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Sustainability at Continental
September 2017

Ticker: CON
ADR-Ticker: CTTAY
Twitter: @Continental_IR
URL: http://www.continental-ir.com Equity and Debt Markets Relations (EDMR)
Topics

I Sustainability at Continental 3
II Environmental Responsibility 15
III Social Responsibility 35
IV Corporate Governance 49

2
I. Sustainability at Continental
Extract from our Understanding of Sustainability

Sustainable management and social responsibility are among our fundamental values.
They form the basis of our work, they guide our corporate strategy and they will take us
into the future.

We are convinced that acting sustainably will increase our capacity for innovation and
our future viability by opening our company to change and helping identify risks and
opportunities at an early stage.

We are working to create electrified, automated and connected mobility that contributes
to clean air and accident-free, comfortable driving.

Source: Sustainability Report 2016, page 4.

Sustainability at Continental
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I. Sustainability at Continental
Systematic Entrepreneurial Approach

Environment – Information –
For clean power For intelligent driving

Great people Value

culture creation

Regional
Technological sales
balance Value Creation balance
is Our Driving
Force
Top
Balanced
market
customer
position
portfolio
In the market
for the market
Safety –
Affordable Cars –
For safe mobility
Source: FactBook 2014.
For global mobility

Sustainability at Continental
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I. Sustainability at Continental
Our Policies and Guidelines
Principles of our Corporate Social Responsibility
Environmental Responsibility Social Responsibility Corporate Governance

ESH1 Policy – implements Code of Conduct – personal Corporate Governance

worldwide the responsibility ethics, conflicts of interest
for protecting the
environment OUR BASICS – the
guidelines, codex and basic
principles of our business
activities
Policy – to further a
responsible management of
the company focused on
value creation
Risk Report – overview of
our Risk Management

OUR BASICS Our corporate guidelines

1 Environment, Safety and Health.

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I. Sustainability at Continental
CSR Principles
To Continental, achieving sustainability means establishing an
acceptable balance between the economic requirements of the
Corporation and the valid expectations of its interest groups.

The Executive Board of the company approved the

principles of our Corporate Social Responsibility in August 2010.

› Human Rights › Labor relations

› Child labor › Health and safety
› Forced Labor › Environmental protection
› Social Responsibility › Bribery and corruption
› Equal opportunity/ Harassment › Suppliers

Source: https://www.continental-corporation.com/en/sustainability/general-information/code-of-conduct---download-list-63186

Sustainability at Continental
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I. Sustainability at Continental
Our BASICS
OUR BASICS are the basis for our success as a company.
They were introduced in 1989 and continuously updated.

OUR BASICS describe our Vision, our Mission and Values

as well as the behavior that grows out of these.

Our four values are the crucial element here:

Trust, Passion To Win, Freedom To Act and For One Another.

Some statements from OUR BASICS:

› “We are passionate about adding value to our customers

and thus to all stakeholders of Continental.”

› “We create value according to the principles of sustainability

to provide highly qualitative and innovative solutions.”

› “We respect the freedom of others, including future

generations, and act responsibly.”

› “We actively involve diverse backgrounds as a source

of inspiration, creativity and innovation.”

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I. Sustainability at Continental
Our Values

› Our four values form the basis of our joint actions.

› Together with our vision and mission,
our values stand for what drives us forward
and how we want to work together.

› None of the values takes precedence over any of

the others – all four are of equal importance for our
sustained success.

› We live out our values on a day-to-day basis,

bringing our own behaviour into line with them − all
employees are role models for their fellow
colleagues as well as for business partners,
customers and all other stakeholders.

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I. Sustainability at Continental
Materiality Matrix

For more information please go to the GRI Report 2016, page 10ff.
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I. Sustainability at Continental
Roadmap 2020
In 2015, we developed a consolidated sustainability program and set ourselves goals for
2020 in order to achieve measurable improvement in our four fields of action. Some of these
extend until 2025. These goals form our Roadmap 2020.

Fields of activity:

› Corporate governance and › Environment

corporate culture › Climate protection/air
› Compliance & Supply Chain › Waste
› Lobbying › Water
› Employees and society › Products
› Diversity & equal opportunities › Road and vehicle safety
› Occupational safety and health › Raw materials
› Attractiveness as an employer › Sustainable products
› Job training and continuing
education

For more information please go to the GRI Report 2016, page 12ff.
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I. Sustainability at Continental
Publications

Our commitment is reported within the

› Webpage Sustainability

› Sustainability Report 2016

The 2016 report applies to the GRI
(Global Reporting Initiative) standards in
accordance with the “Core” option.

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I. Sustainability at Continental
Essential Corporate Memberships
› Continental is a participant of the United Nations Global Compact.

› Continental is a member of the World Business Council for

Sustainable Development (WBCSD).

› Continental is a member of a work group of the Sustainable Natural

Rubber Initiative.

› Continental is a signatory company of the Luxembourg Declaration

on Workplace Health Promotion (WHP).

› Continental is a signatory company of the Charter of Diversity.

