SUSTAINABILITY REPORTCapitalise on Megatrend &Portfolio Alignment

Contents
1

About this Report

2

A Message from Leadership

4

About Nexteer

7

Sustainability at Nexteer

13

Business Ethics

24

Value Creation

32

Environmental, Health & Safety51

Supply Chain

55

Community

59

Reporting IndicesNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

About This ReportThank you for your interest in Nexteer Automotive
Group Limited’s (the Company, together with its
subsidiaries are collectively referred to as we, us, our,
Nexteer, Nexteer Automotive or the Group) eighth
annual sustainability report. Our sustainability report isan important way in which we communicate progressagainst our sustainability material topics and goals.
We self-declare that the 2023 Sustainability Reportcomplies with applicable requirements and reporting
principles set forth in the Environmental, Social andGovernance Reporting Guide (HKEX ESG), as set out
in Appendix C2 to the Rules Governing the Listingof Securities on The Stock Exchange of Hong Kong
Limited (the Listing Rules). Please see pages 9-12 for a
detailed description of our materiality process, identified
stakeholders, and the results of our 2023 stakeholder
engagement. Quantitative data are prepared inaccordance with the applicable HKEX ESG requirements,
details of the calculation basis are disclosed in relevant
sections of this report. The results of our performance inaccordance with the applicable HKEX ESG requirements
are presented in this report and are indicated with agreen marker as their unique identifier. Nexteer has also
reported the information in this report with reference
to Global Reporting Initiative’s (GRI) standards,
Sustainability Accounting Standards Board (SASB) “AutoParts” sector standards and United Nations Sustainable
Development Goals (UNSDGs) if deemed available under
HKEX ESG. See page 59 for our reporting indices.
This sustainability report covers information and shareshighlights for fiscal year (FY) 2023, which aligns withthe calendar year. Unless otherwise noted, it covers all
Nexteer’s global operations and the information applies
to all full-time and part-time employees working inpremises operated by Nexteer, as well as in majorityowned joint-venture locations. There is no significant
change in the boundary and scope of this sustainability
report, compared to FY 2022.

Information about the standards, methodologies,
assumptions, calculation references, and source of
key conversion factors used for the key performanceindicators (KPIs) are stated wherever appropriate. As
far as reasonably practicable, consistent methodologies
are adopted when calculating the KPIs or any changes
that affect a meaningful comparison would be stated.
All financial information is reported in US dollars unlessotherwise stated.
Before publication, this report was reviewed by
Nexteer’s Sustainability Working Group, management’s
Sustainability Steering Committee and Disclosure
Committee, as well as the Board of Directors.
In addition to publishing an annual sustainability report,
Nexteer provides sustainability-related information tomeet specific requests from OEMs. We also provide
information to CDP (formerly the Carbon Disclosure
Project) and benchmark our sustainability performancethrough EcoVadis, a third-party provider of businesssustainability ratings.
For feedback, questions or additional information about
this report or our approach to sustainability, pleasecontact us at:

HEADQUARTERS
1272 Doris Road
Auburn Hills, Michigan 48326, USA
nexteer.sustainability@nexteer.com

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

A Message From Leadership

Dear Stakeholders,
At Nexteer, we lead with purpose. We
leverage our 110+ years of experience andvast technical expertise to drive sustainable
solutions in mobility.
Sustainability is a key part in achieving our
vision to be the global leading motion control
technology company accelerating mobility
to be safe, green and exciting. In 2023, we
continued to engage with internal and external
stakeholders to enact sustainability initiatives
around the globe, from renewable energy
projects, to employee events, a global supplierconference, community engagement activities
and more. In addition, we continue to monitor
and manage evolving mobility megatrends, as
the automotive industry transitions to a lowcarbon economy in the decades to come.
As concrete evidence of our commitment tosustainability, Nexteer is proud to be recognised by
the Hong Kong Hang Seng Corporate Sustainability
Benchmark Index for the seventh consecutive year
and included on Newsweek’s list of America’s Most
Responsible Companies 2024 for the fourth time in five
years. Our workforce’s commitment to innovation andvalue creation, as well as our support of our business
partners, earned Nexteer these prestigious distinctions.
As the Chair of our Sustainability Steering Committee,
I’m honoured to introduce Nexteer’s 2023 Sustainability
Report, and share highlights for reporting year 2023 fromour five focus areas: Business Ethics; Value Creation;
Environmental, Health and Safety; Supply Chain; andCommunity.
Business Ethics. At Nexteer, we are committed
to adopting sound corporate governance practices,
embracing sustainability topics with an enterpriserisk management mindset and acting according to
unwavering ethics. We believe these provide us with astrong foundation to achieve our vision and serve theinterests of our stakeholders. We reference leading
guidance in governance and transparency, including
Corporate Governance Code under the Listing Rules andreinforce a culture of business ethics through our Codeof Conduct and compliance standards. Our focus on

