Sustainability
Report2017

2_Editorial

Dear Readers,This year too I am delighted to present you with our new Sustainability Report. Since2009 we have informed our stakeholders annually this way about everything wehave achieved regarding sustainability at Voith in the past fiscal year.

Ulrich Weiße
Head of the Central Function
Corporate Sustainability & HSE

In the previous year we worked out a new, more strongly target-group oriented
reporting concept. Positive feedback from our target publics confi rmed thisapproach, which we are now continuing with this year’s report. At the same time,
this feedback reflects our stakeholders’ keen interest in Voith’s sustainability activities. For us this is a motivation and a duty at the same time. We will not slacken
the pace in driving our sustainability activities forward, and by setting ourselves
ambitious targets will continue to work on making Voith the industry benchmark
in terms of sustainability.
In environmental management we are now coming up to the end of our current
target period, and are already in a position to make a positive assessment: We areon the right track towards reaching our targets and have even exceeded some ofthem. The environment thus benefits from a clear reduction in our use of energy,
reduced consumption of water, and lower volumes of waste, while Voith benefits
not only through an improved sustainability scorecard but also in economic terms:
Compared with the 2011/12 fiscal year, through our commitment to sustainability
we are saving over € 11 million each and every year.
To enable us to tap into further potential improvements in future we have alreadyset ourselves new, far-reaching environmental goals. For the first time we haveformulated specific CO2 emissions reduction targets. We want to improve in thisarea, and based on a scientific approach make our contribution to achieving theclimate target agreed in Paris. In many other areas we also achieved a great deal
in the past fiscal year. In occupational safety, personnel management, societal
engagement, and in developing new environmentally friendly products in all Group
Divisions, Voith is on the right track!
Thank you for accompanying us on our journey through your interest. I wish you an
inspirational and informative read – and look forward to your feedback!

Sincerely yours,

Ulrich Weiße

Voith Sustainabilit y Repor t 2017

3

Voith 2017
_Editorial_Foreword

2
4

1_Strategy and Integrity
Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

10
15
22
25

2_Environment
Environmental Management Approach
Performance in the Reporting Period

32
39

3_Employees
Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

50
53
57
61

4_Products and Supply Chain
Product Responsibility
Responsibility in the Supply Chain

70
86_The Report_Imprint and Contacts

90
91

GRI Index
Fact base

93
103

Voith Sustainabilit y Repor t 2017

4

_Foreword

Stephan Schaller
President and CEO

Dear Readers,
A few days ago we received the news that Voith has achieved Prime Status in
the latest oekom research AG rating. This makes Voith one of the sustainability
leaders in our industry – news that is just as pleasing as it is important. This rating
proves that our efforts to achieve greater sustainability are effective, and that
this achievement is being seen and recognized externally. It also means that weare gradually getting closer to our goal of becoming the industry benchmark forsustainability in our markets.
Our aspiration to deliver excellence plays a special role in terms of how we see
ourselves. After all, only those who achieve excellent results on a daily basis will be
successful in the long run. This is especially true when it comes to sustainability.
For over ten years now we have taken a systematic approach to sustainability
management, implementing specifi c objectives that we monitor continuously. All
this leads to measurable results that pay off in the truest sense of the word. For
example, in the past fi ve years alone we have achieved over € 11 million in savings
through our environmental management system in the areas of energy, water, andVoith Sustainabilit y Repor t 2017

5

waste. These are savings that benefi t the environment and help us to withstandcompetition year after year. It shows in concrete terms that sustainable businesspractices lead to real competitive advantages.
And all this is no coincidence. Through our commitment we are embracing the
tradition of Voith as a family company and remain absolutely committed to upholding it. At the same time we are making our company fi t for the future, capable ofweathering anything, and robust – ready for the coming decades of our company’s
history which already spans over 150 years.
This applies particularly to our approach to sustainability management. We haveachieved a great deal in this regard in recent years, and undergone an important
evolution. Today, we combine the advantages of centralized coordination withthe experience and expertise of our locations. With our recently restructured
Sustainability Steering Committee we are continuing this evolution and assigning
responsibility to individual departments – in the interests of our company and our
stakeholders.
We are already setting benchmarks in many areas of sustainability management,
including the area of occupational safety. To give an example, our Frequency
Rate – meaning the number of occupational accidents per million hours worked –currently stands at 1.4. This is an outstanding rate, which we fi rst achieved three
years ago and continue to meet. That said, when it comes to the safety of thepeople at Voith, no goal is high enough. Every accident is one too many and is apermanent reminder that we must not let up in our efforts. This is why we also takenew and innovative approaches to become even better and reduce the number ofaccidents further still. To give just one example, in the area of occupational safety
our eVAP (electronic Voith Awareness Program) app enables us to combine thepossibilities of digitization with our know-how in occupational health and safety.
The result is a tool that our employees embrace and proactively use, making workat Voith a little safer every day.

Voith Sustainabilit y Repor t 2017

6

“Sustainability is afundamental part of how
we see ourselves.”
Stephan Schaller

We also set benchmarks with our Green Controlling process: It enables us togather and control all environmental KPIs – as well as to continuously leverage
additional potentials to save precious resources. We have already received several
awards for our management approach, and our strong oekom rating is also due
in large part to our environmental management system. It is characterized by
concrete objectives that we work tirelessly to implement. As our current target
period draws to a close, we are well on the way to achieving – and in some caseseven exceeding – the environmental goals we have set for the end of the current
fi scal year. This benefi ts the environment – and also our company in economic
terms.
We also have many plans for the future, as those who rest on their laurels soon
fall behind the competition. Given that our current target period ends soon, we
have already set ourselves new environmental objectives. For the fi rst time wehave also set ourselves specifi c requirements in terms of climate protection andreducing our CO2 emissions. As a fi rst step we aim to optimize our electricity
mix and in doing so achieve a 25 % reduction in our CO2 emissions resulting
from our power consumption by the end of the 2021/22 fi scal year. By the endof 2024/25 we then plan to reduce our total CO2 emissions by 35 % until we haveachieved a 90 % reduction by the end of 2049/50 – meaning our operations will bepractically climate-neutral. Through our science-based approach, as a company
we aim to contribute towards achieving the goals of the Paris Climate Accord
and ensure future generations can enjoy a bright future – a guiding principle ourfounder Friedrich Voith embedded deep in the company culture. After all, taking
responsibility for people and through this for the environment in which we all live,
is inextricably linked to our company’s economic success.

Voith Sustainabilit y Repor t 2017

7This makes sustainability a fundamental part of how we see ourselves, and issomething that has shaped the way we do business for over 150 years. As aresult, this past fiscal year was also marked by a large number of measures andactivities to improve our sustainability performance. This Sustainability Reportshows exactly what happened and what we achieved. It is the eighth consecutive
report since we started making our efforts transparent in 2007. I am delighted
that you are interested in following our progress, and wish you an enjoyable andinformative read!

Sincerely yours,

Stephan Schaller

Voith Sustainabilit y Repor t 2017

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1_Strategy and Integrity
As a global technology group Voith
sets standards worldwide in the
Energy, Oil & Gas, Paper, Raw Materials, and Transport und Automotive
markets through its diverse portfolioof systems, products, services, anddigital solutions. Our 150-year tradition as a family business is shaped bya sustainable, values-based approachthat commits us to conducting business in a way that is environmentally
focused, fair, and oriented towards
long-term economic success.

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1_Strategy and Integrity

1_Strategy und Integrity
1.1 Our Profile
Voith is one of Europe’s largest family businesses. Since it was founded in 1867,
sustainable thinking and a values-based approach have shaped our company – long
before these concepts became part of the economic debate. At Voith, businesssuccess is founded on a long-term approach. In view of this, our shareholders, theSupervisory Board, and the Voith Corporate Board of Management work together
under a joint commitment to develop the company in an economically, environmentally, and socially sustainable way.
Voith’s economic strength is based on the following strategic principles that havebeen carefully established over the decades:• A diversifi ed product portfolio based on megatrends• An international footprint and strong local roots• Our capacity for innovation• Our fi nancial independence as a family-owned company
These principles underpin Voith’s long-term success; they are also the prerequisite
for the company’s successful further development, also under the managementof future generations.

Location Overview Online

Voith Sustainabilit y Repor t 2017

Overview of the Group
Voith is a global technology group present in over 60 countries. It maintains aworldwide network with around 120 production locations. Voith GmbH & Co. KGaA,
headquartered in Heidenheim an der Brenz, Germany, is the operational holding
company and parent company of the Group. The Group’s core functions are also
concentrated within it. The company operated under the name Voith GmbH until
July 31, 2017. Since August 1, 2017 the company has been incorporated as aGmbH & Co. KGaA, that is, a partnership limited by shares. The Corporate Boardof Management of Voith Management GmbH is responsible for the strategic andoperational management of the Voith Group. Voith Management GmbH, which
is 100 percent family-owned just like Voith GmbH & Co. KGaA, manages thebusinesses of Voith GmbH & Co. KGaA as the personally liable shareholder. The
General Managers of Voith Management GmbH are appointed by the Shareholders’Committee of Voith Management GmbH. The supervisory body of the GmbH & Co.
KGaA is the Supervisory Board.

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2_Environment

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4_Products and Supply Chain

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Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

As at the end of the reporting period the Group’s operating business is bundledwithin four Group Divisions, which are each managed by legally independent
management companies:• Voith Hydro is a turnkey provider and a leading industry partner to hydropower
plant operators for equipping hydropower plants.
• Voith Paper is a system supplier to the paper industry, providing technologies,
products, and services covering the entire paper production process.
• Voith Turbo produces drive solutions as well as technical systems andcomponents, which are in use around the globe in industrial plants as well as onrailroads, highways, and seaways.
• Voith Digital Solutions combines long-standing automation and IT expertise withhydropower, paper machine, and drive technology know-how. Established in theyear under review, this Group Division develops innovative products and services
together with existing and new customers to drive forward the Internet of Thingsand shape the digitization of machine and plant manufacturing.

Annual Report 2017,p. 52 et seq., Group strategy

The 2016/17 Fiscal Year – A Good Year for Voith
In Voith’s 150 th anniversary year the operating business continued its positive
development, reinforcing the company’s sustained earning power. We achieved,
and in some cases beat, forecasts. Given the slightly brighter investment climate,orders received increased by 6.3 % to € 4.4 billion versus the previous year. As
forecast, Group revenues of € 4,223 million were maintained at the previous year’slevel (€ 4,252 million) despite the challenging market environment.
In the reporting year the three original Group Divisions continued to benefit fromefficiency gains from the successfully completed Voith 150+ Group program. As
a result of this, the operating profits of Voith Hydro, Voith Paper, and Voith Turborose by 3 % overall. The ROCE (Return on Capital Employed) of the core business
improved from 15 % in the previous year to 16 %. In the reporting year currency
effects had no material influence on the development of Voith’s key figures.

Total Revenues € 4,223 million
by Group Division
Voith Turbo
31 %Group Revenues
by region

Voith Hydro
33 %Americas28 %in € million
Germany
13 %

4,252

4,223

2015/162016/17

Rest ofEurope26 %Voith Paper
36 %

Asia
27 %

Other
6%

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1_Strategy and Integrity

Annual Report 2017,p. 58 et seq.,
Business development

Fact base
Economic Indicators
Fact base
International Focus
Fact baseFinancial AssistanceIn the Voith Group, the reported profit from operations of € 241 million was, as
expected, below the previous year’s value (€ 275 million) owing to forward-looking
investments in the Group’s digital transformation. The net result reached a record
level in the year of the company’s 150 th anniversary: Influenced mainly by the
successful sale of Voith’s stake in KUKA AG, net income amounted to € 596 million(previous year: € 29 million). This also improved the Group’s asset and financial
position. At the end of the reporting year Voith has an equity ratio of 27 % and our
net liquidity is around € 650 million.
Group Transformation Fully Completed
The Group transformation launched in the fall of 2013 was completed fully andsuccessfully in the reporting year. As part of this transformation, we worked hardto adapt our product and service portfolio to meet market requirements, increase
our efficiency through improved structures and processes, and reduce costs. We
handled workforce changes associated with the Group transformation fairly andresponsibly in discussion with workers’ representatives – an approach that is fullycommensurate with Voith’s culture and values.
We have set a course to safeguard the long-term competitiveness and further
growth of the Voith Group primarily through the following measures:• We have fundamentally transformed the Group Division Voith Paper and taken
into account the far-reaching structural change in the paper machine market.
We completed this turnaround, with Voith Paper operating successfully again in
the market with a lower cost structure and modified product range.
• We divested the Group Division Voith Industrial Services. The rationale forthis was the fundamental strategic decision to focus the Voith Group on its
technology and engineering expertise for the digital age.
• A targeted portfolio adjustment was made in other business areas. This
included the consolidation, reduction in size, or closure of locations that did notachieve planned profitability levels.
• We implemented a more streamlined, centralized administration system, androlled out Global Business Services units for accounting, human resources,
and purchasing. On top of this, we managed to complete this comprehensive
transformation of our indirect activities in the 2015/16 fiscal year – a year earlier
than originally planned.

Annual Report 2017,p. 54 et seq., Successful
completion of the Group’s
reorganization

At the end of the 2016/17 fiscal year Voith is strongly positioned with a much
improved cost structure, a substantially higher equity ratio, and strong net liquidity –giving us the financial and business scope for future development.
Voith 150+ Next Level Launched Successfully
One of the cornerstones of our corporate culture is the constant pursuit of improvement. Following the successful completion of our Voith 150+ efficiency program,

Voith Sustainabilit y Repor t 2017

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2_Environment

3_Employees

4_Products and Supply Chain

13

Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

this is why we developed and officially launched our Group-wide Voith 150+ Next
Level excellence program on August 1, 2017. Compared to its predecessor, the newprogram aims not only to optimize structures and costs but above all to optimize
growth. Excellence, meaning outstanding performance in all areas of our businessactivities, is the prerequisite for this.
Voith 150 Next Level embodies this conviction. The program comprises five modules:
Operations Excellence (OPEX), Administration Excellence, Product Improvementand Engineering Excellence, Sales Excellence, and Quality@Voith. The scope ofeach module is derived from a detailed analysis of Voith’s current products andprocesses. This scope was further expanded upon based on employee feedback
from every region. We also benchmarked ourselves to other companies, as ouraim is to always be among the best in our industry.
Each of the five modules is led by a manager and is sponsored by a member of theVoith Corporate Board of Management. The modules support ongoing and new
excellence initiatives and projects at a Group, Group Division, and regional level;
they also offer methods, tools, best practice examples, and comprehensive training
on product and process improvements.
The five Excellence Modules are accompanied by a further development of ourcorporate culture, as responsible thinking and actions form a key prerequisite
for top performance across all areas of our company. This is why we encourage
our employees to seize the initiative more frequently and put forward their ideas
independently of hierarchical levels. We ask them to point out sources of errors
or emerging problem areas at an early stage, and see mistakes as an opportunity
for improvement. This requires dialog-based leadership, which lays down theframework for employees to actively shape improvement processes, innovation,and change. These aspects are emphasized in our new leadership concept, which
defines the behaviors and actions expected of management, and also form an
integral part of our leadership training activities.

Employees chapter,
pp. 49– 67
Annual Report 2017,p. 55 et seq., Growththrough excellence:
Voith 150+ Next Level
launched

Forging Ahead with Our Digital Agenda
In the reporting year we further drove the implementation of our digital agenda.
Over the course of the previous and current reporting years we will have invested
around € 100 million in the development of digital products and services, on top of
the Group’s existing R&D expenditure.
The Group Division Voith Digital Solutions, founded in the 2015/16 fiscal year, is at
the heart of our digital agenda. We are concentrating all our know-how in the areasof automation, IT, software, data analytics, and sensor technology in this Group
Division. This makes Voith Digital Solutions a digital enabler of our original core
activities on the one hand, while on the other it develops completely new digitalproducts and solutions.

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1_Strategy and Integrity

Voith Digital Solutions pursues three strategic directions:1) Supplementing Voith’s existing product portfolio with digital capabilities thatoffer the customer additional functions and benefits2) Developing new digital solutions for our traditional core markets3) Developing new applications and business models for markets not yet coveredby Voith
In the reporting year Voith Digital Solutions began to develop new digital products
and solutions, the first of which are already proving successful in the market –including merQbiz, the digital marketplace for recyclable paper. In addition, in collaboration with our three original Group Divisions, Voith Digital Solutions is working
on a large number of incubator projects, the first of which will be launched in the2017/18 fiscal year. However, the digital transformation is affecting our company
far beyond the core of Voith Digital Solutions. It influences our own production
and administration processes, changes the requirements on our employees, anddemands new training and further education models. It alters the way we workwith each other, and therefore affects the way we design our working environment.
Digitization is also reshaping the way we approach and interact with customers andbusiness partners, employees and applicants, as well as many other stakeholders.
Our trajectory is marked by dynamic change, and Voith Digital Solutions is helping
our entire Group keep pace with and shape this trajectory.

Annual Report 2017,p. 53 et seq., Forging ahead
with the digital agenda

Voith Sustainabilit y Repor t 2017

Strategic Investment in Ray Sono AG
We acquired a majority stake in Ray Sono AG in May 2017 as part of our digital
agenda. Ray Sono is one of Germany’s leading digital service providers, serving
well-known industrial companies as well as businesses with a B2C focus. Ray Sono
also has special expertise in the areas of design thinking, data preparation, anduser experience. This makes the partnership especially attractive to us as, fromour customers’ viewpoint, well-designed and intuitive user interfaces and ease ofuse – qualities typical of end-consumer electronic devices – are also becoming
increasingly important on systems and machines in the industry sector. Our strategic partnership with Ray Sono ranges from the joint development of industry-related
digitization solutions, particularly in the area of Industry 4.0/Internet of Things,
through to the implementation of digital solutions within the Voith portfolio such as
the virtualization of machines and systems as well as the improvement of existing
digital solutions.

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Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

1.2 Strategy and Organization
Sustainability – Targeting a Leading Role
In terms of sustainability our clear goal is to become the industry benchmark inthe markets and sectors in which we operate. We therefore base our processeson this to make a measurable contribution to the sustainable development of ourcompany, society, and the environment. We also understand Voith’s tradition asa family-owned company as a commitment to conduct business in a way that
protects the environment, is fair, and is oriented towards long-term economic
success. This is both our guide and motivator. Just as we are world leaders with
our products, we also aspire to take a leading international role as a sustainable
company.
Clear Structures in our Sustainability Organization
At Voith, sustainability is a cross-functional responsibility shared by our Corporate
Board of Management, Group Divisions, and Corporate Departments. The central
function Corporate Sustainability & HSE sets the framework for our strategic focus
and the way we organize sustainability. It also advises our Group companies andCorporate Departments, and is responsible for the strategic development of the
topic. It reports directly to the President and CEO, and takes decisions on thenecessary tools and methods such as our sustainability database and associatedreporting tools, used within our Group to measure and control our sustainability
activities. Furthermore, this central function holds direct responsibility for the
global specialist organization Health, Safety, and Environment (HSE) as well as
the Sustainability Office.
Our central Corporate Sustainability Council (CSC) controls all of the Group’s sustainability activities and reports directly to the Corporate Board of Management.
The Council draws up decision-making principles, and as a control and monitoring
body also monitors the operational implementation of strategies, objectives, andmeasures in the Group Divisions. Moreover the CSC is responsible for all key
data-collection processes. Specific topics regarding the collaboration with non-governmental organizations (NGOs) and other stakeholders are also discussed andagreed in the CSC with those responsible.
In the 2016/17 fiscal year CSC convened three times. The core topics it addressed
included the achievement of environmental objectives and the setting of new targets,
also for the company’s CO2 emissions reduction. In addition, the CSC commissioned
the Sustainability Office to produce a plan for the appointment of new members to
the CSC; the change came into effect at the start of 2018. While the CSC previously
only comprised Sustainability Officers from the Group Divisions, they will now bejoined by the respective Department Heads. The specialist organizations (e.g. HR
and Purchasing) are also responsible for the operational implementation of themeasures.

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1_Strategy and Integrity

The organization, responsibilities, and principles underpinning our actions havebeen embedded in our Group Directive on Sustainability ever since 2015. We
will modify this in the current fiscal year to respond to the updated organizationalframeworks and thus also reflect the new composition of the CSC.
Spotlight on HSE
Voith’s HSE organization follows a uniform business partner structure, thereby
corresponding to our Group’s Shared Services system. The Center of Competence
HSE provides focused methods, tools, and standards from a single source for
our Group Divisions. Furthermore, each Group Division is assigned one employee
from the Center of Competence HSE as a business partner. As the central pointof contact, this business partner advises the Management Board of the Group
Division on all HSE matters.
Our operating units are responsible for implementing health, safety, and environment
activities locally. Seasoned experts accompany the process via the Center of Competence HSE, helping to continuously improve HSE, leverage synergy potentials,
and in doing so optimize service costs. Furthermore, as skilled partners they canbe called upon to identify risks and systematically reduce them through a continual
improvement process. To ensure safety the HSE software was implemented as
efficiently as possible, each region started out by introducing a different module;
this enabled every other region to build on the experience gained, significantly
speeding up the roll-out.

Sustainability, Health, Safety, and Environment Organization

CEO

Head of Sustainability & HSE

Advisory Board
Sustainability

Corporate
Sustainability
CouncilCentral Management
Organ for Sustainability Activities

Voith Sustainabilit y Repor t 2017

Sustainability
OfficeControlling,
Reporting,Communication,
Strategy

Center ofCompetence HSE
Methods, Tools,
and Standards

HSE
Services

EcologicalBusiness
Management
Energy andResource
Management

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17

Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

In the majority of cases the HSE experts are assigned either to the areas of Health& Safety or to Environmental Protection, with one expert each supporting several
regional Voith companies depending on their size. Duties include providing support
with opportunity and risk assessments, local approval of hazardous substances,and incident analyses. The experts also provide support with the Group companies’
global HSE matrix certification.
The HSE Steering Team comprises the Heads of the regional HSE service organizations and the members of the Center of Competence HSE. It meets biannually andis chaired by the Head of the Corporate Sustainability & HSE central function. This
regular exchange of experience has proven a success. The HSE Steering Team also
conducts regional HSE audits at its meetings: These are an important element ofinternal knowledge transfer and also provide the framework for internal HSE audits.
Through our HSE organization we have a uniform global organization for health,safety, and environment with standardized processes, a powerful global IT system,
and a Group-wide certified HSE management system. Over 97 % of Voith employees
around the world are supported or coordinated directly by our HSE organization.
The remaining 3 % of the Voith workforce are covered by qualified external service
providers, who are coordinated and integrated by the respective regional HSE
service organization. This mainly concerns countries where we only have a few
local employees.

Fact base
HSE Data Recording

Systematic Further Development of Our Sustainability Approach
Voith defined six fields of action that integrate sustainability management into
the Group. Our aspiration to practice sustainable corporate governance and our
pursuit of profitable growth are just as much a part of these fields of action as
our responsibility towards our products, the environment, our employees, and tosociety. We also regularly publish our goals as part of our sustainability reporting
activities, and document our progress.
We are currently working on realigning our fields of action. While they will remain
essentially unchanged, we will include additional topic areas and assign these to
their respective managers. We will also define new target guidelines as part of thisrealignment – especially in terms of our CO2 emissions, which we want to reduce
further. Voith is committed to the targets set as part of the Paris Climate Accord, andwill meet its corporate responsibility in this regard. To deliver on this, our Corporate
Sustainability department will develop a new CO2 emissions target corridor in thecurrent fiscal year that will also set interim targets based on fact-based forecasts.

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1_Strategy and Integrity

Environment chapter,
p. 31–47

We take a systematic approach to implementing our Sustainability Strategy. To
monitor our progress, our CSC checks our achievement of sustainability goals on
a quarterly basis at both a Group and Group Division level. The resulting quarterly
report contains a detailed list of measures that outline the tasks, responsibilities,
and deadlines for the respective operational level.
Matrix Certification Process EstablishedBy establishing our global HSE organization we also laid the basis for our global HSE
matrix certification system. This includes all ISO 14001 and OHSAS 18001 certified
Voith locations, including the holding companies and our HSE management system.

Fact base
Certifi cations

Besides the transformation of our formerly local documentation, in the reporting
period we focused on introducing and applying our Legal Compliance module.
Based on a global standard, this module provides us with even greater transparency
in terms of legal certainty regarding the current status and application of laws.
The organization has since been established and is in operational support mode.
It is now important to ensure that we handle the corresponding change process
successfully in our company. We still expect that the new organization will be fully
embedded in the company within the next two years, at which point every employee
will be able to use the processes and standards. This process is being supported
by an international information and training program which we set up in the 2016/17
fiscal year; this is designed to enable the HSE Steering Team to strengthen personal
contact with experts locally, and in doing so to stabilize and continuously improve
the organization. The focus is on establishing a common understanding of ourHSE culture, on training for the uniform application of the hse+ IT tool, and HSEprocess training as part of workshops. Through this, we also ensure that informationis shared biannually between the employees from the regions, the HSE Steering
Team, and the regional HSE experts.
Sustainability Communication as a Success Factor
We specifically employ suitable means of communication, such as our regular
Ecological Business Management newsletter, to motivate facility managers andemployees in the Group companies to get involved in identifying savings potentials
and measures. Through these we reach plant managers in particular and encouragethem to adopt measures that other locations have already implemented successfully. Two newsletters (HSE Best Practices and HSE Flash News on current HSE risk
areas) complement our communications mix with information on incident-related
focal points in HSE. Clear focus areas and concrete examples of success in eachissue provide practical guides on how to integrate the measures into everyday
work life.

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Our Profile
Strategy and Organization
Values and Compliance
Responsibility for Society

Focus on Stakeholder Dialog
Regular dialog with a large number of stakeholders is essential for a global Groupsuch as Voith. Through this, we incorporate their varying demands, interests, andexpectations in our key business decisions. Our key dialog partners include shareholders, supervisory committees, employees, the Works Council, our customers,
suppliers and investors, as well as neighboring communities, trade associations,academia, government agencies, and policy makers. We also focus on NGOs suchas the World Wide Fund for Nature, and naturally the broader interested public.

Fact base
Association Membership

External Experts Provide Further Stimuli
Our Advisory Board Sustainability meets annually and provides us with external
expertise. Comparing our own experiences with the perspectives and assessmentsof other companies as well as the social environment constantly provides us withnew stimuli for the management of sustainability at Voith. The committee comprises
Prof. Dr. Stefan Schaltegger from Leuphana University, Lüneburg, Germany, andAndreas Zamostny, CEO of sustainability management consultancy Schlange &Co. GmbH based in Hamburg, Germany.
Among other things, the external experts’ findings led to the aforementioned reorganization of our CSC in the reporting period. The recommendation to integrate
our existing sustainability approach into our Corporate Strategy originated from asuggestion from the Advisory Board Sustainability; as a result we already initiateda corresponding process in the reporting year.
Stakeholder Survey with New Model
Regular stakeholder surveys help us to learn more about our stakeholders’ expectations and requirements, and assess Voith’s sustainability performance from anexternal viewpoint. Our surveys in 2013 and 2016 performed well in this regard
and provided a good overview; however, it became apparent that our stakeholders’ expectations differ significantly from one region to another. To meet thesewide-ranging requirements, regional, industry, and stakeholder-specific approaches
are required.
This is a challenge we intend to meet by overhauling our survey model: Insteadof a single global survey covering all topics, we will run topic-based and possibly
region-specific surveys in future. This will support us in rooting our organizationeven more firmly in the regions.
We will supplement this with direct stakeholder dialog, which will enable us to obtaineven more detailed results and help our departments to meet individual stakeholder
requirements in an even more targeted way. We also plan to increase the frequency

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1_Strategy and Integrityof surveys, although these will be much smaller in scope. We intend to launch our
new form of stakeholder dialog in early 2018.
Transparent Reporting for Different Audiences
Since as long ago as 2009 we have informed our stakeholders of our performancethrough our annual Sustainability Report as well as via additional online information.
To ensure our reporting remains as effective as possible, last year we developed a
new reporting model that focuses even more strongly on our target groups. Positive
feedback from our target groups confirms this approach, which we will continue
systematically in this report.
In our traditional sustainability report we continue to concentrate on the fields ofaction that matter most to our company and stakeholders. We have supplemented
this with an extensive online facts & figures resource that includes detailed information intended mainly for sustainability experts and specialists. We also publish
an additional brochure every two years in which we explain the principles of ourcommitment and report interesting facts about our sustainability activities in acompact form. This brochure is intended mainly for interested parties who want togain an initial overview of our activities.
We have also explained our sustainability strategies and measures for many years
now in our annual reports. We also keep our employees regularly updated onsustainability issues through posts on our Group-wide intranet and articles in our
employee magazine.
Materiality Analysis as the Basis
The results of our stakeholder survey of 2016 provided us with the basis to perform a detailed materiality analysis, and continue to help us prioritize our activities
and focus on the essential aspects. In line with the redesign of our stakeholder
surveys, in 2018 we will also progressively adjust and, where applicable, refocus
our materiality analysis.
Continuous Development of the Sustainability Organization
Since 2018 we have continuously embedded sustainability deeper in our organization. The current structure comprising our Sustainability Office, the CSC, andthe Sustainability Advisory Board has proven to be powerful and effective in recent
years – not least providing confirmation of the full achievement of our environmental
objectives.
HSE Controlling laid the basis for transparent sustainability reporting, and Voith
received numerous awards for it – particularly in the areas of resource efficiency,
and occupational health and safety. At the same time, it became apparent that

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Materiality Analysis
Very important

1029

Importance to external stakeholders

13 11

6

30
28

20
21

17
18
16
19

7
15

26

25 2 27

12

24
23

14 4
5

3
1

8

22
9

ImportantManagement

Importance to internal stakeholders
Supply Chain

1

Anti-corruption

2

Data Protection

3

Economic Stability

7

4Good Governance85

Human Rights

69

Supply Chain
Anti-corruption

Employees

Very important

Environment

Products

10

Occupational Safety

17

Material Effi ciency

23

Customer Collaboration

11

Education

18

Emissions Reduction

24

Innovation Management

Supplier Relations

12

Health Benefi ts

19

Energy Effi ciency

25

Reliability

Environmental
Standards

13

Training

20

Water Effi ciency

26

Value for Money

14

Work-life Balance

21

Renewable Energies

27

Energy-effi cient Products

15

Remuneration

16

Diversity

Social Standards

Society22

Social Engagement

28

Product Safety

29

Resource-effi cient
Products

30

Water-effi cient Products

individual aspects of sustainability within our Group Divisions are still at different
stages of development and that there is potential for improvement. This is why weare working on developing new sustainability objectives within the departments
and assigning clear responsibilities. After all, our goal remains unchanged: Voith
aims to be the industry benchmark in terms of sustainability in the markets andsectors in which it operates.