› Continental has endorsed the Women’s Empowerment Principles

since March 2015.

› Continental is a member of econsense - the Forum for Sustainable

Development of German Business e.V.

Source: www.globalcompact.de; www.wbcsd.org; www.snr-i.org ;www.charta-der-vielfalt.de (German Federal Government Commissioner for Migration, Refugees
and Integration); www.luxemburger-deklaration.de; www.weprinciples.org; www.econsense.de

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I. Sustainability at Continental
Ratings and Indices
Indices
› ECPI
› FTSE4good global and FTSE4good Europe Index
› Stoxx Global ESG Leaders & Stoxx Europe ESG Leaders
› Stoxx Global Reported Low Carbon, Euro Stoxx Low Carbon

Ratings
› CDP rated Continental in the climate category with ´Score B´, in the
water category with ´Score D´ and in the supply chain category
with ´Score C´.
› Oekom research rated Continental with ´Prime (C+)´.
› Sustainalytics rated Continental with 76 points in the overall score.
› MSCI rated Continental with ´BB´.

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Topics

I Sustainability at Continental 3
II Environmental Responsibility 15
III Social Responsibility 35
IV Corporate Governance 49

Sustainability at Continental
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II. Environmental Responsibility
Environmental Strategy

Our 2020 environmental strategy, which sets out clear objectives, key
figures, and measures, forms the framework for our environmental
management activities.

In 2016, we started updating our environmental strategy for the time up to

2030, aligning ourselves with the United Nations’ 17 sustainable
development goals (SDGs).

Our environmental strategy also involves working with our suppliers. We

demand and encourage comprehensive environmental management. In
the scope of our 2020 environmental strategy, the supply chain has the
same importance as strategic environmental projects for reducing
environmental impacts through our own action.

Source:https://www.continental-corporation.com/en/sustainability/environment/environmental-strategy-63142

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II. Environmental Responsibility
Status of Environmental Certification at Continental
Continental established an environmental management system throughout the corporation more than
30 years ago.

The environmental management system incorporates all levels of the value chain and the complete life
cycles of Continental products. As a result, our environmental responsibilities extend from
research and development, the purchasing of raw materials and components, logistics and production,
to the use and recycling of our products.

Our activities are geared toward continually optimizing the use of resources in relation to business
volume. We manufacture products that make an active contribution toward protecting the environment
and conserving resources throughout their entire duration of use as well as when they are ultimately
recycled.

In manufacturing, we are aiming for a 20% reduction in relation to the adjusted sales volume of energy
and water consumption, CO2 emissions and waste generation by 20201 (base year: 2013). At the
same time we are doing our best to increase the recycling rate of industrial waste by 2% each year.

Production Thereof ISO 14001

Locations certified
worldwide
210 189
1 Roadmap 2020
Source: Sustainability Report 2016, page 22.

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II. Environmental Responsibility
Status of Quality Certification at Continental
“The ISO 9000 family addresses “Quality management”.
This means what the organization does to fulfill:
ISO/TS 169491
› the customer's quality requirements, and specifies requirements using ISO 9001
for service and replacement
› applicable regulatory requirements, while aiming to production in the automobile industry

› enhance customer satisfaction, and

› achieve continual improvement of its performance in
pursuit of these objectives.”1

ISO/TS 16949 ISO 9001 or

ISO/TS 16949
Automotive Group:
100%
production sites
Rubber Group Tires:
100%
production plants
Rubber Group ContiTech:
100%
production sites

1 Source: ISO (International Organization of Standardization) www.iso.org/iso/home.html.

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II. Environmental Responsibility
Certification of Suppliers
1. Assesssments to determine status of the supplier.
2. Measures (joint projects, training sessions, and workshops
for example) are initiated to achieve our goals in supplier
development as necessary.

We monitor the environmentally friendly production of our

suppliers ww as part of internal supplier audits. Relevant
issues in the scope of these audits include compliance,
organization and the provision of resources for EH&S.

Starting in 2017, we will systematically evaluate our suppliers

based on sustainability criteria with the help of an independent
service provider. Our goal in doing so is to better fulfill our
responsibilities and ensure that we are able to comply with our
requirements within the worldwide supply chain.
Suppliers in the Thereof ISO 14001
certified
Automotive Group 85%
Rubber Group 73%
1 Roadmap 2020.
Source: Sustainability Report 2016, page 22.

