Report on the Supply Chain Due Diligence Act
Reporting period: 01.01.2023 – 31.12.2023

Name of the reporting organization: BorgWarner Germany Holding Services GmbHAddress: Im Fuchsloch 16, 69123 Heidelberg

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A – Monitoring of risk management and management responsibilities
A1.1 Were responsibilities for monitoring risk management defined for the period underreview?
For the reporting period, the following responsibilities for monitoring risk management were as
follows:
The role of the internal human rights officer is overseen by the Chief Compliance Officer. OurSupply Chain Board has managerial responsibility for all aspects of supply chain sustainability
policies, practices, oversight, audit, and compliance. In addition, other Corporate Functions
support the monitoring of risk management. The plant managers are responsible for monitoring
the supply chain of the individual plants in Germany.

B – Risks identified and/or injuries identified
B1.1 Has a human rights or environmental risk been identified during the reportingperiod?
During the reporting period, no human rights or environmental risks have beenidentified.
-How long does the regular risk analysis take?
The risk analysis was carried out for 2023, utilizing our Risk Management Procedure.
This procedure’s objective is to identify high-risk suppliers in sufficient time to mitigate
any associated risk and ensure that the supply base complies with sustainability
principals (ESG) and applicable supply chain management laws, e.g. the German
Supply Chain Due Diligence Act.

-What are the main steps and methods of risk analysis, in particular:o The internal and external sources used in the context of the abstract riskassessment?
BorgWarner uses the following sources as part of its risk assessment:
The Sustainability Assessment Questionnaire (SAQ) is an industry-standard
questionnaire administered by an authorized organization in the automotive
industry – NQC. This questionnaire is updated approximately every other yearby the OEMs and adapted to the requirements of business and internationallaw. The SAQ is sent to the suppliers, who are obliged to answer it. The SAQ
questions suppliers on various supply chain law issues, with a particular focus
on human and environmental rights, working conditions, health and safety, andbusiness ethics, among others. The questionnaire is designed to display andverify suppliers' compliance with sustainability regulations in line with theAutomotive Industry Guiding Principles to Enhance Sustainability Performancein the Supply Chain. Depending on the number of questions answered and thequality of the answers, a score is calculated that provides information onwhether the supplier is in line with expectations. This score is added to asustainability section of a scorecard and stored until the next analysis by theborgwarner.com

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SAQ. This scorecard evaluates suppliers for use by BorgWarner whenassessing its partnership and future sourcing activities.
The Compliance Hotline is a publicly available reporting resource on theCompany's websites (https://www.borgwarner.com/legal/compliance-hotline).
It is managed by an independent third-party administrator. Anyone can accessthis website, including our suppliers, and report a violation anonymously. Afterthe complaint has been reported, BorgWarner's compliance team is notified. All
reports received are reviewed, directed to appropriate channels, and followed
to resolution.
oThe methodology of identification, evaluation and prioritization in the context ofconcrete risk assessment?
BorgWarner uses the above-mentioned scores from the SAQ to identify andevaluate potential risks with its suppliers. Suppliers found to have an
unsatisfactory response will be provided the opportunity to resolve the issue andassigned a BorgWarner-responsible party to follow-up with progress. A crossbusiness supply chain management team is in place to monitor progress.
Identification of risk is based on information obtained through the SAQ, thescorecard or the compliance hotline. A specific violation or risk is evaluatedusing the "Supplier Code of Conduct", the "Supplier Manual", the company'sown "Code of Ethical Conduct" and “Basic Working Conditions (Human RightsPolicy)”, as well as industry guidelines. In these sources, BorgWarner
formulates the requirements for a proper supply chain not only for itself, but also
for its suppliers. If a supplier fails to meet BorgWarner's expectations and this is
identified through the risk analysis process, this will be recorded and thesupplier will be asked to eliminate the risk as part of an action plan. If risk cannot
be eliminated, the determination of punitive actions will be determined, including
but not limited to: reviewing the raw materials sourcing strategy, blocking thesupplier from new orders, suspending ongoing business, and terminating therelationship with the supplier. These measures shall be appropriate, reasonable
and enforceable and shall be selected accordingly.
Another method for identifying, assessing and prioritizing risks is our supply
chain management function. Internal training is available to sensitize employees
to due diligence obligations and possible problems along the supply chain, so
they understand what is considered a violation of e.g. the Supply Chain Due
Diligence Act, and what to do if they identify a violation.
All suppliers have been informed about the obligations arising from the Supply
Chain Due Diligence Act in our updated terms and conditions of purchase. Ourpolicy has been published on our company website and is available to all
suppliers. Every year, BorgWarner publishes a Sustainability Report, which,among other things, addresses the company's human rights and environmental
management and performance. The Company sets targets across sustainability
topics, including supplier due diligence.