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1.3 Values and Compliance
How We See Ourselves
At Voith we combine the tradition of a family-owned company with the cultureof a global Group. Voith has been undergoing a comprehensive transformation
process for several years now that affects our portfolio of products and services,
our organization, and our culture. In the reporting year we consolidated the way
we have come to see ourselves in a new corporate mission statement. Our vision:
Voith is the industrial technology partner for generations to come.
Our values underpin all of our actions: We are respectful and reliable, open andambitious. Our values, and the guidelines derived from them, ensure that Voith
acts according to the same business principles and adopts the same philosophy
worldwide. We have summarized this mission statement in our new claim, which
we presented in the 2016/17 fiscal year: Inspiring Technology for Generations. Our
new claim took effect on January 1, 2017 – the beginning of our 150 th anniversary
year – and has been in use globally ever since.
Code of Conduct for All Employees
Voith committed itself to upholding the following business principles way backin 1927: “In the business world one must be ethical, decent, and honest. If acontracting party or competitor behaves unfairly, this does not give us the rightto deviate from this principle.” These principles still govern our actions today. Our
Code of Conduct defines the way we act towards customers and business partners,
as well as how employees behave towards each other within the company. It
can be viewed online and provides information on contact partners and the Voith
Compliance Committee.

Fact baseExternal Chartas and Principles

We require every single one of our employees to comply with prevailing legislationand our company’s internal regulations. This applies across our Group and all
hierarchical levels, with any violations entailing sanctions. We constantly update
our rules and procedures, and adapt them to meet current requirements.

Key Aspects Addressed by the Voith Code of Conduct
Observance of the rules of fair competition.
No anti-competitive agreements.
• No corruption or bribery: No offering and granting, or demanding andaccepting of unfair advantages.
• Transparency on donations and sponsorship.
• Safeguarding our own and respecting others’ patents, industrial property
rights, and trade secrets.
• No undue preferential treatment of suppliers and service providers.
• Respect for human rights, fair working conditions, and rejection of childand forced labor.
••

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Voith Compliance Committee
The Voith Compliance Committee is responsible for establishing, developing,and coordinating our Compliance Program, revising compliance regulations, andcoordinating training. This committee meets monthly and comprises the Headof the Group Law Department (Chairman) as well as the respective Heads of theGroup Human Resources Management and the Group Audit Departments. Its
Chairman reports directly to the Corporate Board of Management of Voith GmbH& Co. KGaA. The CFOs of the Group Divisions and the individual Group companies
serve as the Compliance Officers in their units. Within their area of responsibility,
our Compliance Officers are responsible for implementing our Code of Conduct
and also serve as Group-wide contact partners. This also corresponds to our otherRisk Management organization.
Compliance Training for Employees
All of our employees are required to keep themselves regularly updated on compliance issues and on our Code of Conduct via our e-learning programs. Throughtheir successful participation, employees also document that they are fully awareof our Code of Conduct and have understood the appropriate regulations. Around
98 % of our employees with a computer workstation completed our programs on
Anti-Corruption and Antitrust Law, as well as on Leadership and Employees. A
higher degree cannot be achieved owing to customary headcount fluctuation in acompany, so we assume the programs cover all employees. Employees who do
not have a computer workstation are trained by their line manager to ensure theirknowledge is up to date.
Face-to-face courses were also held again in the reporting year, which are now
also assigned automatically to individual buyers. 576 employees, mainly comprising
managers and employees from Sales and Purchasing, took part in 25 events.
Separate, highly detailed training courses were offered to Compliance Officers
from our Group Divisions.

Fact baseCompliance Training
Fact baseExternal Security Personnel

Group-wide Information and Complaints Reporting System
Any employee can report abuse, complaints or violations of our Code of Conduct tous. This principle applies just as much to our employees as it does to our suppliers,
local residents or other stakeholders of our company.
There are several ways in which Voith employees can do this: either personallythrough their line manager or the Compliance Officer, or electronically via the
Helpdesk, or by e-mail. We also follow up on complaints that have been submitted
anonymously via our Group-wide whistleblower system, with the number and typeof violations documented centrally.
This whistleblower system can also be accessed by external parties at any time
via our company website, so it is open to all business partners and suppliers too.
Any type of complaint on any subject can be reported. And to ensure the strictest

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confidentiality is maintained, the number and nature of the complaints at Voith are
not disclosed externally.

Fact base
Violations ofCompliance Regulations
Fact base
Escalation Paths

Reports relating to the environment can also be submitted to the local Environmental Officer. The exact complaints process and escalation paths are set out inour HSE Group Directive and its annex Environmental Incidents. Complaints arecommunicated based on their severity along disciplinary and functional reportinglines. We are pleased to report that no instances were reported to Voith in thereporting period.
Regular Reviews Guarantee Effectiveness
Our Internal Audit Department examines observance of all compliance regulations ina routine risk assessment involving around 30 operating units annually. We ensurethat our business partners comply with our regulations by means of a SupplierSelf-Assessment (SSA). Compliance also forms part of our General Purchasing
Conditions (GPCs). For the reporting period we are pleased to announce that weneither received any complaints concerning supplier violations of environmental
or social standards, nor were we notified of any suspected cases of corruption.
As in virtually all companies, in the reporting year we also had isolated cases wherecompliance regulations had been violated at Voith. Appropriate action was taken
in all instances.
Continuous Optimization of Compliance Organization
We work tirelessly to optimize our Compliance organization, and adapt it to meet
new standards and requirements. As an example of this, in January 2017 we
implemented the UK Modern Slavery Act declaration in our organization. In light of
this, among other things we also published our Management Board Declaration on
Human Trafficking, Forced Labor and Child Labor. Furthermore, we reviewed ourcompliance system against the requirements of the German federal government’s
National Action Plan on Business and Human Rights. We are pleased to report thatno modifications were needed.
Scope of Training Expanded
We are also expanding our training courses in line with optimizing our Complianceorganization. In the 2016/17 fiscal year we launched a new face-to-face course on
Business Crime and Preventative Accounting Measures for all Accounts employees
in our Shared Services organization. Additionally, the Compliance area of humantrafficking, forced labor and child labor was integrated into existing courses.
Tackling Corruption
It is vital that we take rigorous action against corruption. This is why all Compliance
Officers are required to create a Risk Control Matrix that also includes potential
corruption risks for their specific Group Division. This structured process covers all

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Voith locations worldwide. The results of all Group Divisions are aggregated and,among other things, form the basis of internal compliance audits.
Our risk assessment is based on many factors including the Corruption Perception
Index (CPI) published annually by Transparency International; this index ranks virtually all countries by their perceived levels of corruption on a scale of 1 to 100. As
we maintain business relationships the world over, special precautionary measuresapply to high-risk countries, whereby the risk manager responsible decides on themeasures. 176 countries are listed in the Corruption Perception Index.

CPI Index

Human Rights
Compliance with human rights is a matter of course for Voith as a global Group. As
part of creating their Risk Control Matrix, Compliance Officers also review whether
there is a risk of child or forced labor in the company. In the reporting period weare pleased to announce that we were not notified of any human rights violations.
Confidential Treatment of Information
Information security and protection of confidential data are core aspects of privacy
and information security at Voith. Every employee is expected to show appropriate
awareness of security and a sense of responsibility. Our information technology andsecurity management system is certified according to the international standard
ISO/IEC 27001. Appropriate handling of company, business partner, and personal
data is also governed by our Group Directive on Information Security and Data
Protection. In the reporting period we are pleased to announce that there were no
notifiable breaches of data security.

Code of Conduct
www.voith.com/corp-en/
about-us/compliance.html

1.4 Responsibility for Society
Our understanding of sustainability has always included the aspiration to be socially
active as a company. In Heidenheim, where we have our headquarters, as a goodneighbor we are actively involved in various initiatives including as sponsor of a training program run by the Sonderberufsfachschule Hanns Voith (Special Vocational
College Hanns Voith). We have focused on the areas of sports, education, social
affairs, and culture, which we support either through direct financial contributions
or in-kind benefits.
Group Directive Defines Frameworks
Our Group Directive on Donations and Sponsorship has set out the type and scopeof our commitment ever since 2008, and also outlines the financial frameworks ofour donations. The budget is based on the previous year’s Earnings Before Tax (EBT),
limited to a maximum of 1 % of EBT or at least two-thirds of the volume of funding
in the year before last. This smoothing ensures that we can provide consistent

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support, irrespective of any volatility in our company’s development. We record ourdonation and sponsorship activities once every six months, covering all our global
activities and across all business units using our internal controlling systems. The
Head of the Legal Department informs the Corporate Board of Management oncea year on how funds have been allocated across the entire Voith Group.
Clear criteria enable us to select projects in a targeted way that also conforms
with our guidelines. To qualify for assistance, above all we must be convincedof the recipient’s integrity and that their project is a worthy one. We also take
into consideration the regional relevance and the appropriateness to our businesssegments, values, and corporate culture. Furthermore, we consider the frequency
and volume of previous contributions, ensuring these are distributed as widely as
possible. Irrespective of this, in humanitarian emergencies that demand urgent
action we provide help quickly and directly.
By contrast, our sponsorship activities always focus on the appropriateness ofthe contribution and the benefit we received in return. This is because we follow
additional, mainly communicative goals besides providing sponsorship.

Ready for Africa’s Future
In 2017, the year of our anniversary, we supported the establishment of aVoith Code Club in Tanzania with a donation of € 150,000. This is intended tohelp 480 girls and young women prepare to tackle the increasing
technological transformation of Africa through communication, leadership,
and programming courses. As part of this, we are working together with theaid organization Theirworld. We also joined the Global Business Coalition for
Education (GBC Education). The donation was made possible by Voith
employees who participated in sporting events around the world to mark thecompany’s 150 th anniversary. The donation was raised from the distances
covered in various runs, hikes, and bike rides.

Organization of Our Engagement
Our social engagement activities are managed by Voith GmbH & Co. KGaA, headquartered in Heidenheim. In terms of organization, within our company we havealso taken into account our activities’ differing objectives. Our Legal Department
coordinates our social engagement activities, while Corporate Communications
controls our sponsorship activities. Individual Group Divisions and local Group
companies can also launch and run their own assistance and sponsorship projects,
provided they comply with our Group Directive.
We also support numerous initiatives and projects in coordination with the Hanns
Voith Foundation. Through its activities, this independent foundation regularly

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engages in a large number of local and cross-regional initiatives, and also provides
financial support in the form of annual donations to various projects.
Our Engagement Activities in the Reporting Period
In the 2016/17 fiscal year we invested around € 2.96 million in social engagement
activities (previous year: € 2.08 million). This increase resulted mainly from donations
to the Hanns Voith Foundation.
We provided € 1.91 million in the form of donations, while € 1.04 million was used forsponsorship measures. We spent the greatest share on education (54 %), followedby sports (32 %), social projects (9 %), and cultural projects (3 %). Political parties
and organizations received financial contributions of € 50,000 from Voith In thereporting year.

Fact base
Donations and Sponsoring
Fact baseContributions to Political Actors

Sports Engagement
Voith sponsors both professional and amateur sports, and supports sports clubs
and events around the world with the main focus on Heidenheim. In the reporting
year we invested € 0.95 million in this area. At our company’s headquarters, wesponsor the sports club 1. FC Heidenheim 1864 e.V.; this includes sponsoring thenaming rights to the Voith Arena and supporting the club as the principle sponsorof the shirts and perimeter boards. By doing so, we aim to increase recognitionof the Voith brand in particular. In addition, we sponsor the fencing center of the
Heidenheimer Sportbund 1846 e.V. (HSB – Heidenheim Sports Association) as wellas the local HSB baseball team and the HSB Athletics Department, whose trainingsite bears the name Voith-Sportzentrum (Voith Sports Center). We believe support
for local initiatives is an investment in the attractiveness of the region – one which
benefits both the regional citizens and our employees. Furthermore, in the 2016/17
fiscal year we provided financial assistance to the sunpor cycling club, St. Pölten,
the TSV Crailsheim women’s football club, and the DomiZiel curling team (Special
Olympics World Champion), St. Pölten.
Committed to Education
A good education and training provide the basis for the best development opportunities in life. This is why we support kindergartens, schools, and universities
around the world, continuing the tradition of Hanns Voith. Starting way back in
1946, Voith has dedicated itself in the German state of Baden-Württemberg totaking disadvantaged young people and preparing them for training schemes andthe world of work. What initially started as a vocational preparation and training
course has now become an institution, and has been recognized since 2004 as
the Sonderberufsfachschule Hanns Voith (Special Vocational College Hanns Voith).
14 years have passed since we began supporting the Germany-wide business@school education initiative of The Boston Consulting Group. It gives senior highschool students a closer look at business, including hands-on experience, overthe course of one school year.

Fact baseSpecial Vocational
College Hanns Voith
Fact basebusiness@school
Education Initiative

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At university level we support young talent through the German Deutschlandstipendien scholarship initiative. Furthermore, we provide endowments for professorships
at the German universities of Stuttgart, Ulm, and Aalen. By doing so, we aim tocontribute – without influencing the research content or teaching practices – totraining new academic talent and promoting research in scientific areas relevant
to Voith.
Our long-standing cooperation with schools and universities has also proven its
worth in Europe, the US, India, China, and Brazil. Our assistance in this area
includes support for the Educational Freedom projects of Recreatur ResgataTUR,
Escola Estadual Conjunto Habitacional Voith, and Friedrich von Voith School inSão Paulo, Brazil as well as the Formare project of Fundação Iochpe. Each year
Formare offers 20 children from low-income families the chance to take a training
course and go on to gain a state-recognized qualification. Employees’ children are
excluded from taking part.

Fact base
University Engagement andEndowed Professorships
Fact base
International Education Projects

We forge a link to our cultural engagement through our contribution to the Heidenheim Opera Festival, of which we are the main sponsor. In the reporting year this
support included inviting all fourth grade primary school pupils in Heidenheim to
the Junge Oper opera for youngsters, thereby contributing to these pupils’ earlymusical education.
Cultural Engagement
We want to give as many people as possible access to culture. As an example, in
the reporting period we provided financial support to various institutions in Heidenheim, including the Opera Festival with a € 60,000 donation.

Fact base
International Education Projects

National and International Social Engagement
Our company also stands for encouraging global social engagement that improves
people’s living conditions and promoting intercultural exchange. For instance, Voith
is one of the initiators of the German industry integration initiative Wir zusammen(We Together), which helps refugees integrate in Germany. We are involved inproviding an introductory vocational training course for young refugees to facilitate
their start into professional life or vocational training. Three refugees had alreadycompleted their one-year entrance qualification in July 2016. Two of them have been
particularly successful, and they have been in vocational education since September 2017 – one as a metal technology specialist in at Voith. Another refugee began
his vocational training in September 2017 as an IT systems integration specialist.
Many of our employees volunteer their spare time to assist people in need. Among
our activities in this area, we support them by granting temporary paid release fromwork and providing them with materials or equipment that is no longer required.

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150 Good Causes – Global Engagement in the Anniversary Year
We used our 150 th anniversary year to further the global social engagement of
our locations. 150 social projects were carried out around the world between
January and July 2017 as part of our 150 Good Causes campaign. Regional
teams were able to set different priorities based on our donation rules, anddepending on requirements, support either educational projects, social aid
projects, or cultural or sports activities. Up to € 1,000 per project was available.
Our financial support for suitable initiatives was – as is typical for a family
company – complemented by the active personal involvement of ourworkforce.
Among the initiatives, in Brazil support was provided to the Dorcas Institution,
which aims to protect children and adolescents from slipping into a life of drugtrafficking or prostitution. The Indian project Midday Meal reaches out to needy
children from families who live below the poverty line, with Voith providing
school bags, meals, uniforms, and books. The aim is to give poorer children
just as good a chance as children from socially better-off families. At our US
location in Appleton, Voith got involved in the technical education of students,
and promoted a range of training programs in robot design, programming, andinnovative thinking. There was a similar focus in Sweden, where theorganization KomTek Glada Hudik was selected for inclusion in our 150 Good
Causes campaign. Their goal is to introduce youngsters to technological
topics, technical education, and entrepreneurial thinking from an early age.

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2_Environment
We aim to conserve resources andminimize our environmental impact
in all of our activities. This is why wesee it as our responsibility to handle
resources and energy efficiently aswell as to avoid environmental risks
at all of our locations. By linking
our economic principles with anenvironmental approach we not only
contribute actively to protecting theclimate but also create measurable
added value for our company.

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2_Environment
2.1 Environmental Management Approach
As an industrial company Voith is required to comply with a large number of national,
regional, and industry-specific laws, regulations, and guidelines. The need for Voith
to demonstrate full compliance with these goes without saying. At the same time,
we see ourselves as responsible towards our employees and neighbors for avoiding
environmental risks and using resources responsibly. As a manufacturer, our main
focus therefore lies on energy and resource management. Through this we intend
to continually reduce our energy consumption and corresponding greenhouse gas
emissions, make efficient and safe use of direct materials and raw materials, andprevent waste as much as possible. We also work continuously to reduce our water
withdrawal and wastewater volumes.
To steer and coordinate our environmental activities we defined two main subject
areas:• Operational Environmental Protection – Eco Standards provide strategicand operational support to our divisions and locations in complying with andimplementing environmental regulations as well as internal environmental
protection policies.
• Resource Protection – Ecological Business Management (EBM) improvesenergy and resource efficiency at our locations.
2.1.1 Operational Environmental Protection
Eco Standards Establish Clear Frameworks
The aim of operational environmental protection is to minimize all environmental
impacts of Voith’s operating activities. Our activities in this area focus on strategicand operational control, with the aim of ensuring environmental regulations are
implemented and upheld. In particular, this includes the analysis and internal communication of potential environmental risks, categorized into risk classes according
to their probability and potential impact.
Our HSE Steering Team coordinates and standardizes our operational environmental protection activities. This decision-making body focuses on bringing auniform and organized structure to existing environmental protection processes
and procedures. In hazardous materials management, activities focus on replacing
particularly harmful materials with harmless substitutes. Alongside this, we areworking to reduce the total amount of substances we use.
In accordance with our Shared Services system, full-time environmental experts at
the regional HSE service organizations ensure our Group companies are provided
with high-quality, organized support. Our HSE Group Directive sets out specificrequirements on how environmental protection is to be organized at a local level,

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Environmental Management Approach
Performance in the Reporting Periodwith every Voith location required to appoint an Environmental Officer. Their tasks
cover a wide range of topics including emissions control and water protection,
waste management, hazardous materials and goods, and preventing environmental
incidents. They also advise operations managers on new plant constructions, modifications, and approval processes, and conduct regular site inspections and audits.
Our new organization proved successful in the reporting period, and Field Service
employees were also increasingly involved in activities. A range of pilot projects
were carried out successfully in the regions via the HSE platform, including one
to assess hazards in Brazil and one run within the scope of hazardous materials
management in Germany.
Central hse+ Platform Creates Transparency
The work of our environmental experts is supported by the Group-wide hse+
IT system. It is the basis for matrix certification and supplies all key operational
environmental protection data via uniform processes, forms, and evaluations.
In the reporting period we gradually migrated our most important environmentrelated systems to our Group-wide HSE software. This single platform now provides
us with transparent and centralized access to all relevant information. Importantfacility-related requirements such as inspection deadlines, permissible limits, andrestrictions are recorded in the system and are available for timely resubmission.
In addition, in 2017 we developed and tested another module to record and analyze
environmental risks within our organization. Following successful pilot testing, the
new Environmental Risk Assessment module will be rolled out Group-wide in the2017/18 fiscal year.
ISO 14001 environmental certification prerequisites changed in the reporting period,
and the migration of the OHSAS 18001 standard to ISO 45001 is also giving
rise to new requirements. However, we see the changes in both standards as anopportunity to integrate health, safety, and environmental aspects even more as amatter of course into our daily processes. Preparations are going to plan for us toswitch over to the new ISO 14001 standard in the coming fiscal year, and once it
comes into force, also to the ISO 45001 standard in good time.
Through hse+ our experts also have access to a central legal database that contains
all the relevant HSE regulations and standards that apply to us in each region.
Besides current legislative texts, experts can also access summaries and comments in the respective national languages. The legal requirements are assigned
via the system to the relevant officer, who then becomes responsible for ensuring
the requirements are met. The same applies to Voith standards, approvals, andrequirements. hse+ is also used to perform location-related environmental risk
analyses. The measures derived are then assigned implementation responsibilities
and review dates, and documented and monitored in hse+.

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Environmental Incidents Recorded and Analyzed Across the GroupAll environmental incidents at Voith are recorded and analyzed centrally each monthusing a Group-wide reporting system based on standardized criteria. The Corporate
Board of Management is informed about the results of the analysis on a quarterly
basis. In doing so, we follow corresponding occupational health and safety categories so that we can evaluate and rate incidents across topics according to the same
standards. As awareness of our Group-wide standardized process increases, so
too does its use – with a corresponding increase in the quality and conclusivenessof the analyses. Internal communication measures also help to raise our employees’
awareness. Among activities in this area, in the reporting period Voith Hydro ran aposter campaign promoting the careful use of resources.
With the Group-wide roll-out of our eVAP app, which covers not only occupational
health and safety but also environmental aspects, the number of reported incidents
continues to rise. Thanks to this, employees are not only reporting actual incidents,
but also increasingly identifying potential risks – fundamental proof that there is ahigh level of awareness of the topic of HSE (health, safety, and environment).
Fact base
Noise Complaints

We are pleased to announce that no incidents requiring public reporting wereregistered in the reporting period.
Central Approval Process in Hazardous Materials Management
Arguably, just like every other industrial company Voith also uses hazardous
materials in its production processes, such as paints, lacquers, thinners and solvents, adhesives, resins and hardeners, lubricants, cleaning agents, and industrial
chemicals. We ensure these materials are used as safely and securely as possible
by means of a Group-wide hazardous materials approval process. We base ourdecisions on our central hazardous materials database that allows us to perform a
uniform global analysis of the environmental, health, and safety risks of work materials and hazardous materials. For many years now, we have worked to eliminate
particularly harmful materials, and encourage the use of low-risk substitutes as wellas the harmonization of safety standards across the Group.
We also aim to exert a positive influence on hazard potentials and costs by
reducing the wide range of redundant materials we use. By adhering strictly to
the “polluter pays” principle, we work to ensure that approved materials in ourhazardous materials database are used in preference to all others. In doing so, wemeet environmental protection, occupational health and safety, and compliancerequirements while achieving the greatest possible degree of standardization.
Since rolling out the process, the quality and completeness of the data have already
improved noticeably. Particularly in German-speaking countries, specific substitutes have already been proposed for certain product groups such as coolants andVoith Sustainabilit y Repor t 2017

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Performance in the Reporting Periodcleaning agents. This means that we are progressively building the basis to be able
to issue product declarations at the press of a button, and to reduce pollutants in
our products.
Since launching the approval process in 2016, around 5,500 materials have beenrecorded centrally – 800 of which have either not been approved or blocked for
future use. In the reporting year alone, 1,470 applications were processed. A new
analysis process now delivers results that are reproducible across the Group, irrespective of which HSE experts were involved in the checking process. Thanks to theuniform Group-wide analysis process the rejection rate also increased year on year,with around 16 % of applications rejected in the reporting year; in over half of thesecases it was because they concerned banned or harmful materials – proof that the
new process is working and effective. The other rejected applications were returned
with the request to select a suitable substitute from the list of approved materials.
In coming years we will continue to gradually reduce the number of hazardous
materials used; however, owing to the abundance of materials to be stored in
the database, consolidation will take longer than was anticipated at the start ofthe project in 2011. Currently, we expect that the consolidation process for theGerman-speaking countries and the region of Europe will have been completed in
the 2017/18 fiscal year. In the third quarter of this fiscal year we will start recording
existing materials in the Americas and Asia in the database. Based on our previous
experience, we expect the consolidation to have been largely completed (80 %) by
the end of the 2018/19 fiscal year at the earliest.
Back in 2016 we developed our Substances Navigator tool to provide information
quickly and reliably whenever required on which hazardous materials are used in
our products. The tool indicates any hazardous materials that product groups may
contain. We update it regularly, and among other things it allows us to check quickly
if and to what extent a (sub)product may contain certain hazardous materials. It also
allows banned or restricted materials to be checked against current standards, sothat Purchasing does not buy problematic materials in the first place, or a stop is
put to their use as soon as possible. The existing base information in the databasealready allows us to deliberately avoid including redundant products by creatinginternal shopping baskets. Building on this, we will initiate pilot projects in the
coming fiscal year to reduce the identified redundancies in these shopping baskets.

Fact baseNanotechnology

2.1.2 Efficient Use of Resources
Through Ecological Business Management (EBM) we aim to identify ecological,
environmental and economic potentials for improvement in our production processes and leverage these potentials by performing analyses at process, system,
and component level.

Voith Sustainabilit y Repor t 2017

36

2_Environment

To assist with this, in the reporting period we improved our process of continuous
data collection. In doing so, our central database now also includes data that allows
for weather influences (heating-degree days) that all EBM locations can access. In
addition, we integrated the gathering of emissions data on process-related gases
such as sulfur hexafluoride (SF6) and refrigerants. We also revised our updatingprocess for greenhouse gases and other emissions.
Our activities focus on the areas of energy, waste, and freshwater for which our
Corporate Board of Management set specific targets taking the 2011/12 fiscal
year as the benchmark: We will reduce our energy consumption by 20 % basedon revenue, our waste by 25 %, and our freshwater withdrawal by 10 % by the
2017/18 fiscal year.

Fact baseEnvironmental Goals

We expect to achieve these targets by the end of the 2017/18 fiscal year. However, atthe end of the target period our measures in the area of water will show a decreasing
marginal utility, as the majority of potentials will have been exhausted at that point.
Furthermore, there will be a conflict of objectives between the areas of water andenergy if a greater amount of environmental heat is to be used in the future. We are
reducing our fossil-fuel consumption also by switching to water-based heating andcooling. Although this increases the volume of freshwater we require, as we only use
it for heat exchange the environmental impact of this is far less than the increased

Climate-change Roadmap
Reduction in CO2e−25 %kg/MWh Groupelectricity mix−35 %CO2e emissions/value-adding activities

by 2021/22−90 %CO2e emissions/value-adding activities

by 2024/25

by 2049/50

Production-related Energy Consumption
specifi c value in MWh/€ million in revenues
126.2

126.2
113.8

Target value
for 2016/17
Target value
for 2017/18

Voith Sustainabilit y Repor t 2017

106.4

107.3
104.6
100.8

2012/132013/142014/15

2015/162016/17

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

37

Environmental Management Approach
Performance in the Reporting Period

consumption value indicates. Waste is another area in which further potentials canalmost only be leveraged through long-term strategic measures.
For us to seamlessly further optimize processes even after the end of the current
target period, in the reporting year we already started working on further specifictargets for the next target period. The new targets have already been discussed in
our Corporate Sustainability Council (CSC) and adopted by our recently established
Environmental Steering Committee and our Corporate Board of Management.
Within the framework of these activities, we continue to use data from the 2011/12
fiscal year as the benchmark.
The three main drivers of energy, waste, and water withdrawal will remain thefocus of our attention going forward. By the end of the 2021/22 fiscal year we aim
to reduce our energy consumption by 30 %, our waste volumes by 35 %, and ourwater withdrawal by 40 %.
We have also set ourselves specific carbon-reduction targets to make an additional
contribution to climate protection by taking the values from the 2016/17 fiscal year
as the basis and orientating ourselves to a scientific approach in accordance with
the Paris Climate Accord.