Sustainability at Continental
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II. Environmental Responsibility
Corporate Environmental Key Performance Indicators

CO2 Emissions1
Water consumption1

2.073 2.252
1.974 1.932
1.642 1.671

662 771 715 738 794 754 613 487 480 442 394

2014 2015 2016 Ziel 2020 2014 2015 2016 Ziel 2020
Scope 1- Direct CO2 Emissionen (1000 metric tons)
Scope 2 - Indirect CO2-emissions from external sources (1000 metric tons)
10.000 m3 Specific water consumption (m3/€ million in adjusted sales)
Specific CO2 emissions (100kg/€ million in adujsted sales)

Energy consumption1
Waste production1
3.299
2.789 2.935 353
291 310

816 777 819 669 85 85 82 83 88 79 68 90

2 2
2014 2015 2016 Ziel 2020 2014 2015 2016 Ziel 2020

10.000 GJ Specific engery consumption (GJ/€ million in adjusted sales) Waste Generation (1000 metric tons)
Specific waste generation (100kg /€ million in adjusted sales).
Abfallverwertung (%)

1 Reviewed with limited assurance by an independent auditor.

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II. Environmental Responsibility
Corporate Environmental Key Performance Indicators

For the selected indirect CO2 emissions (Scope 3), we follow international standards such as the Corporate Value
Chain Accounting and Reporting Protocol of the World Resources Institute (WRI) and the World Business Council for
Sustainable Development (WBCSD).

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II. Environmental Responsibility
Sales of Products to Reduce CO2 Emissions

Sales 2016 (€ 40.5 bn)

Other Sales
Other Sales
~ 24%
''Green Tires''

Powertrain
~1/3 ~54% Components
Lightweight
Components
~22%

› Green tires: Tires optimized on rolling resistance (all tires labelled B and better)
› Lightweight components: Light weight brakes, road database (green maps), intelligent transportation
systems

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 II. Environmental Responsibility
Sustainable Product-Solutions for Automotive Industry by Continental

Full hybrid electric vehicle (FHEV) 20-25%

Compressed Natural Gas (CNG) 15-20%

Piezo common rail injection 10-20%

Mild hybrid electric vehicle (MHEV, 48V) 10-15%

Engine downsizing and turbocharger ~15%

Telematics, ACC, ADAS 5-12%

2 3
SCR systems/DDS 2-5%
4
Tires (rolling resistance, TPMS ) 2-5%
5 6
Energy management (POD /AES ) 1-5%

Connected energy management 3-4%

Double clutch transmission (DCT) 3%

5
Transmission (POD ) 1-2% min max

1Saving potential compared with gasoline direction injection Euro 5 / NEDC.

2 SCR = Selective Catalytic Reduction. Sustainability at Continental
3 DDS = DEKA injector for diesel dosing into exhaust gas. EDMR – Equity and Debt Markets Relations 22
4 TPMS = Tire Pressure Monitoring System.
5 POD = Power-On-Demand.
6 AES = Advanced Energy Supply.
II. Environmental Responsibility
How to Reach the European CO2 Target of 75g/km

[g CO2/km] Areas of Improvements:

130 Vehicle
127
Combustion/Transmission

120 Electrification
Eco Innovations / Super Credits

110

100
95

90

80
1
75

0
2013 2020 2025
1 Assumptions for CO2 target in the EU by 2025.

Sustainability at Continental
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II. Environmental Responsibility
Powertrain – Electrification Tailored to Fit

5
2 EMR3 with Integrated
EV – 90
50- 90kW
50 100%
100 Inverter

6
3 EPF 2.8 / EPF Gen. 4
PHEV 50- –
50 90
90kW 50--75%
50 75  Single and Dual
Inverter Technology

4 EPF 2.8 / EPF Gen. 4

HEV 20 – 40
20- 40kW 20- -30%
20 30  Single and Dual
Inverter Technology

Air cooled: < 10kW

48V 66- –
20kW
20 10
10--20%
20 Water cooled: >10kW

Advanced engine
12V <5
< 5kW <<10%
10 Stop/Start @ low cost

E-Motor CO2 Saving

A B C D E
Power Potential1

Vehicle Segments
Source: FactBook 2015.
1 Saving Potential Tank-to-Wheel in New European Driving Circle.
2 Electric Vehicle.
Sustainability at Continental
3 Plug-in-Hybrid Electric Vehicle.
EDMR – Equity and Debt Markets Relations 24
4 Hybrid Electric Vehicle.
5 Electric Machine Reducer.
6 Electronics Platform Fluid.
II. Environmental Responsibility
Powertrain – Electrification Tailored to Fit (48-Volt Eco Drive)

Source: FactBook 2016.

Sustainability at Continental
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 II. Environmental Responsibility
Interior – eHorizon

› Since mid of 2012 Trucks can be fittet with eHorizon

(Software and ECU)
› Over 250.000 units sold so far1
› The calculated cummulative CO2 reduction amounts
to over 23,250 kt1
› Fuel saving by eHorizon at about 3%

CO2 Reduction of Trucks with eHorizon

1 From July 2012 to July 2017. Sustainability at Continental

EDMR – Equity and Debt Markets Relations 26
II. Environmental Responsibility
Chassis & Safety – Stop the Crash

Sustainability at Continental
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 II. Environmental Responsibility
ContiTech – Sustainable Product-Solutions for Other Industries
› Technological expertise for customer-specific solutions made from rubber and plastic
› Sustainable management with long-sighted economic, ecological and social solutions
› Creating added value for our customers, human beings and the environment

Components for Health-friendly Lightweight Rubber tracks for Added value through Flexible insulation
engine downsizing & Interiors engineering more efficiency functional integration for energy saving
emissions reducing

Climate-friendly Climate-friendly Drive belts from Perfect mount for Printing technology Drive System for
conveyor belts printing blankets renewable resources wind power for printed eBikes and pedelecs
electronics/solar cells
Source: Fact Book 2016.