Robin Milavec

Business Ethics has been central to our operations since
our founding over 110 years ago and remains as strong as
ever today.
This is reflected in our 2023 achievements. For example,
we updated our global Code of Conduct, which
maintains the same commitment to doing business withintegrity we have always lived by at Nexteer, but withnew, updated features and emphasis on growing areasof focus – including, but not limited to, fair competition,
diversity and inclusion, global trade requirements andprivacy. In addition, Nexteer views our culture as a truecompetitive advantage. We are committed to fosteringa collaborative and inclusive environment because webelieve diverse viewpoints yield better decision-making
and problem-solving. Our culture and organisation’s
efforts earned us various workplace-related recognitionsin 2023, including Great Place to Work® certifications
and top employer awards in multiple regions.
Value Creation. Without innovation, we wouldn’t
be Nexteer: Relentless innovation is a key part ofour culture. Our innovation is fuelled by our in-houseownership of R&D, design, testing and manufacturing,as well as our focus on global, cross-functional
collaboration. We encourage our teams to find new
ways to improve effectiveness and efficiencies in all
our daily business activities to drive solutions for ourNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

customers. In 2023, we invested over US$298 million
in research and development and remained focusedon industry megatrends of electrification, software/connectivity, advanced driver assistance system (ADAS)/
automated driving (AD) and shared mobility. Throughout
the year, we delivered solutions that were well-alignedwith the electrification trend, supporting electricvehicle (EV) related platforms around the world, which
in turn contributed to our customers’ decarbonisation
aspirations. Additionally, our innovative Road Surface
Detection & Early Intuitive Warning Software solution
with Tactile Mobility shows how industry collaboration
can lead to game-changing solutions that improve safety
and performance for future mobility.
In 2023, we achieved a global production milestone of
100 million electric power steering (EPS) systems – a
key technology enabling fuel efficiency and advanced
safety and performance. This production milestone isa testament to our team’s commitment to producing
high-quality, safety-critical steering systems for ourcustomers around the world.
Environmental, Health & Safety (EH&S). Upholding
high standards in EH&S is imperative to our success– both in achieving our vision and in managing ouroperations around the globe. At Nexteer, employee
health and safety is a top priority – we believe every
accident is preventable, and this is reflected in our safety
culture. In 2023, our employees completed over 63,000
hours of safety training and we observed a reduction
in all our global lost workday, recordable and injury/
Illness incident rates compared to prior year. In addition
to prioritising the safety of our people, we also focus
on assessing and developing initiatives to improve ourenvironmental footprints. For example, we establishedour climate roadmap with emission reduction targets.
Turning vision to actions, we broke ground on a 25acre on-site solar field at one of our largest operation
footprints in Michigan, USA. To prepare ourselves toembrace risks and opportunities as the world transitions
to a low-carbon economy, we continue to explore
initiatives, such as renewable energy projects, energy
efficiency improvements and supply chain engagement.
Supply Chain. We view our suppliers and business
partners as extensions of our company, enabling us
to collaboratively embrace sustainability and generatevalue for our stakeholders. Just as we are committed
to operating our business to the highest level of ethicalconduct, we expect our partners to hold themselvesto these same standards. In 2023, we continued toreview supplier sustainability assessment feedback
as part of our supply chain management practices. In
addition to supplier engagement through our global
supplier conference and sustainability surveys, ourcross-functional teams continued to collaborate on
incorporating ESG topics as part of the supply chain risk
management framework. These efforts help our team
identify opportunities to improve the sustainability andresilience of our supply chain.
Community. I remain inspired by the dedication,
collaboration and teamwork of our Nexteer team. Our
Corporate Social Responsibility (CSR) – Nexteer Cares– programme is committed to community involvement,
and over the past seven years, we have invested over
US$2 million and about 107,000 employee volunteer
hours to support charitable causes and programmes
in the communities where we live and work aroundthe world. Our global colleagues are service-minded
and deeply committed to positively impacting theircommunities. In 2023, our community engagement
strategy remained focused on three focus areas:
proactive community involvement, careers andeducation, and strengthening neighbourhoods. Many
colleagues engaged in impactful initiatives throughout
the year – ranging from exposing youth to Science,
Technology, Engineering and Mathematics (STEM)
education to participating in community and humanitariancrises support initiatives.
Thank you to our employees, customers, suppliers,
communities and many others who helped make allthis possible. Take a moment to reflect on the inspiring
results of our collective efforts highlighted in this report– and let this progress encourage us to improve therobustness of our business and collectively contributefor a sustainable future.

