Sustainability Report
2020

Sustainability Report 20201

Table of Contents¬ Disclosure and Reporting
About This Report2

3
3¬ CEO Statement

4¬ About Marelli

6¬ Supporting Our People, Customers, Suppliers and Communities Through the Pandemic

8¬ Marelli at a Glance

12¬ Materiality Assessment

14¬ Sustainability of Our Operations

15

Sustainability Management

15

Occupational Health and Safety

15

Sustainability Targets at Marelli

16

Toward a Low Carbon Society

16

Effective Use and Reuse of Resources

17

Water Conservation

17

Prevention of Pollution and Commitment to Biodiversity

18

Excellence in Monozukuri

18

Message From Executive Vice President, Chief Quality Officer (CQO) & Head of Manufacturing

19

Commitment to Quality

20¬ Advanced Mobility and Innovation

21

Technology Vision of Mobility Megatrends

21

Creating Sustainable Solutions With Our Customers

22

Advanced Mobility and Innovation Strategy

22Powering Progress Together (Partnership)26¬ Responsible Corporate Citizen

27

Responsible Business Management

27

Risk Management

29

Information Security and Protection of Data Privacy

29

Employer of Choice30

Employee Well-Being

31

Diversity and Inclusion

32

Sustainable Supply Chain

32¬ Social Contribution

34¬ Sustainability Data

36

MarelliDisclosure
and Reporting
About This Report
Reporting Period and Scope
This document is the second edition of the Marelli Sustainability Report (“this Report”). This Report covers the period from 1 January
2020 to 31 December 2020 (the “reporting period”) and encapsulates Marelli’s (“Marelli”, “We” or the “Company”) sustainability
achievements in the reporting period. In this Report, we present how Marelli managed key Environmental, Social and Governance(ESG) issues and our progress against material ESG issues and Sustainable Development Goals (SDGs).
Unless otherwise specified, the reporting scope of the environmental data includes Marelli sites with production activities(“manufacturing sites”) that are significant, according to materiality criteria (based on information on the number of employees),and social and Human Resources data that covers all operations in Marelli (“reporting scope”).

Looking at 2020 and Beyond
In 2020, COVID-19 presented an unprecedented situation that resulted in a significant impact on people and businesses around theworld. Despite this challenging time, Marelli is devoted to continue expanding our position as a leading global Tier 1 independent
automotive supplier. In 2020, we introduced the AMBITION 2024 strategy, strengthening our position as a global automotive supplier.
In the meantime, we will continue to anchor sustainability across Marelli and advance further toward a sustainable and resilientbusiness model.

Forward-Looking Statements
This report contains forward-looking statements. Please be aware that actual results may differ due to a variety of factors.

Publication Date: July 2021
For further information, contact us at
sustainability@marelli.com

Sustainability Report 20203

CEO Statement“2020 has been the ultimate demonstration of why it is importantto build a sustainable business. Every aspect of our lives have beenchallenged during the last year. For Marelli, the number one focus
has been to ensure the health and safety of employees, while alsopreserving business continuity and delivering for our customers
and communities.
Like every business, our adaptability was tested to the extreme and
I am immensely proud of and grateful to our 58,077 employees
around the world who demonstrated their ability to respond to anever-changing situation.”
Beda Bolzenius, President and CEO

4

MarelliResponding to COVID-19
Collaboration is one of Marelli’s key values and it has
never been more evident in Marelli this year. Teamsaround the world have pulled together virtually torespond to the crisis. Our Safe & Healthy Restart policy
introduced in May 2020 laid out global measuresand guidelines to be introduced across all of Marelli’s
facilities. By consistently applying these measures,alongside local government and health authority
recommendations, we were able to do our best to
protect our people and give them confidence in asafe return to work.
During April and May global vehicle manufacturing
came to a standstill. There were small exceptions, but
volumes were extremely low. Like many others in our
industry, we were able to secure funding from ourshareholder and our banks to see us through the crisis.
Access to this additional capital gave us the flexibility towithstand the extended market downturn and protect
the long-term financial health of the business, allowing
us to continue the execution of our strategy despite
the extended impact of COVID-19. Prior to securing
this funding we introduced multiple measures to react
to the shutdowns, which helped us to protect our
financial position and ensure business continuity.

AMBITION 2024
While 2020 was undoubtedly dominated by a single
issue, it was also a year in which Marelli made goodstrategic progress. The launch of our first mid-term
strategy as One Marelli, AMBITION 2024, outlines
our clear direction. And despite the difficult backdrop,
there has already been good progress made withineach of our six growth levers.
AMBITION 2024 focuses on the transformationof Marelli to create a business that is built aroundstrong customer relationships; focused on building
and maintaining market leading positions within
businesses where we have a right to win; has inplace strong partnerships to provide access toknowledge, skills, technologies and expertise in
new markets; the creation of clean, innovative andsustainable technologies; and invests in People
and skills to ensure Marelli remains a company
that our people are proud to work for.

Building Our Sustainability Roadmap

In 2020, as One Marelli, we set ourselves our first setof short-term environmental targets. These included
reductions in total CO2, and water, waste and energy
within our operations by 2024.
In 2021, we will go further and will announce further
targets towards achieving full operational carbon
neutrality within a defined period. This will be a huge
milestone for Marelli and enable us to meet the GHG
Protocol Corporate Standards within Scope 1 and 2.
In 2022, we aim to take this further again and will
make clear our roadmap towards full carbon neutrality
across full Scope 1, 2 and 3, enabling us to set a net
zero target in line with GHG Protocol.
Not only will this allow us to better support ourcustomers as they also transition towards a zerocarbon future, but it will help us build stronger andmore sustainable relationships with our customers
and our supply chain. Our industry has one of themost complicated supply chains of any industry.
COVID-19 and its continuing reverberations has
shown us that a complete rethink of how we assess
supply chain risk is needed. This is something thewhole industry is looking a and Marelli is no different.
Sustainability of our supply chains, both in terms of
the environmental impact as well as the predictability
and reliability of those suppliers, is a critical factor inprotecting our business and delivering for customers
during periods of great uncertainty.

Next Steps
While the vaccine is providing relief for many countries,
our employees and their families based in some partsof the world, are still very much battling this virus.
Already in 2021, we have provided support throughdonation and shipments of ventilators, oxygen
concentrators, reallocation of our corporate and social
responsibility funds towards on the ground COVID-19
recovery We will continue these efforts throughout
2021, supporting the COVID-19 recovery efforts.
In the coming year, I look forward to updating you
further on Marelli’s plans to achieve its net zero
emissions targets, which is an important step forward
for the new Marelli in doing our bit to tackle climatechange and protect the environment.
Beda Bolzenius
President and CEO

Underpinning these six growth levers is a commitment
to grow sustainability, taking seriously our
responsibility to the environment, the communities
we serve and how we govern ourselves.

Sustainability Report 20205

About Marelli

Throughout 2020, the Co-Creation team worked on actions toenhance the understanding of the VMVP content throughout
Marelli. The team initiated local deployment events surrounding
VMVP with the support of Co-Creation ambassadors who areappointed in each region. Feedback collated from the employee
engagement sessions were reported to the management
team and will be utilized to shape and develop the employee
experience. The VMVP activities in 2020 were performed in
two phases:

VISIONWhy we are here
We exist to innovate
and transform thefuture of mobility.

MISSION
What we offer
We work hand-in-hand withour customers to create asafer, greener and better
connected world.

­ Phase 1 (January 2020) started with deploying VMVPPowering
progress
together.

VALUES
Innovation, Diversity,
Collaboration,
Sustainability,
Excellence (Monozukuri)

posters, creation of narratives in 19 languages andvisuals on VMVP globally, both physically and digitally,
with the aim to raise awareness so that every employee
knows and understands VMVP.

PERSONALITY
Who we are
A progressive,
open-minded and truly
global partner who
inspires you to go further.

Vision, Mission, Values, and Personality
Since January 2020, there has been a continued focus toincrease the awareness and understanding of our Vision,
Mission, Values, and Personality (VMVP) inside Marelli, defining“where we want to go” and “what we want to be”. This has
been led by the Marelli Co-Creation team, a team created tobetter integrate and engage our teams around the world.
Marelli’s Vision reflects our shared ideals and aspirations,helps us set goals, and encourages all employees. With thisperspective, we expect to innovate and transform the futureof mobility by putting heart and soul into what we do andmaking the most of our passion for excellence throughinnovation for a safer, greener, and better-connected world.
The Mission represents “what we offer” and “where we want
to go.” We want to be an indispensable ally for our customers,
and, through our collaborative spirit, we will continuously
push the boundaries of technology.
Our shared values: Innovation, Diversity, Collaboration,
Sustainability, and Excellence (Monozukuri) are the foundationof Marelli’s strong culture. Only by reflecting on the behaviorof our Mission, Vision, and Values do we create our
Personality, our way to be one team and one Company. We
are diverse and multi-cultural but have a common goal: to
do our best and put all our efforts into what we do; we wantto create a harmonious workplace that inspires the best inpeople and that inspires us to go further. Our common VMVP
are aimed to govern every single action that we take each
day to further the development of Marelli as a global andcompetitive partner.

6

Marelli­ P hase 2 (August 2020 to December 2020) further enhanced
employee understanding of VMVP. Part of this included
launching a global video contest “What’s your value?”on VMVP. There were 223 teams around the globe thattook part in the contest with the aim to uncover real-lifescenarios of how Marelli team members are exemplifying
our core values in their professional lives. In addition
to the video contest, we held over 36 roundtables in
15 countries and received over 490 employee participants.
The roundtables were organized in a friendly atmospheremoderated by VMVP ambassadors, where employees were
free to express what they think, experience, and feel about
VMVP through open conversations.

Toward Our AMBITION 2024
Our aim is to build on our manufacturing excellence and technological innovation to compete and win in an increasingly complex
market environment. AMBITION 2024 defines Marelli’s vision and plan for the coming years. Through the AMBITION 2024 strategy,
our goal is to expand our position as a leading global Tier 1 automotive supplier and become a true global champion. We haveidentified four strategic priorities to achieve this goal:

Developing Next-Generation
Technologies andBest-in-Class Standardization
Building products for the mobilityof today and tomorrow

Prioritizing Sustainability
and Responsibility

Increased focus across theenvironmental, social, governanceand financial dimensions

Commitment to Monozukuri
Quality and excellence in all we doI ncreasing Efficiency and
Cost CompetitivenessPreconditions for successOur Six Levers for Success
Our strategy to achieve our goal is built around the six growth levers for success:1

Customer Knowledge
and Diversification

4

Transformation

Building and sustaining long-term
customer relationships, we are a strategic
partner to our customers and aim tosupport them throughout the entire
value creation process, from development
and engineering over product launches
to continuous, reliable product delivery.

Transformation is essential to make Marelli
fit for the future, set it up for profitable
growth in a highly complex industry andunlock the true value of the company.
Our ongoing transformation process has
already generated a great deal of newvalue, and we will continue to work hardon our excellence initiatives with regards
to processes, finance and in the regions,to ensure we are in the best position tocompete and succeed.

2Growth ThroughPartnerships

5

Innovation

Joining forces with other market leaders
is a core element of our growth strategy
from financial, geographical andtechnology perspective. We will continue
to work alongside our partners to bringto life our vision of using innovationand transformation to shape the futureof mobility.