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II. Environmental Responsibility
Tires – ContiLifeCycle for Commercial Vehicle Tires

New Continental Tires Regrooving

Retreading
Hot | Cold
Casing Management

› Acknowledgements

German Federal Ministry Umweltbundesamt, KfW Bankengruppe, Hannover Impuls GmbH,

of Environment (BMU), Berlin Bonn Hannover
Berlin

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II. Environmental Responsibility
Tires – ContiLifeCycle for Commercial Vehicle Tires (2)
› General Information
Breathing life into tires a second and even a third time is
the basic idea behind the ContiLifeCycle approach (CLC).
What has worked with glass and metals for decades is now
also possible for premium truck tires, with the world’s first
fully integrated recycling and retreading plant in Hannover-
Stöcken.
The ContiLifeCycle Plant is a combined facility for hot and
cold retreading of truck tires and recycling rubber from
used tires.

› Coming round again for a cleaner world.

The Continental LifeCycle™ is a retreaded solid rubber
tire using only casings that pass strict quality checks.
The tread is completely replaced using materials identical
to those used in the production of new tires.
› Reduce the number of scrap tires
› Reduce the amount of raw materials used
› Energysaving
› Eco-friendly

Sustainability at Continental
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 II. Environmental Responsibility
Tires – ContiLifeCycle (3)
5%
10%
PLT4 CVT4
› End-of-life tires in the European Union1 8%
A total of approximately 3 million tons of used tires 42%
accumulate in the EU per year. The majority of these tires are
used for energy recovery in the cement industry and for 35%
material recycling (mainly downcycling). The rest is used for Civil Engineering Recycling
Energy Reuse/Export
civil engineering, landfill and is reused or exported. Landfill

› Recycling versus raw material2

The total amount of energy for producing one kilogram of tire Raw Material 82
compound is 82 megajoule, including other factors, such as
logistics. The amount of energy needed to recycle one Recycled Material 8,7
kilogram of used rubber is only 8.7 megajoule, or roughly 11%
of the energy needed for one kilogram of new compound. MJ per KG Material

Rubber saving2
The recycling plant’s annual material output results in the saving of 2,400 tons of rubber, which equals the annual
production of roughly 1.3 million rubber trees.
CO2 emissions3
By recycling 4,000 tons of used rubber in the recycling plant, an annual 8,000 tons of CO 2 emissions are saved. In order
to achieve this CO2 reduction by natural means, 625 hectares of pine forest (the size of 877 soccer fields) are needed.

1 Source: ETRMA, 2011 Sustainability at Continental

2 Source: Continental Reifen Deutschland EDMR – Equity and Debt Markets Relations 31
3 Source: United States Environmental Protection Agency (EPA), September 2012
4 PLT = Passenger and Light Truck Tires; CVT = Commercial Vehicle Tires
II. Environmental Responsibility
Tires – ContiLifeCycle (4)

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II. Environment Responsibility
Tires – Rubber from Dandelions
› This natural rubber used from dandelion roots has at least the same quality
and performance characteristics as conventional rubber from rubber trees.

› The plants can be cultivated in Northern and Western Europe on land that is unsuitable for food crops.
“Plantations beside the tire plants” in Central Europe makes both economic and ecological sense.

Benefits:
› Reduction in dependency on harvest situation in subtropical regions
› Lower requirements on the fertility of the soil
› Lower environmental impact due to reduced logistic requirements
› Optimal material properties enable first-class products in terms of technology

› The new dandelion rubber Taraxagum should enter production within the next five to ten years and
then flow step-by-step into our rubber products.

› Innovation and the Green Award both at the

international trade fair Automechanika 2016
› Joseph von Fraunhofer Prize 2015
› GreenTecAward 2014
Source: www.taraxagum.com

Sustainability at Continental
EDMR – Equity and Debt Markets Relations 33
Topics

I Sustainability at Continental 3
II Environmental Responsibility 15
III Social Responsibility 35
IV Corporate Governance 49

Sustainability at Continental
EDMR – Equity and Debt Markets Relations 34
III. Social Responsibility
Corporate Code of Conduct
Continental’s Code of Conduct describes the basic values and principles which are
binding for all Continental employees during their everyday work and when dealing
with colleagues, customers and other company stakeholders.