Sincerely,
Robin Milavec
President, Chief Technology Officer (CTO),
Chief Strategy Officer (CSO),
Executive Board Director &Chair, Sustainability Steering Committee &Enterprise Risk Management Committee
Nexteer Automotive

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

About Nexteer
Nexteer Automotive’s vision is to be the global leading
motion control technology company accelerating mobility
to be safe, green and exciting.
Our innovative product and technology portfolio ofadvanced steering and driveline (DL) systems solves
motion control challenges across all megatrends –including electrification, software/connectivity, ADAS AD
and shared mobility.
In-house development and full system integration of
hardware, software and electronics provides Nexteer acompetitive advantage as an agile, full-service supplier
to automotive original equipment manufacturer (OEM)around the world.
Our ability to seamlessly integrate our systems into
OEM vehicles is a testament to our more than 115 years
heritage of vehicle integration expertise and productcraftsmanship. Our “One Nexteer” culture inspires
employees to achieve personal and corporate growthby focusing on our core values across all aspects of
the Company: people first, operational excellence andenterprise growth. As One Nexteer, our vision guides us
every day, and we’re making it a reality by challenging

GLOBAL FOOTPRINT & CUSTOMERS

the impossible and making tomorrow better than today.
We strive to be the partner of choice for our customers
and suppliers by delivering highly engineered, safetycritical products and building enduring relationships.
Nexteer provides real-world, vehicle-level solutions by
being:•

Customer Focused: Respected and trusted fordelivering on commitments•

Proactive: We listen carefully to understandcustomer needs, requirements and aspirations•

Innovative: A market leader in steering and DL
system innovation and value-added service•

Agile: Able to respond quickly with high-quality,
cost-effective solutions•

Global: Committed to exceeding customer andvehicle needs every time, in every customer-targetedmarketNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

About Nexteer

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

About Nexteer

NEXTEER’S FIVE KEY FOCUS AREAS
Business Ethics
We remain grounded by a strong foundation of corporate governance and ethics.
Our Board of Directors and leaders set the tone of our One Nexteer culture, one thatembraces transparency, upholds our Code of Conduct and ensures not only fair andethical labour practices, but also that Nexteer is workplace where employees can thrive

Supply Chain
Nexteer is dedicated to providing best-in-class technology, quality and value to every
customer, every day. To achieve that goal, we provide a clear, consistent message to our
supply partners regarding requirements and expectations. Our Supplier Requirements
Manual and our Corporate Social Responsibility Supplier Principles are intended to dojust thatEnvironmental, Health & Safety
Nexteer promotes a culture of Environmental, Health and Safety responsibility in all
activities:• We design our products, processes and services for continuous environmental
improvement• We comply with laws, regulations and our requirements for safety and environmental
protection where we operate• We are committed to reducing our greenhouse gas (GHG) emissions through energy
efficiency and renewable energy initiatives• We conserve resources, reduce pollutants and recycle materials for environmental
preservation• We embed health and safety into all aspects of our corporate culture througheducation, training and awareness• We remain committed to continuous improvement and ultimately achieving a lost
workday case rate of zero