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oWhether and to what extent information on risks and actual breaches of duty
obtained through the processing of reports from the company's complaints
procedure is taken into account in the risk analysis?
As mentioned above, one of our tools for identifying risk is our complaints
procedure. The Compliance Hotline is a publicly available reporting
resourceontheCompany'swebsites(https://www.borgwarner.com/legal/compliance-hotline). It is managed by anindependent third-party administrator. Anyone can access this website,
including our suppliers, and report a violation anonymously. After the complaint
has been reported, BorgWarner's compliance team is notified and will
investigate. All reports received are reviewed, directed to appropriate channels,
and followed to resolution.

oHow can the interests of the potentially affected persons be adequately taken
into account in the risk analysis?
Individual interests of potentially affected persons are protected during the risk
analysis process. All reports received are reviewed, directed to appropriate
channels, and are followed to resolution. BorgWarner does not tolerate
retaliation against an individual for making a good-faith report concerning aviolation of laws or regulations, our Beliefs, the Code, our policies or procedures
or anyone who assists in an investigation regarding the same.

-

Were there any reasons for event-related risk analyses during the reporting period?
No.

B1.2 Has a violation of a human rights or environmental obligation been identified
during the reporting period?
-What procedures can be used to detect violations in one's own business area?
The Company’s Compliance Hotline, which enables anyone to report a violation
anonymously via an independent third-party provider, is used to detect violations. TheCode of Ethical Conduct is introduced to all employees when they join BorgWarner andis reinforced through continuous training. Our flexible ethics and compliance training
content and delivery model enables us to offer training to 100% of our salaried
workforce, online or in-person. Locations also coordinate compliance training for ourhourly employees through various methods, including in-person. We also offer targetedand in-depth training on topics, such as data privacy and protection, anti-trust, antibribery and anti-corruption, antiharassment, and global trade compliance (includinghuman trafficking). Additionally, we have an annual questionnaire that monitors ourcompliance culture. Leadership within BorgWarner plants in Germany play an importantrole in reviewing their own business area, as they can quickly identify risks and prevent
violations through stable supply chain management and proper management of theplants.

-What procedures can be used to detect injuries to direct suppliers?
The SAQ asks the supplier about working conditions, health and safety as well as
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the framework of the risk management described above. Another measure is theCompliance Hotline described above, which is freely accessible. In the anonymous
procedure, violations by the direct supplier can be reported to the BorgWarnerCompliance Team. In addition, BorgWarner sets clear requirements for its supplierswith regards to human rights and environmental issues along the supply chain("Supplier Manual" and "Supplier Code of Conduct"). All suppliers have been informed
about the obligations arising from the Supply Chain Due Diligence Act in our updated
terms and conditions of purchase. Our policy has been published on our company
website and is available to all suppliers.
-What procedures can be used to detect infringements at indirect suppliers?
Violations at indirect suppliers can be identified primarily with the help of possible
reports via the compliance hotline. In the "Supplier Manual" and the "Supplier Code ofConduct", the direct supplier is informed of its obligations with regard to due diligenceobligations towards its direct supplier (BorgWarner's indirect supplier). Together with its
direct suppliers, BorgWarner strives to prevent possible risks along the supply chain
and to secure the necessary support. If a violation becomes known in the business areaof an indirect supplier, BorgWarner will carry out an event-related risk analysis together
with the direct supplier. The published policy statement is also freely accessible toindirect suppliers and describes their due diligence obligations.

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