It regulates the following issues:

› Application
› Compliance with the Continental Code of Conduct
› Responsibilities for Our Action and Behaviour
› Compliance with Laws, Regulations, and Continental
Corporate Rules, Standards and Instructions
› No Discrimination or Harassment
› Fair Dealing
› Antitrust and Competition Law Compliance
› Anti-Corruption
› Conflicts of Interest
› Use of Continental’s Company Property
› Health, Safety, Environment and Product Integrity
› Data Protection and IT Security
› Confidential Information
› Export and Import Regulations
› Reporting of Violations of the Code of Conduct

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III. Social Responsibility | Responsible Employer
Structure of our Workforce

Employees by region in 2016

Other countries
4% 2016 2015
Germany
NAFTA 26% Total number of employees 220,137 207,899
19%
Temporary workers 13,975 14,205
Trainees in Germany 3,72% 3,78%
Female employees
27.0% 27.1%
of the global workforce
Average years of service
9.2 years 9.3 years
Asia to the company
19% Europe
(excluding Fluctuation 4.7% 4.9%
Germany)
32%

Source: Based on information in Annual Report Continental AG 2016 (p 63ff), and in GRI Report 2016 (p 28).

Sustainability at Continental
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III. Social Responsibility | Responsible Employer
Continental recognized as an Employer of Choice in many key markets

Rank 2016 Country Rank 2015

1 Romania 1
› Romania defended Rank 1 13 Germany 16
23 Hungary 18
› Significant improvement in many
markets 32 Slovakia 40
34 Portugal 21
› Volatility in Hungary & Portugal led to Czech
decrease 36 73
Republic
75 Malaysia2 77
73 Mexico 75
99 Finland 101

Source: Trendence Rankings; 2 Based on Universum Ranking.

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III. Social Responsibility | Responsible Employer
Equal Opportunity and Diversity

Workforce Diversity
The Continental team is made up of people with different
backgrounds, cultures, religions, genders and ages. The
diversity of different mindsets and points of views, skills and
experiences makes us strong.
To promote diversity within the company, we focus on two
key areas:

› A balanced mix of men and women

› Internationality

Promotion of Women
› Global Diversity Network to support women’s career development. In March 2017, 75 women
for all over Europe took part in the program. Expansion to Asia is planned.
› Diagnostic procedures to eliminate any prejudice towards women when making recruitment
decisions.
Senior Executives Executives
5.7% 13%
1 Roadmap 2020.

Sustainability at Continental
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III. Social Responsibility | Responsible Employer
Equal Opportunity – Demographics Program

A comprehensive concept designed to address the far-reaching changes as a result

of the expected demographic trend focuses on four topics:
› Workplace design
› Health maintenance for longer employment
› Targeted qualification measures
› Motivation for a longer working life

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III. Social Responsibility | Responsible Employer
Work Life Balance

Global Flexible Working Conditions at Continental1 (established in 2016)

› Parttime
› Flextime
› Working home from elsewhere
› Sabbaticals

Country-specific solutions for the 21 countries involved were developed and adapted to
regional requirements and legal conditions by the end of 2016. Implementation is
planned for 2017.

1 Roadmap 2020, achieved in 2016.

Source: Based on information in Sustainability Report 2016 (p 33ff).

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III. Social Responsibility | Responsible Employer
Health and Occupational Safety

The Continental ESH Management System

meets the international standard for
occupational safety management OHSAS
18001.
Hours lost due to accidents1
A total of 32 locations worldwide are 20

certified according to OHSAS 18001.

800
729
18
700
638
600
574 554
16

Company agreements on occupational 486 498 14

472
health and safety are concluded at the 500
12

company and/or site level in Germany. 400 10

8
300

4.6 4.2 6
200 3.6 3.3 3.0 3.1 2.9 4

100
2

Accident rate2
0 0

2010 2011 2012 2013 2014 2015 2016

1 Number of accident related hours lost worldwide per million hours worked.
2 Number of work related accidents worldwide with one or more days lost per million hours worked.

Sustainability at Continental
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III. Social Responsibility | Responsible Employer
Health and Occupational Safety

Absences due to sickness1

4.1

3.8 1.1
3.5 3.5 3.5 3.6

3.0 ww without Germany

2011 2012 2013 2014 2015 2016

Since our German locations have by far the highest absence rate, and since we had
already achieved our goal with a rate of 3.0% worldwide without Germany, measures are
currently focused on Germany.

To achieve long-lasting success in Germany, we implemented longterm tools and

processes to reduce absences, as well as short-term projects such as management
personnel training sessions.
1 Paid and unpaid absences as a percentage of contractual working hours.

Sustainability at Continental
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III. Social Responsibility | Responsible Employer
Job Training and Continuing Education

In 2016, the total expenditure for external training

sessions and seminars1 was around €72 million.

This corresponds to €350 per permanent

employee.

Continental developed an employee suggestion

program way back in 1930. Nowadays, thousands of
ideas are generated by employees and implemented within the corporation every year.

In July 2012, the Executive Board set out the aims of the Continental Idea Management (CIM)
program in a policy guideline.
Ideas Ideas Savings in
Submitted Implemented € millions
2016 369,000 339,000 150
2015 470,000 406,000 124
2014 500,000 440,000 160

1This does not include internal training sessions, such as IT seminars, project management, and compliance and anti-trust law training courses.