Value Creation
Nexteer strives to achieve profitable and balanced global growth by creating value:• Through innovation and alignment with megatrends that advance sustainable
technologies• By partnering with winning automotive original equipment manufacturers (OEMs)• By growing geographic, customer and vehicle platform diversity

Community
Nexteer embraces corporate citizenship by:• Aspiring to be the business neighbour of choice in every community where we
maintain a presence• Supporting the economic prosperity of the communities where our employees live
and work• Supporting and encouraging the involvement of our employees in company-endorsed
community endeavours• Enhancing technical and economic education by supporting STEM educational
opportunities• Promoting a culture of collaboration by supporting community-based initiatives thatengage our employees, make a difference in the lives of others and matter to ouremployees

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Sustainability at Nexteer
In this section – Sustainability at Nexteer
2023 Sustainability Highlights & Recognitions
Managing Sustainability at Nexteer
Our Approach to Materiality
Engaging with Our Stakeholders

We’ve organised our approach to sustainability into
five key focus areas: Business Ethics, Supply Chain,
Environmental, Health & Safety, Value Creation, andCommunity. Taken together, these areas encompass
our corporate sustainability framework.

2023 SUSTAINABILITY HIGHLIGHTS &RECOGNITIONSIn 2023, we were selected as a constituent memberof the Hang Seng Corporate Sustainability Benchmark
Index (HSSUSB) for a seventh year in a row. Additionally,
Nexteer was recognised on Newsweek’s list of
America’s Most Responsible Companies 2024 for the
fourth time in five years. The following is a samplingof sustainability highlights and recognitions across our
five focus areas. Please see our 2023 Annual Report for
more.

•

Supply Chain•

Engaged with over 100 suppliers in annual suppliersustainability survey•

Collaborated with our suppliers in fundraising golf
events to provide scholarships for local students•

Hosted our Global Supplier Conference for morethan 200 supplier representatives to strengthen ourcollaboration and strategic alignment•

GM Supplier Quality Excellence Award for Nexteer
Juarez (Mexico)•ZEEKR Strategic Cooperation Award for Nexteer
Suzhou (China)•

Wuling Motors Best Quality Performance SupplierAward for Nexteer Liuzhou (China)•

XPENG’s Cooperation Award for Nexteer Suzhou

Business Ethics•

Updated global Code of Conduct•

TOP Companies México SúperEmpresas 2023
Award for Nexteer Mexico – Fourth Time•TOP HRM Excellent Employer Award for Nexteer
China

•

2023 Most Caring Employer Award – Great Suzhou•

2023 Extraordinary Employer – Eastern China•

2023 Great Place to Work Certification for Nexteer
Brazil – Sixth Time Since 2017•2023 Great Place to Work Certification for Nexteer
Morocco – Fourth Consecutive Year

Jiangsu Province Corporate Social Responsibility
Construction – Industry Top 10 Award for Nexteer
SuzhouEnvironmental, Health & Safety•

Reduced around 9,470 metric tonnes of carbon
emissions and over 4 million kWh of energy•

Broke ground on a 25-acre solar field, in partnershipwith NorthStar Clean Energy, at Nexteer’s USA
Operations site in Saginaw, Michigan, which is
expected to reduce GHG emissions by an estimated
7,000 metric tonnes annually•

Maintained strong health and safety performancewith a global recordable incident rate of 0.58

7

8NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Sustainability at Nexteer•

Received 65 National Safety Council awards in 2023,
including a Corporate Culture of Safety Award

Value Creation•

Achieved a global production milestone of 100 million
electric power steering systems – a key technology
enabling fuel efficiency and advanced safety andperformance•

Received three innovation awards in China for
Road Surface Detection and Early Intuitive Warning
Software with Tactile Mobility–•

Our Board of Directors (the Board) provides
oversight regarding sustainability/ESG
strategy and material ESG aspects. The
Board’s Audit and Compliance Committee
supports the Board's oversight role with
their subject matter expertise in risk management and internal controls (including
material ESG aspects).
Our management-level Sustainability
Steering Committee (SSC) leads theorganisation on integrating sustainability
throughout global business strategies,
advancing ESG efforts and implementing
actions to enhance our sustainability
framework.