Waste
specifi c value in t/€ million in revenues
10.9
10.2

9.9
8.7

Target value
for 2016/17
Target value
for 2017/18

7.3
2012/132013/142014/15

2015/168.8
8.0

2016/17

Freshwater Consumption
specifi c value in m 3/€ thousand in revenues
Target value
for 2016/17
Target value
for 2017/18

0.32

0.32

0.33
0.32

0.27

2012/132013/142014/15

0.25

0.25

2015/162016/17

Voith Sustainabilit y Repor t 2017

38

2_Environment

In the first step, by the end of the 2021/22 fiscal year we aim to achieve a 25 %reduction in our carbon emissions resulting from our power consumption by optimizing our grid mix. By the end of 2024/25 we then plan to reduce the Scope 1 & 2carbon emissions of our value-adding activities by 35 % until we have achieved a
90 % reduction by the end of 2049/50. We will set additional interim targets andmilestones for our carbon targets beyond 2024/25, taking into account our businessdevelopment.

Fact base
Green Controlling

Green Controlling Delivers Transparency
We aim to create economic and environmental added value through our resource
management activities. To achieve this we follow a four-stage Green Controlling
process that provides us with transparency concerning our pipeline of measures,the degree of implementation of the measures represented within it, and their impact
on the development of indicators, allowing us to actively control the target-achievement process. We have already received numerous awards for our approach toenvironmental management. Among them, in the reporting year we were nominatedfor the German Federal State of Baden-Württemberg’s Environmental Award in the
category of “Industrial companies with over 250 employees.”
Further Hot-spot Analyses Performed
We use hot-spot analyses to work on specific and cross-location focus topics
such as the energy consumed during a process step. To achieve maximum effectwe focus on the greatest consumption drivers in individual regions and locations.
In the reporting period we conducted three hot-spot analyses in North America
and three in Europe. Once again, energy and waste were the focus topics of theanalyses. In addition, we performed a cross-location benchmark analysis on coolant
lubricant management.

Fact baseHot-spot Analysis Methodology
Fact base
EBM Experts

Voith Sustainabilit y Repor t 2017

The recent analyses also confirm the trend that we are increasingly moving awayfrom facility infrastructure topics (lighting, compressed air, heating, ventilation, andair conditioning) towards process-specific topics (such as the use of steel grit forsandblasting, and the heat-setting process for felt production). In doing so we are
gradually leveraging the greatest value potentials, although the expense involved
in implementing the measures is rising.

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

39

Environmental Management Approach
Performance in the Reporting Period

2.2 Performance in the Reporting Period
2.2.1 Energy Efficiency and Greenhouse Gas Emissions
Energy Consumption Rises Slightly
In the reporting year Voith consumed 453,012 MWh of energy (previous year:
452,294 MWh). 107 MWh of energy was needed per € million in revenues, anincrease of 0.9 % versus the previous year (106 MWh per € million in revenues).
One of the main factors behind this slight increase is the start-up phase of the newfacility in Shanghai, China. Energy is being consumed there for heating and cooling
during this start-up phase, while the corresponding contribution to revenue will only
take full effect in the future. To reduce consumption as quickly as possible, a task
force is already on site and has already achieved initial process optimization results.
In the reporting period the identified potential for action in the pipeline rose from107.0 GWh to 123.7 GWh (+15.6 % versus the previous year). Measures with avolume of 9.8 GWh (previous year: 23.6 GWh; −59 %) were implemented in thereporting period; as a result, the total amount of measures implemented corresponds to 83.4 GWh. Taking the figures of the 2011/12 fiscal year as our benchmark
we have already achieved a 14.8 % improvement, with the goal of 20 % at the endof the 2017/18 fiscal year still firmly in our sights.
In the coming months we expect to achieve further significant energy savings as
a result of a range of contracting projects in Heidenheim. In addition to this, theaforementioned start-up optimization in Shanghai will significantly reduce the plant’s
energy consumption.
In the reporting period we also identified additional heating energy consumption
drivers, also through the aforementioned hot-spot analyses. In future we also
intend to include heating degree days into our analysis, where our heating energy
requirements are adjusted to take into account the effect of the outdoor temperatureon energy consumption. This will provide us with even more accurate results. By

Production-related Energy Consumptionin MWh582,277

2011/12573,336

2012/13525,862

2013/14489,473

2014/15452,294

453,0122015/162016/17

Voith Sustainabilit y Repor t 2017

40

2_Environment

Fact baseEnergy Consumption
Fact base
Certifi cations
Fact baseEnergy Saving Measures
and Further Potentials

way of example, in the 2016/17 fiscal year there were 5 % more heating degreedays worldwide than in the previous year; in Germany, this figure was even higher
at 10 % above the previous year’s value. This gave rise to a significant increase in
the demand for district heating.
To identify additional potentials, our EBM experts meet on a regular basis to compare processes, set benchmarks, and implement the best solutions at Voith throughsharing best practice.
Energy Mix Improves Slightly
18.2 % of the energy we consumed came from renewables, and 81.8 % from
non-renewable resources. This calculation included all energy sources associatedwith our production-related energy consumption.
Besides heating and cooling, which account for around 31 % of our energy consumption, the production of paper-machine clothing remains the key driver of our
production-related energy use, accounting for 26 % of our global consumption.
Apart from weaving processes, heat-setting is especially energy-intensive –particularly in felt production. The operation of machine tools consumes 6 % of
the energy used at Voith, and 4 % of production-related energy consumption
accounted for by our foundry in São Paulo, Brazil.

Fact baseRenewables
Fact baseProduction-based
Energy Consumption
Fact baseDirect and Indirect
Energy Ratio

Main Sources of Energy Consumption in Percent in 2016/17
In the reporting period there was no real change to the proportion of direct (30 %)and indirect (70 %) energy consumption. With a share of 83 %, natural gas remains
the key energy source for our direct production-related energy consumption, followed by LPG (liquefied petroleum gas), diesel, and heating oil with percentage
shares in single digits. Among other purposes, we use these energy sources asheating fuel and for heat-intensive thermal processes. Diesel is used primarily tooperate emergency generators and generate steam at our locations in Karawang,Indonesien and in Shanghai, and for thermal processes in São Paulo, Brazil.

Main Sources of Energy Consumption
in %

33 %

31 %

Heating and cooling energy
Paper-machine clothing
Machine tools

4%Foundry in São Paulo
6%

Voith Sustainabilit y Repor t 2017

26 %

Other

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

41

Environmental Management Approach
Performance in the Reporting Period

Improved Efficiency Lowers Power Consumption
In the reporting period we consumed 242,735 MWh of electricity (previous year:
249,206 MWh). This fall is thanks to improved facility and process efficiency.
In terms of our electricity mix, the share of energy sources supplied by external
providers was 66.4 % (previous year: 73.3 %) from non-renewable and 33.6 % (previous year: 26.7 %) from renewable resources. With our newly formulated carbon
target we intend to create an additional incentive to further increase the share of
renewable forms of energy.
We first gathered information on our electricity mix at facility level in the 2016/17
fiscal year and in doing so updated the figures (see also the following explanations
on greenhouse gas emissions). These showed that among the renewable forms ofenergy, the share of wind power is increasing; among non-renewable resources,
there was a decline in nuclear power in favor of electricity generated from coal.
At Group level, this is resulting in a slight increase in the emission factor andgreenhouse gas emissions, despite an increase in renewables.

Fact baseEnergy Mix
Fact baseEnvironmental Impact
of Buildings

Slight Increase in Greenhouse Gas Emissions
We aim to minimize the impact our actions have on climate change. This is why wecontinue to focus our activities in the current fiscal year on improving our energy
efficiency, as our energy consumption is the main driver of the greenhouse gas
emissions (GHG) we generate. We take special account of this fact in our newly
formulated environmental goals and, in particular, our dedicated carbon target.
We also consider the challenges of climate change when developing products.
After all, our products’ lifecycle analyses demonstrate clearly that their environmental footprint is far greater when they are in use than in the production stage. As
a fundamental principle we aim to be the technology leader in all of our markets –where Voith products feature regularly in the highest efficiency class.

Section 4 Product Responsibility
p. 70–89

Electricity Mix Consumption by Resource Typein %Electricity from renewable
resources

34 %Electricity from
non-renewable resources

66 %2014/15

2015/162016/17

Voith Sustainabilit y Repor t 2017

42

2_Environment

In the 2016/17 fiscal year our facilities’ GHG emissions increased by 3.7 % to158,876 t CO2e (previous year: 153,168 t CO2e). The share of direct GHG emissions
fell by 7.1 % to 26,442 t CO2e (previous year: 30,544 t CO 2e) while indirect GHG
emissions rose to 130,506 t CO2e (previous year: 122,614 t CO2e).
Since the 2011/12 fiscal year we have reduced our absolute energy consumption
by 22.2 %, with absolute GHG emissions also falling in the same period by 15.6 %.
Differences in the national electricity mixes are causing the figures to diverge, meaning energy savings at individual locations or even production relocations vary intheir impact on GHG emissions.

Fact base
GHG Emissions Gathering
Methodology
Fact base
GHG Emissions by
Scope and Region
Fact baseTransport Emissions
Fact base
Emissions Trading
Fact base
Air Pollutants

In the reporting year we calculated both location-based and market-based emissions for the first time. The GHG factors for electricity reported by our locations
are, on average, slightly higher than the market-based factors (IEA [International
Energy Agency] 2016). The biggest difference is in China, where our locations arereporting significantly worse emission factors than the IEA factors owing to the highproportion of hard coal. The difference in the reporting year is 13,457 t CO2e. By
contrast, the electricity factor at our main facility in Heidenheim is much better thanthe German average thanks to the high proportion of natural gas and renewableenergies, with a difference of 9,318 t CO2e.
One of the main factors behind this increase in our GHG emissions in the reporting
period is the expansion of our production capacities in China and the associatedstart-up phase. As mentioned, the less favorable grid mix there acts as an additionalburden as there is little scope to change the power source. In addition, production
cutbacks in the Americas and Austria had a year-on-year impact, where GHG
emission factors are either very low or are developing at an exceptionally goodlevel when compared across the Group.

Production-related Greenhouse Gas (GHG) Emissions
total GHG emissions in t CO2eVoith Sustainabilit y Repor t 2017

159,924

153,168

158,876

2014/15

2015/162016/17

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

43

Environmental Management Approach
Performance in the Reporting Period

2.2.2 Material Efficiency and Waste
We work tirelessly to make our processes resource-friendly, which is why we control
the use of direct materials and raw materials throughout the Group. However, thebreadth of our product portfolio and the correspondingly diverse process landscapepresent us with special challenges. We are also faced with a range of requirementsin the project business at Voith Hydro and Voith Paper as well as in mass production
at Voith Turbo.
Known methods to increase material efficiency have so far focused heavily on mass
production and efficiencies of scale; however, in practical terms there is currently agenuine lack of useful methodical approaches to increase material efficiency in the
project business. We have therefore invested a great deal of time in recent years
in developing a standard methodology for project business and mass production.
Focus Remains on Material Efficiency
In the reporting period we purchased around 220,000 t of materials from suppliers, anincrease of around 18 % versus the previous year (186,000 t). The distribution in termsof the materials we purchased is as follows: 65 % semifinished products (previous
year: 59 %), 26 % raw materials (previous year: 30 %), 7 % packaging (previous year:9 %), and 2 % auxiliaries (previous year: 2 %). As we used less wood for packaging,
the share of renewable materials fell year-on-year to 6 % (previous year: 9 %).
In the reporting period around 38 % (previous year: 41 %) of the materials we used
had been recycled. The proportion was 55 % (previous year: 55 %) for auxiliaries,
46 % (previous year: 45 %) for raw materials, 30 % (previous year: 33 %) for semifinished products, and 78 % (previous year: 80 %) for packaging.
We are always working to further optimize material efficiency by utilizing provenapproaches, such as hot-spot and Ishikawa analyses. We do so by closely following one of the focus areas of our Voith Excellence Initiative – Voith 150+ Next
Level – whose objectives include identifying potentials for improvement in productdevelopment and engineering.

Fact baseMaterials Used

4.2 Responsibility in
the Supply Chain,p. 89

Material Consumption by Usein %of which raw materials

26 %

65 %

of which semifinished productsof which packaging
of which auxiliaries

7%2%
2014/15

2015/162016/17

Voith Sustainabilit y Repor t 2017

44

2_Environment

Significantly Lower Waste Volume in the Reporting Period
In the reporting period Voith generated 30,786 t of waste (previous year: 36,989 t),which is 6,203 t or 16.8 %, less than the year before. The main reason for this fall isa drop in demand for casting sand and other materials at the foundry in São Paulo,
Brazil. And as we purchased a greater amount of semifinished products, this also
reduced waste in production.
Correspondingly, the ratio of waste volume to revenue improved by 16.3 % to 7.3 t
per € million in revenues (previous year: 8.7 t). With an overall reduction of 29.3 %since the base year we have already exceeded our target of 25 % in the current
fiscal year.
In the reporting year the gains from measures implemented rose from 3,782 t to4,423 t (+16.9 %). The identified potential for action in the pipeline increased by
1.2 % to 6,044 t in the period under review. While more significant saving measures
are now almost only achievable as part of complicated product re-qualification
measures, the effort that is typically involved in the changeover is a prohibitive
hurdle. The measures covered relate mainly to material efficiency; the effects of
make-or-buy decisions or revenue shifting to less waste-intensive processes are
generally not reflected.
To further reduce the amount of waste we generate, we conducted expert workshops on waste. These achieved a range of useful results, including a benchmark
analysis of coolant lubricant management at Voith Paper locations. In addition,individual measures were initiated such as to increase the reusable proportion of
pallets and to extend the service life of hydraulic oils.

Fact base
Waste Volume
Fact base
Waste Saving Measures
and Further Potentials

Wood, paper, and cardboard waste account for a large proportion of the waste we
generate in all regions. This is due mainly to packaging and making one-off production components safe and secure for transportation. Owing to the high proportionof one-off and custom-made products at Voith, it is often not economically viable touse separate types of material-optimized packaging; nevertheless, in some cases
we achieved an increase in the share of recycled packaging.

Waste
in t
49,29546,54045,412

42,632

36,98930,744

2011/12Voith Sustainabilit y Repor t 20172012/132013/142014/15

2015/162016/17

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

45

Environmental Management Approach
Performance in the Reporting Period

Reduction in Hazardous and Non-hazardous Waste
In the 2016/17 fiscal year we generated 5,121 t less non-hazardous waste and1,082 t less hazardous waste than in the previous year. Our waste classifications
remained virtually unchanged versus the previous year, with around 81 % of ourwaste deemed non-hazardous and the remaining 19 % classified as hazardous.
The slight drop in hazardous waste is due to the cutback in (foundry) production
at our facility in São Paulo, Brazil, which continues to generate just under a third(32.4 %) of our hazardous waste.
The collection of hazardous waste at Voith is regulated by internal guidelines, withdisposal performed by specialist external disposal and recycling companies – Voith
does not transport any waste itself. We are pleased to announce that in the reporting
period no violations of the law were reported to us relating to the disposal of waste
by our external service providers.
Individual locations are constantly developing specific solutions to meet local waste
challenges. Among them, in some countries pallet pooling solutions are unattractive
owing to low order volumes, so reusable or repairable pallets are returned wherever
possible to local processors to enable their reconversion to high-grade materials.
At other Voith locations, cardboard boxes are processed into packaging materials
onsite for the safe and secure transportation of their own products to customers.

Fact baseHazardous Waste
Fact base
Waste Disposal

2.2.3 Water
Freshwater Withdrawal Falls Again – Target Achieved
In the reporting period our freshwater withdrawal fell by 5,945 m³ or 0.6 % to
1,040,967 m³. Of this, we use around a third (35.2 %; previous year: 41.9 %) for
cooling purposes only, which do not contaminate it. As a ratio to revenue, ourfreshwater withdrawal fell year-on-year by 0.2 % to 0.25 m3 per € thousand inrevenues.

Waste by Hazard Classificationin %Hazardous waste

19 %Non-hazardous waste

81 %2014/15

2015/162016/17

Voith Sustainabilit y Repor t 2017

46

2_Environment

With a total reduction of over 30 % since the 2011/2012 base year we have alreadyclearly exceeded our goal for 2017/18 even before the end of the five-year timeframe
we set ourselves. Nevertheless, we again increased the volume of identified measures in the pipeline by 9.9 % to represent a saving of 816,573 m3 of freshwater in thereporting period. In the same period, the gains from measures already implemented
from the pipeline rose by 12 % to 789,000 m3 of freshwater.

Fact base
Water Withdrawal
Fact baseFreshwater Savings Measures
and Further Potentials
Fact base
Water and Neighboring Habitat
Protection
Fact baseEnvironmental Incidents
Fact baseSealing of Soil Surfaces

In the 2017/18 fiscal year we aim to further increase the high level achieved. However, following many years of continuous improvement, our efforts to reduce water
withdrawal are increasingly declining in marginal utility.
By the end of the current fiscal year we also intend to update our 2011 studies onwater scarcity and biodiversity. We will then incorporate the findings into our action
planning for our newly defined environmental goals.
We are paying particular attention to the development of water withdrawal atfacilities located in regions faced with water shortages. This concerns our water
conservation measures particularly at our facility in São Paulo, as Brazil has been
increasingly afflicted by droughts and water shortages in recent years.
Significant Drop in Wastewater
At 914,569 m3 the volume of wastewater we generated in the reporting period was
7.2 % lower than in the previous reporting period (985,880 m3). Around 41 % (previous year: 51 %) was discharged into rivers, lakes or the soil, while 59 % (previous
year: 49 %) was discharged into the sewage system.
The significant drop in our wastewater volume was due to a variety of factors,
including the closing of the water cycle at our Garching facility, which alone led toa reduction of 50,000 m3 of wastewater.

Freshwater Consumption
in m3
1,649,221
1,236,915

2011/12Voith Sustainabilit y Repor t 20172012/13

1,349,592

2013/14

1,393,639

2014/15

1,046,912

1,040,967

2015/162016/17

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

47

Environmental Management Approach
Performance in the Reporting Period

Wherever it is worthwhile in terms of economic, environmental, and social aspects,
we use recycled water in our processes, such as in cooling processes (São Paulo)
and in closed cooling water circuits (Garching; Summerville). We also operate ourown wastewater treatment plants at our locations in São Paulo, Brazil, Garching,and West Monroe, USA.
Compared to other industrial companies our manufacturing processes only havea minor impact on water. Therefore, we are rarely required to measure water quality. For instance, at our Chinese locations only one sample per year is analyzed,
whereas at our other locations continuous or repeated monitoring measurements
are required. However, the overall burden of BOD, COD, TSS, heavy metals, nitrogen, and phosphorus cannot be derived owing to the low sampling requirements.
We are pleased to announce that there were no reports of limits being violated in
the reporting period.

Fact base
Wastewater by Discharge Type
Fact base
Wastewater Quality

Outlook
Shortly before the end of the current target period, we expect that we will reachour goals by the end of the 2017/18 fiscal year. In fact we have already exceeded
our target for freshwater withdrawal. Our waste reduction measures have proved
particularly successful: Instead of the 11,900-tonne reduction planned originally,
we have already saved 14,300 tonnes since the base year. In the area of energy wehave saved 78.8 GWh of power since the base year, so our target of 112.5 GWh
is firmly in our sights.
We fully intend to continue creating both environmental and economic added
value through our activities. With our newly defined targets, which also incorporate
national and international sustainable development goals, we will continue on our
successful path – for the equal benefit of our company and the environment.

Wastewater by Discharge Typein %Public sewage system

59 %Surface water
31 %
10 %
<1 %

Groundwater
Reuse inanother company

2014/15

2015/162016/17

Voith Sustainabilit y Repor t 2017

49

3_Employees
Voith is a family company and we see
ourselves as responsible towards our
employees – as a fair and dependable employer that also takes into
consideration their personal circumstances. We set high standards forour employees while also offering
them extensive opportunities for theirpersonal development, enabling us
to open up a variety of career paths
to them within our global technology
group.

Voith Sustainabilit y Repor t 2017

50

3_Employees

3_Employees
3.1 Our Aspiration – Our Responsibility
Voith’s success depends fully on the success of our employees. Qualified, motivated, and committed employees are our guarantee of future success, so we doeverything to offer them challenging tasks, personal development opportunities,
and an attractive working environment. We aim to retain good employees for thelong term and be a dependable employer. In doing so, we are continuing our
150-year tradition and laying the basis for the successful long-term developmentof our company.

Fact base
Workforce Structure

Voith as an Employer
The Voith Group’s workforce stood at 19,267 employees at the end of the 2016/17
fiscal year (previous year: 19,494 employees). This is equivalent to 19,045 (previous
year: 19,098) full-time equivalent (FTE) jobs excluding apprentices. Around 55 % of
our employees work in Europe, 25 % in the Americas, and 21 % in the APAC region.
Workforce Changes
In the Group Division Voith Hydro, 243 jobs were lost in the reporting year due toadjustments to reflect the market situation. 14.4 % of those affected found a newrole in other divisions. We also utilized every available option, such as a generalhiring freeze, the targeted use of working-hours accounts, and early retirement
offers, to prevent people falling into hardship.

Fact base
Workforce by Employment TypeThe ongoing expansion of our Group Division Digital Solutions led to an increase to
1,182 FTE positions (previous year: 661 FTEs) in the reporting year, with numerous
employees finding a new role in the Group Division. Aside from a few new hirings,
the majority of new jobs were filled by Voith employees from other divisions.

Number of Employees
in individual people
20,981

2014/15

Voith Sustainabilit y Repor t 201719,494

19,267

2015/162016/17

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

51

Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

Challenges and Focus Topics
Voith has been in a process of transformation for several years now, which is setting
the course for our continued success in the future. This has also resulted in new
challenges for our HR area. It is essential that we counter the constantly changing
labor-market conditions around the world. Indeed, our employees and their skill
profiles are facing new challenges particularly as a result of increasing digitizationin business and society. This is why our HR area set itself the task of assisting
employees in this process.
For this purpose, within our HR Strategy we defined the following focus fields forour actions:• Talent Management• Workforce Planning• Performance Management• Change Management• HR ExcellenceWith the launch of our Voith 150+ Next Level program, in the reporting year we
expanded the existing focus areas to include the aspect of HR Excellence.

Annual Report 2016/17, pp. 52–56,
Strategy

We linked specific packages of measures to all focus fields. Through numerous
strategic projects we are also setting strategic priorities to achieve the objectives

HR Strategy
Corporate Strategy

Focus Fields

Strategic HR Projects 2017/18

Fields of Action

Workforce Planning· Employer Branding· Target-group-oriented Recruiting
Experiences/Channels· Offering Safe Working Conditions

Workforce Planning
Performance
Management
Corporate Strategy
Requirements· Competency Management· HR Analytics (HR Cockpit)· Grading· Staff Development and Further
Training & Education· Health Benefi ts for Employees· Training and Promoting New Talent

Change Management· Engagement Survey Follow-up· Achieving a Work-life Balance· Performance-related,
Gender-neutral Remunerationand Social Benefi ts

HR Excellence· C&B Compensation Management Tool
· Lift-Focus Projects (CPI)· Travel Management· HRT Reactivation· Service Career· ESS/MSS· NA Harmonization(Policies and Benefi ts)· Diversity and Equal Opportunity· Co-determination by Employee
Representatives

Voith HR Management

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defined in our Corporate Strategy. At the same time, we are addressing the majorityof the fields of action that we have derived from our stakeholder survey (see graphic).
Company Values
Voith’s identity as a company is based on a clear set of values that are firmly
embedded in our corporate culture, and which are embraced by all divisions andacross all levels of our company. They are the benchmark by which we assess our
employees’ performance each year. In addition, our values play a central role inour training programs, such as our Start-up Leadership program for prospective
executives.
Our value framework is summarized as follows: We are respectful and reliable,
open, and ambitious. These values have been an integral part of the Voith visionand mission for over 100 years, and are transmitted in a variety of ways including
through our training programs at the Voith Academy.
Our Code of Conduct sets out binding rules for cooperation within our company
as well as with our customers, suppliers, and business partners. It also contains
fundamental guidelines for our leadership and trust-based culture as well as forpromoting tolerance and equal opportunity.
Shared Services in HR Management a SuccessIn line with our Shared Services system, HR activities at Voith are organized into
four regionally distributed Global Business Service Centers. For each region, sevenservice lines handle tasks such as payroll, time management, and HR administration
using a service approach that is uniform across the Group. In doing so, we areworking systematically to standardize, automate, and modernize HR processes
across Voith. In connection with this, in the reporting year we added further self-service options for our employees. These include changing details such as address orbank account information as well as the approval of leave and correction of time
records. We aim to further expand on these options and roll them out gradually
across all regions globally.
Centralizing and bundling activities has enabled us to achieve significant savings
already, while also improving process quality in many areas. As implementation
progresses we will continue to move forward in optimizing processes and systems,
and adjusting or shifting the released capacities according to activities. The next
step of our transformation process involves harmonizing and standardizing those
processes and policies wherever appropriate which have been adopted but so far
not adjusted (shift-and-lift approach).

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Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

3.2 Attractive Employer
Voith enjoys an excellent reputation as an employer brand, as we combine thestability of a 150-year-old family company with the opportunities of a truly global
player. This is also repeatedly confirmed by external institutes, on ratings portals,
and in employer rankings – in this regard the reporting year was no exception either,with us featuring highly in Deutschland Test, trendence, and Universum employer
rankings.

Fact baseRankings and Ratings

Our still fledgling Group Division Voith Digital Solutions gives us an excellent basiswith which to attract and retain the right employees – particularly in the areas of IT,
electronics as well as automation and electrical engineering – to additionally tackle
the major challenges posed by digitization.
Performance-based Market-competitive Remuneration
When it comes to employee remuneration, we are guided by respective market
standards around the world. Remuneration is calculated in a way that is gender-neutral and is based exclusively on professional qualifications and performance. Remuneration schemes and other benefits are in line with the prevalent market situationin each region. At our German locations we typically follow collective bargaining
laws when deciding wages and salaries, although we are also bound by statutory
regulations in all regions. In addition to these aspects we have also started to roll out
a uniform job evaluation system. While we were unable to complete this process in
the reporting period, we will roll it out globally in 2018. The analyses already available,
particularly for the core countries of Germany, the USA, China, and Brazil, confirm
our view that our remuneration meets respective market standards.

Fact base
Expenditures for Employees
Fact baseDetails on Upholding
Employee Rights

Diversity and Equal Opportunity
Our company’s international nature is also reflected in the composition of ourworkforce, with employees from over 88 nations working at Voith. We see theircontribution through their often very different backgrounds and experiences asa strength and something that enriches our corporate culture. This diversity issomething that also permeates every level of Voith, with eleven nations represented
in the Voith Senior Management Circle alone.
At Voith, the principles of equality and respect among individuals for their fellow
colleagues and business partners are just as steadfast as the condemnation of any
form of discrimination based on gender, culture, age, belief, or any other personal
preference. The Voith Code of Conduct makes these principles transparent andbinding for all. Implementation and compliance at Group level is monitored by theCompliance Committee. We follow up on any violation of the ban on discriminationand take appropriate steps to sanction those responsible. We guarantee the highest
degree of confidentiality by not externally communicating the number and type ofviolations at Voith as a general principle.

Fact baseCollective Bargaining
Agreements

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Our Diversity&Inclusion (D&I) program, which we introduced across our Group backin 2012/13, additionally supports our aspiration to promote diversity and equal
opportunity in our Group.

Fact base
Employment Ratio of
People with Disabilities

We understand diversity as being the differences between our employees in termsof the five aspects of gender, age, nationality or ethnic origin, education and professional experience, as well as personal differences such as beliefs or physical abilities.
We understand inclusion as being a culture in which everyone is respectful towards
one another, and that allows for different perspectives and approaches. We see
respect as a prerequisite in enabling us to offer solutions – even to more complex
requirements – to our customers around the world through our employees’ richand varied experience.
Equal Opportunity Officers, typically the local Head of HR, at our various locations
review detailed information on violations of our general equal treatment principles
and take appropriate action.
Our D&I program requires all locations to take a systematic approach to raising
employee awareness, ranging from taking appropriate measures to establishingan inclusive working environment at each location. The regions are responsible foreach focus area and implementation of the measures, while the central HR area
coordinates the program. This ensures that we take a uniform approach acrossthe Group, share best practice approaches, and also take into account the highly
varied challenges we face worldwide.
For some years now we have held D&I awareness workshops for the upper fourmanagement levels to raise our employees’ awareness at many locations outside
Europe. We continued holding awareness workshops in the reporting year, andoffered D&I refresher workshops in South America and China. In addition, weFact base
Diversity in the Management
Team and in the Workforce

Percentage of Women by Management Levelin %Management Level 0–2
Management Level 3–4
Management Level 5
All employees
Only new recruits

Voith Sustainabilit y Repor t 2017

4.8

2016/172015/16

6.1
7.6

8.9
10.6
10.1
17.8
17.4
17.7

20.5

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Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

expanded the offering to include events specifically for managers and HR employees in EMEA, and began rolling out the program in further regions. As an importantfirst step, we have raised the awareness of executives in all regions and laid an
important foundation stone for the topic of D&I, which we want to build on.
We also held workshops with the corporate HR areas of Compensation and HR
Development. As a result, it was decided to make a D&I workshop a mandatory
module of our Start-up Leadership program for new employees. In the updated
D&I SharePoint, since summer 2017, we have provided managers with a toolkit
with ideas and descriptions on D&I measures for team activities.
The aspect of gender is currently attracting a great deal of attention owing to publicdebate and a variety of new laws. As women are traditionally still underrepresented
in technical training occupations and courses, we too are focusing on this areaand striving to further increase the proportion of female employees in our overall
workforce. As at September 30, 2017 the proportion of women in the workforce
stood at 17.8 % (previous year: 17.4 %). In the Voith Senior Management Circle, theproportion of women currently stands at 5.2 % (previous year: 6.6 %). We are wellaware of the need to take further action in this respect. Increasing the proportion of
female managers in the company is of particular importance to us. This is why wehave initiated a range of measures which – alongside our D&I program activities –will in future serve to attract more women to management positions. Among them,the shortlist for any advertised position must always include candidates of eachgender. In Germany a women’s network was established, and in South Africa weheld our first “Female Talent Meeting” with the aim of identifying and specificallypromoting high-potential candidates. Just how successful these measures can be
is demonstrated by the fact that in China we were able to substantially increase
the proportion of women among newly hired university graduates, with the figure
already reaching 30 % in the past year alone.
To get girls and young women more interested in technical professions, we havebeen involved for many years now in running the “Girls’ Day” where girls get tolearn about the range of opportunities open to them in technical professions andreceive information about professional career options at Voith.
Bringing Balance to Work and Family Life
We have always seen ourselves as a very family-friendly company ever since Voith
was founded 150 years ago. In the reporting year we further expanded upon thisunderstanding of how we see ourselves. Based on this we formulated guidelines toensure we have a flexible and family-conscious work culture. These were adopted
by our Corporate Board of Management and enacted. Various communication
measures serve to increase openness towards the topic among our executives. To
achieve this, in the reporting year we communicated a clear commitment on thepart of the Corporate Board of Management to provide guidance for all executives
and clarify the company’s position.