Sustainability at Continental
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III. Social Responsibility | Responsible Employer
Health and Occupational Safety

Status 2014 and 2015

Continental is gradually adapting their jobs in
production areas to make them age-neutral.
This means, for example, that 15% of working 2014: 32%
time can be spent sitting down.
All new workplaces are designed in line with
our internal process optimization system CBS
and the latest ergonomic standards. 2015: 42%
1
By 2020 half of all jobs at German production
locations are to be age-neutral. Global
documentation and improvement of the Target 2020
ergonomic quality of 80% of jobs worldwide.
The aim is to create healthy workplaces and
safety at work.

age-neutral
1 Roadmap 2020.

Sustainability at Continental
EDMR – Equity and Debt Markets Relations 44
III. Social Responsibility | Social Commitment
Social Commitment Society

A company that has a global presence also needs to take global responsibility. Continental
embraces its social responsibilities and respects the laws and cultures of each country. By
ensuring our profitability, we lay the foundations for safeguarding jobs in many regions of the
world. In addition, we want to create value for those who live and work near our locations as
well.

Continental takes on social responsibility primarily on a decentralized, local basis. This also
applies to the social commitment of the corporation and its locations. Our voluntary
commitments are concentrated in three areas: social improvement and road safety,
education and knowledge, and sport.

Exceptions for this include national projects and challenges or our committed response to
international disasters, where the corporation as a whole evidences its corporate social
responsibility.

Examples of our engagement/donations in 2015 - 2016

› € 50,000 to support aid workers in earthquake zone in Nepal
› € 70,000 for flood victims in Serbia
› US$ 110,000 to support aid workers in earthquake zones in Ecuador and Japan
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III. Social Responsibility | Social Commitment
Initiative ‘Afrika kommt’1

The aim of this initiative is to invite young

management personnel from Sub-Saharan Africa to
come to Germany for a year, support their
development and familiarize them with the country.

At the same time, the program paves the way for

lasting economic cooperation with German
companies in Africa.

Participants in the project find out about operational

structures at German companies, enhance their
specialist and management expertise and acquire
cultural knowledge and language skills.

This allows them to use their knowledge to establish

important contacts between Germany and Africa
and take on further management responsibilities in
their home country after completing the program.

1 Alongside 18 other companies and the German Society for International Cooperation
(GIZ), Continental is one of the founding members.

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III. Social Responsibility | Social Commitment
Education and Science
Continental invests extensively in training for young people and promotes the integration of young people
as well as the new generation of natural scientists .These are some examples of our engagement.

Young Professionals

Studies Global
Formular Ambassador Engineering
Student Teams Programm Excellence
VDI-Initiative
Secondary School Sachen machen1

Ideen Expo
Primary School
Projekt Busschule2 IGELab

Kindergarten

1 “Doing Something”
2 Taking the bus to school – safely !

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Topics

I Sustainability at Continental 3
II Environmental Responsibility 15
III Social Responsibility 35
IV Corporate Governance 49

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 IV. Corporate Governance
German Corporate Governance Code/ Background
First version published in 2002:

› The aim is to make Germany’s corporate governance rules

transparent for both national and international investors, thus
strengthening confidence in the management of German
corporations. The Code addresses all major criticisms – especially
from the international community – leveled against German corporate
governance.

› Observes the development of corporate governance in legislation and

practice and reviews the Code at least once a year for possible
adaptation.

Some topics from the latest update in February 2017:

› Executive and Supervisory Board shall ethically sound and

responsible behave (the “reputable businessperson” concept, Leitbild
des Ehrbaren Kaufmanns).

› Early disbursements of multiple-year, variable remuneration

components for the Executive Board should not be permitted.

› The Supervisory Board Chair should be available – within reasonable

limits – to discuss Supervisory Board-related issues with investors.

Source: http://www.dcgk.de.

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IV. Corporate Governance
German Corporate Governance Code
Continental deviates from one recommendations
of the Code1.
Declaration in accordance with Section 161 AktG
Continental has complied with and will comply with
the recommendations issued by the “Government
Commission on the German Corporate Governance
Code” (as amended on May 5, 2015) subject to the
following qualifications.
Deviations from recommendations
Section 5.4.1 para 2
To establish an age limit for the Supervisory
Board members.
Deviations from suggestions
Section 3.7. para 3
Extraordinary Shareholders’ Meeting in cases
of take over bits.

Section 2.3.3
To watch the entire Annual Shareholders’
Meeting via Internet.

1 As of December 2016. Update is prescribed by law once a year.

Source: https://www.continental-corporation.com/en/company/corporate-governance/principles-and-declarationsons; Annual Report 2016 p 20.

