to help us achieve our long-term goal of zero-emission aviation. Our roadmap helps us develop sustainable propulsion concepts that meet the high safety standards of aviation, greatly improving energy and emissions footprints and reducing aircraft noise. We firmly believe that taking a sustainable approach to our business will allow us to remain competitive and successful in the long term. Because stakeholder expectations are clear: the players in aviation, especially aircraft and engine manufacturers, must find clever answers and intelligent solutions to the current challenges. Passengers want to have a significantly lower impact on the environment and on the climate when they travel by air in the future. More on aligning our product stewardship with the Paris Agreement in the chapter Climate impact of aircraft engines

We also want to implement concepts for our own business activities, in production and repair at our plants, that reduce our carbon footprint and go as far as achieving climate neutrality. More on this under Emissions

 

Report structure and cross-references of sustainability topics to the SDGs

All the topics we have identified as relevant to our sustainability strategy are reflected in this report. They are cross-referenced to the four aspects into which this report is structured: corporate governance, product stewardship, value creation, and employees and society. The topics are selected and weighted in the course of a materiality analysis in which we defined a total of 24 strategic focus topics.

Corporate governance

Gender equality
Decent work and economic growth
Peace, justice and strong institutions

Material topics

Chapter in the report

Relevance for MTU along the value chain

 

 

Upstream activities (e.g. supply chain)

Activities within the MTU group

Downstream activities (e.g. flights operated by airlines)

Trade compliance

Compliance

significant

significant

significant

Anti-corruption

Compliance

significant

significant

significant

Human rights

Human rights

significant

significant

significant

IT security

Compliance

significant

significant

significant

Data protection

Compliance

significant

significant

significant

Product stewardship

Industry, innovation and infrastructure
Responsible consumption and production
Climate action
Partnerships for the goals

Material topics

Chapter in the report

Relevance for MTU along the value chain

 

 

Upstream activities (e.g. supply chain)

Activities within the MTU group

Downstream activities (e.g. flights operated by airlines)

Product quality and flight safety

Product quality and flight safety

significant

significant

significant

Innovation

Research & development

significant

significant

significant

Climate impact in operation

Climate impact of aircraft engines

 

significant

significant

Fuel effiency of products

Climate impact of aircraft engines

 

significant

significant

Health impact in operation

Health impact of aircraft engines

 

significant

significant

Value creation

Industry, innovation and infrastructure
Responsible consumption and production
Climate action
Peace, justice and strong institutions
Partnerships for the goals

Material topics

Chapter in the report

Relevance for MTU along the value chain

 

 

Upstream activities (e.g. supply chain)

Activities within the MTU group

Downstream activities (e.g. flights operated by airlines)

CO 2 emissions at production sites

Emissions

 

significant

 

Environmental management: water

Conservation of resources

 

significant

 

Environmental management: energy

Conservation of resources

 

significant

 

Noise abatement at production sites

Environmental management

 

significant

 

Environmental management: waste

Conservation of resources

 

significant

 

Responsible sourcing OEM business

Supplier management

significant

significant

significant

Responsible sourcing MRO business

Supplier management

significant

significant

significant

Employees and society

Quality education
Gender equality
Decent work and economic growth
Partnerships for the goals

Material topics

Chapter in the report

Relevance for MTU along the value chain

 

 

Upstream activities (e.g. supply chain)

Activities within the MTU group

Downstream activities (e.g. flights operated by airlines)

Employee development

Employee development

 

significant

significant

Occupational safety

Occupational health and safety

significant

significant

significant

Diversity and equality of opportunity

Diversity and inclusion

 

significant

 

Work-life balance

Collaboration and leadership

 

significant

 

Health management

Occupational health and safety

 

significant

 

Stakeholder dialog

Stakeholder dialog

 

significant

significant

Corporate citizenship

Corporate social responsibility

 

significant

 

How do we determine the material topics? Our analysis and weighting

We review our sustainability strategy annually as regards the latest changes and developments, refining our priorities in the process. This allows us to recognize opportunities and risks for our business in good time and to honor our claim of being a company that acts in a sustainable manner. In this materiality analysis, we evaluate the topics using defined criteria. These criteria correspond to each topic’s significance for our business activities and how these affect society and the environment. The criteria for the two aspects of business relevance and impact on third parties are incorporated into the evaluation according to a defined weighting scheme. The analysis covers all our key business areas and fully consolidated locations as well as information gathered from our dialogue with internal and external stakeholders, which helps us address societal expectations and requirements. → More information about Stakeholder dialogue We present the results for the respective financial year in our materiality matrix.

The materiality analysis takes place in a multi-stage process: It is managed by the central CR coordination team, with analysis of the key topics performed by the CR divisional coordinators within the departments. Next comes a workshop in which the interdisciplinary CR team discuss the evaluation of the topics and their position within the materiality matrix. Acting as the ultimate decision-making body for sustainability, the CR Board then signs off on the matrix and the risk assessment for the sustainability topics. The Executive Board and the Supervisory Board’s Audit Committee are involved in the materiality determination process.