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Fact baseFlexible Working Time Models
Fact baseParental Leave

It is our stated aim to offer our employees an attractive working environment. This
also includes flexible working models that meet ever-changing personal circumstances. In consultation with their supervisors, our employees can agree personal
working time models, ranging from the use of a home office through to part-timework and job sharing. Through our semi-retirement models, occupational pension
schemes, and a solidarity fund, we also take care of employees who are about
to retire, have become incapacitated for work, or whose employment has been
terminated for other reasons.
Employee Satisfaction
We always keep a close eye on our employees’ satisfaction, which is why weregularly analyze data on illness and employee turnover. The 2016/17 fiscal year
was the first time we had conducted a global employee survey to gain even moredetailed insights and find specific starting points to make potential improvements.

Fact base
Employment Length
Fact base
Employment Turnover

14,500 employees from across our company took part in the survey, answering
16 questions including: “How happy are you working at Voith on the whole?”.
With each question ranked on a scale of 1 (unsatisfactory) to 5 (excellent), Voith
employees rated their happiness at 3.83. Other findings show that Voith employees
value the company as an employer, enjoy working at Voith, and feel a strong
sense of camaraderie in their daily work. In addition, all Voith employees strive to
produce quality results through their work, and they rate it as positive to be able tocontribute their feedback and opinions. By contrast, many employees complainedthat the company is falling short in areas such as personal appreciation as well as
professional and personal development. To counter this, the HR area has alreadydrawn up plans to improve in these areas and increase employee satisfaction.
The employee turnover rate fell in the reporting period to 11.0 % (previous year:
13.2 %). Over half of this rate (6.3 %; previous year: 3.5 %) is due to employees
terminating the employment relationship. As part of exit interviews we ask them
why they are leaving Voith, and record their feedback.

Retention Rate Among Employees Who Took Parental Leavein %Voith Group

62.1

69.2

of whom are womenof whom are men

Voith Sustainabilit y Repor t 2017

100

60.8

100

100

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Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

Outlook
Following the completion of our function grading process we will incorporate thefindings into our HR processes, including those for remuneration. In doing so, we
aim to increase transparency and uniformity, focusing on the respective positionand performance. We are also reviewing our Performance Management field ofaction based on the findings. In addition we aim to further improve the work-lifebalance through even more flexible working time models and the expansion ofexisting options that factor in local circumstances.

3.3 Attracting and Promoting Talent
The competition for suitably qualified employees is getting tougher in many areas,
and we continually face the challenge of attracting qualified employees at all of our
locations. We present ourselves as a modern, forward-looking employer throughour HR marketing campaigns. To make our efforts even more successful we are
currently working on a new detailed plan for our HR marketing campaigns.

www.voith.com/corp-en/careers.html

We have further improved the professionalization of our recruitment processes,
including in the regions, by modifying and standardizing them. In Germany,
North America, Brazil, and China this process is largely completed and we are
currently working on optimizing the finer points. In addition, in the reporting year
we strengthened the focus of our marketing activities on digital marketing. We didso to address interesting audiences while minimizing scatter loss, and to target
qualified personnel for our recently established Group Division Digital Solutions.
And last but not least, in the 2016/17 fiscal year we expanded our company-wide
Global Graduate program to include the functional area of IT.

Fact base
New Hirings

Consistently High Level of Training and Education
We place the highest demands on the training of young people – and have done
so for over 100 years. We are currently delivering training in over 40 commercial,technical, and trade occupations – with interdisciplinary learning and the integrated
provision of social and specialist expertise high on the agenda. The success of ouractivities is demonstrated by the fact that Voith apprentices repeatedly achieve
excellent results in a German federal state and nationwide comparison. Furthermore,
we typically take on our apprentices on completion of their vocational training, andoffer them the opportunity to get their foot on the career ladder in our company.
In the reporting period we launched the Social Internship – a new element of our
vocational training activities, where all apprentices in their second year of training
spend one week working at a sheltered workshop for the disabled. As at the endof the 2016/17 fiscal year, Voith employed 959 apprentices and students (previous
year: 1,012). 599 of our apprentices work in Germany, 360 of these in Heidenheim.

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Fact base
Apprenticeships andOpportunities

While we expect the number of apprentices to remain at a similarly high level inGermany, we forecast a shift towards dual-study programs.
The great importance we attach in our company to training and education is also
illustrated by our Voith Training Center in Heidenheim and Voith China Training
Center in Kunshan. As further training and education centers for employees andexecutives, the multi-function buildings unite cutting-edge training programs witharchitecture, construction, building technology, and design within an innovative
overall approach. At our international locations too, while training is delivered basedon the German dual-study system it also incorporates cultural and country-specificconsiderations.
Lifelong Learning – Both a Right and a Commitment
In times of dynamic change as a result of technological progress, we expect ouremployees to be committed to lifelong learning. To remain competitive, we mustensure that we can always match the right employees with the right qualifications
and corresponding expertise with the right position in our company. This is why
we support our employees with a comprehensive range of training and education
measures. Our leadership concept sets out the framework for this with its rangeof management tools. At the start of the calendar year, a performance review isheld between every employee and their supervisor to discuss and set the person’scontribution to achieving our corporate goals. The additional employee appraisal
focuses on work activities and the working environment, the relationship between
the employee and supervisor, and the employee’s own personal development
perspectives. The outcome of these meetings is entered in our pep. HR IT system
together with findings of the Management Review process. This approach means
we are always aware of our employees’ training requirements, and can tailor ourofferings and initiate personal development measures. In the reporting period 83 %(previous year: 87 %) of Voith employees took part in an employee-supervisor discussion. In doing so we reached all employees who were not prevented by sickness,on parental leave, or who were exempted from the discussions as they had recently
taken on a new function.

Number of Apprentices (Including Dual-study Students)
in individual people
1,012
889

2014/15

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Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

Our wide range of training and development measures ensure that our employees continue to develop their professional, personal, and methodological skills.
The range of topics covered by Voith training is intentionally broad, and includes
occupational health and safety, environmental protection, technology, IT, quality,
management and personality development, through to business and languages. A
current example includes the launching in the 2016/17 fiscal year of OPEX training
factories at our training and education centers in Heidenheim and Kunshan. Here,employees and management staff are provided with methodical training alongside
instruction on new tools to enable them to pursue our corporate goals even more
effectively.
The Voith Management School is of great significance within the overall strategy of
our training and education measures. Here, we provide special training to employees from specific departments such as Purchasing, as well as to project managers.
Special development programs for executives establish a uniform understandingof management within the company across Group Divisions and regions, and arecompulsory for all executives with supervisory roles.
Our new Business Forum Leadership format, which we established in 2015, isa further component of our leadership development programs. The forum waslaunched as a pilot project at Voith Paper and will now be rolled out at Voith
Turbo and Voith Hydro. This two-day event focuses on topics arising from daily
management practice as well as key aspects of the personal work-life balance for
executives. This underscores our aspiration for our top management level to showcommitment to lifelong learning, show readiness to face future developments andresponsibilities, and to cope with the associated challenges.
In addition, in the reporting year we initiated a comprehensive project to strengthen
our employees’ digital skills. Various divisions also established programs to improvetheir employees’ technical and methodological skills. A range of measures enables
executives from different regions to share their views. Among them, executives fromall regions meet annually at the Voith Academy to learn more about each other’s

Hours of Further Education

320,324
244,604
171,991

2014/15

2015/162016/17

The difference to previous years is due to a variety of factors, including extended data-gathering.

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different experiences, with executive training program attendees coming from allover the world to promote this exchange.

Fact baseTraining and Education& Career Development

In the 2016/17 fiscal year 15,645 employees (previous year: 15,829) across all Voith
locations took up our further training and education offerings, with 320,324 training
hours (previous year: 244,604) completed. We aim to continuously improve ourtraining offering, which is why we ask participants about their experiences after
each training course, and provide the findings to the trainers and the HR area. In
addition, the supervisor’s assessment is obtained as an appropriate means toassess the success of a measure. This enables us to continuously improve ourtraining programs, and see if their scope as well as the trainers are suitable.
We continually receive awards and quality seals that recognize us as an attractive
and fair employer that offers its employees excellent training and development
opportunities, and promotes a sound work-life balance. Among our recent awards,
in the reporting year we received the Employer Excellence Award in China. We werealso awarded the “Fair Company” seal by the initiative of the same name, which iscommitted to fostering a new ethic in the world of work. It was also the first time we
had received a certificate from the DAPR (German Academy for Public Relations)for our training/volunteering program.
Leadership at Voith – Focus on Development and Feedback
The standards we set our executives are high. They are expected to lead their staff
in a way that enables them to fulfill their responsibilities in meeting joint objectives.
At the same time, they must give their staff the opportunity to allow their talents
to unfold and develop further. Our annual Management Review enables us toanalyze whether these requirements have been met. As part of this, we assess
individual potentials to derive and agree on development measures. We also support employees through job rotation schemes or the offering of special orientation
discussions if they are posted abroad, for example, or when finding their feet in a
new management position.
To make the best possible use of the opportunities posed by digitization and torealize the development potentials for our company, in future our executives must
be able to demonstrate new and advanced skills. This is the only way in which
we will be able to develop an increasing number of solutions for the digital world.
Connected thinking, agility, self-management, and the team spirit required for thiswill become ever more important in the course of digitization. Our executives must
be able to create the right environment and appropriate frameworks. At the sametime, working at Voith will be increasingly shaped by greater team self-management.

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Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

As such, we intend to encourage action on self-initiative and strengthen engagement. Through the restructuring and focusing of our values we created a key
foundation for this and have adapted the scope of our executive development
programs accordingly. For this purpose, we developed “Expected Behaviors” thatare intended to guide executives and employees on which actions and behaviors
are appropriate and rightful. We also offer professional development measures ondesign thinking and agile working methods to further promote self-management.
Outlook
In coming years the digital transformation will increasingly take center stage,
which is why we will offer an increasing number of training courses to enable our
employees to easily find their footing in the digital world. Furthermore, digitization
has impacts across the field of vocational training – a challenge we are meeting at
various levels. Our restructuring of industrial metalworking and electrical professions
in Germany is being accompanied by extensive expert work at a political level,
extending right through to the legislative procedure. The trend towards digitizationis also reflected in vocational training: The Voith Training Center in Heidenheim
is already working on additive manufacturing processes, testing welding in an
augmented reality environment, and using integrative training software. This is how
we are already laying the basis today for our future success.

3.4 Occupational Health and Safety
By establishing our HSE (health, safety, environment) organization we have laid
the basis for the best possible occupational safety and health protection at Voith.
The precursor to this was to anchor the reduction of the frequency and severityof accidents in our corporate goals back in 2009. Since then, we have continually
worked to ensure that accidents and work-related illnesses can be prevented
to the greatest extent possible through optimized workplaces and processes. In
the reporting year we achieved another record: With 1.4 occupational accidents
per 1,000,000 working hours, we edged closer to reaching our objective of zeroaccidents. This places us among the best-performing companies in terms of occupational safety across all industries for the third year in a row.
We take a systematic regional approach to health protection. An occupational healthanalysis conducted in Germany, China, Brazil, and the USA in 2016 showed thatdiffering legal frameworks as well as cultural differences call for different approaches.
As a result of this, we have already devised basic strategies for health protectionin the four regions.

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In the reporting year we continued to work on focus areas, including the further
improvement of activities regarding workplace ergonomics and offering of training
at many locations. We also progressively integrated our Group Division Digital
Solutions into our occupational health and safety model and structure. In parallel,
we migrated it to our Group-wide ISO 14001- and OHSAS 18001-certified HSE
matrix certification system, enabling us to benefit from stable and transferable
processes in our HSE organization.
High-performance HSE Organization
Our Shared Services organizational structure enables us to achieve synergies
in HSE. It makes processes much more transparent, allows information to beaccessed within one system, and enables lessons learned to be transferred toother areas. Furthermore, the HSE organization offers largely seamless support.
A Group Directive sets out the requirements and responsibilities for occupational
health and safety, and lays down binding minimum requirements and standards
for the Group. It also includes all standard operating procedures (SOPs) on HSE
at Voith. All occupational health and safety policies are, just like our environmental
protection regulations, available via our Group-wide hse+ IT system. In the reporting
year we consolidated and streamlined our existing policies, amended them in linewith changes to the ISO 14001 standard, and prepared them for the migration fromthe OHSAS 18001 to the future ISO 45001 standard.
We use several communication channels to keep the organization updated onchanges and developments. Besides fortnightly conference calls, the Safety Steering Team meets annually in two regions, ensuring thorough internal and external
discussion takes place. Following this, meetings are held at a regional level tocommunicate the points discussed. In turn, this information is then shared with theindividual locations in the monthly occupational safety working groups. Centrally
produced publications, such as the regular HSE and EBM newsletters, complement
our information offering.
Matrix Certification Process Established
We also use hse+ to control the matrix certification of our locations to the ISO 14001
and OHSAS 18001 standards – a process we established in 2016. At the end of
the reporting year the matrix covered 99 Group companies (Group Holding andCorporate Central Functions). In the reporting year we included locations in South
Africa and the UK as well as Voith Turbo’s Mühlheim facility in the matrix.
In the reporting period Voith was also actively involved in drafting the new DIN EN
45001 standard, contributing through committee work from its position as a global

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Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safetycompany. We place particular emphasis on ensuring the regulations are balanced,
practical, and feasible, and consider the future equal weighting attached to risks
and opportunities as helping to ultimately increase prevention. Indeed, within ourcompany we have been strengthening the involvement of executives and their role
for many years now out of conviction.
Joining Forces with Employee Representatives
Efficient collaboration between Voith as an employer and our employees is crucial
for the success of the occupational health and safety measures that we have taken.
We recognized the essential role played by involving employee representatives in
key decisions, and it is something that we do systematically as part of a fundamental
collaborative approach. Company agreements on occupational health and safety,
as well as on preventing addiction, complement the regulations embedded in our
HSE Group Directive. A monthly Safety Committee meeting brings together all
employee and employer representatives at each production location to develop theannual occupational safety program and implement it in monthly actions. In addition,
we attach great importance to the early involvement of Data Protection Officers in
all issues relating to HSE reporting, controlling, and communication.

Fact base
Employee Representationin Committees

3.4.1 Occupational Safety
The fundamental objective of our occupational safety program is to include every
employee. Executives with supervisory roles have a particular responsibility in thisregard, and have a clear duty to ensure that information and targets are cascaded
as prescribed, right from the Board of Management level, through the respective
executives, down to employee level. Executives are also responsible for employee
training and the active communication of key developments. Employees must be
given documented instruction at least once a year, with centrally prescribed training
documents supporting this process.
Besides annual instruction, brief summaries are provided regularly, sometimes
daily, on HSE issues – with information sheets available for selected topics. In thereporting year we put considerable effort into using our HSE software in online
instruction. We see great potential here, especially for visitors and service employees, although this additional medium is by no means a replacement for face-to-facecontact with the supervisor.
Executive training was one of the key occupational safety topics in the reporting
period. We also involved service providers through our “Coordination of Visitors
and Contractors” Occupational Safety Directive. Furthermore, short high-impact
presentations on a daily or weekly basis serve to raise production employees’

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awareness. Beyond the annual instruction we provide, these five- to ten-minutepresentations on current topics keep the aspect of occupational safety firmly in
employees’ minds as they carry out their daily work. In some cases, employees
are involved directly in these presentations, for instance if they are involved in a
private or voluntary capacity in the fire service, meaning they are highly credible
when presenting fire safety topics.
Hand injuries were the most common type of injury at Voith Hydro in the reporting
period. Besides the short, high-impact presentations and related literature, this is
why one of the focal points of our awareness-raising activities was on providing a
newsletter on the topic of hand and finger injuries. In the 2016/17 fiscal year we will
focus our activities on crane operation, as the large number of near-miss accidents
in the previous fiscal year shows the need for a major information drive in this area.

Fact base
Occupational Safety Training

At Voith we document instruction sessions required by law. Besides verbal or written instruction, we are increasingly providing online instruction after pilot projects
in recent years were greeted so positively. We are now gradually offering such
online instruction using our global hse+ IT tool, with our initial focus areas being
decentralized organizations such as site construction, service and sales employees, and administration. Encouraged by the positive results of another successful
pilot project, we will now offer this form of instruction in the areas of service andconstruction. In close collaboration with environmental protection colleagues fromthe USA, in the reporting year we also further developed our environmental risk
assessment and tested it in pilot applications.
We place particular emphasis on the training of our experts in the regional HSE
organization. They have already been fully trained on the use of hse+, which we havebeen using since the 2015/16 fiscal year to display information on audit planningand audit results globally in a standardized and transparent way, as well as key
information on hazardous materials, compliance, and risk assessments.
Special Responsibility in Field Service
When on construction sites or service calls, Voith field service employees takeresponsibility for HSE in a variety of ways – whether as a supervisor without authority
over other service providers, right through to taking full construction site responsibility that includes authority over subcontractors.
A cross-divisional working group, “HSE in Field Service”, is responsible for analyzing
related challenges and has the long-term goal of standardizing existing regulations.
The working group was launched by the Group Divisions Voith Hydro and Voith
Paper in the 2015/16 fiscal year. Since then, it has developed into an active networkthat has been able to leverage initial synergies and address topics such as customer

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Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safetyenquiries and supplier evaluations in a joint and coordinated manner. Ultimately,
these activities will result in the creation of a uniform cross-division standard.
Documenting, Analyzing, and Preventing Accidents
We record all accidents centrally to ensure that the direct supervisor is reliably
informed and that the notification can be published on the intranet. This also
ensures that the Corporate Board of Management is informed within 24 hours
in the event of serious incidents. Investigation teams comprising stakeholders,
supervisors, and safety experts review and document the accidents. Especiallyserious accidents are examined separately once again at our Center of Competence
HSE. A detailed description of accident definitions is given in our Group Manual,and they are presented in a way that makes them comparable internationally withother companies.
Our eVAP app, which we developed ourselves, involves employees actively in
accident prevention. After its first full year of operation, employees have responded
very positively to the use of the app, which they feel is very user-friendly. It lets themlog unsafe situations quickly and easily on the spot, and then sends this information
to a central database. Clear icons facilitate the entire process of using the app. The
data is analyzed automatically and then published in target group-specific media
together with corresponding instructions. This allows us to raise our employees’
awareness of unsafe actions and situations before accidents occur. In addition,
increased data quality across sectors and countries makes even more targeted
prevention work possible. The DEKRA Award 2016 in the “Safety at work” category
underscores the success of Voith’s innovative accident-prevention measures. In thereporting year we were additionally nominated for the Deutscher Arbeitsschutzpreis(German Occupational Safety Award) for developing this app.
Using accident analyses, audits, and other measures we are always up to date interms of HSE, and can take immediate action in the event of serious accidents ora cluster of accident types. Our global HSE Flash News notice (information on theaccident/incident focus areas in occupational health and safety) is a crucial asset
in promptly informing all affected employees.
In the reporting year we produced and sent specific information on the handlingof work equipment such as cranes. We have also addressed other topics such as
hand injuries, and tackled them through a poster campaign.
Voith standards are implemented globally by our regional HSE organization. Twice ayear, experience is shared locally among experts to ensure know-how is transferredas quickly as possible between locations. The experts are also responsible fortranslating the guidelines and standards into their respective languages.

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In 2016 the business partners at the Center of Competence HSE began to identify
accident hot-spots and division-specific hazards by analyzing the distribution of
accidents at each Group Division. One specific result of this is our hand-injury
prevention program at Voith Hydro.

Fact base
Occupational Accidents

Occupational Safety Benchmark
Our global occupational safety program, which we rolled out back in 2009 acrossall production locations, is enabling us to steadily reduce the number and severityof accidents at our company. Thanks to this, Voith is now one of the world’s leading
companies in the field of occupational safety. This is confirmed by the frequency
rate (the number of accidents per 1 million working hours), which we calculate
based on the international standard. It shows that we reduced the accident rate
significantly from 12.6 in the 2008/9 fiscal year to 1.4 in the reporting year. This
corresponds to 50 notifiable accidents (previous year: 57). In the reporting period
we are pleased to announce that there were no fatalities as a result of occupational
accidents. To put things in perspective, the average frequency rate of companies
in the Professional Association of Plant and Mechanical Engineering is 22. We alsoachieved a significant improvement in the severity rate. With 271 working hours lost
(previous year: 282) in the reporting year, alongside the absolute figure this showsthat the severity of accidents has also decreased significantly.
We intend to maintain this high level of occupational safety going forward, with ourhse+ IT platform playing a key role in this regard. It enables us to further improve

Frequency Rate

Severity Rate

specific figure in accidents
per 1 million working hours

specific figure in lost hours
per 1 million working hours

1.5

1.6
1.4

absolute figures

57

276

282
271

absolute figures

10,67757

10,33050

2014/15

Voith Sustainabilit y Repor t 20172015/162016/17

2014/15

2015/16

9,509

2016/17

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Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safety

the transparency of our actions and derive measures in an even more targeted
way. Moreover, through our eVAP occupational safety app, we can strengthen our
employees’ involvement in our activities.
3.4.2 Occupational Health
We focus particularly on prevention when it comes to our employees’ health. Aspart of this, we pursue a regional approach to take into account the highly varied
conditions at our locations all around the world. Regardless of where our employees
work, we want them to stay fit for work and retire healthily at the end of theirprofessional lives.
For the coming fiscal year we plan to run a pilot project on occupational healthprotection in at least one of our larger organizational units. In doing so, we will callupon the expertise of our works doctors and social workers as well as external
experts where necessary. Our aim is to systematically record factors that negatively
influence illness rates and then implement targeted improvement measures.
Ergonomic and Safe Working Environment –Campaign in Brazil Yields Specific Improvements
From 2013 to 2017 we ran an ergonomics campaign in Brazil and systematicallyevaluated the results. All workplace activities were evaluated through 1,170 individual assessments. In doing so, 985 ergonomic risks were identified, particularly in thefoundry area. Following the completion of the systematic preventative evaluationin 2017, wherever losses occurred as a result of working conditions or an occupational accident they will be specifically reviewed by the respective works doctor. By
the end of the reporting period, improvements implemented so far as part of thecampaign have alone eliminated nearly half (46 %) of these risks.
Illness and Stress Support
In the reporting period we achieved further improvements in occupational medicalcare at our German locations. As planned, we completed the roll-out of our standardized occupational-reintegration management system.
Thanks to our cooperation with an external service provider, our employees inGermany can obtain information and support relating to the care of family members and childcare. We are currently continuing to work on implementing robust
illness and stress-support processes at our locations. Once this is done – as far as
permissible under data-protection legislation – we will establish a central reporting
system on this topic.

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Voith is renowned for its safety, quality,
and reliability. Sustainability is partof the ever-renewing commitment wemake to our customers. This is why
we attach great importance to theenergy and resource efficiency of our
products and ensure that we comply
with all recognized environmental andsocial standards. We also place thehighest requirements on our actions
both within our sphere of influence andin all of our supply chains. In doing so,
we live up to our responsibility towards
the environment and society througheach and every one of our products.
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4_Products and Supply Chain
4.1 Product Responsibility
4.1.1 Management Approach
Voith products and industrial services serve five major markets around the world:
Energy, Oil & Gas, Paper, Raw Materials, and Transport und Automotive. These
markets impose wide-ranging requirements on our company, so we ensure oursolutions are just as varied to meet them.
Voith Hydro is a manufacturer of generators, turbines, and pumps, as well as
electrical and mechanical equipment for hydropower plants of all sizes. This broadoffering means Voith supplies all key components for electricity generation andpower storage. Voith Hydro’s innovative service models also ensure a plant remains
productive throughout its lifecycle. Integrated automation solutions ensure thathydropower plants with all their components and systems always remain fully
operational with maximum availability.
Voith Paper supplies technologies, products, and services covering the entire paper
production process. Its offering includes large industrial production lines for paper,
tissue, and board production, system rebuilds and modernization measures, andcorresponding services. This is complemented by consumables and replacement
parts.
Voith Turbo technologies transmit and control energy under extreme conditions –safely and in a resource-efficient way. Voith Turbo’s drive solutions, highly advanced
technical components, and systems are used in a wide variety of industries wherever
power needs to be converted into controlled movement.
Through Voith Digital Solutions we combine our long-standing automation and
IT expertise with hydropower, paper machine, and drive technology know-how.
Established the previous year, this Group Division develops innovative products andservices together with existing and new customers to drive forward the Internet ofThings and shape the digitization of mechanical and plant engineering.
Our Responsibility – Our Fields of Action
Owing to the diversity of our product portfolio and the very different market requirements we face, our Group Divisions are confronted with a range of challenges interms of product responsibility. To gather data on these requirements systematicallyand evaluate them in terms of their materiality, we draw on the results of our
stakeholder survey of early 2016. As part of a Master’s thesis we also evaluated

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external benchmarks, including those of the IÖW (Institute for Ecological Economy
Research), and oekom research. In conjunction with our Group Divisions’ evaluations and assessments, we defined the material fields of action for our company inrelation to product responsibility:• Quality and reliability of our products and services• Guarantee of maximum product safety• Long product service life
• Technological expertise and innovation• Customer dialog and cooperation• Product resource effi ciency• Minimizing products’ environmental impacts.
Challenges and Trends
To identify trends early on and take effective action to counter upcoming challenges,
our Group Divisions employ their own market- and technology-specific methods
and tools.
Current Challenges
Hydropower competes globally with other forms of renewable energy. It is a challenge that Voith Hydro is meeting, and is continuously monitoring both legal changes
and market trends. The Group Division also works tirelessly to improve the public
image of hydropower as a renewable energy source such as by highlighting the
economic and ecological advantages of pumped storage power plants compared
to battery storage and other solutions. To do so, Voith Hydro employs various communication channels. It is active in political and scientific committees as well as inindustry associations and is a member of the International Hydropower Association(IHA) and the European Association for Storage of Energy (EASE).
Voith Turbo is currently facing the dynamic electrification of its traditional markets.
The Voith Turbo Division Mobility is addressing this challenge by developing hybridtransmissions and a fully electric drive. In the Voith Turbo Division Industry the
new E-Vorecon hydrodynamic variable-speed planetary gear was launched in thereporting period: This gear is highly efficient and enables huge energy savings.
It is important that Voith Digital Solutions exploits the huge growth opportunities in
the area of the Internet of Things (IoT) while at the same time meeting customers’
exacting demands for safety and reliability. Cyber security in particular is one area
in which it can differentiate itself significantly from the competition. In connection
with this, in the reporting year Voith Digital Solutions began forming a dedicated
IoT Security team which works closely with experts from Voith’s subsidiary DITIS.

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Identifying Trends Early On and Exploiting Them
Voith Paper had already expanded its trend-gathering methodology comprehensively back in 2016. This is based on five pillars: Trend Analysis, Technology
Outlook, Customer Perspective, Consumer Perspective, and Radical Technologies –
technological changes that are radically altering the paper-production process
and can affect the entire added value chain. Thanks to this methodology, Voith
Paper identified the trend of water scarcity and the trend to increasingly harness
alternative plant-based raw materials and utilize them in the papermaking process.
This is enabling the Group Division to support its customers in using these new
raw materials, and calibrating processes and machines accordingly. Voith Paper
has been following the decarbonization trend since 2010 together with other CEPI
(Confederation of European Paper Industries) members in development projects
such as Provides.
At Voith Hydro and Voith Turbo, similar processes were rolled out in the 2016/17
fiscal year to address the sustainability of their own or customer-specific manufacturing processes either directly or indirectly through the identified trends. The
required steps have already been introduced and the course set for successful
implementation of the processes in the overall organization. This enables us toevaluate key megatrends at an early stage and use them for our customers’ benefit.
Our corporate structure also means that we are always agile in responding to new
developments.
Through trend surveys, Voith Hydro identified the topic of water scarcity, among
others, as relevant. Added to this are decarbonization in conjunction with asystematic pooling of various energy resources, and more general global climatechange, urbanization, and electrification as well as increasing renewable energy
generation and use. Another key trend is power-to-X (P2X), which refers to theuse of technologies for energy storage and also for sector coupling. Voith Hydro
continues to monitor the ongoing trend of 3D printing production. Once appropriate
scales have been achieved it is expected that initial application areas in the spareparts business for small hydro and pilot machines will emerge.
For Voith Turbo, the trends of decarbonization and electromobility were identified
as key. To tackle these, Voith Digital Solutions has already set up more extensive
projects focusing on the digitization of the product portfolio in the areas of statusmonitoring, optimization, and modularization to enable resources to be used evenmore efficiently.