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IV. Corporate Governance
Two-Tier Board System – Corporate Bodies
Annual Shareholders’ Meeting (ASM)
Shareholders exercise their voting rights (1 share = 1 vote)

election / ratification reporting taking into account

ratification
resolutions of ASM
Supervisory Board
Chairman’s Committee Chairman of the Executive Board
& Mediation Committee Supervisory Board
Chairman of the
Executive Board
Approval of certain management decisions
of material importance to the company
Audit Committee Solely responsible for the management
20 members (in accordance with the of the company
Mitbestimmungsgesetz (German Co-determination
Act)):
Nomination Committee 10 elected by ASM 8 members (thereof 1 women)
10 elected by such employees of Continental AG
and its subsidiaries who are employed in Germany
appoints, supervises, advises

reporting

Corporate Governance is the responsibility of the company‘s corporate bodies. Continental AG‘s Corporate Governance
Principles are closely modeled on the recommendations and suggestions of the German Corporate Governance Code.
Source: Based on information in Annual Report Continental AG 2016 (pp 18-21).

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IV. Corporate Governance
Corporate Bodies – Executive Board
Dr. Elmar Degenhart Wolfgang Schäfer
Chairman of the Executive Board Chief Financial Officer
Born in 1959 Born in 1959
Appointed since 2009 until August 2019 Appointed since 2010 until December 2019

José A. Avila Dr. Ariane Reinhart

Powertrain Division Human Relations
Born in 1955 Born in 1969
Appointed since 2010 until December 2019 Appointed since 2014 until September 2022

Frank Jourdan Hans-Jürgen Duensing

Chassis & Safety Division ContiTech Division
Born in 1960 Born in 1958
Appointed since 2013 until September 2021 Appointed since 2015 until April 2023

Helmut Matschi Nikolai Setzer

Interior Division Tires Division
Born in 1963 Born in 1971
Appointed since 2009 until August 2022 Appointed since 2009 until August 2022

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IV. Corporate Governance
Corporate Bodies – Supervisory Board
Prof. Dr.-Ing. Wolfgang Reitzle
Chairman of the Supervisory Board of Continental AG
Chairman of the Supervisory Board of Linde AG​​
Born in 1949, nationality: German
Elected until 2019, first elected 2009
Board of directors’ seat: 5 (2 as chairman)
Dr. Gunter Dunkel
Chairman European Debt, Muzinich & Co
Born in 1953, nationality: Austrian
Elected until 2019, first elected 2009
Board of directors’ seat: None
Prof. Dr.-Ing. Peter Gutzmer
Deputy CEO and Chief Technology Officer Schaeffler AG
Born in 1953, nationality: German
Elected until 2019, first elected 2013
Board of directors’ seat: None
Prof. Dr. Klaus Mangold
Chairman of the Supervisory Board of Rothschild GmbH
Born in 1943, nationality: German
Elected until 2019, first elected 2009
Board of directors’ seat: 3 (1 as chairman)
Sabine Neuß
Chief Operating Officer Linde Material Handling GmbH
Born in 1968, nationality: German
Elected until 2019, first elected 2014
Board of directors’ seat: 3
Prof. Dr. Rolf Nonnenmacher
Self-employed financial Auditor
Born in 1954, nationality: German
Elected until 2019, first elected 2014
Board of directors’ seat: 3
Financial expert
Klaus Rosenfeld
Chief Executive Officer Schaeffler AG
Born in 1966, nationality: German
Elected until 2019, first elected 2009
Board of directors’ seat: 1
Financial expert
Georg F.W. Schaeffler
Chairman of the Supervisory Board of Schaeffler AG
Shareholder of INA-Holding Schaeffler GmbH & Co. KG
Born in 1964, nationality: German
Elected until 2019, first elected 2009
Board of directors’ seat: 1 (1 as chairman)
Maria-Elisabeth Schaeffler-Thumann
XX Years of experience
Shareholder of the INA-Holding Schaeffler GmbH & Co. KG and
Deputy Chairperson of the supervisory board of Schaeffler AG
Born in 1959, nationality: German
Elected until 2019, first elected 2009
Board of directors’ seat: 1 (1 as vice chairman)
Prof. KR Ing. Siegfried Wolf
Chairman of the board of management of Russian Machines OJSC
Born in 1957, nationality: Austrian
Elected until 2019, first elected 2010
Board of directors’ seat: 7 (3 as chairman)
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IV. Corporate Governance
Remuneration System1
Based on information in Annual Report Continental AG 2016 (pp 23-33)

Executive Board Supervisory Board

Base Fix Pay

Fixed Component
paid in 12 monthly installments

Variable Part2 - three elements: Variable Component2

› Individual target bonus determined by the Supervisory › Contingent upon net income per share for the past
Board based mainly on delta CVC3 & ROCE4. fiscal year and the two previous fiscal year
Maximum can be 150% of the agreed amount. 60% is
paid out immediately. 40% invested in virtual stocks
with a vesting period of three years.
Meeting- attendance fees
› Granted LTI (long-term incentive) bonus5 resolved on
Reimbursement of expenses
annual basis with a term of four years in each case.
› Special Bonus and/or Recognition Bonus6 may be
agreed for particular projects in individual cases.