Building on our strong capabilities andon cross-industry partnerships withtechnology leaders that will help us
leap-frog towards next generation
technologies, firmly focused around
CASE—Connected, Autonomous,
Shared, Electric mobility.

3

People andCulture6

Focused GrowthWithout our people we are nothing. As wework to create a company that our teammembers can feel proud of, our focus forthe coming years will be on diversifying
and developing our talent base, attracting
experts, and establishing new ways ofworking based on collaboration. Healthand safety will continue to be a core value;
it’s our utmost priority that our employees
return home from work healthy every day.

To position Marelli and its businesses for
future success, we aim to make smart
investment decisions that are targeted
toward what customers will need overthe next decades as well as right now.

Sustainability Report 20207

Supporting Our
People, Customers,
Suppliers, and Communities
Through the Pandemic

COVID-19 has undoubtedly been the worst health crisis of

The Company understands the importance of ongoinga generation. It has had far-reaching global consequences,
especially in terms of human loss. But COVID-19 has alsobrought our communities closer together and activatedunexpected resources and acts of human kindness. Our
people have shown resilience, creativity, and optimism incollaborating with colleagues and communities.

communication with employees to share news andinformation, spread commitment and hope, and provide
support and reassurance. Through this, we collectively
built a resilient attitude that represents what we call the“Marelli spirit”. In 2020, our CEO’s weekly message became
an important global update on the situation. Furthermore,
a series of specific messages were sent to all employees toshare advice on how to protect themselves and their families
from the virus, overcome stress, cope with misinformation,and manage work schedules with children at home.

Protecting the Health andWell-Being of Our Employees
The priority for Marelli is to ensure the health and safety of
employees. Consequently, the Marelli Environment Healthand Safety team was immediately committed to the creation
and roll out of the new health and safety standards aimed atbattling the spread of COVID-19, in line with the governments’and health authorities’ recommendations. We first definedsafety COVID-19 essential requirements and assured they
were properly managed at all global Marelli sites. Other
immediate measures include the introduction of smart
working where applicable, increased communications
around health, safety and hygiene, sanitization of ourplants and offices as well as travel restrictions.

8

Marelli

Crisis Management ThroughMarelli COVID-19 Committees
Marelli COVID-19 Committees were crucial in ensuring
the effective implementation of prevention measures.
Committees were established in February 2020 at a
central and regional/ country level. Committees werecross-functional, including Human Resources, Industrial
Relations, Industrial Security, Environmental, Health, andSafety, and Communications.

Central COVID-19 Committee
Implementation of measures toprotect employee health in alignment
with WHO recommendations

Establishment of global
COVID-19 procedures

Communication with employees
and relevant authorities

Regional/Country COVID-19 Committees
Monitor local
regulations and alignwith global procedures

Communicate
best practices

EMEA

Ensuring Business Continuity
and Meeting Customer Needs

Working Safely and Remotely
From Home: The “ICT” Response

The automotive industry has been hit hard by the COVID-19
crisis. In early 2020, due to the increasing severity of thesituation, many of our customers took the difficult decision
to suspend production. To protect our own workforce andrespond to the acceleration of government lockdowns, Marelli
also temporarily suspended production activities at the
majority of plants. Like the rest of the industry, the resulting
impact on volume and revenue was significant and in May
2020, the company secured additional capital in the form ofequity and debt from our shareholders and banks. This gave
the company greater long-term security and flexibility in theevent of an extended market downturn.

Marelli’s program of remote working allows—whereapplicable—authorized personnel to carry out theirduties away from the work site. This reduces theconcentration of personnel in common areas of plants
and ensures interpersonal safety distance is respected.

Several measures were taken to protect business continuity
and ensure we continued to meet customer requirements,
including daily global cross-functional meetings to monitor
cash generation, supply chain, customer shut-downs andrestarts, accounts receivable and owed, and government
workforce support. These measures, combined with thesupport of our shareholders and banks, allowed us towithstand the adverse and temporary impact of COVID-19.

The Information and Communication Technology functionof Marelli provided training to employees regarding remoteconnection and collaboration tools. Marelli increased thenumber of licenses for VPN (Virtual Private Network) softwareand invested in telepresence and communication technology,
including distributing laptops to certain employees to replace
fixed desktops. The Company developed a virtual desktop
infrastructure for remote workers to use personal PCs anddevices to connect safely to the Marelli network. These
measures enabled our people to collaborate and work
effectively even in difficult conditions. We are continuously
working to improve the experience of remote working,always improving the tools for communication andcollaboration and adding new functionalities.

Sustainability Report 20209Preparing for a Safe Restart
The restart began as soon as the situation allowed and by
mid-June almost 100% of our plants were operating again.
To ensure a safe restart, seven new global health and safety
COVID-19 procedures were introduced to guarantee on-site
control and prevention. These include detailed proceduresfor cleaning and disinfection, provision and disposal of
personal protective equipment (PPE) such as masks andglasses, availability of disinfectant dispensers at all premises,
measuring temperatures of staff, and requirements for social
distancing, in addition to local specific needs.
To prepare for the restart, Marelli continued discussions
with employee representatives. In Italy, Marelli signed anagreement with national Trade Union organizations to apply
best practice protective measures for employees to allow asafe return to productivity.

Posters and flyers were created to remind employees to follow
guidelines. Good practices from each Business Unit or region
were collected and shared as tools for further improvement.
Throughout the restart, we continued to stay closely alignedwith customers on a plant-by-plant basis to ensure thatreopening carefully followed their needs and specificrequirements. Close focus was given to inventory management
to ensure plants coordinated with the “center” and orders
were aligned to expected volumes. The company also closely
supported suppliers to ensure they were able to fulfill ourorders and deliver for our customers as we restarted.
Safe and Healthy Restart After COVID-19 Rules and Guidelines

Our booklet, “Safe and Healthy Restart after COVID-19—Rules
and Guidelines”, outlines global measures to ensure a safe
restart in line with recommendations of local governments
and health authorities.

Ensuring Safety of Marelli Employees
Marelli teams implemented initiatives to protect the safety of our people around the world.

v

Italy

Producing Masks to Keep Our People Safe
Face masks are crucial to keeping our people safe. However, in Europe, the Middle East, andAfrica, there was a shortage of masks. In response, our team in Tolmezzo, Italy began mass
production of protective face masks in July 2020. With a daily production of 40,000 surgicalmasks using made-in-Italy fabric, Tolmezzo supplied enough masks to cover the demand of
Marelli in the region.

China
Health & Safety Commitment at Marelli Plants
Marelli China implemented extensive on-site procedures for COVID-19 prevention
measures. We recognize our team at the Hubei Xiaogan Automotive Lighting plant inparticular for their outstanding commitment to safety and performance. This plant islocated in an area that has been severely affected by COVID-19. The plant adopted
new health and safety practices to keep workers safe at an early stage. In February
2020, research and development workers were supplied with computers to enable
working from home, and in March, the plant received permission to restart from thelocal government. Despite the critical situation in the region, not one single employee
in the Xiaogan plant was infected during the COVID-19 emergency. We commend ourteam in Hubei for executing excellence while protecting safety. The plant produced
54,000 lamps to guarantee customer delivery and set its best Labor Loss and Scrap
record during production restart.

10

MarelliSupporting Communities
Around the World During
the COVID-19 Crisis
Marelli supported local communities around the world during
the crisis to fulfil our responsibility as a good corporate citizen.

MexicoDonating Masks for Frontline Workers
The Marelli team in Juárez, Mexico, donated 60,000
bilayer face masks to the Regional General Hospital#66 of the Instituto Mexicano del Seguro Social (IMSS).

Slovakia
Japan
Utilizing Expertise for Communities
In Japan, a number of initiatives utilize our Monozukuri
expertise, facilities, equipment, and skills. Marelli worked with
Metran Co., Ltd. on mass production of easy-to-use, effective,
and affordable emergency ventilators at our Kodama Plant.
Our expertise in electronics and production capacity enabled
us to support this critical project. We produced and delivered
1,000 ventilators and 10,000 patient kits to Bolivia, Vietnam,
Mexico, Turkmenistan, and Japan.
Marelli also helped to meet the needs of personal protective
equipment (PPE) by manufacturing face shields at our Yoshimi
Plant using our manufacturing technology, productionlines, 3D printers, and other equipment. We produced
3,000 face shields and donated them to frontline healthcare
professionals in Japan. Moreover, a Marelli Japan employee
developed a hands-free disinfectant stand, and eight were
donated to local government offices.
In another initiative, Marelli created an infection prevention
product with a cat motif called NEKO no TE. It was designed
to help people avoid touching buttons, handles, or otheritems when out in public and works alongside the use of handsanitizer. We outsourced the production to our suppliers inorder to support some of their businesses that were affectedby COVID-19.

Supporting Health and Leisure During the Pandemic
MARELLI Run in the ZOO offered communities a chance forleisure time with the family during the pandemic. This eventnear Košice in Slovakia is now in its fourth year under thesubvention of Marelli, and is part of the Charity Run Tour
2020 organized by the non-profit organization Active. Out of
more than 400 runners, many were Marelli employees fromour two production plants in Kechnec Industrial Park. Partof the profits from the event were given to the ZOO, which
has been affected economically by the COVID-19 pandemic.

India
Contributing to COVID-19 Relief
Marelli India contributed to COVID-19 relief in Delhi, National
Capital Regions (NCR), Uttar Pradesh, Haryana and Assamby donating dry food rations for more than 15,000 families
through our NGO partners. Employees of Marelli India also
donated money, which was used to distribute COVID-19 kits
containing masks and sanitizers to Public Health personnel,
school teachers, any many more.

Sustainability Report 202011

Marelli at a Glance

RussiaUnited Kingdom

FranceSpain

Germany

PolandCzech
Republic
Italy

Slovakia
Romania

SerbiaTurkey

China
Korea

Japan

MoroccoMyanmar
India
Thailand

Malaysia

Environment

15%

13%

91%

46%

REDUCTION IN TOTAL
GHG EMISSIONS(LOCATION BASED)(VS 2019)1

OF WASTERECOVEREDOUT OF WASTE
GENERATED

Total GHG emissions have been greatly impacted by COVID-19.

1

12

Marelli

REDUCTION IN TOTAL
GHG EMISSIONS(MARKET BASED)(VS 2019)1

OF OUR ENERGY CONSUMPTIONCOMPLIANT TO ISO 50001:2018(TARGET: AS REQUIRED BY CUSTOMERS)99%

OF MARELLI SITESARE CERTIFIED
ISO 14001:2015(TARGET: 100%
BY 2021)

United States

MexicoBrazilArgentina

Social15

CUSTOMER QUALITY
AWARDS RECEIVED

47%

29%

1,266

170

OF MARELLI SITES ARE
CERTIFIED ISO 45001:2018(TARGET: 100% BY Q2 2023)

DECREASED IN THE
RATE OF TOTAL LOST
TIME INJURIESEMPLOYEES (VS 2019)

Corporate

58,077TOTAL EMPLOYEES

billion JPY

TOTAL REVENUE(10.4 BILLION EUR)
(121.8133 JPY/EUR)

PLANTS, R&D
CENTERS ANDAPPLICATIONCENTERS

Sustainability Report 202013

Materiality Assessment
We value views from both our internal and external stakeholders to identify sustainability topics of greatest concern. This allows
us to allocate the required resources to address the acknowledged risks and grasp further business opportunities. We firmly believein the importance of hearing from our stakeholders, on their views of the sustainability challenges that society faces today, and thepriorities that Marelli should take into account moving forward.
This materiality assessment also provided the necessary context to review the relative priority of various Environmental, Social andGovernance (ESG) and financial issues that stakeholders perceive to be important, and to review risks and opportunities, enabling Marelli
to be more agile in responding to challenges that lie ahead. Since there is no material change to our business operations, we adopted
the same materiality process presented in our 2019 Sustainability Report and continue to report on the same topics for 2020.