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Megatrend Digitization
Increasing digitization is a megatrend that spans all areas and activities.
For Voith Paper, the decline in graphic paper caused by digitization was significant;however, increased demand for packaging paper has been identified owing tostrong growth in e-commerce. For Voith Hydro and Voith Turbo, digitization isimportant particularly in relation to condition monitoring in order to ensure that
resources are used efficiently and that safety is maintained at all times.
Collaboration between Group Divisions, especially with Voith Digital Solutions,delivers numerous approaches for new products and services – some of which
are already being implemented.
To give an example: Voith Paper and Voith Digital Solutions are working together
to develop solutions that will enable the paper-production industry to respond tothe volatile supply and price situation in the energy market by allowing production
plants to be operated in a sustainable way through the use of new technologicalprocesses and algorithms. These range from allowing the use of cheaper energy
periods, through to switching off individual process steps at periods when energy
is scarce – without a significant impact on paper production.
Voith Paper and Voith Digital Solutions are also working together on developing
predictive maintenance techniques as an additional service for customers. One
example is the Talking Roll project, where, with the help of sensors, roller operating
data is evaluated and the safe operating window in relation to predictive maintenance is then optimized using cloud-based data-analysis techniques.
Collaboration between Voith Hydro and Voith Digital Solutions unites extensive
know-how in the hydro sector with software development and data analysis expertise. This allows the synergy effects from similar activities in all Group Divisions tobe leveraged in the area of machine and plant monitoring. Through this, diagnostic
methods can be specifically developed to provide customers with accurate availability guarantees along with a predictable level of risk. This offers real added value
and opens up new business opportunities, particularly in the service and spareparts business.

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Fact base
R&D Expenditure

Research & Development
Our success is based on our technological expertise and ability to continually apply
our know-how to innovations that deliver added value to our customers. This is
why we continue to invest, even in economically challenging times, in the researchand development of new solutions. In the past five years alone we have invested
around € 1.1 billion in this area. In the 2016/17 fiscal year, our R&D expenditure
totaled € 224 million (previous year: € 208 million; +8 %). This increase is due tothe new Group Division Voith Digital Solutions, where the merQbiz digital trading
platform and Industry 4.0 solutions were developed. The Voith Group increased theshare of its Group revenues dedicated to R&D to 5.3 % (previous year: 4.9 %). Allof our Group Divisions involved in mechanical and plant engineering have a strong
patent base. The Voith Group currently holds several thousand active patents, withmany hundreds more added in the reporting year alone.

Fact base
CTO Organization

Our Group Divisions perform the majority of our R&D activities. While our activities
have an international focus, they are centered around Germany. Our centers in theAmericas, Asia, and the rest of Europe provide valuable specialized R&D contributions in the relevant Group Divisions.
Voith Technology Foresight Project Started
In 2017 the Foresight project was launched to enable us to respond to long-term
trends in an even more structured way by utilizing a range of courses of action.
All Group Divisions participate in the project via their Chief Technology Officers(CTOs). Unlike traditional trend research, which aims for shorter-term predictionsof between two and three years, the Foresight project aims to provide long-term
scenario analyses of possible changes in consumer behavior and corresponding
impacts right up to 2040. We also cooperate with various Fraunhofer research
institutes within the framework of the project – and plan to extend this to include
further universities and partners. The project is expected to deliver its initial set offindings by the end of 2018. We will share these once the analyses are completed.
Last but not least, the Foresight project serves to identify new markets in industries
that we have not previously addressed. For Voith Hydro these include the area of
irrigation pumps, hybrid solutions, and symbiotic approaches. At Voith Turbo, theForesight project helped in the development of scenarios in the area of mobility,
environmental technologies, and water. Building on this, a range of design-thinking
projects are planned for the 2017/18 fiscal year. Voith Turbo is also responsible forthe two topics of mobility and environmental technology within the Foresight project.
Voith Paper is currently still involved in preparatory work following the project’s
kick-off in December 2017.

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Current Developments in the Group Divisions
Voith Paper is still developing systems that use sensors to forecast the service lifeof products. This approach improves operational reliability, making sudden system
failures virtually a thing of the past.

Fact base
Current Developments in theGroup Divisions – Voith Paper

In the reporting period Voith Turbo continued to strengthen its collaboration with
its partner Fuglesangs, with the aim of developing variable speed drives to operate
multiphase pumps on the seabed. Numerous tests are planned for 2018 to obtainapproval for underwater use. The project also serves as the basis for a potential
expansion of the collaboration between Voith and Fuglesangs, with another joint
converter development project starting shortly.
Voith Turbo sees good growth opportunities in coming years in the heavy goods
vehicle (HGV) sector – the main market for Voith retarders. The Group Division is also
gradually expanding its R&D activities in the field of electromobility, as a significant
share of city buses will be battery-powered from 2025.
In the reporting period two focal points of Voith Hydro’s R&D activities were:
The use of sensors to communicate information on system operation, forinstance, as a basic requirement for universal interconnection on the path torealizing an intelligent, digital power plant.
• The development of a new type of corona-protection technology for highvoltage bars to employ controlled voltage reduction to prevent partial
discharges.
•

Fact base
Current Developments in theGroup Divisions – Voith Turbo

Fact base
Current Developments in theGroup Divisions – Voith Hydro

Annual Report, p. 84,
Research and Development

Collaboration Projects with External Partners Deliver Important Insights
Voith’s Group Divisions are market and technology leaders in many of their businesssegments. This is why they are also in constant dialog with research institutes,
universities, associations, and other companies along the supply chain.
Among them, Voith Paper collaborates with a range of institutes and universities
with clearly defined fields of action. The implementation phase of such initiatives
is often relatively long, as the paper industry investment cycle may extend up to
20 years. To achieve the targeted 80 % CO2e reduction between 2030 and 2050
as planned, Voith is already working actively on developing the technology to makeit market-ready within the next decade. This is why the Group Division is actively
involved in initiatives such as the industry-wide Fiber & Paper 2030 project and theEU-wide Provides project, which aims to achieve a drastic reduction in the CO2e
footprint of cellulose and paper production.

Fact base
Voith Paper Collaboration Projects

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Fact base
Voith Hydro Collaboration Projects

Also in the past, Voith Hydro continued its numerous activities with university
research centers. In the reporting year the long-term collaboration with the
University of Stuttgart achieved particular success: thanks to a highly precise,scale-resolving simulation of the transient flow of a complete Francis turbine, ahighly advanced method for the detection of cavitation in hydropower machinery
has been developed.

Fact base
Voith Turbo Collaboration Projects

Voith Turbo is currently working on a research project that also involves DLR (theGerman Aerospace Center). In this project, composite-structure sensors are being
developed for use in mobile applications such as for rail vehicles. Furthermore, Voith
Turbo is involved in a research project funded by the German Federal Ministry for
Economic Affairs and Energy which involves the development of train body parts
that are not only lightweight but also contain sensors to detect damage at an
early stage.
Customer Dialog
Maintaining close customer relationships and a deep understanding of their needs
has always been one of Voith’s strengths. All divisions are in constant touch with
their customers, and they are also included in Foresight-related activities and trend
analyses. This contact also includes targeted surveys, for instance on customer
satisfaction, or future requirements on our products’ capabilities. At the sametime, digitization is playing an increasingly important role in our Group Divisions’customer communication activities. In this regard, we aim to improve both our own
and our customers’ understanding of digitization in equal measure, and in doing
so give customers the edge through increased connectedness and the intelligent
combination of industry know-how with analysis and IT expertise.
Resource savings, be they in terms of fibers and other raw materials, water, wastewater, or energy, remain central topics for Voith Paper’s customer dialog activities.
An ever-increasing number of customers are also asking for detailed informationsuch as on individual substances that have been used in the product manufacturing
process. Environmentally friendly packaging, in which more paper is used thanplastic, matters to more and more consumers, thereby influencing the requirements
on paper production.

Fact base
Customer Dialog

Customer dialog is an essential part of Voith Hydro’s sales strategy, with customer
feedback playing a key role in supplementing and enhancing this Group Division’s
product portfolio as well as in developing new processes. The global operating
units hold customer satisfaction surveys on a regular basis. And as part of the Voith
Sales Excellence program, in the reporting year the customer analysis process was
reorganized and made even more comprehensive; initial findings are expected in
the next fiscal year.
Voith Turbo identified close customer contact, a strong regional market presence,
and world-class service as success factors for its customer focus. In this respect,
the introduction of a product management team at the interface between sales andVoith Sustainabilit y Repor t 2017

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key account management has proven itself. In the reporting year a project management team was also established to ensure continuous customer communication
during the OTC (order to cash) project phase. In the reporting period, customer
satisfaction surveys and customer training courses were used to gather customer
experiences regarding the use of current products, and the development of new
products was initiated together with them.
Central topics included electromobility and smart services, and in the reporting year
a focus was placed on discussions with rail vehicle operators and manufacturers
regarding market and technology developments as well as operational issues andthe development of drive systems.

Fact baseResponsible Marketing

4.1.2 Reliable and Safe Products
Voith is renowned the world over for its safety, quality, and reliability. We are fully
aware of the value of this important competitive advantage, so we have set out
the principles of our quality and technical risk management processes in a Group
Directive. Our Group Divisions and their companies then expand on these principles
and supplement them accordingly.
We document and certify our activities according to the international ISO 9001, IATF
16949, and ISO/TS 22163 quality management standards, which we supplementwith many of our own QM methods. Virtually all Voith locations are certified tothese standards. With the help of clearly defined project scopes, a Group-wide
Operational Excellence initiative places an even stronger focus on the quality of our
products and processes. The aim in this regard is to continuously improve quality
while reducing associated costs. To achieve this we focus on four core projects:
quality cost transparency, problem-solving methods, continuous improvement
processes, and quality in engineering. In the reporting year Voith Turbo alreadysuccessfully reduced the number of customer complaints by 7 %.
As part of the Voith 150+ Next Level program we are currently setting Group-wide
KPIs to enable each Group Division to be benchmarked against each other as wellas within their respective industrial sector.
Voith products always meet the statutory and regulatory requirements of the countries in which we supply. Our Group Divisions are responsible for implementation,
while the relevant Quality Departments ensure process compliance. To achieve this,they rely on our Group-wide TRQM (Total Risk and Quality Management) system
as well as division-specific regulations.

Fact base
TRQM

We regularly train employees on how to handle regulations, and make these available to them via our Group-wide database and internal communication channels.
In addition, we provide our customers with the relevant know-how through training
courses held either at our training center or directly at the customer’s location.

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Fact baseQuality Management in theGroup Divisions
Fact base
Voith HydroSchool

Right from the development stage we analyze and simulate the various operatingstates, perform computerized calculations, and conduct pilot tests on productperformance and safety. We evaluate the effectiveness of our quality assurance
measures in our respective Group Divisions using division-specific KPIs as well asinternal and external audits. We also closely involve our suppliers in these activities.
A key quality of Voith machines and systems is their long service life, which is
why Voith Turbo gear systems and Voith Hydro turbines are in reliable operation
for decades. The same applies to our paper machines. Due to this, our Group
Divisions are faced with the challenge of supplying spare parts even after many
decades of operation, so the key requirement of ensuring that our products canbe repaired is factored in right from the development stage. Furthermore, Voith
engineers are constantly tasked with supplying spare parts for components – suchas for transmission units produced by competitors who are no longer active in themarket – to enable customers to continue operating a system.
Product Impacts by Group Division
By further developing our products, we work to make them more environmentallyand resource-friendly throughout their lifecycle. In doing so, we meet our customers’
demands, statutory requirements, and ultimately our own aspiration. The primary
aim of all of our Group Divisions is therefore to conserve resources and to minimize
the environmental impact of our products. To achieve this we follow a decentralized
management approach.
We predominantly supply components that, as part of an overall system, havediffering energy and material footprints. We employ a range of tools to gain an evenmore detailed picture of our products’ energy and raw-material efficiency. Indeed,
for many years now we have conducted Life Cycle Assessments (LCA) for selected
products in compliance with ISO 14040 and 14044.
As our product portfolio is so broad and we are active in such a variety of markets,
we constantly face the challenge of producing a balanced account of our activities
in a uniform, standardized report that covers all Group Divisions. By way of example,
in the following we have outlined the lifecycle of a main product of each Group
Division that also shows its environmental and social impact.
As the Group Division Voith Digital Solutions is still being established, we plan toinclude it in our next report; however, this Group Division’s services are alreadyreflected in numerous collaboration projects with our other Group Divisions.

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Product Responsibility Outlook
We expect a further tightening of environmental protection legislation as well asa continual rise in customer demands regarding the environmental and resource
efficiency of our products – something that affects all of our Group Divisions. The
growing complexity of the challenges confronting many of our customers in theirmarkets is increasingly leading them to opt to obtain solutions from a single supplier.
In the coming years, we see Industry 4.0 opening up huge opportunities for all three
Group Divisions involved in mechanical and plant engineering. In our new Group
Division Digital Solutions we are bundling existing know-how in our Group, developing new digital business models, and will further strengthen our technologicalleadership in the years to come.
Solutions are increasingly being expected from a single source in Africa and Oceania,
as well as in South America. Consequently, Voith’s involvement in EPC (Engineering,
Procurement, and Construction) and IPP (Independent Power Producer) projects isincreasing, requiring Voith Hydro to provide technically optimized turnkey solutions.
Voith Hydro will expand its collaborations with major construction companies (EPC
Contractor), and also explore new opportunities for cooperation.
In general Voith Turbo is also seeing a considerable increase in demand for energy-saving solutions in the power plant and raw materials segment, driven by various
government incentives. There are also an increasing number of approaches to rollout systems and services that monitor and increase the efficiency of entire plants –an area in which Voith Turbo works closely together with Voith Digital Solutions.
In China, high-speed rail vehicles are increasing in importance. To meet this demand,
Voith Turbo is developing reliable final-drive units and investing in the developmentof new smart couplings and entire front ends. These systems offer functionality,
handling, and energy consumption benefits. In doing so we are meeting the needfor the modularization and standardization of functions and interfaces.

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Voith Paper

Paper Facility
Sustainability aspects

Upstream/Supply Chain (Procurementof Materials and Services)

Creation(Paper Facility Construction Phase)

Potential risks:· Social & environmental impacts inthe supply chain

Potential risks:· Land use· Loss of biodiversity· Emissions (air, wastewater, noise,
goods transportation)· Occupational accidents· Reduction in supply chain risks
through GPTs, CoC, and LSA· ISO 14001 andOSHAS 18001 matrix certification for
production locations· Planning services for entire paper
facility· Ensuring the occupational health andsafety of our employees when at thecustomer’s location

Voith component lifecycle
Voith Paper Machine
Contribution to greater sustainability

Paper machines are in operation for many decades, also thanks to maintenanceinterval optimization, with an average operating period of around 40 years. Over
this long period even small improvements can vastly improve a machine’s efficiency.
However, while the environmental impacts caused during the manufacturing of
the machine are minor, the amount of energy required to operate a paper facility
exceeds that which is required to manufacture the machine by a factor of 300. Steel,as well as materials for structural and civil engineering, account for the largest shareof material types in the supply chain.
Voith Paper’s strategies are strongly aligned with growing markets, whereby itadapts its product strategies according to the different requirements on paper types
and regional aspects. One area is tissue, where demand is linked directly to thedevelopment of the world population and to economic growth in emerging countries.
Digitization of the highly complex paper production processes will determine competitiveness in the future. First and foremost the decisive factor will be the efficiencyof the machines used, followed by the optimization of the paper-product processes
through corresponding measures.
Voith Paper aims to produce the greatest added value for customers throughoperation that is as resource-friendly as it can be, and by designing machines
as efficiently as possible. To Voith Paper, resource conservation means above all
reducing the specific consumption of water as well as electrical and thermal energy

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Utilization Phase(Paper Production)

End-of-Life (Decommissioningof the Paper Facility)

Potential risks:· Unsustainable virgin fibers and fiber loss
· Increased resource requirements· Use of chemicals and process residuals

Potential risks:· Process residuals, hydraulic oil

Potential opportunities:· Use of fibers from waste paper· Closing of cycles

Efficient paper machine technology
helps reduce:· Energy, water, and fiber consumption· Emissions· Use of chemicals

Potential opportunities:· Recyclable materials such as
metal, structural/civil engineering
materials, plastics, oil

Extension of the utilization phasethrough:· Renewal of components· Modular design· Service offering

per tonne of paper. Moreover, it also means reducing fiber loss and achieving timesavings in paper production for customers by deploying the most efficient systems
possible.
Voith Paper is using increasing amounts of renewable materials, and works tirelessly
to close material, water, and auxiliary cycles. In doing so, we intend to further
reduce the environmental impacts of paper production while increasing the cost-effectiveness of plants. In the reporting period Voith Paper made further progressin increasing the energy efficiency and reducing the environmental impacts of its
products and services. Among their many outstanding features, over 70 % of the
29 new products launched by Voith Paper are also more energy-efficient. Moreover,
Voith Paper is always looking for opportunities to increase the recycling rate of its
own production processes.

Fact base
Progress on Social andEnvironmental Impacts –Voith Paper
Fact base
Recycling in Detail – Voith Paper

Over the coming years Voith Paper expects new emissions laws, which enter into
force in the EU from mid-2018 onwards and in all signatory countries to the Kyoto
Protocol, to provide considerable stimuli. As a consequence our customers are
giving greater consideration to energy-saving projects. Our machines, products,
and modification projects strongly support this focus.

Voith Sustainabilit y Repor t 2017

82

4_Products and Supply Chain

Voith Hydro

Hydropower Plant
Sustainability aspects

Upstream/Supply Chain(Hydropower Plant Planning Phase)

Creation (Hydropower Plant
Construction Phase)· Environmental & social acceptability
checks· Stakeholder engagement· Management of social andenvironmental aspects· Safe working conditions· Reduction in supply chain risks
through GPTs, CoC· ISO 9001, ISO 14001, and OSHAS
18001 matrix certification for
production locations· High global safety and quality standards· Technical customer training courses
on optimal environmental and economic
operation (HydroSchool)

Voith component lifecycle
Complete Equipment from Voith
Contribution to greater sustainability

Hydropower is a renewable energy, yet despite its unavoidable impacts on nature
it is an eco-friendly way to generate electricity. Voith technologies contribute tominimizing the environmental impact of hydropower plants – from improving water
quality through aerating turbines and oil-free hubs which prevent water contamination to innovative fish-friendly runners that improve the fish passage. To further
improve the fish passage of hydropower technologies Voith Hydro is participatingin the EU-funded FIThydro working group.
Voith Hydro works tirelessly to minimize also the remaining environmental impacts,
e.g. by reducing noise emissions produced by generators, turbines, and hydraulicauxiliary units in the hydropower plant. In addition, in the reporting year Voith Hydro
filed a patent in the USA for its aerating runner – a technology that increases the levelof dissolved oxygen in the water and has a minimal impact on energy conversion
efficiency.
Owing to the long service life of hydropower plants – a service life of 70 years is notuncommon – our customers focus on their own energy requirements and material
use during the utilization phase to optimize their operating costs, especially in thecase of large systems and equipment.
To further limit environmental impacts, we aim to switch our production over tousing environmentally friendly substances wherever this is technically possible. Voith
Hydro also aims to install new hydropower plants at existing dams and weirs togenerate renewable energy growth without having a further environmental impact.
Another example includes small-scale hydropower plants based on the StreamDiver

Voith Sustainabilit y Repor t 2017

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

83

Product Responsibility
Responsibility in the Supply Chain

Utilization Phase(Electricity Generation)

End-of-Life· Electricity generation· Inexpensive, low-carbon multi-purpose
benefit of the plant (e.g. flood protection,
irrigation)· Plant safety· Environmental impact· Modernization allows continual
extension of a plant’s operatinglife

VH products offer:· A high level of efficiency and durability· Extension of the utilization
phase through the renewalof components· High proportion of reused
products

VH products/services can:· Improve operation and cost-effectiveness· Mitigate environmental impacts andfacilitate the integration of renewableenergy sources into the gridat existing irrigation dams, which can be installed even where strict environmental
regulations apply.
When forecasting and evaluating trends, Voith Hydro always needs to keep an eye
on special regional aspects and their specific challenges in terms of quality, safety,
and product responsibility. In China, for instance, there is a clear trend towards
the strong expansion of pumped storage power plants and thus highly efficientmachinery that is ideal for both pumping and turbine operation. Countries neighboring the Himalayas, such as Pakistan and India, continue to make significant useof hydropower; however, as the rivers are heavily contaminated by glacial sedimentand suspended sand concentrations, this increases erosion of the components incontact with water in the power plant. Consequently, to improve these components’service life they need to be coated.
Models for the predictive maintenance as well as repair and overhaul of products
throughout their lifecycle help to conserve resources while increasing efficiency. As
an example, Voith Hydro modernized the generators for South Africa’s second-largest pumped storage power plant, thereby significantly increasing the service life of
the machines by reducing operating temperatures and vibration.
Another milestone for Voith Hydro in the reporting period was the successfulcommissioning of Europe’s largest variable-speed pumped storage power plant,
Frades II in Portugal. The power plant, which is considered to be a flagship projectof international standing, makes a significant contribution to grid stabilization andthe further expansion of renewable energy generation in Portugal.

Fact base
Progress on Social andEnvironmental Impacts –Voith Hydro

Voith Sustainabilit y Repor t 2017

84

4_Products and Supply Chain

Voith TurboBus
Sustainability aspects

Upstream/Supply Chain (Procurementof Materials and Services)

Creation(System Construction Phase)

Potential risks:· Social & environmental impacts
in the supply chain· Emissions (air, wastewater, noise,
goods transportation)· Occupational accidents· Reduction in supply chain risks
through GPTs, Code of Conduct,and LSA· ISO 14001 and OSHAS 18001 matrix
certification for production locations· Ensuring the occupational healthand safety of our employees when
integrating the transmission unit at
the customer’s location

Voith component lifecycle
Voith Components
Contribution to greater sustainability

Voith Turbo also follows the principle of offering increasingly energy-efficient andenvironmentally friendly product generations. It focuses on the impact of using Voith
components on the total cost of ownership (TCO). By way of example, a 1 % fuelsaving with a standard bus brings the operator around € 3,600 in operating-costsavings. This makes the topic of resource conservation through increased efficiency
a key aspect of related customer discussions, whether during the tendering phaseor on handover of the product. In this regard, Voith Turbo aims to adopt a continual
process of improvement in which it also involves its customers.
Another of Voith Turbo’s objectives is to play its part in increasing its sustainability
performance in terms of the materials it uses, which is why it aims to ramp up theuse of sustainable materials. At the same time, it will reduce its use of materials
with a negative impact on human health or the environment to the minimum level
necessary. The product development process already incorporates these aspects
right from its early stages, with harmful substances replaced, where technicallyand economically feasible, by other substances as early as the engineering phase.
In the reporting period Voith Turbo achieved the following progress in terms of its
energy efficiency and in reducing the environmental impacts of its products andservices:
The newly designed VoreconNX is 7 % more efficient than its predecessor, meaning
the new VoreconNX saves energy, is more compact and lightweight, and increases
process reliability in production thanks to its modular design. The product was
launched in the reporting period.

Voith Sustainabilit y Repor t 2017

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

85

Product Responsibility
Responsibility in the Supply Chain

Utilization Phase(City and Overland Transportation)

End-of-Life

Potential risks:· Oil loss (30 liters of transmission oil)
· CO2 emissions and transportation noise· Noise emissions (transportation noise)

Potential risks:· Operating fluids and interior fittings,
etc.

Potential opportunities:· Emissions reduction in local public transport· Reducing emissions through accelerationand topography-based gear shifting andSmart Assist· Optimization of operating costs throughSmart Maintenance and service friendliness

Potential opportunities:· Operating fluids and interior fittings,
etc. Recyclable materials such asaluminum, copper, steel, less plastic· Transmission Exchange Program(reconditioning of transmission units)· Correct handling and disposal

In the reporting year Voith also presented the first member of a new product family
in the field of speed control for compressors and pumps: the VECO-Drive. The
assembly is over 97 % efficient, saving energy and reducing operating costs.
Voith Turbo is also driving forward the development of Voith RailPacks to meet themore stringent rail emission regulations for railcars and locomotives that enter into
force in 2021. Furthermore, in doing so this Group Division is also responding to thetrend towards bi-mode rail vehicles that can be operated on non-electrified track
sections using ultra-low emission diesel engines or batteries.
To minimize material costs and noise emissions in gear drives, the Voith Turbo
Division Powertrain Technology developed bionic toothing, which is already being
mass produced and used in rail-vehicle gear units.
Voith Turbo is one of only a handful of suppliers that can provide a complete powertrain for city buses from a single supplier. In the reporting year the presentationof the Voith E-Drive System for city buses marked a continuation of Voith Turbo’s
decades of activities in the field of hybrid and electric drive technology.

Fact base
Progress on Social andEnvironmental Impacts –Voith Turbo
Fact base
Challenge: Long Service Life

Voith Sustainabilit y Repor t 2017

86

4_Products and Supply Chain

4.2 Responsibility in the Supply Chain
Resource conservation and social responsibility are anchored in our supply chains.
Our stakeholders also considered this as material to the way we manage sustainability. In Purchasing, our Guiding Principles and the Voith Purchasing Manual set
out specific requirements in this area.
Besides these aspects, Purchasing naturally focuses on price, quality, on-time
delivery, compliance with health, safety, and environment legislation, as well as on
upholding the ban on child and forced labor. Differing legislation and ever-growing
demands for documentation, such as under the EU chemicals directive REACH andthe Restriction of Hazardous Substances (RoHS) Directive, place high demands
on our company.
In the reporting period, regulatory requirements on our Group continued to tighten
through the UK Modern Slavery Act, for example, as well as through other laws
for the protection of human rights. Please see the Voith website for our statementon these.

Fact baseUse of Conflict Minerals

A further challenge is current legislation on conflict minerals in the USA and EU.
In light of this, controlling complex, heterogeneous supply chains remains a core
challenge for Voith Purchasing. We work tirelessly to increase transparency in our
supply chain regarding the use of conflict minerals.
High Purchasing Volume, Heterogeneous Product Range
In the 2016/17 fiscal year the value of our ordered goods and services stood at over€ 2.0 billion. As usual, the spectrum varied greatly, ranging from a 1 mm nut to a
100-tonne cast part, and from special customer-specific lacquering to electricalcable custom-made for Voith.
In terms of our invoicing volume, as in the previous year structural components
accounted for the majority of our purchased product materials by value, followedby electricals/electronics, subcontracting, and cast parts.
Fairness as a Fundamental Principle in an International Environment
As a global company, each year we work with over 20,000 active suppliers.
In principle we consistently strive for long-term business relationships, so we always
focus on the economic feasibility of our requirements. We also believe firmly thattreating each other fairly is the basis for a long-term partnership based on trust.

Voith Sustainabilit y Repor t 2017

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

87

Product Responsibility
Responsibility in the Supply Chain

Supplier Days are special initiatives at which we get to engage in discussion withour business partners. In the reporting period, we held a successful Supplier Day
for Voith Paper China and at Voith Turbo in Germany, with further Supplier Days
planned.
Clear Conditions Set the Framework
Our Code of Conduct and General Purchasing Conditions (GPCs) define our basic
understanding of partnership, and provide the guidelines for questions regarding
compliance as well as environmental and social standards. Both our Code of Conduct and GPCs are freely available on our website. Our GPCs form the basis forcontractual agreements with our suppliers, and also ensure that their sub-suppliers
abide by these requirements. The updating of our GPCs started in the previous
year has now been completed, with virtually all paragraphs undergoing revision.
This was due to revised export control regulations, which necessitated changes toour terms and conditions.
Country-specific versions ensure that local purchasing processes always takenational aspects into account, for instance regarding payment terms, environmental
standards, and customs requirements. As a result of this we produced additionalcountry-specific versions in the reporting period for Poland, Chile, Argentina, Peru,
and Colombia.

Fact baseProcurement Markets

GPCs:
www.voith.com/corp-en/about-us/
supplier-ecosystem.html
Code of Conduct:voith.com/cn/coc-english.pdf

Fact base
Country-specific GPCs

Embedded in Our Organization
In Voith Purchasing, sustainability topics are assigned mainly to our Corporate
Strategic Purchasing (CSP) Department, with a focus on setting sustainability goals
for Purchasing, gathering data on KPIs, and reporting. In addition, CSP devotes
itself to material sustainability issues such as the use of conflict minerals in the
supply chain.
Relevant topics are identified internally within the Group, and the corresponding activities are agreed across Divisions and coordinated with the Purchasing
committees.
Furthermore, in the reporting period the new analysis and controlling tool was rolled
out in Purchasing. The tool offers greater transparency plus additional analysis
options, and is significantly more user-friendly. The new tool is linked to all relevant
ERP systems via a secure connection, ensuring the latest data is always available.
Employees Receive Extensive Training
Our Purchasing Training Program, developed specifically for Purchasing, ensuresthat our employees around the world are always kept abreast of legal complianceissues, the use of IT tools, and supplier negotiations.