Results for 2020: Climate action continues to grow in importance

The determination of materiality for the 2020 business year identified a total of 24 topics. Changes from the previous year mainly relate to sustainable product stewardship and climate action at our production sites. For one thing, aviation’s climate impact is not based on CO2 emissions alone, as contrails and cloud formation also have an impact on the climate; for another, more attention is being paid to the impact on air quality. A reevaluation of the topics for eco-efficient engines led to the following changes: CO2 emissions from products and other climate effects that are not attributable to CO2 emissions are combined under the heading Climate impact in product use. Fuel efficiency in the sense of environmentally friendly resource consumption is treated as a separate topic. Our approach to product development is described in detail in the chapter Climate impact of aircraft engines. Exhaust and noise emissions from aircraft engines are now gathered under the heading Health impact of product use. This topic’s evaluation reflects both aspects. Another significant change relates to climate action in our production and maintenance operations. CO2 emissions at the production sites have become significantly more relevant. The topic of diversity has also gained in importance due to recent developments, such as the Black Lives Matter movement in the United States or the planned legislation in Germany on having more women in prominent management positions.

Materiality matrix: Important sustainability topics and their weighting

graphic

Evaluation of topics for the financial year 2020 adopts the materiality concept in accordance with the legal implementation of CSR guidelines in Germany (CSR-RUG)

 

 

Organization and management of sustainability

We have integrated sustainability into organizational structures and established sustainability management throughout the MTU Group. A Corporate Responsibility (CR) Board is responsible for the implementation of CR management on behalf of the Executive Board. Through the CR management system, we monitor our sustainability strategy, performance and goals. The CR Board acts as the system’s decision-making authority, drawing its members from the tier-1 senior management team. It is responsible for driving the topic of sustainability forward at MTU. The CR Board meets regularly and as required. The CR Board is in charge of CR activities at MTU and implements relevant actions and initiatives. It reports regularly to the Executive and Supervisory Boards. If needed, representatives from further operational functions are invited to the meetings. A central CR coordination team manages Group-wide sustainability activities, overall CR management, communication with stakeholders about CR topics, and reporting on CR issues. It also works with an interdisciplinary CR team to continuously develop CR management.

CR Board mission statement

We assume responsibility for society and the environment in harmony with economic requirements.

→ We are actively expanding our Group-wide sustainability strategy.
→ Together with the Executive Board and other decision-makers, we are developing measurable targets
for the implementation of MTU’s sustainability strategy.
→ We promote interdisciplinary cooperation in CR projects within the company as well as in
CR networks beyond company boundaries.

At the heart of this interdisciplinary CR team are the CR divisional coordinators. They play an important part in operational implementation, working with experts in their disciplines to develop goals and measures, implement them, and take responsibility for monitoring their progress. In collaboration with the representatives in the business areas, the divisional coordinators are heavily involved in shaping the strategic focus of their respective CR goals and developing these goals over time. CR management officers at the sites support the CR divisional coordinators and the overall CR coordination team. The CR team also jointly conducts the annual materiality analysis for the sustainability topics. By implementing this organizational structure, we ensure that sustainability is embedded throughout the entire company for all relevant topics.

CR management at MTU

graphic

We have a CR management system in place to steer our sustainability strategy. The CR Board makes the decisions, a central CR coordination team manages Group-wide sustainability activities and overall CR management, and the CR divisional coordinators work to develop and implement goals and measures in their disciplines.

  

Risk management

We integrate sustainability risks into our internal control system, and map and evaluate them using defined processes. MTU has established a Group-wide integrated risk management and control system, based on the leading international COSO II ERM Framework standard, with which it manages risks and opportunities for its business. The system also takes into account non-financial risks. For the topic of compliance, MTU has established a separate risk assessment and a separate reporting line, which the Compliance Officer coordinates.

Building on these processes, the company conducts a quarterly risk survey about sustainability topics that are deemed of high materiality in the materiality analysis. In consultation with their upper management, the CR divisional coordinators conduct the survey according to standardized criteria and use a scale similar to the one for risk management. The results of the risk assessment are reviewed quarterly by the CR Board. If necessary, the Board passes the report on to the risk management team and, if appropriate, to the Executive Board.

The risk assessment for financial year 2020 identified no material risks in relation to the top issues of our CR strategy. Material risks are those that are very likely and have a severe negative impact.

For the current 2021 business year, we have revised the risk analysis to better assess the impact of our business activities on the environment and society. Crucial to this is a new risk register that can more accurately identify risk, look at defined time horizons and better capture the potential impact and probability of occurrence. In addition, we have extended sustainability risk management to all topics covered by the strategy in order to identify risks at an early stage.

 

Sustainability ratings and rankings

MTU’s performance with regard to non-financial indicators is also regularly assessed by capital-market analysts and independent experts. The company is currently listed in the following sustainability indexes and rankings:

ISS ESG

graphic

MTU Aero Engines is rated Prime Status (C+) in the overall rating.

www.oekom-research.com


CDP

graphic

In this global carbon accounting of the annual climate footprint, we received a score of B in 2020.

www.cdp.net


MSCI ESG Research

MTU Aero Engines is rated AA.

www.msci.com/esg-ratings

Outlook

We have started to further expand our Group-wide sustainability strategy. In doing so, we want to set ourselves more Group-wide goals for the medium to long term in order to further integrate sustainability into our processes and decisions. In addition, non-financial performance indicators will be included in the variable compensation for the Executive Board starting in 2021.


Services and tools


Photo: www.airbus.com

Corporate governance
Back to Top
Our goals 2025+
Feedback
X