Materiality Assessment Process
Step 1: Identification of
Sustainability Topics

Step 2: Prioritization Basedon Stakeholder Engagement

Step 3: Validation
and Approval

We have conducted a comprehensive
review of sustainability issues andidentified 17 material topics adopted
from 2019 issues.

We have engaged with 6,500
employees and 19 major customers
to gain insights into stakeholders’priorities among the identified
material topics.

Our materiality diagram was validated
and approved by both the Board
Member in charge of Sustainability
and the CEO.

Materiality Diagram

Mobility and Inno
ced
va
an
tio
v
n
Ad

Our 17 material topics arepresented as an inter-related
diagram with priorities, our threesustainability strategic areas, andrelations to the United Nations
Sustainable Development Goals(SDGs). They are fully integrated
with our sustainability vision andmission, which we will elaboratein the subsequent chapters.
• Top Priority• Investment in New Technology• Powering Progress
Together (Partnership)• Water Conservation• High Priority• Climate Change• Effective Use and Reuse of Resources• Medium Priority• Excellence in Monozukurina• Information Security andProtection of Data Privacybili

MarelliOu• Employer of Choice

rO

pera

ti o n s

itiz e n

Sustainable Supply Chain •te C• Respecting Human Rightsora• Fair Labor Condition

Risk Management •

le

tai

14

of

• Diversity and Inclusion

Social Contribution •

Sus

ty

• Responsible Business Managementrp

Occupational Health and Safety •Co

Prevention of Pollution and Biodiversity •

R

esp

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si

b

Sustainability of
Our Operations
Sustainability Management
As one of the world’s leading independent suppliers of the automotive sector with 58,077 employees and 170 facilities and R&D
centers across 24 countries in Asia, the Americas, Europe, and Africa, our mission at Marelli is to transform the future of mobility tocreate a safer, greener, and better-connected world. Marelli aims to foster a culture of prevention, pursuing strategies of sustainable
development by continually improving its environmental, health and safety (EHS) for people and the environment throughout
operations, products and services. To achieve this, we have committed to be environmentally and socially responsible by reducing
our environmental impacts, ensuring the health and safety of our employees and contractors, and complying with all applicableregulatory requirements and international standards as stipulated in our EHS Policy.

Occupational Health and Safety
Marelli’s vision for occupational health and safety is “zero injuries.” We are committed to providing a healthy and safe working
environment for all of our employees and contractors through trainings and awareness-raising initiatives. In 2020, we provided
a total of 101,490 hours of training on health and safety for our employees.
Additionally, we have been collecting health and safety data in order to establish a safety baseline and target for our AMBITION 2024.
In line with the environmental, health, safety and energy (EHS&E) roadmap for the integration process defined in 2019 and the
AMBITION 2024, common Health and Safety (H&S) key performance indicators (KPIs) have been defined across Marelli and theEnvironment, Health & Safety data collection tool has been extended to all sites in 2020. The description of the common H&S
KPIs and the description of data collection methods have been reported in the specific Marelli corporate procedure for H&S KPIs
and data collection (approved by the Marelli Policy & Procedures Committee) in line with requirements of GRI standards. The
standardization process of setting common KPIs across sites allowed Marelli to set the Corporate H&S targets.
Moreover, the business intelligence tool analyzes EHS performance trends with interactive features, such as a comparison across sites
in a specific region. We have also introduced an Environmental Projects Monitoring (EPM) tool to monitor the environmental-related
performance and calculate the potential environmental gains for each project, site, business unit and region. During 2020 Marelli
finalized the transition process from BS OHSAS 18001:2007 to ISO 45011:2018 for all Marelli plants that were already BS OHSAS
18001: 2007 certified.

46%

OF OUR ENERGY CONSUMPTIONCOMPLIANT TO ISO 50001:2018

99%

OF OUR FACILITIESISO 14001:2015 CERTIFIED47%

OF OUR FACILITIESISO 45001:2018 CERTIFIED

Sustainability Report 202015

Sustainability Targets at Marelli
Reduction Targets According to AMBITION 2024
ENERGY (SPECIFICCONSUMPTION)1

WATER (SPECIFICWITHDRAWAL)1

-3.5%

2

-3.5%

2

CO2 (TOTALEMISSIONS)-12.5%

2024
Targets

3

WASTE (SPECIFIC
GENERATION)1

-7.0%

2

Normalized KPI based on hours of production1

2020 as baseline

22019 as baseline

3

Meeting International Standards
ISO 14001:2015

100%

OF FACILITIES4 BY 2021

ISO 50001:2018

as requiredby customers

ISO 45001:2018100%

OF FACILITIES4 BY Q2 2023

Facilities within the sustainability perimeter4

“We aim to excel in waste management and minimize
our wastes as far as practicable. Through our projects,
we improved the efficiency of material use by reusing
cooling emulsion and producing recycled raw materials
for ironworks, which contributed to a significant decreasein waste generation and offered financial savings to
our plant.”
Aleksandra Romanowska, EHS Inspector, Bielsko Biala Plant (Poland)

Toward a Low Carbon Society
The next 10 years have been defined as the climate decade, given their crucial importance for achieving the global climate objectives.
According to the International Panel on Climate Change (IPCC), global emissions need a 45% reduction by 2030 in order to avoid
dangerous impacts from climate change. Recently, the European Commission has launched the Green Deal, with the ambitious plan
to halve the greenhouse gas (GHG) emissions of Europe by 2030 and achieve climate neutral by 2050.

16

MarelliEnergy and Emissions
As a global automotive supplier, we strive to play a leadingrole in the transition toward a low-carbon society, both bycommitting to reducing and improving the efficiency of ourdirect and indirect energy consumption, and by continuing
to develop innovative products and processes that can
improve vehicle efficiency, ultimately reducing the overall
carbon footprint. In particular, we believe that through ourinvestments in the electrification of vehicles, we have aconcrete opportunity to contribute to and shape the futureof green mobility.
In 2020, we continued to implement various energy andCO2 emission reduction strategies at our production sites.
By identifying where we can reduce our usage and emissions
and applying the best energy-saving practices, we arecontinuously improving the performance of our operations.
For example, at our Gunma Plant in Japan, where 30% of
the total energy could be attributed to five furnace systems,
we implemented 13 energy-saving solutions that resulted
in a 19% decrease in total energy usage. As a target for 2021,
we will be integrating similar solutions and other novel
strategies at other production sites to further reduce ourenergy consumption as a Company and play our part in thetransition to a low-carbon, and eventually, no-carbon society.
In 2020, our total energy consumption was 4,969,022 GJ,
of which 79% resulted from indirect energy consumption,
mainly electricity consumption and district heating, and theremaining 21% was from direct energy consumption (mainly
natural gas and LPG consumption). During the year, 8% of
the overall energy consumption, 418,341 GJ, was derived
from renewable sources. The energy intensity (energy
consumption/revenue) is about 0.48 GJ per thousand Euroof revenue.

Climate Change Risks and Opportunities
Together with general risks and opportunities, we also
analyze relevant risks and opportunities related to climatechange to manage and prepare for them. The financial
impact on procurement, manufacturing, or supply chain
are estimated for prioritization.
The main risks identified relating to climate change are:­ R isks related to the changes in the regulatory frameworkof which the Company is subject to, potentially entailingcosts in the event of failure to comply; and­ T he physical risks posed by intense climatic phenomena
such as torrential rain and flooding that can cause theinterruption of plant operations or supply.

DISCLOSURE INSIGHT ACTION

In 2020, we achieved
a score of ‘B’ for both
CDP Climate Change
and Water Security.

Increasing attention to climate change issues by regulatory
lawmakers is an opportunity for our Company to be a leader
in reducing our global carbon footprint. Moving forward, aclear definition of our strategic mitigation and GHG offsets
will commit Marelli to make the most of all opportunities
from a technical and economical point of view.

Effective Use andReuse of Resources
During 2020, we continued our efforts to improve theefficiency of our use and reuse of valuable resources. By
implementing our waste reduction initiatives, we are engaging
our entire Company, from plants to corporate offices toindividual employees, to strive for greater sustainability every
day and commit to our effective use of resources initiative.
In 2020, our Automotive Lighting Juarez plant in Mexico
launched a smart project with the aim to reuse plastic pluriball(foam bags). More than 50 workstations have taken part incollecting and cleaning the foam bags before sending themback to the warehouse for their reuse. In addition to theeconomic benefits, these actions resulted in an annual
reduction of 120 tonnes of waste generation. Other projects
to reduce waste have been done in the Green Technology
Systems Santpedor site (in Spain) and in Ride Dynamics
Bielsko Biala site (in Poland). In collaboration with the supplierof raw material, the Santpedor site replaced cardboard
packaging with returnable ones, reducing waste generated
by 10 tonnes per year. Additionally, the Bielsko Biala site
started a project to reuse wooden packaging internally,
reducing waste generated by 57 tonnes per year.

Water Conservation
Marelli has a global presence in countries throughout Asia,
the Americas, Europe and Africa, including regions that areexperiencing water stress. Therefore, we have a strong desire
and commitment to conserve our water resources and reduce
our overall water consumption. Marelli has been actively
reusing and recycling water back into the production process.
Our plant in Tolmezzo recently initiated the “Greenbox
Project,” which will significantly reduce the annual water
usage at the plant by improving the water efficiency of thecooling system. Specifically, we have installed an osmosis
system in order to recover water lost to evaporation, reducing
the overall water withdrawal.
The total amount of water withdrawn in 2020 was 2,616,917 m3,
mainly provided by third party water utilities (about 72%). In
the same period, the water recycling rate was 92%. The water
recycling rate is calculated based on the ratio of total water
recycled and water reused over total water requirement, inwhich water requirement refers to the total sum of water
withdrawn, recycled, and reused.

Sustainability Report 202017

Prevention of Pollution
and Commitment
to Biodiversity
At Marelli, environmental and social responsibility is embeddedin every aspect of our operations, with controls implemented
to monitor our day-to-day performance. As a Company, we
strive to go beyond local legal and regulatory compliance. We
make every effort to meet the most stringent international
practices to avoid potential significant impacts on theenvironment and consequently, impacts on our communities.

Hazardous and Non-Hazardous Waste
Reducing our waste footprint is crucial not only for a greener
world, but also for a safer world for our communities. The
reduction of both hazardous and non-hazardous waste, forexample by diverting waste from landfills, is a goal that weare working toward by improving our daily operations. As
a part of “Zero Waste to Landfill” initiative, our automotive
lighting site in Pulaski pledged to achieve zero waste tolandfill starting from July 2020 by sending its previously
landfilled waste to an incinerator with an energy recovery
system, greatly reducing the waste to landfill.
This year, we produced a total of 80,366 tonnes of
non-hazardous and hazardous waste, of which 91%
was reused, recycled, composted, or recovered; 1% wasincinerated; 3.7% was sent to a landfill; and the remaining
was disposed of by other methods, such as treatment.