Voith Sustainabilit y Repor t 2017

88

4_Products and Supply Chain

Fact base
Scope of Training

All Purchasing employees either took part in face-to-face or e-learning training
courses in the reporting year.
Supplier Self-Assessment and Evaluation
To mitigate risks in the purchasing process we require our suppliers to provide
regular self-assessments. In the 2016/17 fiscal year we rolled out a new suppliermanagement system called SLM@Voith (Supplier Lifecycle Management): The rollout of the new tool was also used to correct and clean up obsolete and redundant
records. The new solution is not only more stable and technically better, but also
includes more locations and is easier to use thanks to its clear layout. Accreditationand quality certificates as well as additional information to classify suppliers arealso stored in the new system.
Despite the full technical migration and the associated six-month suspension, thesystem contained valid self-assessments for 2,547 suppliers in the reporting period.
As a result, we covered 55 % of our invoicing volume with suppliers listed in oursystem as having a current and approved assessment. By maintaining centralized
processing, we ensure that these assessments are gathered in a meaningful andcoordinated way.
In addition to self-assessments, at least once a year employees from the departments as well as our buyers evaluate those suppliers with whom we place thelargest order volumes. We use a standardized process based on transparent criteria,
so results can be compared across the Group.
Due to the roll-out of the new supplier management system we were obliged tosuspend our systematic evaluation process for six months; no new evaluations
could be initiated during this period.
With the resumption of evaluations using the new system, an optimized evaluation
logic was introduced that allows even more effective prioritization of the suppliers
requiring evaluation.

Voith Sustainabilit y Repor t 2017

1_Strategy and Integrity

2_Environment

3_Employees

4_Products and Supply Chain

89

Product Responsibility
Responsibility in the Supply Chain

Despite the migration to the new database, in the reporting period it held 710 valid
evaluations on 566 different suppliers; we were able to transact 36 % of our invoice
volume with partners providing a valid supplier evaluation for the reporting periodin our new database.
The supplier evaluation also encompasses sustainability criteria, which we use
to calculate the sustainability ratio. It shows our employees’ average subjective
evaluation of our suppliers in relation to compliance with environmental and social
standards. The partners we evaluated in the reporting period achieved an averagesustainability ratio of 89.7 %.

Fact base
Supplier Self-Assessments
Fact baseEvaluations of Suppliers

Rigorous Action on Violations
If suppliers violate laws, the Voith Code of Conduct, or lose their creditworthiness,
Purchasing is obliged to terminate the business relationship and block these suppliers centrally. Even violations of health, safety, and environment standards canlead to a Group-wide block under our Blocked Supplier Concept. In the 2016/17
fiscal year there were no new blocks due to a violation of social or environmental
standards.
Suppliers can also report violations of sustainability standards in the supply chain
on their own initiative. Just like our employees, our suppliers also have access toour anonymous Voith Compliance Helpdesk, which covers all countries and regions
where Voith is active. Complaints can be submitted both in the local language and in
English. We received no voluntary declarations, nor were we informed by suppliersof any violations by competitors or sub-suppliers in the reporting period.

Fact base
Supplier Compliance

Voith Sustainabilit y Repor t 2017

90

_The Report

The Report
Voith has published a Sustainability Report every year since 2009. This report
describes the progress we made in the 2016/17 fiscal year, i.e. from October 1,
2016 to September 30, 2017. This report is supplemented by an online Fact Base.
Furthermore, an accompanying highlight brochure is published every two years
and will appear along with the Sustainability Report 2018.
In producing our report we followed the internationally recognized guidelines of
the Global Reporting Initiative (GRI). Our report was not audited externally. In ourassessment, the scope of our report meets the requirements of the Core optionof the GRI Standards. To identify the material sustainability topics, in 2016 wedeveloped our materiality analysis further, based on the results of a comprehensive
stakeholder survey.
The most far-reaching change in the reporting period concerned the Group Division
Voith Digital Solutions, which we will be covering extensively for the first time thisyear. Unless stated otherwise, the facts, figures and information provided in thisreport apply to the global Voith Group Divisions: Voith Hydro, Voith Paper, Voith
Turbo, and Voith Digital Solutions. Please refer to the Voith Annual Report for theGroup companies involved. The degree of consolidation comprises at least 80 %of the Voith Group by revenue and headcount, and includes all of our Group’s
major locations.
The information was requested electronically in writing, and the data was gatheredusing mainly division-specific software. In individual cases it is not currently possible
to derive a three-year trend; however this is our objective for future reports. In a
few cases, certain facts already reported and affecting previous periods have beencorrected. We have marked this in the report at the appropriate points. Rounding
differences may occur owing to the addition of data.
All forward-looking statements in this report are based on reasonable assumptionsas at the deadline for content submission. Due to unknown risks, uncertainties, andother factors, the actual results, developments or performance of our company may
deviate from our forecasts, estimations, and statements. For further information
please see our Annual Report.
For improved readability we refrain from referring specifically to both genders inthis report. This is not a value judgment, and all forms are to be understood as
gender-neutral.
Further and more extensive information is provided at www.voith.com and in our
Annual Report. We currently expect to publish our next Sustainability Report inearly 2019.

Voith Sustainabilit y Repor t 2017

Imprint andContacts

Environmentally
Friendly Production

Project Management and Point of Contact
for Content-related Questions
Corporate Sustainability
Ulrich Weiße
E-mail: ulrich.weisse@voith.com
Markus Schönberger
E-mail: markus.schoenberger@voith.com

All CO 2 emissions produced during thecourse of printing and preparing the Voith
Sustainability Report were determined. By
making a proportionally equal investment ina Gold Standard climate project, the corresponding CO2 emissions will be saved in the
future and the Voith Sustainability Report will
be CO2-compensated.

Further Information
This Sustainability Report is also available
in German.
This German and English editions areavailable online at:www.voith.com/de/konzern/nachhaltigkeit
www.voith.com/en/group/sustainability
In addition to the Sustainability Report,
Voith also publishes a comprehensive
Annual Report at the end of the fiscal year.
It is available online at:www.voith.com/de/presse/
berichte-und-magazine-18929.html

Printkompensiert
Id-Nr. 1871168
www.bvdm-online.de

The recycled paper used for the Voith
Sustainability Report 2017 is made from atleast 60 % secondary fibers, and was produced using a Voith paper machine.

Consulting
Schlange & Co. GmbH
Text
Carlsberg & Richter GmbH & Co. KG
DesignCorporate Communication and
G2 Printmedienmanufaktur GmbHEnglish translation
World2World, Hamburg –Mark Elliott & Jim Blake
Picture credits
Cover: Getty Images/Rico Wasikowski
Other photo material: Voith

Printed in Germany, © Voith GmbH, 2018-07

Voith GmbH & Co. KGaA
Corporate Communications
St. Pöltener Str. 43
89522 Heidenheim, Germany
Phone: +49 7321 37-0
Fax:
+49 7321 37-7000
E-mail: info@voith.com
www.voith.com

voith.com

GRI Index 2017
Sustainability

GRI Index
General Standard Disclosures
Indicators

Comment

Reference

Organizational Proﬁle102-1

Name of the organization

10

102-2

Activities, brands, products, and services

10–11

102-3

Location of headquarters

10

102-4

Location of operations

AR 2017: 130–131

102-5

Ownership and legal form

10

102-6

Markets servedInternational Focus (3)102-7Scale of the organization

11–12• Key Economics Figures (2)• Consolidation Scope for Employee
Numbers (20)
AR 2017: 122–128

102-8

Information on employees and other workers

50• Workforce Structure (20)• Workforce by Employment Type (21)102-9Supply chain

86–87

102-10Significant changes to the organization andits supply chain

12–14

102-11

Precautionary Principle or approach

As a family-owned company
with a long-term focus, Voith iscommitted to a precautionary
approach. This is anchoredin our Health, Safety andEnvironmental Protection (HSE)Group Directive.

HSE Group Directive

102-12External initiatives

Voith implements the principleof sustainability in its core
processes.

22–25
External Charters and Principles (4)102-13

Membership of associations

Memberships of Associations (4)Statement from senior decision-maker

4–7

Strategy102-142

Indicators

Comment

Reference

Ethics and Integrity
102-16

Values, principles, standards, and normsof behavior

22–25, 86–87

102-17

Mechanisms for advice and concerns
about ethics

22–25
Escalation Paths (5)Governance102-18Governance structure10
AR 2017: 40–45

Stakeholder Engagement102-40

List of stakeholder groups

19–20

102-41

Collective bargaining agreementsCollective Bargaining Agreements (22)102-42

Identifying and selecting stakeholders

19–20

102-43

Approach to stakeholder engagement

19–20

102-44

Key topics and concerns raised

19–20, 76–77
Customer Dialog

Reporting Practice102-45

Entities included in the consolidated financial
statements

90
AR 2017: 130–131

102-46

Defining report content and topic Boundaries

20–21

102-47

List of material topics

20–21

102-48

Restatements of information

90

102-49Changes in reporting90

102-50

Reporting period

90102-51

Date of most recent report90102-52

Reporting cycle

90102-53

Contact point for questions regarding thereport91

102-54Claims of reporting in accordance with the GRI
Standards

90102-55

GRI content index

102-56External assurance

903

Speciﬁc Standard Disclosures
Indicators

Comment

Reference

Economic performance indicators
Economic Performance
103/201

Management Approach

11–14

201-1

Direct economic value generated anddistributed• Key Economic Figures (2)

11–12• Donations and Sponsorships (5)• Employee Wages and Benefits (22)201-2

Financial implications and other risks andopportunities due to climate change

201-4

Financial assistance received fromgovernment

AR 2017: 175–184
No significant financial assistancein the reporting period.

27• Employee Wages and Benefits (3)• Employee Wages and Benefits (5)Anti-corruption
103/205

Management Approach

22–25
http://voith.com/corp-en/
coc-english.pdf

205-2

Communication and training about anticorruption policies and procedures

23–25
Compliance Training (4)Anti-competitive Behavior
103/206

Management Approach

206-1

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

22–25
http://voith.com/corp-en/
coc-english.pdf
For reasons of confidentiality, thenumber and type of complaints
isnot communicated externally.

23–24, 89• Violations of Compliance

Provisions (5)• Supplier Compliance (39)

Environmental performance indicators
Materials
103/301

Management Approach

34–38

301-1

Materials used by weight or volume

43
Materials Used (15)301-2Recycled input materials used

43
Materials Used (15)4Indicators

Comment

Reference

Energy103/302

Management Approach

302-1

Energy consumption within the organization

36–38
39–41
• Energy Consumption (8)• Renewable Energies (9)• Production-related Energy

Consumption (10)• Proportion of Direct and Indirect

Energy (10)• Electricity Mix (10)302-2Energy consumption outside of theorganization

39–41• Energy Consumption: Total (8)• Indirect Energy Consumption(Scope 3) (8)• Proportion of Direct and Indirect

Energy (10)302-3Energy intensity

39–41
Production-related Energy
Consumption (10)302-4Reduction of energy consumption

39–41
Energy Saving Measures andFurther Potentials (9)302-5Reductions in energy requirements ofproducts and services

78–84

103/303

Management Approach

36–38

303-1

Water withdrawal by source

45–47
Water Consumption (17)303-3Water recycled and reused

45–47
Water Consumption (17)

Water

5

Indicators

Comment

Reference

Emissions
103/305

Management Approach

39–42

305-1

Direct (Scope 1) GHG emissions

41–42
GHG Emissions: Scope 1 (12)305-2Energy indirect (Scope 2) GHG emissions

41–42
GHG Emissions: Scope 2 (12)305-3Other indirect (Scope 3) GHG emissions

41–42
GHG Emissions: Scope 3 (12)305-4

GHG emissions intensity

41–42
GHG Emissions: Specific(Scope 1 and 2) (13)305-5Reduction of GHG emissions

41–42
GHG Emission Reduction Measures (13)305-6Emissions of ozone-depleting substances(ODS)

Air Pollutants (14)305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), andother significant air emissions

Air Pollutants (14)

Efﬂuents and Waste
103/306

Management Approach

306-1

Water discharge by quality and destination

32–38
46–47
• Wastewater: By Method ofDischarge (18)
• Wastewater: Quality (18)306-2

Waste by type and disposal method

43–45• Volume of Waste (15)
• Waste Saving Measures and Further

Potentialse (16)
• Waste Disposal (16)306-3Significant spills

Voith is not aware of any
significant incidents.

306-4

Transport of hazardous waste

43–45
Hazardous Waste (16)306-5Water bodies affected by water
discharges
and/or runoff

46–47
Water and Neighboring Habitat
Protection (19)

Environmental Compliance
103/307

Management Approach

307-1

Non-compliance with environmental laws andregulations

6

22–25
Voith is not aware of any
significant incidents.

Violations of Compliance Provisions (5)Indicators

Comment

Reference

Supplier Environmental Assessment
103/308

Management Approach

86–89

308-1

New suppliers that were screened using
environmental criteria

86–89
Supplier Self Assessment (38)SocialEmployment
103/401

Management Approach

50–52

401-1

New employee hires and employee
turnover• Employment Length/

56–58
Workforce Fluctuation• New Hirings (27)401-3

Parental leave

55–56
Parental Leave (24)Labor/Management Relations
103/402

Management Approach

50–52

402-1

Minimum notice periods regarding
operational changes

Upholding Employee Rights (22)Occupational Health and Safety
103/403

Management Approach

61–67

403-1

Workers representation in formal joint
management worker health and safetycommittees

Employee Representation in
Committees (29)403-2

Types of injury and rates of injury,
occupational diseases, lost days, andabsenteeism, and number of work-related
fatalities

66
Work accidents (29)403-3Workers with high incidence or high risk of
diseases related to their occupation

63–64
Work accidents (29)Training and Education
103/404

Management Approach

51–61

404-1

Average hours of training per year per
employee

59
Training and Education &Career Development (28)404-2Programs for upgrading employee skills
and transition assistance programs

58–60

404-3

Percentage of employees receiving regularperformance and career development
reviews

60–61
Training and Education &Career Development (28)7

Indicators

Comment

Reference

Diversity and Equal Opportunity
103/405

Management Approach

53–56

405-1

Diversity of governance bodies andemployees• Employment Ratio of People with

53–56
Disabilities (22)• Diversity in the Management Teamand in the Workforce (23)• AR2017: 46

voith.com/corp-en/about-us/company/
corporate-board-of-management.html
Non-discrimination
103/406

Management Approach

53–56

406-1

Incidents of discrimination andcorrective actions taken

53–54

Freedom of Association and Collective Bargaining
103/407

Management Approach

407-1

Operations and suppliers in which the rightto freedom of association and collective
bargaining may be at risk

86–89
Upholding Employee Rights (22)voith.com/corp-en/coc-english.pdf
Voith is not aware of any
significant incidents.

89
Upholding Employee Rights (22)Child Labor
103/408

Management Approach

408-1

Operations and suppliers at significant risk forincidents of child labor

22–25
voith.com/corp-en/coc-english.pdf
voith.com/de/brochures_modern_slavery_en.pdf
Voith is not aware of any
significant incidents.

89

Forced or Compulsory Labor
103/409

Management Approach

409-1

Operations and suppliers at significant risk forincidents of forced or compulsory labor

8

22–25
voith.com/corp-en/coc-english.pdf
voith.com/de/brochures_modern_slavery_en.pdf
Voith is not aware of any
significant incidents.

89Indicators

Comment

Reference

Security Practices
103/410

Management Approach

We ensure our employees areprotected mainly by working
together with external service
providers. Like all our service
providers, they are subject toVoith’s General Purchasing
Conditions. Like Voith’s own
security personnel, they are
likewise obligated to comply with
the Code of Conduct.

voith.com/corp-en/coc-english.pdf
voith.com/de/brochures_modern_slavery_en.pdf

410-1

Security personnel trained in human rights
policies or procedures

Security service providers are
obligated to support compliancewith the Code of Conduct bysuitable means. Voith does not
currently have any data on training
held by our service providers.

External Safety Personnel (4)Human Rights Assessment
103/412

Management Approach

22–25
voith.com/corp-en/coc-english.pdf

412-2

Employee training on human rights
policies or procedures

23, 87–88
Compliance Training (4)412-3

Significant investment agreements andcontracts that include human rights
clauses or that underwent human rights
screening

Global respect for basic humanrights is enshrined in our Codeof Conduct. All investment
decisions are subject to thiscode.

Supplier Social Assessment
103/414

Management Approach414-1

New suppliers that were screened usingsocial criteria

22–25, 86–89
When reviewing existing andnew suppliers, Voith always
takes their working practices
into consideration. A separate
evaluation of the percentage of
new suppliers that have beenreviewed is not available.

86–89
Supplier Self Assessment (38)Public Policy
103/415

Management Approach

22–25

415-1

Political contributions

27
Contributions to Political Actors (25)9Indicators

Comment

Reference

Customer Health Safety
103/416

Management Approach

77–78
Quality Management in Our Business
Areas (34)416-1

Assessment of the health and safety
impacts of product and service
categories

77–78
Quality Management in Our Business
Areas (34)416-2

Incidents of non-compliance concerning
the health and safety impacts of products
and services

Voith did not receive reports ofany significant incidents in thereporting period.

Customer Privacy
103/418

Management Approach

418-1

Substantiated complaints concerning
breaches of customer privacy and lossesof customer data

25
Voith did not receive reports ofany significant incidents in thereporting period.

Socioeconomic Compliance
103/419

Management Approach

419-1

Non-compliance with laws andregulations in the social and economic
area

10

22–25
Voith did not receive reports ofany significant incidents in thereporting period.

voith.com

Fact base 2017
Sustainability

Fact base
1. Bases for Our Actions
1.1 Our Proﬁle
Key Economic
Figures

Key Economic Figures in € millions

FY 2016/17

FY 2015/16

FY 2014/15

4,223

4,252

4,302

Operating result before non-recurring items

241

275

270

Income before taxes

682

140

−23

4,223

4,252

4,302

Operating costs

2,885

2,863

2,840

Employee wages and benefits

1,415

1,401

1,434

Payments to providers of capital

76

89

73

Payments to government

82

51

48

Community investments

n.d.

n.d.

n.d.

Economic value retained

596

29

−93

1,165

1,154

1,188

251

247

246

Voith Hydro

1,381

1,388

1,313

Voith Turbo

1,283

1,397

1,470

Voith Paper

1,527

1,456

1,506

13

–

–

Voith Hydro

106

105

101

Voith Turbo

91

144

91

Voith Paper

107

76

58

Voith Digital Solutions*

−43

–

–

Germany

26,87334,56140,478Europe excluding Germany

16,167

10,10812,904

Americas29,187

17,302

21,766

Asia

17,677

17,337

16,457

Other

3,132

1,417

1,774

Total

93,03680,72593,379

Revenues

Direct Economic Value Generated and Distributed in € millions
Direct economic value generated (= revenues)
Economic value distributed

Expenditures for Employees in € millions
Wages and salaries
Social security contributions, retirement pensions, and assistanceBusiness Area Portraits in € millions
Revenues

Voith Digital Solutions*
Profit from operations

Taxes Paid by Region in € thousands* Independent segment only since 2016/17; previously in process of being established.

2

International
Focus

Financial
Assistance

Locations by Regional Distribution

FY 2016/17

FY 2015/16

FY 2014/15

Germany

13

12

11

Europe excluding Germany

26

28

27

Americas

28

27

29

Asia

27

27

28

Other

6

6

5

Sales Markets in %Financial Assistance Received from Government
Not recorded

1.2 Strategy and Organization
HSE Data
Recording

We use our reporting tools to record information on health, safety, and environment, as well as to verify key performanceindicators (KPIs) and monitor our goals on acting sustainably. To help us achieve this, we are guided by the international
standards ISO 14001 and OHSAS 18001. In 2003 we set out binding Group-wide environmental standards that apply toall value-adding process levels. They form part of our Health, Safety, and Environment (HSE) Group Directive.

EBM Data
Recording

We review our progress towards achieving all of our EBM (Ecological Business Management) measures through our
integrated process of monitoring of measures and KPIs, something our Corporate Board of Management is also involvedin as part of our quarterly reporting.

Certifications

Existing Voith-location Certifications Number

FY 2016/17

FY 2015/16

FY 2014/15

ISO 14001

56

58

58

ISO 9001

64

69

68

OHSAS 18001

57

60

60

ISO 14001

77.1

70.0

70.0

ISO 9001

80.7

75.6

74.4

OHSAS 18001

78.0

71.4

71.1

Degree of Coverage based on Employees in %3

Membershipsof Associations

German Engineering Federation (VDMA) membership: Specialist area of hydropower and paper technology
Voith association activities by substantial membership contributions:• VDMA – Verband Deutscher Maschinen- und Anlagenbauer e.V. (German Engineering Federation)• SWM – Südwestmetall Verband der Metall- und Elektroindustrie Baden-Württemberg e.V. (The Baden-Württemberg
Employers’ Association of the Metal and Electrical Industry)• FVA – Forschungsvereinigung Antriebstechnik e.V. (Research Association for Power Transmission Engineering)• Förderkreis der Deutschen Industrie e.V. (Society for the Advancement of German Industry)• DIN – Deutsches Institut für Normung e.V. (German Standards Institute)• MAI Carbon Cluster Management GmbH
• IHA – International Hydropower Association• VDB – Verband der Bahnindustrie in Germany e.V. (German Railway Industry Association)• Paper Machine Clothing Association• UNIFE – Union des Industries Ferroviaires Européennes (Union of the European Railway Industries)
Dialog with policy makers:
Since February 2014 Dr. Lienhard has held the position of Chairman of the Asia-Pacific Committee of German Business.

1.3 Values and Compliance
External
Charters andPrinciples
ComplianceTraining

The Voith Group’s Code of Conduct sets out clear standards, which are aligned with established external charters andprinciples.
Compliance Training
Number of employees who underwent further training

FY 2016/17

FY 2015/16

FY 2014/15

542

241

391

Decentralized training by compliance officer (1.5 hours)

1,479

904

857

Instruction by supervisor (0.5 hours)

2,699

2,710

1,457

34

30

28

Management from the upper four levels, new managers at the Voith
Academy, Sales, Sourcing (1 day)

23

12

20

Decentralized training by compliance officer (1.5 hours)

n. r.

n. r.

n. r.

2

2

2

Employees trained in compliance in %

100

100

100

Managers trained in compliance in %

100

100

100

Management from the upper four levels, new managers at the Voith
Academy, Sales, Sourcing (1 day)Compliance officers (2 days)
Number of training sessions

Compliance officers (2.5 days)

External Safety
Personnel

4

For cost reasons, Voith appoints external safety personnel at the majority of its locations and construction sites.
Voith does not train these external safety personnel on the Voith Code of Conduct.

Violations ofCompliance
Provisions

Compliance Helpdesk Number

FY 2016/17

FY 2015/16

FY 2014/15

0

0

0

of which reported violations against environmental standards

0

0

0

of which reported violations against social standards

0

0

0

FY 2016/17

FY 2015/16

FY 2014/15

2.95

1.99

2.80

of which donations

1.91

0.80

0.87

of which sponsorships

1.04

1.19

1.93

Education

54

29

26

Social affairs

9

8

5

Sport

32

57

65

Culture3

7

4Germany

85.7

86.1

91.2

Europe excluding Germany

5.9

1.7

2.0

Americas

3.1

6.6

3.2

Asia

3.8

4.3

2.2

Other

1.5

1.3

1.3

Germany50800Europe excluding Germany

0

0

0

Americas

0

0

0

Asia

0

0

0

Other

0

0

0

Total

50

80

0

Reports via the Compliance Helpdesk (complaints regarding suppliers)

Comment: The Voith Code of Conduct is an integral part of our compliance training.
Escalation
Paths• Compliance Officer• GD Compliance Officer• Compliance Committee• Corporate Board of Management• Supervisory Board

1.4 Responsibility for Society
Projects and Activities
Donations andSponsorships

Donations and Sponsorships in € millions
Voith Group

Sponsorship Aid by Project in %Sponsorship Aid by Region in %Contributions
to Political
ActorsContributions to Political Actors in € thousands

5Special
Vocational
CollegeHanns Voith

The aim of the institution is to support special-needs youngsters in their development, to encourage them personally,
and thus open up opportunities for training placements or work. The model is a success story: Over 90 percent ofstudents are taken on after one year of vocational preparation, with over 70 percent of them going into a training
scheme. And we are proud to say that since 1972 Voith has enabled 1,406 youngsters from the district to lead astructured life.

business@school
Training
Initiative

In the 2016/17 fiscal year 17 Voith employees volunteered their services once again to support the initiative, providing thenecessary practical link through their knowledge and experience. They supervised around 40 students in eight groups attwo Heidenheim high schools.

University
Engagement
and Foundation
Professorships

At university level, we support young talents at the universities of Kempten, and Ulm as part of the German
Germanystipendien scholarship scheme. In the reporting year we invested €9,000 in this area. Additionally, we provide
endowments for professorships at several German universities. By doing so, we aim to contribute – without influencing
the research content or teaching practices – to the training of new academic talent and promote research in scientificareas relevant to Voith.

International
Education
Projects

Our long-standing cooperation with schools and universities has also proven its worth in Europe, the US, India, China,
and Brazil. Our assistance in this area includes support for the Formare project of Fundação Iochpe, the Educational
Freedom project of Recreatur ResgataTUR, and collaboration with Escola Estadual Conjunto Habitacional Voith, theFriedrich von Voith school in São Paulo, Brazil, and the Ithembelihle School, South Africa.

International
Social Projects

On the occasion of its 150th anniversary, Voith is donating €150,000 to the charity Theirworld to set up six new Voith
Code Clubs in Tanzania. The Code Clubs help 720 girls and young women in Tanzania learn key communication andleadership and basic programming skills that qualify them for the growing technology industry in Africa. The clubs wereopened in autumn of 2017.

6

2. Environment
2.1 Environmental Management Approach
2.1.1 Operational Environmental Protection
Environmental Incident Reporting System
Noise
Complaints

We work tirelessly to minimize noise pollution at our locations and rigorously follow up on any information or complaints.
In the reporting period we received no complaints concerning noise.

Hazardous Materials Management
Nanotechnology

Nanoparticles are embedded in the following products:• Voith Turbo: cooling systems for monorails, locomotives, railcars, special vehicles and high-speed trains. The particularcoating process is performed by a service provider, and currently less than 10 kg of material is in field use.
• Voith Paper: calendar and roll covers in the area of finishings. The NanoPearl coatings represent the latest in calendar
cover technology thanks to an improved nanoparticle filler system. According to the manufacturer’s statement, thequartz particles are produced in situ with the resin and never released at any stage of the manufacturing process. Whenrubbed during use, the particles are still surrounded by plastic, so pose no hazard. No particles are released in thermal
processing either.

2.1.2 Efﬁcient Use of Resources
Environmental
Goals

Environmental Goals in %FY 2016/17

FY 2015/16

FY 2014/15

Reduction in specific energy consumption compared to 2011/12

−14.8

−15.6

−9.7

Reduction in specific freshwater consumption compared to 2011/12

−30.9

−30.8

−9.2

Reduction in specific waste volume compared to 2011/12

−31.7

−18.2

−7.1

Green Controlling Provides an Objective Basis for Decision-making
Green
Controlling/
Group-wide
Data Recording

When gathering data, we follow the definitions set out by the international GRI G4 sustainability standard, which also
forms the basis for this report. Wherever an additional, directly measurable added value arises for Voith, we also go
beyond meeting these requirements.
Almost 90 Voith locations globally record data on energy consumption every month, and data on waste and fresh water
every quarter using our hse+ sustainability database. The EBM organizations in our Group Divisions and the central
function Corporate Sustainability & HSE validate the data, and report it to the Corporate Board of Management on
a quarterly basis. Besides data and KPIs, this report includes a listing of resource-conservation measures and theirimplementation status. Before a measure can be completed, its validity must be checked at the location in question andthe result stored in the database.
The data is the basis for deriving our internal targets down to location level and is incorporated into our quarterly internalreporting.

EBM Experts

The work of our EBM experts is underpinned by the legal requirements relating to energy and environment as well as theextensive experience they have gained since 2008 from EBM projects on energy and resource efficiency. Their activities
include assessing the cost-effectiveness of measures using lifecycle costs.

Hot-spot Analyses Leverage Further Potential
Hot-spot
Analysis
Methodology

When conducting a hot-spot analysis, the consumption of each control and analysis level (i.e. region, Group Division,
location, system, process) is determined and displayed graphically. Data is prepared both according to physicalconsumption and by associated cost, bringing transparency to “hot-spots” with high consumption levels and costs.
Based on this, we develop and approximately evaluate project ideas before gradually developing them further using a
stage-gate process through to implementation. As part of this, we employ economic and ecological evaluation criteria,
in accordance with our Green Controlling cycle. We regularly review the distribution of consumption based on changing
patterns of consumption and general conditions (location activities, economic activity, changes to the fleet of machines
and plant, etc.).