D&O insurance policy D&O insurance policy

The deductible is in line with the requirements of the The deductible is in line with the recommendations of the
VorstAG7 since July 1, 2010. German Corporate Governance Code.
1 Effective January 2017.
2 No payment if certain minimum values are not achieved.
3 Continental Value Contribution (absolute amount of additional value created).
4 Return on capital employed.
5 Vary between 0% and 200% according to achievement of targets based on CVC and total shareholder return. Increases the long term components to 60%.
6 Plus performance bonus must not exceed 150% of the target bonus.
7 Gesetz zur Angemessenheit der Vorstandsvergütung (German Act on the Appropriate Remuneration of the Executive Board).

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IV. Corporate Governance
Compliance Management
Our compliance management system (CMS) is based on a comprehensive analysis of potential
compliance risks that can arise from structures and processes, from a specific market situation, or
in specific regions. In this regard, the results of the regular corporation-wide risk inventory are used, as
well as recognized external sources (e.g. Transparency International’s Corruption Perception Index).

We see significant corruption risks in the following areas:

› Facilitation payments
› Advisors/business intermediaries and slush funds
› Gratuities in business transactions that do not comply with internal requirements, especially with high
value hospitality
› Kickback scenarios in purchasing and sales
The Executive Board is fully committed to a zero tolerance policy with regard to corruption and antitrust.
Corruption-related issues are reviewed in every general audit. For this reason we do not
conduct any audits specifically related to this topic.

For the year under review, the audit “universe” of Continental AG encompassed 458 audit objects and
locations. We completed 53 principle reviews at our locations in relation to upholding human rights in the
scope of our audit program.

Our Compliance & Anti-Corruption Hotline gives employees and third parties outside the corporation the
opportunity to report violations of legal regulations, fundamental values and ethical standards.
Source: Sustainability Report 2016, page16.

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IV. Corporate Governance
Risk Reporting
Continental's overall risk situation is analyzed and
managed corporation-wide using the risk
management system.

› To ensure that risks are detected in time,

› their causes analyzed,
› and that risks are assessed and avoided or at
least minimized.

It regulates the identification, recording,

assessment, documentation, and reporting of risks
and is integrated into the company‘s strategy,
planning, and budgeting processes.

The risk management system complies fully with

the Corporate Governance Principles of the
Continental Corporation and with statutory
requirements and as prescribed by law is included
in the annual audit.
Responsibility for identifying and assessing key
risks is distributed among various levels and
organizational units within Continental AG.

Source: Annual Report Continental AG 2016 (pp 110-119).

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Disclaimer
› This presentation has been prepared by Continental Aktiengesellschaft and includes information available to us until
September 2017. It has not been independently verified. It does not constitute an offer, invitation or recommendation to
purchase or subscribe for any shares or other securities issued by Continental AG or any subsidiary and neither shall any
part of it form the basis of, or be relied upon in connection with, any contract or commitment concerning the purchase or
sale of such shares or other securities whatsoever.
› Neither Continental Aktiengesellschaft nor any of its affiliates, advisors or representatives shall have any liability
whatsoever (in negligence or otherwise) for any loss that may arise from any use of this presentation or its contents or
otherwise arising in connection with this presentation
› This presentation includes assumptions, estimates, forecasts and other forward-looking statements, including statements
about our beliefs and expectations regarding future developments as well as their effect on the results of Continental.
These statements are based on plans, estimates and projections as they are currently available to the management of
Continental. Therefore, these statements speak only as of the date they are made, and we undertake no obligation to
update publicly any of them in light of new information or future events. Furthermore, although the management is of the
opinion that these statements, and their underlying beliefs and expectations, are realistic or of the date they are made, no
guarantee can be given that the expected developments and effects will actually occur. Many factors may cause the
actual development to be materially different from the expectations expressed here. Such factors include, for example
and without limitation, changes in general economic and business conditions, fluctuations in currency exchange rates or
interest rates, the introduction of competing products, the lack of acceptance for new products or services and changes in
business strategy.
› All statements with regard to markets or market position(s) of Continental or any of its competitors are estimates of
Continental based on data available to Continental. Such data are neither comprehensive nor independently verified.
Consequently, the data used are not adequate for and the statements based on such data are not meant to be, an
accurate or proper definition of regional and/or product markets or market shares of Continental and any of the
participants in any market.
› Please note that differences may arise as a result of the use of rounded amounts and percentages.

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Contact
Equity and Debt Markets Relations
Vahrenwalder Str. 9
30165 Hanover
Germany
e-mail: ir@conti.de
Fax: +49 511 938 1080
www.continental-ir.com
Rolf Woller
Phone: +49 511 938 1068
e-mail: rolf.woller@conti.de
Jana Cross
Phone: +49 511 938 1163
e-mail: jana.cross@conti.de
Klaus Paesler
Phone: +49 511 938 1316
e-mail: klaus.paesler@conti.de
Marvin Kalberlah
Phone: +49 511 93814034
e-mail: marvin.kalberlah@conti.de
Sabine Reese
Phone: +49 511 938 1027
e-mail: sabine.reese@conti.de
Michael Saemann
Phone: +49 511 938 1307
e-mail: michael.saemann@conti.de
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