Biodiversity Commitment
Marelli is committed to the protection and restorationof regional biodiversity, one of our planet’s most valuable
resources. During 2020, we were active in various
biodiversity conservation and restoration projects, suchas our adopt-a-camellón initiative in Aguascalientes, Mexico.
Through this project, we were engaged in the restorationand protection of important tree species in a local camellón,
which is an agricultural ecosystem that is historically uniqueto the region.

Excellence in Monozukuri
Integration of Monozukuri

TOTAL WASTE GENERATED

80,366 tonnes
TREATMENT METHOD

91%

was reused,recycled, composted

In 2019, we introduced our new Marelli Quality Policy basedon the Japanese ideology of Monozukuri, a term that refers
to the excellence in product, process, and quality. Now, a year
after its inception, we are further integrating this policy into
our operations and are steadily improving toward our visionof “realize zero defects to satisfy customers.”
Our vision of Zero Defects is fully executed through
AMBITION 2024. Zero Defects includes not only productquality but also process design, product design, supply
chain control logistics management, maintenance, safety
and environment management. We aim to achieve Zero
Defects through structured actions guided by three pillars,
namely Standard Development, Standard Implementationand Standard Improvements.

Biodiversity Case Study

The Green Classroom Project in Germany
Marelli Automotive Lighting Brotterode (Germany) joined 60 other companies inAustria and Sweden, including banks, energy suppliers and schools, to lead an initiativein the reclamation and re-planting of endangered fruit trees in the region. Since its
inception in 2017, this project, led by the city of Brotterode, has contributed to regional
biodiversity by planting 20 different species of native fruit trees, establishing 200 m2 offlower strips for honeybees, and building the largest insect hotel in the region. In 2020,
the project incorporated education as a point of emphasis, and this education initiative
dubbed the “Green Classroom,” (Grünes Klassenzimmer) has provided educationalseminars focused on biology and conservation to schoolchildren of all grade levels.

18

MarelliMessage From Executive
Vice President
Dear stakeholders,
One of the aspects of 2020 which we should all be proudis our workers’ collective response to this pandemic.
Throughout the year, our priority was to protect the healthand safety of employees while preserving business continuity
and delivering for our customers. Given that at one point, avast majority of our plants were in shutdown and our people
on furlough, the focus had to be on how to ensure a healthyand safe restart of our operations. The immediate redesign by
the Central COVID Committee of our global health and safety
procedures made sure that all of our 170 locations around theworld were armed with consistent best practice information.
These were not guidelines, these were mandatory principles

Team around the world allocated time and resource tohelping and protecting people and communities. This
included the production of more than 1 million masks by
the teams in Italy; 3,000 face shields made by our employees
at the Yoshimi Plant, Japan; our work with the ventilator
company, Metran Co., Ltd. to produce 1,000 emergency
ventilators and 10,000 patient kits at the Kodama Plant, Japan;
Marelli Cabin Comfort plant in Barcelona, Spain produced face

to be applied in line with local rules and restrictions.

protectors using 3D technology to assist local hospitals andAlthough this pandemic was a real tough obstacle toGermany, used our selective laser sintering machine to

be faced, on the other side it was also an “accelerator”

produce adjustable mask frames that were used internallyin bringing out the true Marelli spirit.

and donated to the crisis response to help front

The “Marelli spirit” has been present in every single employee
this year, despite the very difficult challenges. It was, and stillis, the real factor that enabled us to limit the impact of thepandemic to the minimum possible extent. The community
spirit among employees has also been very important.

Introducing Marelli Manufacturing
System for Monozukuri Standardization
As a manufacturing business, our manufacturing system iscore to developing shared objectives and culture and helps
each of the 170 production bases globally to achieve thebest performance as one team. Before the integration eachcorporation had its own manufacturing system, enablingeach employee to make improvements to the manufacturinglevel, namely Calsonic Kansei Production System (CKPS) and
Magneti Marelli’s World Class Manufacturing (WCM).
Each of these systems had relative strengths, with CKPS
having a strong focus on basic conditions management andadherence to standards, and WCM is strongly focused on
structured loss reduction though prioritization and focusedkaizen (referred as continuous improvement). We are very
pleased to have launched our new integrated manufacturingsystem to support Marelli across the world. Marelli
Manufacturing System (MMS) brings together the bestof both of these systems. In 2020, we applied MMS to
the shop floor control and evaluation methodology.

essential service providers; Automotive Lighting in Reutlingen,line workers. All this, and much, much more.
Hiroyuki Ishikawa
Executive Vice President
Chief Quality Officer (CQO)& Head of Manufacturing

Looking forward, we are planning to expand the diagnosis
and improvement activity across countries and business units.
MMS builds on the strong manufacturing history of both
corporations by combining our strengths through one system
based on:­ Creating standards for all activities;­ Applying standards rigorously in daily activity, and;­ C onsistently seeking to improve our standards, throughopportunity identification and kaizen activity, and sharingof best practice.
Marelli strives to provide competitive products to satisfy
customers’ needs by raising the level of our manufacturing
operations and refining our core technologies. This involves
making permanent improvements in quality, cost and time
(QCT) while ensuring safety and reducing our impact on
the environment. Our mission is to perpetually follow thisactivity with a strong sense of purpose as if on an endlessjourney. Through these activities, we will develop our people,
expand our business and contribute to the industry and thewider community.

Sustainability Report 202019

Commitment to Quality
In order to share our Quality Vision with our colleagues
working in all regions and plants, we have developed
a “Quality Mindset” handbook and distributed it to all
employees. This handbook is available in 24 languages
and in 25 countries to facilitate communicationand implementation.

Production Efficiency andOperational Performance
In 2020, we implemented a cost-and-usage standardization
initiative, with an emphasis on innovative technology andsynergy across all regions and business units. Through these
initiatives, we reduced our indirect purchasing by approximately
100 million yen. To further improve operational performance, aPlan-Do-Check-Act (PDCA) system was incorporated to mitigate
the loss of scrap and labor costs, achieving a 20% reduction
over the planned target. Furthermore, we have evaluatedcost performance using cost per hour as a KPI to measure
the effectiveness of our productivity improvement activities.
In 2020, our cost per hour (CpH) has improved by 2.9%
compared to 2019, exceeding the assigned target of 1.74%.
We will continue to improve our productivity as we strive
to integrate our Quality Vision across all business units.

NUMBER OF CUSTOMERQUALITY AWARDS RECEIVED

15 awards

Q-Forum
As part of our quality awareness-raising activities, we holda “Q-Forum” once a year among our employees in Japan.
Through exhibits on the prevention of quality defectrecurrence, displays of actual defective products, presentationof kaizen examples, and supplier quality seminars, thisQ-Forum gives all participants the opportunity to reflect on
their own awareness and actions regarding quality and makenew discoveries. In this way, the participants can raise theirawareness of quality and the quality of their own actions,leading to improvements in quality.

QC Circle Championship
We conduct “QC Circle” (Quality Control Circle) activities allover the world to promote quality improvement activities.
This QC Circle Championship is held annually at our Head
Office in Saitama, but the 2020 event was cancelled due tothe impact of COVID-19. However, in order to present theprevious results and continue to promote friendly competition
among regions, we plan to film the activities of the firstand second place winners from the 2019 Japan Regional
Championship and share them with the entire Company.
This initiative was originally scheduled in 2020, but postponeddue to the pandemic.
Also in 2021, we will expand the scope of our activities to all
locations, even those where QC circle activities have not been
widely adopted. If the COVID-19 pandemic continues to affectus, we will remain focused on making our activities moreglobal by allowing remote participation.

Quality Recognized by Our Customers
Delivering high quality products and services to ourcustomers is always at the heart of our daily activities. Every
year, we receive numerous quality awards from customers
around the world. In 2020, we were given 15 quality awards
from 13 customers. This is the result of accumulating quality
step-by-step through manufacturing and is proof of ourcustomers’ trust. We will continue our activities to steadilybuild up quality, satisfy our customers, and earn ourcustomers’ trust.

“As we faced the challenges posed by the COVID-19
pandemic, various health and safety protocols were put
in place, including practicing social distancing measures.
During this time, we worked closely with our customers
to understand their production plans and to ensure
we were prepared to support them. This level of close
communication was key to ensuring that we could meetthe needs of our customers.”
Tracey Hoover, Director of Manufacturing for Thermal Solutions (United States)

20

MarelliAdvanced
Mobility andInnovation
Technology Vision of Mobility Megatrends
There is no doubt that the automotive industry is in the midst of a transition, which is guided by the mobility megatrends of C.A.S.E.:
Connected, Autonomous, Shared, and Electric. Nevertheless, in 2020 the COVID-19 pandemic impacted not just global automotive
sales volumes, but also changed the relative emphasis on the four megatrends. With governments across the globe reinforcing
their commitments to zero carbon targets and launching massive funding initiatives to help economies recover, the drive toward
the adoption of electric vehicles (EVs) accelerated. It is expected that sales of EVs will overtake those of non-electric vehicles ten
years earlier than predicted before the pandemic. Such an acceleration has had the effect of diverting investment away from thedevelopment of autonomous vehicles, where the technological challenges are harder and the market scenarios more uncertain.
But among these trends the forecast for ride-hailing shared (“S” of CASE) vehicles has ticked up as the pandemic triggered anaversion to mass transit. The “C” of CASE has seen a slowdown too as a delayed investment in 5G infrastructure reduces thepressure on carmakers to deploy connected car services.
The role of automotive suppliers will change in the years ahead and auto makers will look to source not just components, but
integrated systems. Marelli’s response to C.A.S.E. is founded on six distinct technology domains which underpin our systems
and products, and is strengthened by our strategic partnerships.

Our Six Technology Domains
Marelli offers innovative products within six technology domains that characterize major themes in the automotive arena.
Here are some examples within those domains:
Connected System

Autonomous Driving

On-Board Experience 2X Communication: Offer V2X (Vehicle to Anything)Vsolutions enabling cars to be constantly connected
to other devices as the 5G mobile telecoms rollout
more bandwidth.

Advanced Driver Assistance Systems (ADAS): Decrease
costs and provide turnkey solutions with integrated
sensing functions for fully autonomous vehicle control.

Tier 0.5 System Integration for Intelligent, ConnectedInteriors: Supply more connected products for the
future world of Electric and Autonomous vehicles wherecar interiors are expected to change significantly.

Software Portability and Cybersecurity: In this“Internet of Cars” where functionality is defined bysoftware, cybersecurity is an essential element of safety.

Enhanced Vehicle Motion Control Systems:
Motion control in an autonomous vehicle is complex
because occupants may be sleeping, reading, or usinga screen and be less aware of the surroundings.

Multi-User Solutions for Personal and Shared
Vehicles: As users and movements will be diverse,
provide flexible solutions to meet the needs of the future.

External Perception

Electrification

Lean Propulsion and Dynamics

360° Illumination and Sensing to “See and Be Seen”:
Meet the growing trend towards lateral illumination
whether for stylistic purposes or messaging.

Powertrain Systems: Produce an integrated andoptimized package that combines the powertrain witha full thermal management system for e-drive, battery,and cabin interior.

Support Original Equipment Manufacturers (OEMs)

Thermal Solutions for Total Energy Management:
Marelli’s diverse thermal systems portfolio provides
a new way to improve energy efficiency.

Light-Weight Materials for Energy Efficient System:
Help to reduce energy consumption and offset theweight of batteries. Select material designs that emit
less CO2 in production.