7

2.2. Performance in the Reporting Period
2.2.1 Energy Efﬁciency and Greenhouse Gas Emissions
Energy Consumption
EnergyConsumption:
Total

Total Energy Consumption in MWh

FY 2016/17

FY 2015/16

FY 2014/15

641,736

635,647

706,416

Production-related energy consumption

453,012452,294

489,473

Business travel

53,06659,581

65,272

Logistics

135,658

123,772

151,671

Scope 1

25

26

25

Scope 2

49

49

48

Scope 3

26

25

27

Total Energy Consumption

Total Energy Consumption in %Data-gathering: The required unit of data is gathered, validated, and evidenced centrally each month by means of adata-gathering process at the locations. The units are converted in the database.
Energy use (total, renewable, non-renewable); total biomass + renewable energy sources; total energy use for own fleet
from non-renewable energy sources was 2,310,249 GJ.
Direct Energy
Consumption(Scope 1)

Direct Energy Consumption (Scope 1) in MWh
Direct energy consumption in production

137,286

143,687

153,709

Direct energy consumption of the Voith vehicle fleet

22,492

24,43523,541Company cars*

5,295

5,432

5,412

Logistics

17,19719,003

18,129Natural gas in %

83

82

81

Heating oil in %

4

4

3

Diesel in %

6

6

6

LPG in %77

9

Biomass/biogenic energy sources in %

–

–

–

<1

<1

<1

0

0

0

Other renewable energy sources and captive generation of renewableenergy in %Others in %Data-gathering: The required unit of data is gathered, validated, and evidenced centrally each month by means of adata-gathering process at the locations. The units are converted in the database.
Direct Energy
Consumption(Scope 2)

Direct Energy Consumption (Scope 2) in MWh
Indirect energy consumption (purchased and captive, only if the fuels
are not included above)

315,726

308,606

335,764

Electricity

242,735

249,206

268,855

Long-distance heating

63,77458,30566,058

Steam

9,216

1,096

850

Energy sold

125

242

343

* Company cars do not include: taxis, employees’ personal cars, rental cars.

8

Direct Energy
Consumption(Scope 3)

Direct Energy Consumption (Scope 3)

FY 2016/17

FY 2015/16

FY 2014/15

47,771

54,14959,860<1<1<1

Car (not belonging to the Voith fleet, e.g. rental cars) in %

7

6

6

Flight (short-distance) in %

2

3

2

Flight (long-distance) in %

90

91

91

118,461

104,769

133,542

Rail in %

<1

<1

<1

Truck in %

14

11

9

Ship in %6

4

5

Flight in %

80

85

86

Business travel in MWh
Rail in %Logistics (upstream and downstream) in MWh

Only the stated uses of energy and greenhouse gas emissions have as yet been able to be recorded with reference to
Scope 3. We are working to include other significant uses of energy and sources of emissions in our calculations.
Energy-saving
Measures andFurther Potentials

Reduction of Energy Consumption as a Direct Consequence of Conservation and Efficiency Drives in MWh
Reduction in energy consumption

9,789

23,63425,400The following savings were achieved, among others, in the reporting period:
1.3 GWh (925 t CO2e) through lighting projects in Heidenheim, Salzgitter, and Faridabad, India
820 MWh (160 t CO2e) through process optimizations in generator production in São Paulo, Brazil
440 GWh (100 t CO2e) through capacity adjustments in the decentralized process heat system at our Högsjö location,
Sweden300 MWh (90 t CO2e) through demand control of pumps and cooling units at our Crailsheim location
Energy Saving Potential in GWh
Energy saving potential since FY 2011/12
of which achieved in the FY
savings already achieved since FY 2011/12

123.7

107.0

90.1

9.8

23.6

25.4

83.4

73.6

49.9

Method: The relevant Ecological Business Manager checks the effectiveness of measures recorded at location level. A
special tool is used to check measures centrally.
Energy Mix Largely Unchanged
Renewable
Energies

Energy from Renewable and Non-renewable Resources in %Energy from renewable resources

18.2

14.8

15.6

Energy from non-renewable resources

81.8

85.2

84.4

9

Productionrelated Energy
Consumption

Specific Production-related Energy Consumption (Scope 1 and 2)
in MWh/€ millions revenues

FY 2016/17

FY 2015/16

FY 2014/15

107.3

106.4

113.8

453,012452,294

489,473

Germany in %

36

35

37

Europe excluding Germany in %

13

14

14

Americas in %

32

35

34

Asia in %

19

16

14

Other in %

<1

<1

<1

Reduction in production-related energy consumption versus
previous year

0.2

−7.6

−6.9

Reduction of direct energy consumption

−4.5

−6.5

−9.5

Reduction of indirect energy consumption

2.3

−8.1

−5.7

Heating and cooling energy

31.1

31.9

33.5

Paper machine clothing production

26.2

26.6

25.5

Machine tool operation

3.8

5.8

5.4

São Paulo foundry

5.8

5.0

5.5

Proportion of direct energy

30

32

31

Proportion of indirect energy

70

68

69

Renewable resources

33.6

26.7

28.1

Non-renewable resources

66.4

73.3

71.9

Specific energy consumption/greenhouse gas emissions(Scope 1 and 2)
Production-related Energy Consumption (Scope 1 and 2) by Region in MWh
Total energy consumption/greenhouse gas emissions in MWh

Reduction of Production-related Energy Consumption in %Key Drivers of Energy Consumption in %Proportion of
Direct andIndirect Energy

Direct and Indirect Energy in %Electricity Consumption Continues to Fall
Electricity Mix

10Electricity Mix in %

Environmental
Impacts of
Buildings

Voith takes environmental aspects fully into consideration when we construct new plants or modify existing ones.
In doing so, we involve environmental experts from the regional HSE service organization in the project right fromthe planning phase. They provide expert advice on minimizing environmental impacts and ensuring compliance withapplicable legislative requirements, and assist with approval processes. When it comes to new plant constructions andmodifications, our experts focus particularly on measures to improve the energy and water efficiency of the building.
The procedure they follow is set out in an Environmental Group Directive, which is part of our HSE Group Directive.
This also lays down energy and resource efficiency standards for the procurement of new or replacement production
systems and their components.
Our actions here are also receiving external recognition: At our production facility in Kunshan, China, one productionbuilding and the new Training Center are certified to the LEED Gold Standard.
Implemented measures to increase building/infrastructure energy efficiency:• Refurbishment/upgrading of multiple heating plants at the location of Heidenheim, reduction in circulation losses,
savings of approx. 100 MWh/year• Replacement of skylight windows in the production hall at our Garching location, improvement in the U-value, savingsof approx. 427 MWh/year
Performing of energy audits in accordance with DIN EN 16247-1• In all areas subject to statutory regulations• Identification of building and infrastructure measures, including initial assessment of their effectivenessGreenhouse Gas Emissions
GHG
Emissions:
RecordingMethodology

We calculate our greenhouse gas emissions by energy source and based on specific CO2e factors. We derive these froma database as CO2 equivalents.
Since the 2016/17 fiscal year our global locations have reported on and evidenced their location-specific CO2 factor for
power, replacing country- or region-specific factors. This allows us to achieve even greater accuracy. As part of thischange, we also adjusted the factors for district heating and steam. This also gave rise to retroactive changes in previous
years of approx. 6,000 tonnes. We now also gather data on the GHG effect of refrigerant emissions. Non-specific GHG
factors are now taken from DEFRA or the GaBi database.
Recording emissions as CO2 equivalents based on conversion factors also allows us to factor in the emission of othergreenhouse gases such as CH4, N2O, HCF, PFC and SF6.

GHG Emissions:
Total

Greenhouse Gas Emissions in t CO2e

FY 2016/17

FY 2015/16

FY 2014/15

210,752

203,637

219,568

Production-related energy consumption

158,876

153,168

159,924

Business travel

14,397

16,30817,896

Logistics

37,48034,161

41,748

Scope 1

16

18

18

Scope 2

62

60

58

Scope 3

22

21

24

158,876

153,168

159,924

Germany in %

28

26

28

Europe excluding Germany in %

5

7

7

Americas in %

28

35

35

Asia in %

39

33

30

Other in %

0

0

0

Total Greenhouse Gas Emissions

Total Greenhouse Gas Emissions in %Production-related Greenhouse Gas Emissions (Scope 1 and 2) by Region
Total energy consumption in t CO2e

11

GHG
Emissions:
Scope 1

Direct Greenhouse Gas Emissions (Scope 1) in t CO2e

FY 2016/17

FY 2015/16

FY 2014/15

Direct energy consumption in production

26,44230,55432,728

Direct energy consumption of the Voith vehicle fleet

6,095

6,869

6,613

Company cars

1,312

1,463

1,465

Logistics

4,783

5,406

5,148

1,928

n.v.

n.v.

Natural gas in %

79

79

77

Heating oil in %

6

5

5

Diesel in %

7

8

8

LPG in %78

10

Biomass/biogenic energy sources in %

–

–

–

Other renewable energy sources and captive generation of renewableenergy in %

<1

<1

<1

Other in %

0

0

–

130,506

122,614

127,196

Electricity

108,541

107,228

111,017Long-distance heating

16,46914,98915,857

Steam

5,495

397

323

70

118

167

13,084

14,845

16,417<1<1<1

Car (not belonging to the Voith fleet, e.g. rental cars) in %

6

6

6

Flight (short-distance in %

2

3

2

Flight (long-distance) in %

92

91

92

32,69728,75536,575

Rail in %

<1

<1

<1

Truck in %

16

13

11

Ship in %6

4

5

Flight in %

78

83

84

Volatile greenhouse gas emissions

In FY 2016/17 volatile GHG emissions were recorded for the first time as production-related emissions.
GHG
Emissions:
Scope 2

Indirect Greenhouse Gas Emissions (Scope 2) in t CO2e
Indirect energy consumption (purchased and captive, only if the fuels
are not included above)

Energy sold
GHG
Emissions:
Scope 3

Indirect Greenhouse Gas Emissions (Scope 3) in t CO2eBusiness travel
Rail in %Logistics (upstream and downstream) in t CO2e

Note: Only the stated uses of energy and greenhouse gas emissions have as yet been able to be recorded with reference
to Scope 3. We are working to include other significant uses of energy and sources of emissions in our calculations.
* Company cars do not include: taxis, employees’ personal cars, rental cars.

12

GHG Emissions:
Specific (Scope 1
and 2)

Specific Production-related Greenhouse Gas Emissions (Scope 1 and
2) in t CO2e/€ millions revenues

Transport
Emissions

Business trips

Specific greenhouse gas emissions (Scope 1 and 2)

FY 2016/17

FY 2015/16

FY 2014/15

37.2

36.0

37.2

Wherever possible we avoid taking unnecessary business trips, which is why we are increasingly using video andtelephone conferencing in our global organization to save on travel expenses and allow speedy coordination.
Furthermore, every quote provided by our travel agency partner automatically shows the CO2e emissions generated
by a particular means of transport, providing transparency to Voith travelers when choosing their means of transport interms of CO2e emissions.
In addition we predominantly lease the vehicles in our vehicle fleet, and we replace them every three years by the next
generation of lower-emission vehicle.
Logistics
Our transport-related CO2e emissions – caused mainly by our external logistics service providers – rose year on year by
14 % to 32,697 t (previous year: 28,755 t). This increase was due mainly to the significantly higher transport volumes,
especially by ship; however, we reduced the share of emissions from airfreight.
As part of our Group-wide program to improve operational excellence, we are also working on shortening delivery times
and optimizing delivery costs.

GHG Emission
Reduction
Measures*

Reduction in Energy Consumption as a Direct Consequence of Conservation and Efficiency Drives in t CO2e
Reduction in GHG emissions

7.456

10.23811.003

1,9

−4,1

−6,1

Reduction in direct CO2e emissions in %

−13,5

−6,6

−9,97

Reduction in indirect CO2e emissions in %

5,7

−3,46

−5,05

Reduction in production-related CO2e Emissions
Reduction in production-related CO2e emissions versus previous yearin %Emissions
TradingVoith does not participate in the European emissions trading scheme.

* See energy consumption reduction measures.

13

Air Pollutants

Air Pollutants* A384 in t

FY 2016/17

FY 2015/16

FY 2014/15

Chlorofluorocarbons (CFCs)**

<1

<1

<1

Hydrochlorofluorocarbons (HCFCs)**

<1

<1

<1

Halon**

n.s.

n.s.

n.s.

Methyl bromide (CH3Br)**

n.s.

n.s.

n.s.

Volatile organic compounds (VOC)

689

671

691

135

149

153

Persistent organic pollutants (POPs)

n.s.

n.s.

n.s.

Hazardous air pollutants (HAPs)

27

26

26

Dust emissions

197

171

166

151

128

125

3

2

2

Nitrogen oxides (NOx)

592

551

614

Sulfur oxides (SOx)

490

449

479

Sulfur hexafluoride (SF6)

<1

<1

<1

Non-methane volatile organic compounds (NMVOCs)

Respirable fraction
Heavy metals

The indicators of other air pollutants are calculated using LCI-based conversion factors from the reported energy
consumption, logistics, and business travel data. In addition, we also measure emissions of refrigerants, solvents, heavy
metals, and dust from non-energy based manufacturing processes.
In principle, other air pollutants from energy consumption are the dominant factor.
In terms of VOCs significant contributors include the transport of goods at 117 t (previous year 85 t) and business travelat 89 t (previous year 99 t). In terms of NMVOCs significant contributors include production-related VOC emissions of
50 t (previous year 70 t). For the latter, coating processes (resins for generator production and roll coating), lacquering
processes, and cleaning processes (particularly surface cleaning) account for around a third each.
Nitrogen oxide (NOx) emissions are generated in significant quantities from goods transportation, at 206 t (previous
year: 166 t).
Regarding dust emissions, our foundry in São Paulo, Brazil, is a significant individual emitter, generating 19 t (previous
year: 17 t). Dust emissions originate mainly from steel reconversion, which is unaffected by declines in local production.
* Production-related energy consumption and product-related energy consumption were recorded as well as air pollutants from the transport of goods
and business travel.
** Ozone-degradable substances in t CFC-11e.

14

2.2.2 Material Efﬁciency and Waste
Material Efﬁcient Increased
Materials Used

Materials Used by Weight in t

FY 2016/17

FY 2015/16

FY 2014/15

220,001

186,000

161,739

Raw material

57,30555,25655,645

Semifinished products

143,147

109,647

89,352

Packaging

14,437

16,155

12,555

Auxiliaries

5,111

4,941

4,186

Renewable materials in %

6

9

10

Secondary Raw Materials in %

38

41

50

Total materials/raw materials used

Voith employs country-specific recycling factors to calculate the proportion of secondary raw materials in terms of theoverall amount of materials used. The lower share compared to the previous year of secondary raw materials in terms of
the overall amount of materials used is due to regional changes in materials procurement, whereby the recycling factors
used have changed.
Waste Volume Reduced
Volume of
Waste

Waste by Region in %Germany

39

37

37

Europe excluding Germany

7

7

8

Americas

32

35

38

Asia

23

20

17

Other

<1

<1

<1

20,89024,951

27,709

Reused

122

213

217

Recycled

15,761

18,824

21,458Composted

185

176

179

Recovered

4,230

4,927

4,487

Other reclamation

592

810

1,368

Removed waste

9,896

12,03814,925

Incinerated

2,885

2,467

2,610

Dumped at an external site*

7,011

9,571

12,316Dumped at a company site

–

0

–

Reclaimed and Removed Waste by Method in t
Reclaimed waste

Other removal
Total waste

–

0

–

30,78636,98942,635* Alongside the type of waste, the locations also enter the manner of disposal in our database.

15

WasteReduction
Measures andFurther Potentials

Reduction in Specific Waste Quantities

FY 2016/17

FY 2015/16

FY 2014/15

Reduction in specific waste quantities in %

−16.3

−12.2

−9.1

7.3

8.7

9.9

Specific Waste Weight
Specific waste weight in t/€ millions revenues

In the reporting period numerous Voith locations also developed specific solutions to local waste challenges. Voith
considers the most significant measures for this reporting year to include:• 420 t less waste by optimizing molds at our São Paulo, Brazil location• 180 t less hazardous waste thanks to improved coolant lubricant management in Wimpassing, Austria and Crailsheim• 90 t less waste by reducing the use of cleaning sprays at our Heidenheim location
Material Efficiency Potential in t

FY 2016/17

FY 2015/16

FY 2014/15

6,044

5,975

8,661

640

2,383

1,073

4,423

3,782

1,399

FY 2016/17

FY 2015/16

FY 2014/15

5,816

6,898

8,652

5,816

6,898

8,652

imported hazardous waste

–

–

–

exported hazardous waste

–

–

–

waste transported nationally and internationally between Voith
locations–––Non-hazardous waste

24,97030,091

33,980Total waste

30,78636,98942,632

Efficiency Potential Since FY 2011/12
of which achieved in the FY
savings already achieved since FY 2011/12
Reduction in Hazardous and Non-hazardous Waste
Hazardous
Waste

Hazardous and Non-hazardous Waste in t
Hazardous wastetransported hazardous waste

Waste
Disposal

16

The collection of hazardous waste at Voith is governed by internal regulations. Only qualified specialist waste disposal
companies that adhere strictly to our regulations are permitted to dispose of our waste. Any violations are rigorously
pursued and lead to the termination of the business relationship. To check this, we regularly audit the waste disposal
companies we use. The scope of these audits includes inspections of the waste disposal companies’ sites and related
plants, as well as the collection and documentation of proof of disposal.

2.2.3 Water
Signiﬁcant Drop in Freshwater Consumption
Water
Consumption

Water Consumption by Source in m³

FY 2016/17

FY 2015/16

FY 2014/15

1,042,539

1,057,398

1,406,104

Surface water

1,572

10,486

12,465Groundwater

–

–

–

Freshwater

1,040,967

1,046,912

1,393,639

Surface water

67,50779,93290,431

Groundwater

442,722487,675

817,995

Municipal water utility

530,738

479,306

485,213

Total water consumption

Data-gathering: Categories are gathered centrally each quarter by means of a data-gathering process at the locations.
Water Consumption by Region in %Germany

39

41

55

Europe excluding Germany

11

13

10

Americas

20

21

18

Asia

29

25

17

Other

<1

<1

<1

104.2

116.1

131

<1

<1

<1

Percentage and Total Volume of Reused Water
Reused water in m³
Total water withdrawal
Reused water in %Data-gathering: Categories are gathered centrally by means of a data-gathering process at the locations.
Freshwater
Savings
Measures andFurther Potentials

Specific Freshwater Consumption in m³/€ thousands revenues
Specific freshwater consumption

0.25

0.25

0.32

The following savings were achieved, among others, in the reporting period:• Approx. 45,000 m³ less freshwater consumed thanks to the optimization of a remanufacturing cleaning process at our
Munich location• Approx. 25,000 m³ less freshwater consumed thanks to the reuse of vacuum evaporation distillate for cleaning
processes at our Kunshan, China location• 10,000 m³ less cooling water use by optimizing a heat exchanger at our São Paulo, Brazil location
Freshwater Efficiency Potential in 1,000 m³
Efficiency potential in planning since FY 2011/12

817

743

695

of which additionally achieved in the FY

83

78

326

savings already achieved since FY 2011/12

789

706

627

Note: The savings achieved so far since FY 2011/12 are already above the volume of savings which Voith anticipates it
needs to make to achieve its reduction goal in FY 2017/18.

17

Less Wastewater
Wastewater:
By Method ofDischarge

Wastewater by Method of Discharge

FY 2016/17

FY 2015/16

FY 2014/15

914,569

985,880

1,212,974

Discharged into the public sewage system in %

59

49

44

Discharged into surface water in %

31

39

27

Discharged into groundwater in %

10

13

29

Reused at another company in %

<1

<1

<1

156,192

116,342

99,576

Discharged into the public sewage system in %

69

59

59

Discharged into surface water in %

30

37

37

Discharged into groundwater in %

1

4

5

Reused at another company in %

0

0

0

Total untreated wastewater in m³

758,377

869,539

1,113,398

Discharged into the public sewage system in %

57

47

43

Discharged into surface water in %

31

39

26

Discharged into groundwater in %

11

14

31

Reused at another company in %

<1

0

0

Total wastewater in m³

Total treated wastewater in m³

Wastewater:
Quality

Wastewater Quality* in t
Biological oxygen demand (BOD)

7

25

13

Chemical oxygen demand (COD)

20

37

40

Total suspended matter content

7

6

8

<1

<1

<1

2

<1

<1

<1

<1

<1

Heavy metals
NitrogenPhosphorus

Due in part to very long measurement intervals, there are significant fluctuations in the total footprint over the years.
There were no notifiable limit violations in the reporting year.
* The emissions in wastewater are based on the volume of wastewater streams from Voith locations subject to monitoring and the respective averageof the measured concentrations.

18

Water and
Neighboring
Habitat Protection

Sealing of Soil
Surfaces

Significant* Direct Wastewater Discharge in 2016/2017 in %Location

Destination

Protection
Status

54 % of wastewater is returned to the natural water cycle. The water
was previously used for cooling purposes. The discharged water issubject to strict observation, as the location is in a water protection
zone.

Heidenheim

River Brenz

Water
protection
area acc. to
WRRL, WHG(§§ 50–53),
Zone III/IIIA(Zone II/IIA TB
Mergelstetten,
not yet final)

11 % of wastewater is returned to the natural water cycle.

Garching

Groundwater–

95 % of wastewater is returned to the natural water cycle. The water
was previously used for cooling purposes.

Högsjö
(Sweden)Lake Högsjö

–100 % of wastewater is returned to the natural water cycle.

Noida(India)Yamuna River–

100 % of wastewater is returned to the natural water cycle. We havepurification equipment locally with which the water is treated fordischarge. The location is adjacent to a water protection zone.

São Paulo(Brazil)

Perus River

Permanent
Protection
Area (APP),
national law(Brazil)

39 % of cooling water is returned to the Schwarza.

Wimpassing(Austria)

River
Schwarza–

To counter the progressive sealing of soil surfaces we pay particular attention to this development in our sphere of
influence.
Annual reporting from location through to Group level on sealed soil surfaces vs. overall surface area showed no change
in the reporting year at 50 % (based on the total area of Voith locations).

Environmental
Incidents

Environmental Incidents (Pollution of Soil, Water, etc.) Number

FY 2016/17

FY 2015/16

FY 2014/15

Product and warehousing incidents

38

40

36

Transport accidents: road, rail, inland waterway, sea

n.r.

n.r.

n.r.

* “Significant” is considered to be wastewater discharged to surface water and to groundwater that exceeds 5 % of the total wastewater volume of theobserved unit.

19

3 Employees
3.1 Our Aspiration – Our Responsibility
Workforce
Structure

Consolidation Scope for Employee Numbers* Number

FY 2016/17

FY 2015/16

FY 2014/15

Employees Group-wide in FTE

19,04519,09820,223

Employees Group-wide as a headcount

19,267

19,494

20,981

Employees included in data analysis

19,267

19,494

20,981

19,26719.49420.981

Women

3.415

3.388

3.680

Men

15.85216.10617.301< 30 years

2.517

2.689

3.142

30–50 years

10.71410.948

11.599> 50 years

6.036

5.857

6.240

German

7.306

7.240

n.d.

non-German

11.961

12.254n.d.

Germany

7.669

7.563

8.335

Europe excluding Germany

2.879

2.921

3.221

Americas

4.748

5.050

5.243

Asia

3.286

3.269

3.484

Other

685

691

698

Employees by Gender, Age Group, and Region** Number
Voith Group
GenderAge

OriginRegions* Unlike in the Annual Report, employee figures in the Sustainability Report are represented by headcount, rather than by
FTEs (full-time equivalents). The Group companies, as per the Annual Report, are reported on in FY 2016/17.
** Due to part-time work the regional distribution in headcount and FTE (full time equivalents) is different to the Annual Report.

20

Workforce byEmployment
Type

Full-time and Part-time Employees by Age and Gender Number

FY 2016/17

FY 2015/16

FY 2014/15

Full-time

18,323

18,33019,662

Women

2,748

2,686

2,888

Men

15,575

15,644

16,774< 30 years

2,456

2,580

2,996

30–50 years

10,19910,27910,846> 50 years

5,668

5,471

5,820

Part-time

944

1,164

1,319

Women

667

702

792

Men

277

462

527

< 30 years

61

109

146

30–50 years

515

669

753

> 50 years

368

386

420

17,36017,50718,506

Women

2,977

2,963

3,154

Men

14,383

14,544

15,352

1,907

1,987

2,475

Employees with Temporary and Permanent Employment Contracts by Gender Number
Permanent employment contract

Temporary employment contract
Women

438

425

526

1,469

1,562

1,949

949

847

776

Women

176

157

127

Men

773

690

649

19,267

19,494

20,981

Women

3,415

3,388

3,680

Men

15,852

16,106

17,301

949

847

776

Women

176

157

127

Men

773

690

649

Men
Temporary employees

Total Workforce by Employees and Supervised Workers by Gender Number
Employees/workers

Supervised workers

To respond quickly and flexibly in our somewhat volatile markets, Voith also utilizes fixed-term or temporary employment
contracts. In the reporting year Voith employed 949 staff through recruitment agencies. In the reporting year, the numberof fixed-term employment contracts decreased by 4 % to 1,907.

21

3.2 Attractive Employer
Rankings andRatings

In autumn 2017 Voith performed impressively in the DEUTSCHLAND TEST, trendence studies, and the Universum-Institut
studies as an employer that offers outstanding career opportunities.
• DEUTSCHLAND TEST: In the study, which comprises 2,000 companies from 59 industries, Voith received the Top
Career Opportunities award in the mechanical engineering category.
• trendence Institute: Voith featured in two categories at the same time in the trendence study of Germany’s top 100
companies. In the Young Professionals Barometer, a survey of young professionals with up to a decade of professional
experience, Voith secured 64th place. In the trendence Graduate Barometer, Voith ranked 91st in the Engineering
category, once again making us one of the industry’s most attractive employers.
• This ranking includes the results of a survey of 24,000 engineering students from 107 German universities. In 2017
Voith was ranked 77th among all German employers mentioned.

Employee
Wages andBenefits

Employee Wages and Benefits in € millions

FY 2016/17

FY 2015/16

FY 2014/15

Wages and salaries

1,165

1,154

1,188

Social security contributions, retirement pensions, and benefits

250.6

246.8

245.7

n.d.

n.d.

n.d.

Remuneration of the Corporate Board of Management

Please see the chapter “Remuneration of governing bodies” in our latest Annual Report for information on the compensation of our Corporate Board of Management.
Upholding Employee Rights Globally
Collective
Bargaining
AgreementsCollective Bargaining Agreements in %Number of employees covered by collective bargaining agreements
In Germany

Upholding
Employee
Rights

77

77

74

100

100

97

Local employee representatives are involved in discussions between Group management, employees, and local HR
departments. Within the individual countries, relationships are structured in accordance with national laws, collective wage
agreements and company agreements. Our compliance processes ensure that agreements are also upheld. Our Corporate
Board of Management or the local management team communicate fundamental changes to employees at all our sites ina timely manner. Within this, we strive to inform employees as early as possible via a number of communication channels,
especially the intranet, video and telephone conferencing, notice boards, employee magazines, and other employee media.
In Germany, the decision-making process is subject to co-determination if fundamental changes are made to thecompany. Implementation of the measures that have been taken is supported by the respective locations’ Works
Councils.

Diversity and Equal Opportunities
Employment
Ratio of People
with Disabilities

22

Employment Ratio of People with Disabilities in %Employment ratio of people with disabilities

3.4

3.3

3.8

Diversity in theManagement
Team and in the
Workforce

Diversity in Senior Management Circle Number

FY 2016/17

FY 2015/16

FY 2014/15

Senior Management Circle*

77

76

82

Proportion of women in %

5.2

6.6

7.3

Non-German members in %

35.1

35.5

31.7

Corporate Board of Management, Executive Team, Senior
Management Circle*

84

82

88

Proportion of women in %

4.8

6.1

6.8

Non-German members in %

33.3

34.1

29.5

Regional directors/chairpersons, Management Board of operating
units, heads of product groups, managers in Group management
functions**

367

361

372

Proportion of women in %

7.6

8.9

8.1

Non-German members in %

50.7

51.8

53.5

Mid- and lower-level management***

715

711

763

Proportion of women in %

10.6

10.1

10.4

Non-German members in %

60.1

60.1

58.8

Total (across all management levels)

1,166

1,154

1,223

Proportion of women in %

9.3

9.4

9.4

Non-German members in %

55.2

55.6

55.1

88

91

96

Distribution of Women and Men at Management Levels Number

Various nationalities
Bringing Balance to Work and Family Life
Flexible
Working Time
Models

Flexible Working Time Models
Availability of Flexible Working Time Models Number
Definition/Explanation: Share of employees to whom variable working time models are available (e.g. flextime, bank or
reduce accrued overtime, sabbatical)
Voith Group

7,669

7,563

n.r.

Women

1,383

1,326

n.r.

Men

6,286

6,237

n.r.

< 30 years

916

888

n.r.

30–50 years

3,909

3,918

n.r.

> 50 years

2,844

2,757

n.r.