China Lingxuan Award for Advanced Technology/
Auto Software–

China Automobile & Parts Innovative Technology/
ADAS Award–

China Automobile Industry Innovative Technology
Award

Honoured with Auburn Hills Chamber of Commerce’s
Oakland University Innovator of the Year Award forSteer-by-Wire (SbW) with Stowable Steering Column

Community•

Nexteer manages sustainability through a three-tieredgovernance structure:

Invested US$298 million in research anddevelopment••

MANAGING SUSTAINABILITY AT NEXTEER

Donated over US$200,000 to charitable efforts
and contributed about 16,200 hours of employee
community service in 2023
Supported our global communities throughnumerous events focused on proactive community
involvement, careers and education, andstrengthening neighbourhoods

Our cross-functional Sustainability WorkGroup (SWG) has supported theorganisation’s sustainability journeysince 2015. SWG includes members
from our Climate Change Task Force(CCTF) that coordinates enterpriseefforts that relate to climate change.

Our Sustainability Monitoring and Reporting Framework(SMRF) guides our external disclosures, which arealigned to the HKEX ESG. We review and update the
SMRF annually to reflect our material topics (see page11) and to ensure continued alignment with applicable
reporting requirements.

Board of Directors
Our Board of Directors oversees ESG issues andmaterial aspects. This includes reviewing and approving
our materiality matrix, Sustainability Report and receiving
updates regarding our sustainability & ESG goals, KPI
performance, and progress. Nexteer’s management
leaders report to the Board. For more information about
our governance practices, please see page 13.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Sustainability at Nexteer

Sustainability Steering Committee
Serving as an overarching tier, the SSC connects withthe other two tiers in our sustainability governancestructure. With the Board’s oversight, the SSC provides
leadership and guidance to each of the interrelated
functional and divisional teams within our SMRF.
The SSC has been established with the objective tooperationalise Nexteer’s sustainability efforts and drive
continual improvements for the organisation to embrace
ever-increasing challenges and opportunities along many
fronts. For reporting year of 2023, the SSC continued
to meet regularly and on an ad hoc basis to provide
leadership insights to promote sustainability efforts. For
example, the SSC:•

Incorporated sustainability in strategic discussions at
global leadership meetings•

Provided leadership insights, reviewed, and approved
ESG material topics as a part of the materiality
assessment process•

Evaluated key findings and subject matter expert
recommendations from ESG risk assessments•

Reviewed and approved ESG initiatives such as
corporate climate roadmap and renewable energy
projects•

Reported ESG material aspects and relevant
strategic initiatives to the Board and/or its Audit andCompliance Committee

OUR APPROACH TO MATERIALITY
In 2015, we completed our first materiality assessment
to define the ESG topics that are most pertinent to ourbusiness and stakeholders. Since then, we’ve conducted
several refreshes of our topics so they may continue toencompass Nexteer’s and our stakeholders’ evolving
sustainability interests and priorities.
For reporting year 2023, we conducted a comprehensive
review of our material topics , contemplating referencessuch as the HKEX ESG Reporting Guide, and theInternational Sustainability Standards Board (ISSB)
Sustainability Disclosure Standards.
Additionally, we broadened our collaborative approach tomateriality to consider potential sustainability risks andautomotive industry trends across our global operations.
We continue to leverage specific feedback from a variety