Intelligent, Efficient, and Tailored Solutions forLighting, Style, and Sound: Marelli excels in combining
advanced technologies with great styling and efficiency.

To Meet Emission Regulations: Emission regulations forInternal Combustion Engines (ICE) are becoming more
stringent, even as ICE vehicles are being phased out.

Sustainability Report 202021

Creating Sustainable Solutions With Our Customers
In addition to the industry-specific megatrends, the concerns about Environmental, Social & Governance (ESG) factors have intensified
during the COVID-19 pandemic. The shift is changing international norms, government policies, people’s behaviors and social
expectations. One of the eminent examples is the climate agenda where the international community is working to achieve the global
goal of the Paris Agreement. The global demand for a low carbon society is increasing and many governments have announced
carbon-related regulations in new car sales to be launched in the coming years.
Traffic safety remains a constant challenge for the auto industry. As vehicles become more connected, security measures are requiredin addition to unprecedented safety measures.

Advanced Mobility and Innovation Strategy
Our goal is to play a leading role in the development of advanced technology for the vehicles of tomorrow. We believe thatsustainability and social responsibility are important value creators. We help our customers meet the changing needs of theircustomers with three strategic directions in our advanced mobility and innovation path.

Shift to Electrification
Marelli has a wide range of proven electric powertrain technologies which are evolving to provide integrated systems for the future ofmobility. We have a wide range of products aimed to optimize electric powertrain technology, inverter, and thermal solutions, including
battery cooling plates and cooling systems for the power distribution unit. With its capabilities, Marelli plays a key role in the electrificationof mobility as a whole, helping to reduce CO2 emissions and promoting energy efficiency and the effective use of resources.

e-Axles
Better power management in lighter, smaller, and cost-effective solutions. Optimalcooling is crucial for minimizing energy usage and consequently reducing battery
size. Marelli’s specific thermal management expertise is playing a pivotal role in thedevelopment of dedicated and customized e-Axle solutions.

Inverter
The efficient conversion from DC power to three phase AC reduces energy loss andthe Smart Dynamic e-Motor control optimizes the utilization and reuse of energy.
The heat exchanger is designed to maximize performance and efficiency. Also, aninnovative solution for the direct cooling of ceramic substrates with liquid coolant
provides low mass and low thermal resistance.

“The new Cologne site is focused on the future. The existing
infrastructure and installation of state of the art and energy
efficient manufacturing facilities ensure a sustainableproduction of e-machines to reduce CO2 emissions
from road traffic. We are passionate about generating
added value for our customer through our cooperative
collaboration and our own high-quality standards.”
Stephan Ulner, Plant Director, Cologne Plant (Germany), Electric Powertrain

22

MarelliDC-DC Converter Evolution With SiC/GaN Technologies
The DC-DC converter generates low voltage (12V and 48V) power for the car’s
electrical systems from the high voltage hybrid power battery (900V). It contributes tothe reduction in size and weight of the battery system, on top of improving the electric
efficiency of the whole electric powertrain.

EV Thermal System (iTMS)
Though the number of electric vehicles are increasing, thermal energy is a large andexpensive problem: a proper battery cooling system is necessary to avoid thermal
runaways (fire), while a battery needs to be heated before charging in cold weather.
Electric powertrains (EPT) need a cooling system and the cabin needs to be climatized,
so Marelli has created what we call iTMS (innovative Thermal Management System) to
provide a proper balance between supply and demand of heat by connecting EPT,
cabin, and battery thermal loops.

Heat Energy Recovery System (HERS)
Marelli is preparing two systems that contribute to sustainable mobility by reducing
CO2 emissions using heat energy recovered from the exhaust gas. The first one

recovers heat energy through a heat exchanger thanks to Marelli’s EGR-coolingtechnology, enabling a 3–11% CO2 reduction and improving the cabin heating
performance. The other system, regardless of vehicle driving conditions, recovers
heat energy whenever the engine is running and converts that energy into electricity,
allowing a 4% CO2 emission reduction.

“HERS combines technology from the exhaust and heatexchangers to create a thermal energy management
system. Through this work I was able to consider how tobenefit both the environment and our customers. My
ambition is to continue developing innovative productsthat contribute to a low-carbon society.”
Shiro Nakajima, Advanced Development, Green Technology Systems

BurnerBurner promotes earlier catalyst warming-up to meet further stringent emission
reduction requirements, especially in a cold-start condition and when Hybrid-electricvehicles (HEVs) engine stops. HEVs require a higher frequency of engine stops tofurther reduce CO2 emissions; this also causes a deterioration of catalyst performance.
This system can achieve faster catalyst light-off by providing heat energy to an
upstream catalytic converter.

Full Digital Cluster
Marelli’s Full Digital Clusters (12.3’’ or 10.25’’) and larger display with mixed
digital/analog clusters in mass production has a significantly decreased numberof components and provided benefits of easy disassembly and higher recyclability.
From a driver’s point of view, information is shown in a readable and immediate
way by the Full Digital Cluster, making it easier to change driving habits by instantly
verifying consumption levels during the trip and reacting accordingly.

Sustainability Report 202023

Safety and Security
Marelli’s product development plan is strongly influenced by the introduction of the maximum levels of safety and security. This isreflected in our portfolios of hardware, software and architecture solutions. All our systems contribute to the maximization of safetylevels inside and outside the vehicle: from communication and visibility systems, to the optimization of vehicle dynamics, throughstate-of-the-art electronic components that underpin the latest ADAS solutions and HMI systems.
All our hardware- and software-defined systems, their related production systems and supply chain management are aligned to thelatest cybersecurity regulations and standards to protect our customers and end-users against vulnerabilities.
Cockpit Domain Controller
The Cockpit Domain Controller consolidates traditionally separate Electronic Control
Units (ECUs) into a single controller, and its architecture contributes to weight andspace efficiency in today’s automotive cockpit and copes with safety and security
by enabling separate safety-critical features from infotainment and entertainment
functions, keeping them always active. Cybersecurity is granted thanks to domain
segregation, where the access and the exchange of data are secured fromexternal entities.
h-Digi
Digital light of h-Digi® plays an important role for traffic safety with its immediate
response feature. A light carpet projected on the road help the driver pass safely
through very narrow lanes. With various informative graphics appearing just aheadof the car, the digital light draws the attention of the driver to a possibly criticalsituation on the road. A digital warning alert appears if the driver is about to drive
against the traffic direction, ignore a red traffic light or stop sign, or if the drivergets too close to another car. It is proven that the safety features of h-Digi® canhelp prevent collisions and severe accidents and is a PACE award winning module.
LiDAR
LiDAR (Light Detection and Ranging) sensors are critical enablers of advanced
autonomy. Sensing technology of LiDAR contributes to reinforcing ADAS and enabling
fully autonomous cars. LiDAR also supports driver assistance functions, such as traffic
jam chauffeur, highway pilot, and urban pilot to help avoid collisions. Depending on
the product’s configurations, LiDAR sensors can support various applications that
contribute significantly to traffic safety.
Telematic Box Module - Generation 2
The Telematic Box Modules (TBMs) provide the functionalities necessary to ensure
a secure connection. TBMs also support and enhance safety and security. There are
two types of calls; an ECall, where in the event of an accident the TBMs automaticallyinitiate an emergency call; and a BCall which enables drivers to manually call Road
Assistance when needed and automatically sends the vehicle’s location. Among theothers, TBM also grants the possibility to install other remote-controlled features suchas: the Stolen Vehicles Recovery, to support tracking of a stolen vehicle; the Security
Alert for remote vehicle monitoring; and the driver behavior monitoring, to monitor
and keep track of the car users’ behavior to enhance safety and security.

24

MarelliVDCM
VDCM is a multiple domain control module, for powertrain and vehicle dynamic control,and designed for multiple scalable architectures. The project has been developed
according to the ISO26262 functional safety guidelines. The system is able to prevent andmanage critical situations, coordinating in real time torque vectoring, the chassis attitude,
powertrain, braking, steering and ADAS. Hardware and software on some of the I/O areconceived to reach the highest grade of automotive safety integrity level (ASIL D) applied
to vehicle strategies. The microprocessor integrates the Hardware Security Module andthe software implements the strategies of cybersecurity agreed with OEM.
Full Active Suspensions
The full active suspension is an intelligent system, designed in partnership with ClearMotion,in which shock absorbers are replaced by four smart Activalves that are mounted onto actuator
bodies to enable high-bandwidth actuation. The system actively controls suspension motion
by pushing and pulling the wheels against uneven surfaces to adapt to driving conditions inreal-time. This minimizes car body movements providing improved comfort and increasedhandling performance by controlling heave, pitch, and roll. The system can be coupled with aroad-mapping software, RoadMotion, that gives vehicles a “sixth sense” by crowd-sourcing roadconditions and irregularities enabling predictive control to adapt to upcoming road events.
Smart actuators allow the integration of safety dedicated features such as the pre-collisionsystem, which prepares the car to receive an impact in the stiffer areas of the chassis.

Efficiency of Internal Combustion Engines
While the shift to electrification is the overarching trend in personal transport, the transition period will see increasingly strict regulations
on internal combustion engines (ICE) and the demand for increasingly higher efficiency. Marelli has a wide portfolio of products andtechnologies aimed to optimize fuel economy and reduce exhaust emissions for today’s ICE systems. These technologies are in highdemand to help our customers meet recent climate-related regulations and support them in the transition toward full electrification.
Injector With TJI Technology
Turbulent Jet Ignition technology allows optimization of the ignition system by
pre-combusting just 5% of fuel injected into a pre-chamber, which then directs the
pre-burnt gas into the main chamber where the remaining 95% is then ignited very
efficiently. The difference compared to a conventional direct injection is that the charge
is ignited no longer from a single point (created by the spark of the spark plug), butfrom multiple points, creating a faster and more homogeneous combustion. Furthermore,this process allows an increase in the compression ratio, compared to conventional
direct injection, due to the maximum combustion control and a higher knock resistance.
The improved combustion significantly reduces fuel consumption.
DCT TCU 11TDF
TCU (Transmission Control Unit) is the electronic unit that drives a generic automatictransmission. 11TDF is a TCU for a 6-Speed Dual Clutch Transmission, compliant with thelead-free regulation requirements and host high computation software that contains
complex SW features for fuel economy optimization and hardware solutions for cybersecurity.
TCU also reduces the CO2 emissions generated by the internal combustion engine.
ICE Efficiency Improvement by Thermal Management Products
While electrification is promoted in order to comply with stricter regulations, thedemand for higher ICE efficiency is also increasing. Marelli has developed an Exhaust
Gas Recirculation Cooler (EGR/C) and Water Charged Air Cooler (WCAC) to improve
ICE efficiency. These products guarantee high performance by adopting innovativetechnologies, such as a unique tube shape for WCAC and a specially designed fin (VG-Fin®)
for EGR/C. Marelli will continue to develop the heat exchanger to improve ICE efficiency.

Sustainability Report 202025

Powering Progress Together (Partnership)
Enhancing Strategic Partnerships
Marelli is promoting open innovation to efficiently develop in our technological domains. We build long-term partnerships withselect market leaders enabling us greater access to new and innovative technologies. Our strength is the global network we haveestablished, and we effectively use this network for technology scouting activities.