This data relates to Germany; at Voith it is possible to arrange individual working time models with one’s supervisor. This
also applies to sabbaticals.
* management levels 1 + 2** management levels 3 + 4*** management level 523

Parental Leave

Parental Leave Number

FY 2016/17

FY 2015/16

FY 2014/15

Voith Group

19,074

19,184

17,231

Women

3,390

3,312

2,825

Men

15,684

15,872

14,406Voith Group

668

731

304

Women

139

151

61

Men

529

580

243

Germany

436

429

284

Europe excluding Germany

39

52

16

Americas

190

247

3

Asia

3

1

1

Other

0

2

0

Voith Group

578

565

299

Women

112

91

57

Men

466

474

242

Employees Entitled to Parental Leave

Total Parental Leave Take-up

Employees Who Returned to Voith After Parental Leave

Employees Who Returned to Voith After Parental Leave Who Are Still at Voith 12 Months after Returning
Voith Group

351

396

214

Women

63

77

38

Men

288

319

176

Voith Group

79.1

77

98

Women

74.2

60

93

Men

80.3

82

100

Voith Group

62.1

70

72

Women

69.2

85

67

Men

60.8

67

73

Return-to-work Rate in %Retention Rate Among Employees Who Took Parental Leave in %24

Employee Satisfaction
Employment
LengthAverage Employment Length by Region in years

FY 2016/17

FY 2015/16

FY 2014/15

Voith Group

12.39

12.18

12.47

Germany

16.19

16.22

16.66

Europe excluding Germany

12.41

11.96

12.49

Americas

10.35

10.15

10.49

Asia

7.27

6.93

6.52

Other

8.33

8.58

8.24

New Employee Hires Who Left Voith within Twelve Months by Gender, Age Group, and Region Number
Voith Group

305

326

386

Women

57

72

73

Men

248

254

313

< 30 years

120

132

182

30–50 years

147

152

157

> 50 years

38

42

47

Germany

36

71

39

Europe excluding Germany

36

43

30

Americas

165

142

219

Asia

61

66

97

Other

7

4

1

25

Workforce
Fluctuation

Employees Who Left the Company by Gender, Age Group, andRegion (Workforce Fluctuation) Number

FY 2016/17

FY 2015/16

FY 2014/15

Voith Group

2,127

2,665

2,655

Women

324

524

505

1,803

2,141

2,150

Men
< 30 years

454

504

638

30–50 years

1,051

1,233

1,230

> 50 years

622

928

787

Germany

393

933

684

Europe excluding Germany

250

433

398

1,079

784

1,015

Asia

328

446

500

Other

77

69

58

Voith Group

11.0

13.2

12.5

Women

9.5

14.9

13.1

Men

11.4

12.9

12.4

< 30 years

17.7

17.3

19.3

30–50 years

9.7

11.0

10.3

> 50 years

10.5

15.4

13.0

Germany

5.2

11.9

8.1

Europe excluding Germany

8.6

14.3

11.3

Americas

22.4

15.0

18.7

Asia

10.0

13.3

15.2

Other

11.3

9.9

8.2

Americas

Employees Who Left the Company by Gender, Age Group, andRegion (Workforce Fluctuation) in %Employees who Left the Company on Own Initiative* in %
11.0

13.2

12.5

At the employee’s initiative

6.3

3.5

4.0

At the employer’s initiative

3.7

7.2

7.0

Other

1.1

2.5

1.5

Voith Group* FY 2014/15 adjusted: Consolidated companies only.

26

3.3 Attracting and Promoting Talent
New Hirings

New Employee Hires by Gender, Age Group, and Region Number

FY 2016/17

FY 2015/16

FY 2014/15

Voith Group

1,603

1,287

1,544

Women

283

264

279

1,320

1,023

1,265

< 30 years

537

481

619

30–50 years

813

650

731

> 50 years

253

156

194

Germany

283

166

229

Europe excluding Germany

174

175

205

Americas

758

657

683

Asia

324

226

384

Other

64

63

43

Voith Group

8.3

6.6

7.4

Women

8.3

7.8

7.6

Men

8.3

6.4

7.3

< 30 years

21.3

17.9

19.7

30–50 years

7.6

5.9

6.3

> 50 years

4.2

2.7

3.1

Germany

3.7

2.2

2.7

Europe excluding Germany

6.0

6.0

6.4

Americas

16.0

13.0

13.0

Asia

9.9

6.9

11.0

Other

9.3

9.1

6.2

959

1,012

889

in Germany

599

606

827

at our Heidenheim location

360

358

406

Men

New Employee Hires by Gender, Age Group, and Region in %Apprenticeships andOpportunities

Vocational Training Number
Apprentices and students at cooperative universities

In the 2016/17 fiscal year, several of our apprentices completed an Energy Scout training course at the Chamber ofIndustry and Commerce IHK Ostwürttemberg.
In the 2016/17 fiscal year we launched the Social Internship – a new element of our vocational training activities, where
all apprentices in their second year of training spend one week working at a sheltered workshop for the disabled.

27

Training and
Education& Career
Development

Training and Education Expenditure Number

FY 2016/17

FY 2015/16

FY 2014/15

320,324

244,604

171,991

Women

63,15041,24327,163

Men

257,174

203,361

144,828< 30 years

48,296

61,118n.d.

30–50 years

206,913

154,598n.d.

> 50 years

65,11528,888n.d.

The Corporate Board of Management, Executive Team, Senior
Management Circle; Regional Directors/Chairpersons, Board ofManagement of operating units, heads of product groups, managers inGroup management functions

14,335

11,326

9,728

Mid- and lower-level management

34,107

18,72019,384

All other employees

271,882

214,557

142,879

Voith Group

16.6

12.5

8.2

Women

18.5

12.2

7.4

Men

16.2

12.6

8.4

15,645

15,82914,5055,723,508

4,413,721

2,998,737

Training and Further Education Hours

Hours of Further Education by Employee

Employees Who Underwent Further Training Number
Voith Group
Total Expenditure in €Voith Group

Employees Who Received Performance and Career Development Reviews* in %28

Voith Group

82.7

86.9

82.9

Women

83.1

83.9

79.6

Men

82.6

87.6

83.6

The Corporate Board of Management, Executive Team, Senior
Management Circle; Regional Directors/Chairpersons, Board ofManagement of operating units, heads of product groups, managers inGroup management functions

84.5

83.5

96.2

Mid- and lower-level management

87.7

86.2

96.1

All other employees

82.4

87.2

82.0

3.4 Occupational Health and Safety
Employee
Representationin Committees

Total Number of Employees* Represented on Health and Safety
Management Worker Committees* in %FY 2016/17

FY 2015/16

FY 2014/15

75

75

75

approx. 100

approx. 100

approx. 100

Administrative managers

80

80

80

Trained service providers

n.r.

n.r.

n.r.

Voith Group

50

57

57

Germany

37

37

30

Europe excluding Germany

6

12

7

Americas

7

1

14

Asia

0

6

6

Other

0

1

0

0

0

0

Voith Group

3.4.1 Occupational Safety
Training
Courses in
Occupational
SafetyTraining Courses in Occupational Safety in %Operations managers

Documenting, Analyzing and Preventing Accidents
Work accidents

Work Accidents Number

Occupational Accidents Resulting in Fatalities
Work accidents resulting in fatalities
Frequency Rate
Definition/Explanation: Number of occupational accidents resulting in downtime (1 day or more)
per 1 million working hours
Voith Group

1.4

1.6

1.5

Germany

2.4

2.6

1.8

Europe excluding Germany

1.3

2.4

1.4

Americas

0.8

0.1

1.4

Asia

0.0

0.8

0.7

Other

0.0

3.5

0.0

Voith Group

271.2

282.4

275.7

Germany

306.3

349.1

156.8

Europe excluding Germany

217.0

479.2

390.6

Americas

159.5

0.8

285.4

Asia

391.9

396.7

397.1

Other

0.0

42.1

0.0

Severity Rate
Definition/Explanation: Hours lost per 1 million working hours* Based on headcount29

Work accidents(continued)

30

Absence Rate in %Definition/Explanation: Refers to the actual days of employee absence, expressed as a percentage of the overall
scheduled working days for the workforce over the same period.
Voith Group

2.5

3.1

3.0

Germany

3.8

4.9

4.2

Europe excluding Germany

3.2

3.1

3.4

Americas

1.6

2.2

2.4

Asia

1.1

1.2

1.0

Other

1.2

1.6

1.4

4 Responsibility for Products and Supply Chains
4.1 Product Responsibility
4.1.1 Management Approach
Research & Development
Research &Development
Expenditure
CTO
Organization

Research & Development in € millions

FY 2016/17

FY 2015/16

FY 2014/15

R&D Expenditure

224

208

210

Revenues Dedicated to R&D in %

5.3

4.9

4.9

We established the function of Chief Technology Officer in each of our divisions back in the 2014/15 fiscal year. Since
then, the CTOs have regularly compared their divisions’ technological development roadmaps within the CTO Council toleverage synergies. By doing so, we intend to achieve positive economies of scale as well as create knowledge in a morestructured way, and distribute it within our Group, particularly in the case of technologies and processes that can be
implemented universally, such as in the area of materials use.

Current Developments in the Group Divisions
Voith Paper

Voith Paper already offers automated monitoring systems with its OnCare product family, which it is expanding
constantly. In doing so Voith Paper follows two approaches: On the one hand it focuses on developing sensors thatrecord operating data directly, enabling the condition of components or the entire product to be evaluated. On the other
hand, Big Data management, meaning the targeted analysis of the data obtained, provides another approach to assess
the condition. This involves assigning components to a process application and saving operating data in a database.
By linking a wide variety of data sets a report can be given on the product condition, triggering the momentum to find apotential solution to the problem.

Voith Turbo

Together with Fuglesangs, Voith Turbo is working on developing speed-controllable drives to operate sea-floor
multiphase pumps. This dispenses with the need for a frequency converter to control the speed, which would otherwise
take up a lot of space on the supply ship. The technology is making a considerable contribution to exploration for raw
materials beneath the sea floor.
Voith Turbo sees good growth opportunities for the coming years in the heavy goods vehicle (HGV) sector – the mainmarket for Voith retarders. While the switchover to electric powertrains is not expected to cause a significant change inthe retarder business from 2030 onwards, some form of independent retarder will still be necessary.
A significant proportion of city buses will be battery-powered from 2025, so Voith Turbo is gradually expanding its
R&D activities in the direction of electromobility. Bridging technologies such as DIWA E-Volition with crankshaft starter
generators will be essential. Diesel engines will continue to play a significant role, in conjunction with alternative fuelsand downsizing. In this regard Voith is well equipped to face coming combustion engine developments with its new
generation of transmissions and their mild hybridization.

Voith Hydro

The development of sensors is seen as a prerequisite for further networking. This results in opportunities to learn andrespond faster and also achieves the aim of realizing an intelligent digital power plant. Through this, customers enjoy
specific advantages such as even safer operation in a broader operating spectrum as well as condition-based maintenance and, as a result, higher electricity production availability.
The new corona-shielding technology process for high-voltage bars allows application of the entire insulation systemeven before impregnation and curing, increasing robustness in production. This technology was designed for generator
voltages up to 25 kV, and will be used as standard for other major projects.

31Collaborations Deliver Key Findings on Future Viability
Voith Paper
Collaborative
Projects

Since its launch in 2015, Voith Paper has been involved in the industry-wide “Fibres & Paper 2030 – Shaping a
Sustainable Future” project, which is coordinated by the German paper-technology foundation PTS. During the
project’s 15-month timeframe, a scenario analysis was produced which addressed future business fields and customer
requirements for fiber-based materials.
Furthermore, Voith Paper, together with some 30 other paper-industry customers and suppliers, is part of apre-competitive cluster being developed by the CEPI (Confederation of European Paper Industries). The project
centers around the use of DES (deep eutectic solvents), which are used to dissolve fibrous materials to produce pulp
with minimal energy, emissions, and residues. In accordance with the CEPI roadmap, the aim is to achieve an 80 %reduction in CO2 emissions and increase value in the sector by 50 %.
As part of the Provides project, Voith Paper is currently conducting a preliminary study on the construction of a pilot
system. The plan is to operate this system at the CTP (Pulp and Paper Research & Technical Center) in Grenoble andfurther develop the technology there as part of a follow-on project. At the end of the 2016/17 fiscal year the research
partners made significant progress in developing the technology.
The publicly funded Copernicus program was launched on September 1, 2016, with the aim of making better use offluctuations in the availability and price of electrical energy as part of the expansion of renewable electricity generationin Germany and Europe. In collaboration with several key customers, Voith Paper assessed the potentials in this area,
and initial product ideas have already been derived for load control and distribution that will be further developed
together with the customers.

Voith Hydro
Collaborative
Projects

Voith Hydro and the China Three Gorges Corporation signed a strategic cooperation agreement in the reporting year.
This agreement covers the continuation and strengthening of cooperation between the two companies in Africa, anddescribes the plan to jointly promote the strategy of sustainable hydropower development, economic growth, andsocial progress.
The Hyperbole research project was completed successfully. This resulted in a unique comparison of measurement
data from the dynamic behavior of the Francis turbine on the detailed prototype, reduced-scale physical model, andnumerical dynamic models for different operating regimes. The insights gained will contribute to optimizing the designof turbines with an extended operating range (https://hyperbole.epfl.ch).
Voith Hydro and the University of Stuttgart are collaborating in a variety of ways including to improve numerical methods
for the calculation of flow in water turbines, and to develop cutting-edge methods to detect cavitation in hydropowermachinery.

Voith Turbo
Collaborative
Projects

32

The research project on sensors for composites focuses on gathering data on vehicle damage resulting from external
influences and/or material fatigue, with the aim of increasing operational safety as well as reducing construction weight.

Customer Dialog
Customer
DialogGood ideas are no coincidence. That is why the newly founded Voith Innovation Lab, together with the Group
Divisions, is driving innovation and new business opportunities. For this purpose, the center relies on creative methods
such as design thinking and also offers corresponding training for employees from all hierarchical levels. Over thecurrent financial year, more than 200 employees will be trained in the method and learn how to use design thinking intheir daily work. The aim is to understand problems from the customer's point of view, to focus clearly and to reachcustomer-oriented solutions more quickly and purposefully.

Voith Paper

Voith Paper employs the Net Promoter Score (NPS) methodology to measure customer satisfaction. Customer
feedback is gathered at various fixed times during the course of project implementation, whereby specific questions
are asked about the phases of development, which take into account both emotive and rational evaluation criteria.
Measures to improve internal procedures are then derived from this customer feedback.

Voith Hydro

Voith Hydro’s customer requirements are often reflected in great detail in individual tenders. Furthermore, in thesubsequent negotiations the technical as well as new or further optimized solutions are discussed at length. Last
but not least, the Product Management team holds discussions with customers and associations to examine further
improvements.
The aim is to maintain constant dialog with customers regarding developments in the business environments to develop
new business opportunities as and when necessary. For example, in the reporting year plant reliability was further increased
thanks to a modified maintenance strategy that is integrated optimally into the customer’s business environment. ThroughRemote Diagnostics & Collaboration Voith Hydro can also access the hydropower plant’s automation and control system,enabling it – with the customer’s consent – to resolve issues quickly and directly without needing to go through the costly
and time-consuming process of deploying a service engineer on site.
Last but not least, by engaging in dialog with customers Voith Hydro has realized that the increased use of wind farms
and solar power plants is making electricity generation more volatile. This opens up possibilities for hydropower plants
to be additionally used to stabilize the grid. Optimization of the automatic start-up system by Voith Hydro allows ahydropower plant to feed all of its power to the grid within a much shorter time than is normally possible.

Responsible
MarketingCorporate Marketing and our Code of Conduct, which every Voith employee abides by, ensure Voith products arepresented to customers truthfully and transparently. The actions of each and every Voith employee are bound by theunwavering principle that information should be presented fairly and truthfully. We provide regular instruction on thescope of our Code of Conduct through online training sessions (including compliance training sessions) and in employee
appraisals.
Moreover, Voith Paper’s marketing approach ensures that technically complex solutions are presented by selected
experts from our R&D centers (York, Heidenheim, Västeras, Shanghai), and discussed with customers. If necessary,the marketing activity is supported by the Group Division’s, or even the holding’s, top management team. Internal
coordination meetings ensure that global knowledge is bundled in relevant projects.

33

4.1.2 Reliable and Safe Products
TRQM

Our TRQM system also defines how to fulfill the respective statutory product documentation requirements, and how
products are to be labeled. Besides internal technical documentation, operating instructions provide information on
the intended use of our products as well as on how to handle them in a technically and environmentally safe way.
Our TRQM system also outlines procedures for decisions that entail risks.

Quality
Managementin Our Business
Areas

Through its internal management system, Voith Hydro ensures that quality standards and certificates are uniform for allunits globally. All of Voith Hydro’s locations are certified according to the ISO 9001 international quality management
standard. Regardless of the operating location, the European standard applies at all times as the minimum standard formachine and plant safety. Through active product monitoring of the installed machines, Voith Hydro also ensures thatnew findings gained from operation are incorporated into machine optimization.
With its EPEX (Excellence in Project Execution) project, since the 2014/15 fiscal year Voith Hydro has aimed to achieve
excellence in executing projects. EPEX focuses on process and product standardization as well as on strengthening
customer focus.
As KPIs Voith Hydro uses our internal GPS Standards for turbines and generators and their auxiliary systems, which wedeveloped internally and which are based on our own extensive experience as well as harmonized standards.
In the reporting year the Owner Quality module was established as part of the project. All internal and external inspection
and test plans have been revised, and now reflect current market requirements.
Moreover, several major successes have been achieved during project implementation in the reporting period. Amongthem, many pilot projects are already up and running according to the new standards. Furthermore, numerous
employees have been trained in accordance with the train-the-trainer model.
In addition, as part of the continual development of Voith Hydro’s quality management system, a special faultclassification code was developed and implemented in the SAP fault documentation system in the reporting year. Now,
according to the Pareto principle, fault clusters can be calculated and displayed at the press of a button. On the basis of
this, the various functional units in the company are now regularly asked to initiate targeted improvement measures.
Voith Paper sees quality as a key differentiator that distinguishes it from the competition, and has anchored the subject
at the top management level. The bases of the Voith Paper quality management system are set out in Group Directives,
process descriptions, and work instructions. Necessary reviews and corresponding documentation are controlled mainly
via the internal ERP (enterprise resource planning) systems. Potential health, safety, and environment impacts are taken
fully into consideration. To continuously improve the processes, Voith Paper uses various tools such as Ishikawa, FMEA
(failure mode effect analysis), and 8D reports.
Voith Turbo maintains a uniform and comprehensive quality management system, which is also certified to ISO 9001.
All employees are trained on quality issues and consistently implement this system. Several quality programs are
currently running at Voith Turbo to increase the reliability of its products even further. At the same time, Voith Turbo seeksa close relationship with customers to allow their experience of daily system operation to be incorporated into further
product development.

Voith
HydroSchool

34

Voith Hydro is faced with a particular challenge, as the long operating life of hydroelectric power plants requires several
generations of employees to be trained on existing technology to ensure optimal operation and maintenance of theplants. The Voith HydroSchool takes these requirements into account through targeted training courses.

Voith Paper
Progress
RegardingSocial andEnvironmental
Impacts

With the progressive digitization of the manufacturing processes involved in paper production, through Papermaking 4.0
Voith Paper offers next-level solutions that are perfectly tailored to address customers’ biggest issues. Here, agile
methods are used to offer compelling solutions quickly. As part of Papermaking 4.0, in the reporting year two customers
installed special rollers that allow condition and process measurement data to be gathered directly and used for a rangeof purposes including for maintenance.
In addition, Voith Paper developed the first VR applications for customer training and support. Based on the standardized
installation space models, Voith Paper developed initial prototypes that are now being further developed with customers.
These pioneering technologies allow products and machinery to be experienced in a completely new way – even before
a machine has been built.
Refiner fillings made of a special steel alloy are used in fiber treatment. As these are consumables, Voith Paper
customers can return the fillings, which are then reused in a further stage of casting production – thereby closing therecycling loop. Voith Paper Fabric & Roll Systems has extensively tested and investigated the recycling of PPS-based
clothing used in paper machines. However, as this is currently not feasible owing to the current cost situation andtechnically uncontrollable ancillary constraints, the focus was shifted to the recycling of other plastic-based productionwaste. The options here are currently being examined extensively.
Significant effort particularly in China is being put into improving the cleaning of wastewater from paper factories.
Together with the Voith subsidiary Meri Environmental Solutions, Voith has won multiple orders for water treatment plants
in China, enabling it to gain a foothold in China with Meri and successfully provide Smart Loop technology to treat water.

Recycling in
Detail

The loss of large amounts of graphic paper such as newspapers and magazines means that fewer fibers, which are often
only used once, are introduced into the recycling loop. In turn, this reduces the strength potential of the used-paper mix.
This relationship represents a specific challenge for Voith Paper, so it is working on new solutions to improve the strength
potential of fibers before further processing. This is an important contribution to maintaining the recycling loop.
As a specific example of this, in felt production pure polyamide fibers are reused as standard in the production process.
In the Business Line Fabric & Roll Systems, polyphenylene sulfide (PPS) is recycled and used to produce PPS yarns.
The plastic is produced as a byproduct of dryer fabric production.
At Voith, we use KPIs to depict and monitor the recycling rate: The percentage share of recycled PPS yarn and recycledinternal waste in relation to total waste represent two important KPIs in this regard.
The further development of sorter screen baskets has optimized fiber fractionation, enabling long and short fiber flows to
be selectively separated and the final strength of the paper web to be controlled in a targeted manner by adjusting thefraction mixing ratio.

35

Voith Hydro
Progress
RegardingSocial andEnvironmental
Impacts

IIn the reporting period Voith Hydro began development, planning, and construction work on the refurbishment of thepumped storage power plant in Ffestiniog, North Wales. Once completed at the start of 2020, the complex will be able
to respond more quickly to grid power demand and operate across a greater range. In addition, as the initial machineunits are being refurbished mid-life this will extend their operational lifespan for at least a further 20 years. Ffestiniog’s four
generating units will achieve a combined output of 360 MW of electricity – enough to cover all of North Wales’ electricity
needs for several hours.
As part of tendering for the Chang Long Shan pumped storage power plant in China, we successfully developed
machine units that combine high capacity (357 MW) with a fast rotational speed (600 rpm) in the smallest of spaces.
Compared to competitors’ offerings, the machines we developed offer not only higher hydraulic efficiency but also asmaller diameter – representing better value for money.
In the reporting period the Mount Coffee hydropower plant in Liberia resumed operation after extensive refurbishment.
For the power plant, which has an installed capacity of 88 MW and supplies clean electricity to over a million people,
Voith Hydro supplied new Francis turbines, generators, the control technology, and the electrical and mechanical power
plant equipment. In doing so, Voith Hydro has made a significant contribution to ensuring the population and industry
receive a reliable and stable electricity supply – a key prerequisite for improving living conditions.
In collaboration with the Technical University of Munich, Voith Hydro developed an eco-friendly solution for the “Alte
Bleiche” small hydropower plant. It takes the form of a shaft power plant, where a StreamDiver turbine-generator unit
is installed in a concrete chamber in the riverbed. The power plant, which was constructed on our factory premises
in Heidenheim, generates no noise emissions and has minimum impact on the landscape. As a compact, oil-freesubmersible turbine, the StreamDiver makes it possible to achieve a standardized, cost-efficient plant design thatminimizes environmental impacts during the installation phase.

36

Voith Turbo
Progress
RegardingSocial andEnvironmental
Impacts

VoreconNX
In the redesigned VoreconNX a new transformer in the power splitter allows the second planetary gear to be replaced
by a single gear stage, enabling the Vorecon to be designed in a modular way. The advanced design of the remaining
planetary gear offers a very high power density, making it around 7 % more efficient across the complete operating range
than its predecessor. This means the new VoreconNX saves energy, is more compact and lightweight, and increases
process reliability in production thanks to its modular design. The product was launched in the reporting period.
VECO-Drive
The VECO-Drive is an electrical superimposing gear based on the tried-and-tested principle of the Voith VoreconNX
variable speed planetary gear that has proven itself in over 600 installations. The VECO-Drive combines a mechanicalplanetary gear with frequency-controlled servo motors. The electrical superimposing gear is the most efficient way tomake speed variable, with servo motors driving a planetary gear. Since only a small amount of rated power is needed,
an overall component efficiency of greater than 97 percent is achieved, saving valuable energy and reducing operating
expenditure – day after day.
RailPack
The diesel-electric RailPack for rail vehicles increases resource utilization and passenger transportation efficiency. In
addition to the power supply via the overhead lines, the RailPack is integrated into the vehicle allowing trains to be
operated on rail networks which include electrified, partly electrified, and non-electrified track sections. This means there
is no need to operate a diesel locomotive to serve non-electrified sections, dispensing with the time-consuming processof uncoupling and recoupling wagons. Passengers also benefit as they no longer need to change trains or wait for theswitchover from the electrified to the non-electrified sections.
City Buses
Thanks to our collaboration with selected partners, our own know-how, and manufacturing capabilities for traction andauxiliary converters as well as ancillary components such as compressors, we are able to supply a complete powertrain
for city buses from a single source.
The presentation of the Voith E-Drive System for city buses marked a continuation of Voith Turbo’s decades of activities
in the field of hybrid and electric drive technology. The operating data and immense experience gained from DIWA
bus transmissions and retarders play a key role in this regard. Voith Digital Solutions is driving forward digitization andconnectivity, with fleet management and predictive maintenance tools increasingly finding their way into Voith products
thereby constantly enhancing them. This enables us to offer the best drive solution to each customer.

Challenge:
Long Service
Life

In the reporting period Voith Turbo developed an obsolescence management system, which identifies, manages, andcontrols the natural and artificial aging or non-availability of a product, not least from an innovation viewpoint. To givean example, Voith Turbo offers a system for use in buses that allows driveline monitoring over the entire lifecycle. The
bus operator is informed automatically of any impending malfunctions, which in turn improves operational reliability andalmost completely rules out spontaneous vehicle failures.

37

4.2 Responsibility for Supply Chains
Capable Organization
Use of Conflict
Minerals

The EU has still not clearly defined its position on the US’s Dodd-Frank Act concerning the use of conflict minerals. In
addition to a current amendment to EU legislation, it remains to be seen whether the US government, which has been
in office since 2017, will revise or abolish the Dodd-Frank Act. To prepare in good time for the new regulations, in the2013/14 fiscal year we established a working group consisting of representatives from Purchasing, the Legal Department,
and the central function Corporate Sustainability. The aim is to record and evaluate all information centrally, including
related customer inquiries, and prepare action recommendations for Voith.
In the reporting period at Voith Turbo a Quality team responsible for material compliance started its work. Its duties also
include the use and recording of conflict minerals in our products.

International Environment with Fairness as the Guiding Principle
Procurement
Markets

Regional distribution in % of Invoice Volume

FY 2016/17

FY 2015/16

FY 2014/15

Europe56

61

62

Americas

23

23

22

Asia

20

15

15

Other

1

1

1

26

21

21

of which new

5

none

3

of which updated

all

none

none

Purchasing employees globally

528

520

n.d.

Trained Purchasing employees globally

528

520

n.d.

Hours of training of Purchasing employees (Purchasing Training Program)

3,629

5,128

n.d.

Hours of training of Purchasing employees

12,022

n.d.

n.d.

2,547

n.d.

n.d.

Initial Supplier Self-assessment

n.d.

2,430

2,156

Share of the invoice volume obtained from suppliers for whom there is avalid Compliance & Sustainability Check available in %

55.0

n.d.

n.d.

Supplier Self-assessment Ratio (share of the invoice volume obtained
from suppliers for whom there is a valid Self-assessment) in %

n.d.

59.2

61.7

Clear Conditions Set the Framework
Countryspecific GPCs

Country-specific GPCs
Country-specific GPCs

Employees Receive Extensive Training
Scope ofTraining

Training of Purchasing employees globally Number

Supplier Self-assessment and Evaluation
Supplier SelfAssessment

Suppliers Who Have Filled Out a Self-assessment* Number
Compliance & Sustainability Check out of Initial SupplierSelf-assessment* Owing to the system migration, in FY 2016/17 no new assessments were able to be gathered for six months. In addition, questions regarding
compliance and sustainability were detached from the Initial Supplier Self-assessment and can now be requested on their own as a Compliance& Sustainability Check by suppliers as an individual questionnaire.

38

Supplier
Evaluations

Evaluations of Existing Suppliers*

FY 2016/17

FY 2015/16

FY 2014/15

Evaluations (individual processes) Number

710

2,441

4,655

Suppliers evaluated Number

566

1,956

3,814

Suppliers audited Number

n.d.

n.d.

n.d.

Sustainability ratio in %

89.7

85.4

84.0

Share of invoice volume placed with evaluated suppliers in %

36.0

68.0

62.0

705

1,274

947

0

0

0

of which reported violations against environmental standards

0

0

0

of which reported violations against social standards

0

0

0

13

10

7

Invoice volume in € millions
Invoice volume with suppliers for whom an up-to-date, approved
Supplier Evaluation was available
Rigorous Action on Violations
Complianceat Suppliers

Compliance at Suppliers
Reports regarding suppliers via the Compliance Helpdesk

Blocked suppliers** Due to a system migration, systematic Supplier Self-assessments and Supplier Evaluations were suspended for six months during thereporting period.
** Only includes blocks due to violations of compliance and/or sustainability guidelines; excludes blocks owing to bankruptcy or technicalquality issues.

n.s. = not significant; n.a. = not available
n.d. = no data; n.r. = not recorded39