XenomatiX

Transphorm
Marelli and XenomatiX, supplierof true solid-state LiDAR,
partnered for a technical andcommercial development in
the autonomous driving field.

This partnership enables Marelli to offer modular LiDAR
system solutions for Advanced Driver Assistance Systems(ADAS) and autonomous driving applications to our customers
to meet future global automotive needs. Thanks to its
distinctive features, the true solid state and multi-beam LiDAR
modules developed by XenomatiX and Marelli’s Automotive
Lighting division will provide high reliability with different
fields of view and ranges, crucial to enabling a variety of ADAS
functions. Marelli will be able to embed object recognition andclassification capabilities, from AI and rule-based algorithms,
to support global customers on their journey toward making
mobility safer and more convenient.
XenomatiX LiDAR is known for its high resolution, reliability,and durability. In contrast to most other LiDAR offerings,
XenomatiX uses non-scanning LiDAR.

Marelli Motorsport, under direction from
Marelli’s Saitama, Japan headquarters,
is running a development project basedon the Transphorm 900V 50mΩ Gallium
Nitride (GaN) transistor.
The GaN device will replace the 1200V Silicon Carbide (SiC)
transistors which are currently used in a 2 kW insulated
DC/DC converter on endurance race cars, where efficiency
is key to success.
The Transphorm device is an enabler which permits theintroduction of GaN technology in this application where
it has an advantage over more traditional 800V converters.
GaN technology has benefits in efficiency and size reduction
thanks to the lower switching losses, while the higher
switching rates allow the designer to reduce the size andmass of magnetic components (inductors).
Compared to similar GaN devices, the Transphorm transistor issignificantly easier to introduce into a circuit designed for moreestablished technologies as it requires a simpler driver stage.

Making Every Effort To Be the Best Partner for Our Customers
Marelli is always thrilled to be the best partner for our customers by offering solutions to meet their expectations. We are proud tobe part of the major car launches in 2020 around the globe to drive sustainability through our technologies that contribute to safety,
security, and the shift toward electrification.

26

Mercedes-Benz S-Class

Fiat New 500

GAC AION’s AION V

The new S-Class, top-of-the-line
Mercedes-Benz AG, mounted with ourstate-of-the-art PACE award winningh-Digi® lighting solution; a technologythat enables the instant responsefeature of projected informativegraphics onto the road in frontof the vehicle in critical situations.

Fiat New 500 is the first fully electric
car made in Italy by Fiat. Marelli’s
equipment in the new model includes
the supply of both full-LED headlights
and rear lights, HD infotainment
display, and structural componentsof the suspension system of thevehicle, which is specifically designed
to provide the best performanceand comfort while minimizing
energy consumption.

GAC AION’s AION V features thefirst Marelli Cockpit Domain
Controller application with hypervisor
technology, which provides a unified
experience that enhances driver
comfort and access to information.
The safety-critical features are
separated from the other domains
in order to be on at all times and thesegregation of the domains ensures
the security of the car network.

MarelliResponsible
Corporate Citizen
Responsible Business
Management
Being accountable and responsible for our actions is thebasis of how Marelli runs its business. We strive to upholdour values and raise our standards through focusing on thecreation of long-term value for all of our stakeholders, fromour employees to communities at large.
As a global Company with a multinational workforce andoperational presence, we are committed to providing aworkplace and culture for people that support diversity,
inclusion, and sustainability. We strive to create an environment
where people can thrive, as this will be key to attract andretain a more diverse and multi-generational workforce andto share talent effectively across our integrated business.
The management of the relationships with our suppliers
is a strategic factor for our business operations. The
sustainable supply chain management process promotes
the long-standing partnership and trust of our suppliers.
In the meantime, we recognize the change in lifestyles
and consumer choices that can lead them to make moresustainable decisions. We therefore actively consider topartner with suppliers who promote an efficient use of natural
resources throughout the lifecycle of products and services.

Code of Conduct
The Marelli Code of Conduct represents our core values:
Innovation, Diversity, Collaboration, Sustainability andExcellence. It is an essential part of our commitment tooperating as an ethical and responsible global citizen and forms
a major part of how we work and our global corporate culture.

It applies to all our stakeholders and offers a clear frameworkaround how we interact with customers, suppliers,
communities, governments, and employees. Global policies
and procedures have been implemented to supplement theCode of Conduct, including the Marelli Ethics and Compliance
Charter and Conflicts of Interest; Export, Import, andAntiboycott Laws; and Antitrust and Insider Trading Policies.
Any violation to the content of the Code and policies andprocedures may be subject to disciplinary actions.
The Code of Conduct aims to ensure that all members ofMarelli’s workforce act with the highest level of integrity,
comply with applicable laws and build a better future for our
Company and the communities where we run our business.
In 2020, we launched our first global employee training on
the Code of Conduct throughout Marelli. Training sessions on
the Code of Conduct were provided to all Marelli employees,
along with a train the trainers session for investigators, a
Manga style training material in Japanese and English andshort two-minute YouTube videos on compliance topics. The
Code of Conduct, available in 19 languages, reflects who weare as a Company and was established to be consistent with
the Universal Declaration of Human Rights (UDHR) and theInternational Labor Organization (ILO). One of our employeesthat made an exceptional contribution, far above their
responsibilities, received an award called “Above and Beyond
Chief Compliance Officer.”Moreover, we have established an Integrity Hotline, whichallows employees and third parties to report possible
violations of the Code, Company policies or procedures,or laws and regulations. The channel is available 24/7
and in 19 local languages. This system fosters a cultureof integrity and ethical decision-making, in alignment
with our Company values.

Sustainability Report 202027

Corporate Governance Structure
We are working to enhance our corporate governance to create a prosperous society through our business activities andto build excellent relationships with all our stakeholders. In 2020, we stipulated and rolled out the “Marelli Code of Conduct,”“Compliance Charter,” and other rules among the Marelli worldwide.
Since the integration of Marelli in May 2019, Marelli Holdings Co., Ltd. (MH) has been positioned as the Company’s highest
decision-making body. The Marelli Delegation of Authority (DOA) is a common decision-making tool that enhances theCompany’s transparent and efficient decision-making process. The auditors of MH and Marelli Corporation (MJ) work together
to audit all business related to the Company’s management. In addition, outside auditors conduct accounting audits where
they verify the appropriateness and legal compliance of accounts and internal controls from an independent standpoint.

Shareholders’ Meeting
Appointment/Dismissal

Board of Directors

Statutory Auditors
Audit

Information Sharing/Agenda
Determination of Appointment
and Dismissal​
Audit

Appointment/Supervisory/Dismissal

Internal Audit Office

Accounting Audit

CEO

Report/Instruction

Chair
Internal Control and Risk
Management Committee

Group Executive
Committee (GEC)

Audit

Accounting Auditors

Business Unit Executive
Committee (BEC)

Response

Executive Organization
Instruction

Ethics and Compliance
Committee

Internal Control
Business

Instruction

Respecting Human Rights
Marelli Code of Conduct stipulates that we will not tolerate any activity that creates an intimidating, discriminatory, demeaning,or offensive working environment. The Marelli Integrity Hotline allows anyone to report any misconduct related to discriminatory
behaviors, treating the topics with the highest degree of confidentiality and no tolerance on retaliation. Additionally, 100% of oursignificant investment agreements and contracts included clauses on human rights or underwent screening for human rights. A
company-wide Human Rights Policy will be introduced in 2021, in order to promote the respect of human rights, a non-negotiable
fundamental value of Marelli culture and corporate strategy, and to manage and reduce the potential risks of violations thereof.

Engaging With Employee Organizations
We recognize and respect the right of our employees to be represented by trade unions or other representatives establishedin accordance with applicable local legislation. Marelli always seeks a constructive approach and relationship when engaging
with these representatives. As of December 31, 2020, about 70%1 of Marelli employees were covered by collective bargaining
agreements. Of the employees not covered by such agreements, more than 95% benefit from conditions that are better thanthe minimum requirements by law.
Survey conducted on 96.3% of Marelli’s global headcount.

128

MarelliMarelli qualifies as a European community-scale group ofundertakings and is therefore subject to regulations designed
to ensure employees the right to information and consultation
through the establishment of a European Works Council(EWC). At the end of 2019, we started the process ofnegotiations for the establishment of the Special Negotiating
Body (SNB) in compliance with the Italian law transposing the
Directive 2009/38/EC and the development is still ongoing.

Risk Management
Risk management creates and improves performance,encourages innovation, and supports the achievement ofbusiness and environmental, social, and governance (ESG)
objectives. As part of the integration process in 2019, Marelli
started to develop a Risk Management System that also
integrates ESG risk management into business activities andfunctions, and is supported by governance structures andstakeholder collaboration. Going forward, we will continually
optimize roles and responsibilities, create a unified Enterprise
Risk Management platform, and translate the risks identified
into meaningful sustainability activities. As is common inorganizations like ours, the main ESG risk exposure is in
our supply chain, where suppliers can potentially breachstandards relating to environmental, human rights, andcorruption. To manage this risk, Marelli implements
questionnaires during supplier selection and performs
regular supplier audits.
To avoid and minimize the risk of adverse events related tofire and natural hazards, Marelli has been implementing aloss prevention and business impact analysis as a foundationof our Business Continuity, adopting National Fire Protection
Association standards (NFPA) applied to our worldwide
locations, and strengthening our footprint resiliency.

Risk Management on Product Safety
Managing Product Risk and preserving the safety of people
in the surrounding environment is of high importancefor Marelli. The Legal and Compliance Technical Complianceand Regulatory Group manages and minimizes productliability risk and conducts technical investigations into
compliance cases. This avoids potential violations of legal
obligations related to homologation, product regulatory andsafety requirements, and prevents any kind of internal fraud.
Marelli’s Risk Management approach includes evaluation andmanagement of customer functional safety requirements
as well as relevant laws, regulations, and international
standards for product development. Marelli products aredeveloped using with the Functional Safety International
Standard, Functional Safety Procedure, and Functional
Safety Assessment procedure, in accordance with ISO 26262.
Customer requirements are evaluated in order to mitigate riskof personal injury from hazards relating to malfunctioning ofelectrical and/or electronic products. These evaluations takeplace during weekly Safety Policy Committee meetings among
Business Units with Technical Compliance & Regulatory andLegal Operations.

Information Security andProtection of Data Privacy
In 2020, Marelli’s Information Security Team formed a new setof integrated Information Security policies. The new policies
present Marelli’s standard for data classification and handlingof confidential data, as well as a set of Information Security
rules which must be followed by every Marelli employee andthird party.
In addition, our global Information Security function started
to deploy global security processes. The processes included
information security incident management through theestablishment of our central Security Operation Center, whichguarantees 24-hour security monitoring, incident detection
and response based on Splunk technology. Through datalogs and capability, and the deployment of a new Endpoint
Detection and Response solution across all Marelli systems
globally, the central Security Operation Center has anincreased visibility over Marelli technical infrastructure and isable to promptly detect and respond to cybersecurity threats.

Cybersecurity on Products
At Marelli, strengthening the cybersecurity of our products
is managed by the Working Group for Product Cybersecurity,
jointly led by the Technical Compliance & Regulatory andInformation & Communication Technology departments,
with representatives of relevant Business Units, the Legal
Department, Purchasing, Sales and Software Supplier
Quality Assurance.
The goal of the Working Group is to develop a Global
Marelli Policy for Product Cybersecurity by the end of 2021,
which will be compliant with global standards, particularly
the United Nations Economic Commission for Europe(UNECE) Regulation R155 on Cybersecurity and ISO 21434:
Road vehicles— Cybersecurity engineering. We are further
protecting data privacy by revising existing processes such as
supplier management, change management and document
management, to meet cybersecurity requirements under
UNECE R155 and ISO 21434. The Working Group ensures
our cybersecurity approach is aligned with the latest industry
best practice, including emerging regulations out of the
UNECE, such as best practice for vehicle cybersecurity.
Marelli is proud to report that there were zero reported
complaints concerning breaches of customer privacy in 2020.
We believe this is a reflection of each Marelli employee’s
individual commitment to cybersecurity, which wasstrengthened through education on security-related topics
via the intranet portal, as well as training sessions including
security lectures and cyber-attack response trainings.

Sustainability Report 202029

Employer of Choice­ C ultivate an inclusive culture that values teamwork,
collaboration and transparency

In 2020, the journey toward the consolidation and integrationof two companies and cultures has been a paramount priority
for Marelli. Each employee is critical to the success of therecently merged company, and the focus for 2020 was onstrengthening the integration and standardization of humancapital management. We are striving to unite employees
across all regions under the vision of One Marelli. In eachregion and country, within the HR department, employee
welfare initiatives are managed and monitored according
to the local legislation and the Company’s vision.
Our Goals­ C reate an agile environment that embraces change
and fosters innovation­ E nsure a high performing organization where teammembers with diverse backgrounds can turn theirfull potential into outstanding performances­ F oster a world-class customer experience and a senseof social responsibility to build sustainable success in
our team members and business
Career Initiatives
In order to inspire our employees to strive for more, we
promoted career initiatives such as our “Believe it, Achieve it”
program in North America and a “Leader’s Workshop”
in Brazil, both of which provided our future leaders withthe experience and training they need to thrive in our
ever-evolving company. More details about these initiatives:­ “ Believe It, Achieve It”: Provided training for employees
who are transitioning to a new role to prevent untrainedinternal movements, prevent turnover, and ensure aneffective placement. In 2020, 31 employees completed
this program, with an 85% pass rate.
­ “ Leader’s Workshop”: Provided training on how to leadeffectively during unprecedented and challenging times.

Employee Training and Development
In June 2020, Marelli approved a new common and consistent Global Training Framework to further integrate employee training anddevelopment. The framework resulted from the extensive benchmarking efforts carried out throughout 2019 by the HR Team, to map
and identify all the existing training best practices and policies already in place. The new Marelli Global Training Framework establishedthe Training Pillars that build the foundation for fostering talent and personal development.
Technical trainings that are plant-specific and role-specific are a fundamental part of our training worldwide to ensure that ouremployees continue to hone their existing skills and learn new ones. In 2020, we rolled out various training programs, such asa technical knowledge transmission program in Slovakia and manager training for plant managers in Japan.

30

Management
Development

TalentDevelopment

Behavioral
and Soft Skills

To support managers in
gaining and training the rightskills to improve performanceand achieve excellence

To boost the growthof those talents who are
the most suitable to feed
our succession pipeline

To enhance our people’s ability
to align with our behaviors andto reach their goals, improving
their overall performance

Functional andTechnical Specialties

Business Skills andCross Cultural Training

Diversityand Inclusion

To develop a specific skill
or knowledge related to a
job family or function

To help our employees
perform well in their roleand communicate effectively
with international audiences

To create a working
environment and culture where
all our employees can thrive
and perform at their best

MarelliEmployee Well-Being
The year 2020 has been marked by the pandemic outbreak, which has forced most companies to adapt quickly to the new challenges,
finding new solutions and working arrangements. Several of our well-being initiatives and programs for our employees in 2020 havetherefore been developed specifically to address the new way of working and mental health issues caused indirectly by the pandemic.

Italy and U.K.

Romania

Around 600 managers were involved in specific training for
managers in a remote working environment to provide skills
and nurture attitudes and behaviors, which allow them towork efficiently when remote but also to establish a trusting
relationship with colleagues and peers.

Marelli Romania issued a weekly newsletter with topics
related to stress, anxiety, well-being and working remotely.
Due to a positive response, they also started organizing
online workshops on Stress Management in collaboration
with The Happy Minds Association.

China

BrazilThe Employee Brisk Walking Contest encouraged everyone toexercise together and the 9,800,000 accumulated steps wereconverted into a 9,800 yuan donation to a public welfare fund.

Employees were enrolled in a wellness project focusing
on emotional health: Sipatma. Through the Movimentese
Project, Marelli Brazil promoted interaction, relaxation,and the creation of entertaining moments with colleagues.

Poland and Malaysia
Marelli Poland and Malaysia have made in-house doctors
available for plant workers and recently launched a Healthand Safety competition.

Employee Benefits andRetention Initiatives

Italy

Benefits provide employees with a value that goes beyond
their salary incentives and can make up a meaningful partof the total remuneration package. For this reason, Marelli
offers a competitive range of benefits, normally available
to all full-time employees and, in many countries, also topart-time or temporary employees. Benefits differ according
to an individual’s level and country of employment anddepend on local policy.
Marelli supports equitable choices for maternity, paternity
and adoption benefits, which encourage employees tobalance parental responsibilities with their careers. Whilelabor law requirements may vary from country to country,
parental leaves are provided to all employees to the extent
required to comply with local regulations.

Employees can convert a portion of their pre-tax earnings intoa spending account that can be used for a wide range of health,wellness, well-being, and education benefits and services.

Thailand
Employees are entitled to health insurance, life insurance,
and financial support for disability.

United States
We provide healthcare coverage, life insurance,
a dental plan for employees and eligible dependents,
voluntary and company sponsored disability coverage,
and a 401k Retirement plan.

Marelli Employees Worldwide Eligible for Benefits

78%
46%

Supplementary Company-Provided
Retirement Plans
Health Plans

73%

Life
Insurance

71%

Financial
Support for
Disability/Invalidity

48%

Employee
Cafeteria or
Lunch Vouchers

73%
45%

30%
Childcare
Services

Wellnessand Nutrition
Programs

Gym and Fitness
Services

Sustainability Report 202031

Diversity and Inclusion

Sustainable Supply Chain

Marelli is committed to providing a workplace that is freeof discrimination and harassment. As our Code of Conduct
states we do not tolerate any activity that creates anintimidating, discriminatory, demeaning, or offensive working
environment. As a global Company, we recognize that our

We adopt a strategic approach to the management of ourentire supply chain, from small local companies to large
multinational organizations, establishing relationshipsthat go beyond commercial transactions. Our vision for asustainable supply chain is based on fostering long-lasting

members come from a variety of different backgrounds.
We celebrate this diverse workforce and make sure thateveryone has an equal opportunity to succeed. We value
diversity in all facets of an individual that makes themunique—be it gender, religion, culture, socio-economic
status, physical abilities, or other forms of diversity.

and mutually satisfying collaborations with qualified partners
that share our principles.

During 2020, we launched our first global employee
e-learning course about our Code of Conduct, offeredin 19 languages to ensure that all of our employees
understand and share our vision for diversity and inclusion.
We are working to embed diversity and inclusivity into ourcompany culture through our recruitment process. In China,
we have modified our recruitment ads and job postings toremove any barriers to inclusivity, such as questions addressing
age, gender, religion, nationality, and marital status

Celebrating Diversity
Celebrating diversity in many forms:­ I nternational Women’s Day celebrated in Russia,
Slovakia, Brazil, China, and other countries­ “ The Art of Rangoli Kolam”: Competition held in
November and during the Chinese New Year in
Malaysia to celebrate religious and cultural diversity­ Joint initiative with Associação de Pais e Amigos de
Excepcionais: Program in Brazil to assist people withintellectual or other disabilities to enter the job market­ P rison Resocialization Project: Joint initiative with theMinas Gerais Prison Administration Secretariat in Brazil
to fight social stigma against incarcerated people andassist incarcerated people in re-entering the job market­ “ 16 Days of Activism against Gender-based Violence”:
Awareness event of gender-based violence held in Poland

32

MarelliOur Values in Purchasing­ INNOVATION: proactive initiative to challenge/anticipate
the market expectations­ PEOPLE: inspire the organization with responsibility
and courage to change and develop a world-classinternational team
­ DIVERSITY AS A STRENGTH: enhance diversity andoperate as one team
­ SUSTAINABILITY: business ethics, working conditions,human rights, and environmental attention­ ADDED VALUE CREATION: speed and resolution on
acting to meet or exceed customer requirements­ QUALITY: only excellence is essential to success—what
we do, we do well
­ STRATEGY: actions are taken with a long term perspective­ INTEGRITY: be reliable, be transparent, be compliantSupply Chain Management

Distribution of Direct Materials Purchased by Commodity

10% 1%In the latter half of 2020, we established a dedicated team tobuild our new supplier sustainability program. The aim of thisprogram, extended to both direct and indirect suppliers, is topursue the behavior of responsible and sustainable businessduring the supplier selection and spread the awareness andcommitment of suppliers with the sustainability topics. The
updated Sustainability Program will also include an integrated
supplier sustainability questionnaire, which will be sharedwith our suppliers through a dedicated platform. We expect
to roll out this program during 2021, which will enable us
to secure a more sustainable supply chain. We also reinforce
our supplier risk evaluation methodology with the adoptionof a new platform that makes sure our supply chain
is constantly monitored.

17%
72%

Electrical

Metallic

ChemicalAluminum“We use customer information as the base for all ourplans and activities. The new Marelli Manufacturing
System (MMS) and relevant standards will improve
our supply chain globally. Due to changing needs
during the COVID-19 pandemic, we have improved
our customer visibility, ensuring the organization
can react quickly to changing needs.”
Joanne Munro, Senior Director, Material Demand & Standards, Global Manufacturing & Operations

Procurement Budget Spent on Suppliers by Regions1

Europe32.5%

Japan and Korea

16.0%

India

1.6%

North America

20.8%

South America
China

20.4%

3.8%

ASEAN

4.9%
1

The percentage was calculated by the total direct procurement budget spent on suppliers excluding services.

Sustainability Report 2020

33

JAPAN

Marelli Scholarships for Studying Abroad
The Marelli Next-Generation Scholarship, launched in 2017, is a scholarship program that supports thedevelopment of global talents who will contribute to future innovation and mobility through their overseas
study experience. It provides two types of scholarship to students: a scholarship for a short-term overseas
study experience (at least one month) and a scholarship for overseas study with the aim of obtaining an
academic degree. In May 2020, our chairperson Hiroshi Moriya was awarded a Letter of Appreciation by
Saitama Prefecture and the Saitama International Association for Marelli’s contributions.

Social Contribution
Social Initiatives and Activities
Marelli is fully committed to active involvement and development with local communities where our employees live and work. In our
strategic implementation of social contribution activities, we constantly consider how we can leverage our capabilities and expertise

Local Community Activities
Our team in Lewisburg was active in various community events for holidays year-round. During Halloween, we
set up a booth for the trunk-or-treat event and celebrated the holiday by giving out gifts and candy to the local
children. Marelli employees came together during the winter to bring some holiday cheer to the communityand give holiday gifts to seniors at a local nursing home.

34

Marelli

UNITED STATES

to contribute to the development of both the community and automotive industry.

INDIA

Reconstruction of School Block
Marelli India donated funds for the reconstruction of a government school building that wasdestroyed by landslides and heavy snow fall in Jaachh, Himachal Pradesh. This was supervised
and implemented by our NGO partner SARD (Society for All Round Development).

Skill and Overall Development
Our support continued for the acid attack survivors through our NGO partner—Make Love
Not Scars. This included Social and Economic rehabilitation of acid attack victims at its centerin Delhi, providing healthcare and legal support to the survivors. More than 60 survivors have

Supporting Children With
Neuromusculoskeletal Diseases
In December 2020, our employees in Aguascalientes, Mexico
gathered donations of shoes, clothes, and toys for a total of
44 children through a local organization, Casa Hogar Villa dela Asunción. Marelli also contributed 2,500 USD to Centro deRehabilitación Infantil Teletón, a local association that provides

MEXICO

benefitted through this initiative who were taught candle and soap making skills.

rehabilitation services to children and adolescents with

THAILANDneuromusculoskeletal diseases.

National Children’s Day
In January 2020, Marelli Thailand celebrated National Children’s Day with the local community by providing fun
activities for the children on the day of the celebration. We also provided scholarships and special gifts forschoolchildren in order to nurture their self-esteem and inspire them to become the future driving force forthe nation.

Sustainability Report 202035

Sustainability Data
Environment1
GRI

KPI

302-1

TOTAL ENERGY CONSUMPTION
Direct energy consumption

Unit of Measure

2019

2020

GJ

–

4,969,022

GJ–

1,039,115• of which natural gas

GJ–

872,205• of which LPG (Liquefied Petroleum Gas)

GJ–

128,558• of which gasoil

GJ

–

840

• of other fuel (heavy oil, kerosene, light diesel oil)GJ–

33,059• of which total electricity consumption
self-generated from renewable sources

GJ

–

4,454

Indirect energy consumption

GJ–

3,929,908• of which electricity from non-renewable sources

GJ–

3,467,315• of which total purchased electricity
from certified renewable sources

GJ–

413,887• of which heat (district heating)

GJ–

45,031• of which cold water

GJ

–

272

• of which compressed air

GJ

–

3,403

594,428

503,125

TOTAL GREENHOUSE GASES (GHG)
EMISSIONS (LOCATION BASED)

tonnes of CO2 eq

305-1

GHG emissions: Scope 12

tonnes of CO2 eq

68,59959,600305-2

GHG emissions: Scope 2 (location based)3

tonnes of CO2 eq

525,829

443,525305-2

GHG emissions: Scope 2 (market based)4

tonnes of CO2 eq

516,893449,091305-7

OTHER SIGNIFICANT AIR EMISSIONS

tonnes

154.65134.96• of which NOX

tonnes142.43124.61• of which SOX

tonnes

303-3

306-2
(partial)

12.21

10.35

WATER WITHDRAWAL5m3

3,262,051

2,616,917• of which surface waterm3

95,412

66,713• of which from surface water from water stress area

%

–

99

• of which groundwaterm3

1,006,871

666,600• of which from groundwater from water stress area

%

–

67

• of which third party waterm3

2,159,768

1,883,604• of which from third party water from water stress area

%

–

85

HAZARDOUS AND NON-HAZARDOUS WASTE

tonnes95,96080,366• of which sent to recovery(reuse, recycling, energy recovery)

tonnes90,86973,153• of which sent to incineration

tonnes• of which sent to landfill

tonnes• of which sent to other disposal method

tonnes

2,097
2,994

937
2972
3,304

The environmental data, except GHG emissions, are not comparable between 2019 and 2020 due to the implementation of a new EHS-E (Environmental, Health and Safety - Environment)
methodology for data collection and KPI (Key Performance Indicator) calculation in 2020. Marelli will use 2020 data as a baseline for all EHS-E data, except for GHG emissions.

1 

Scope 1 CO2 emissions reported using the emission factors reported in Table 2.2 of the “IPCC Guidelines for National Greenhouse Gas Inventories, 2006.”

2 

Scope 2 CO2 emissions (location based) related to the consumption of electricity are calculated according to the location-based approach, using the emission factors reported by
the “International Energy Agency (IEA), Emissions from Fuel Combustion”. The coefficients for the other indirect energy consumption types (e.g., cooling, heating, compressed air,etc.) are calculated considering the “generation mix” or “recipe” used by the supplier to generate the supplied energy vector. If the supplier cannot disclose the “generation mix”
of a specific energy vector, historical data are used.

3

Scope 2 CO2 emissions (market based) related to the consumption of electricity are calculated according to the market-based approach, using the emission factors for electricity
consumption as reported by the “International Energy Agency (IEA), Emissions from Fuel Combustion” for extra-EU countries, and AIB Residual Mixes 2019 emission factors forcountries included in the EU zone. Heat, compressed air, and cold water emissions are calculated by referring to 2020 Defra Conversion factors database.

4In general, water stress areas (using Aqueduct tool) include: Italy, Brazil, France, Spain, Germany, Slovakia, Mexico, Romania, Turkey, United States, Thailand, India and China.

5

36

MarelliOccupational Health and Safety6
GRI

KPI

403-9

EMPLOYEESUnit of Measure

2019

2020

Number of Injuries

no.

162

95

• of which fatal injuries

no.

0

1

• of which high consequences loss time injuries (LTI)

no.

24

12

• of which LTI

no.

138

82

• of which first aid (FA)

no.

584

776

Number of commuting injuries

no.

160

119

Rate of total LTI (included high consequences LTI)

(Total LTI/Worked
hours)*1,000,000

1.43

1.01

Rate of fatalities as a result of work-related injury(Fatal injuries/
Worked hours)x
1,000,000

–

0.01

0.21

0.13

113,153,641

93,755,310

no.

5

2

Number of Injuries

no.

3

10

• of which fatal injuries

no.

0

0

• of which high consequences loss time injuries (LTI)

no.

2

1

• of which LTI

no.

1

9

• of which first aid (FA)

no.

24

60

Rate of total LTI (included high consequences LTI)

(Total LTI/Worked
hours)*1,000,000

0.45

0.76

Rate of fatalities as a result of work-related injury(Fatal injuries/
Worked hours)x
1,000,000

–

–

0.30

0.08

6,661,687

13,160,289(High consequences
LTI/Worked hours)x
1,000,000

Rate of high-consequence work-related
injuries (excluding fatalities)
Total worked hours
403-10

Number of work-related ill health403-9

WORKERS WHO ARE NOT EMPLOYEES7

hours/year(High consequences
LTI/Worked hours)x
1,000,000

Rate of high-consequence work-related
injuries (excluding fatalities)
Total worked hours

hours/year

Data for Occupational health and Safety of 2019 are not comparable with 2020 data because of the implementation of a new EHS-E (Environmental, Health and
Safety - Environment) methodology for data collection and KPIs (Key Performance Indicators) calculation in 2020.

6 

7

Workers, who are not employees, include both agency workers and external contractors.

Training
GRI

KPI

404-1

TRAINING

Unit of Measure

2019

2020

hours

605,813429,122

Hours of training per employee

hours/employee

10.05

7.39

Hours of training per female employees

hours/employee

–

7.57

hours/employee

–

8.24

Total training hours provided to employees

Hours of training per male employees
Hours of training per “other” employees

hours/employee

–

1.33

Hours of training per Manager

hours/employee

5.98

77.02

Hours of training per White Collar

hours/employee

15.66

8.74

Hours of training per Blue Collar

hours/employee

6.84

5.41

8

Sustainability Report 2020

37

GRI

KPI

Unit of Measure

2019

2020

412-2

Total training hours related to human rights policies
or procedures concerning human rights aspects

hours

–

2,779

head count

–

6,234

Percentage of employees receiving regularperformance and career development reviews

%

45

60

• of which Manager

%

91

88

• of which White Collar

%

85

89

• of which Blue Collar

%

20

42

• of which women

%

44

70

• of which men

%

51

65

Number of employees trainedin human rights policies etc.
403-3

“Other” employees refers to those employees for whose gender information is not available since they work in country where the data privacy regulation does not allow to collectgender information.

8

Human Resources
GRI

102-8 Typeof contracts
by gender

GRI

102-8 Typeof contracts
by region

GRI

401-1 New
Hires andLeavers

GRI

KPI

Permanent
2019

2020

Women

14,26013,738Men

37,73836,376"Other"2019

Full-timePart-time

2020

2019

2020

2019

2020

868

784

12,321

1,531

1,461

33,105

14,181

2,807

341

37,718

6,164

119

9

5,877

5,641

13

77

1,868

5,709

4,022

9

Total Employees

57,87555,755

2,412

2,322

47,29457,60812,993

469

KPI

EMEA

APAC

NAFTA

LATAM

2019

2020

2019

2020

2019

2020

2019

2020

Permanent

21,757

20,993

18,40916,943

12,95013,179

4,759

4,640

Temporary

800

753

1,483

1,232

17

80

112

257

22,557

21,746

19,892

18,175

12,967

13,259

4,871

4,897

Total Employees

KPI

New Hires

New Hires Rate

Leavers

Leavers Rate

2019

2020

2019

2020

2019

2020

2019

2020

Women

2,385

2,019

17%

15%

3,533

2,665

25%

19%

Men

4,664

4,706

12%

13%

7,216

6,393

19%

18%

"Other"9

106

624

2%

11%

130

1,038

2%

18%

< 30 years

4,035

3,011

30%

27%

4,136

2,845

31%

25%

30<=x<=50

2,886

3,662

8%

10%

5,192

5,568

15%

16%

> 50 years

234

676

2%

6%

1,551

1,683

13%

15%

KPI

Manager
2019

405-1
Diversity of
employees

Temporary

White Collar

2020

2019

Blue Collar

2020

2019

Total

2020

2019

2020

Women

47

47

4,999

4,559

12,005

9,916

17,051

14,522

Men

461

513

16,071

15,10923,76622,21540,29837,837"Other"

46

38

926

1,941

1,966

3,739

2,938

5,718

< 30 years

1

1

4,126

3,353

9,275

7,886

13,402

11,24030<=x<=50

252

211

13,24313,804

21,61321,65635,10835,671> 50 years

301

386

4,627

4,452

6,849

6,328

11,777

11,166

Total employees

554

598

21,996

21,60937,73735,87060,28758,077

9“Other” refers to those employees for whose gender information is not available since they work in country where the data privacy regulation does not allow to collectgender information.

9

38

MarelliSocial

10

GRI

KPI

Unit of Measure

2019

2020

308-2 /
414-2

Suppliers assessed for socialand environmental impacts10

no.

823

827

Suppliers identified as having significant
actual and potential negativesocial and environmental impacts

no.

448

448

• with which improvements were agreed
upon as results of assessment

no.

383

383

%

85

85

• with which relationships were terminatedas a result of assessment

no.

1

1

%

0.2

0.2

412-3

Percentage of significant investment agreements
and contracts that include human rights clausesor that underwent human rights screening

%

100

100

102-41

Percentage of total employees coveredby collective bargaining agreements

%

64.7

69.8

Non-GRI

Total number of days/hours on
strike, for significant episode

days

0

0

406-1

Number of incidents of discrimination
recorded during the year

no.

1

0

418-1

Total number of substantiated complaints received
concerning breaches of customer privacy

no.

2

0

Number of identified leaks, thefts,
or losses of customer data

no.

2

0

The social aspects assessed also includes ethics and compliance.

Sustainability Report 202039

marelli.com
40

Marelli