of internal and external stakeholders to rank and validate
nineteen unique environmental, social, and governancetopics.
The overall process involved five key steps:
1. We started with researching automotive industry
trends, as well as potential near-term and long-termbusiness risks with global and regional trends.
2. We reviewed the following content: Information
published by HKEX, industry and globally recognised
sustainability reporting protocols and guidelines
including the ISSB Sustainability disclosure standards,
the Task Force on Climate-related Financial
Disclosures (TCFD), the Task Force on Naturerelated Financial Disclosures (TNFD), and third-party
sustainability and CSR evaluation frameworks to
identify material issues based on our five key focus
areas: business ethics, value creation, supply chain,community, health, safety, and environment. We
also assessed and analysed ESG topics through areview of sustainability reports published by relevant
companies in automotive industry.
3. We refined this list of potential material topics
through an extensive stakeholder engagement
process which included one-on-one interviews with
our leadership team and digital surveys distributed
to our employees and suppliers. Our stakeholders
were asked to rank topics according to their potential
impact on business growth and performance, ourbrand and reputation, our business culture, productquality, and safety and regulatory impacts. Topics
were also ranked according to their potential impact
on broader social expectations.
4. Once the leadership interviews were completed
and survey results were received and analysed, weapplied weighting based on professional judgement
and external perspectives such as sustainability
reporting protocols and guidelines, third-party
ESG rating and ranking organisations, investors’
ESG methodologies and others. Topics that wereconsistently emphasised through these mechanisms
were ultimately be given more weight in ourmateriality assessment, increasing in importance on
our matrix.
5. The final step in our process includes reporting our
results and sharing for consideration through our
corporate strategic planning and enterprise risk
management processes.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Sustainability at Nexteer

Our Materiality Process

Enterprise
Objectives

Identification

Prioritisation

Validation

Sustainability
Objective

UpdateReporting

Review

Stakeholder
Objectives

A Collaborative Process and Methodology
Analyse Global
and Industry
TrendsIdentify
Material
IssuesAssess &AnalyseIn 2023, our distribution of topics on our matrix remains
similar to years prior. However, some noteworthy
highlights include:
Supply Chain Management and Practices has
continued to grow in importance and was identified
by leadership as a strategic focus area in 2023. Please
read more about this topic on page 51 for how we aremanaging supply chain disruption.
Climate Change remains a top priority for stakeholders,given its emphasis with our customers, investors,
suppliers, and leadership team, as well as nearly all
external sustainability reporting protocols and guidelines,
third-party ESG rating and ranking organisations,investors’ ESG methodologies, regulators and others.
We continue to sharpen our focus on climate change
and enhance our strategy, see page 34 for more
information.
Energy remained an important topic, given its direct
relationship with emissions and climate change impacts,
as well as pricing volatility driven by geopolitical tension.
Our global operation teams recognised the relevance ofthe topic, and continued to implement energy efficiency
projects, as well as to explore renewable energy levers.

Rank &
Validate

Inform &Integrate

Information Security and Privacy increased inimportance over last year’s results given its pertinence
to risk management and protection of critical informationand data, and growing prevalence in regulatory andglobal developments. A wide range of Nexteer’s
stakeholders focused on this topic. Read about ourapproach on page 29.
Sustainability Strategy and Risk Management has
been added to our value creation focus area in 2023 toensure continuous improvement and better inform ourstrategic planning with emerging sustainability issues
impacting our business.
We are committed to reviewing our materiality
assessment process and results on a regular basis toensure we are focused on addressing the topics thatmatter most to our business and our stakeholders. We
will continue to use the results of this process to refine
our sustainability framework, key focus areas, andrelevant initiatives as required.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Sustainability at Nexteer

Our Materiality Matrix
PriorityHigh Priority

Brand Identity andManagement

Diversity and Equal
Opportunity

Highest Priority

Business Ethics and Integrity

Climate Change
Emergency Preparedness
Economic Performance,
Innovation, and Market Presence

Community Involvement
and Investment

Environmental Compliance

Energy and Emissions

Materials and Waste
Management

Health and Safety
Fair Employment Practices
and Labour Relations
Product Safety,
Responsibility andSocioeconomic Compliance

Nature and Biodiversity

Water and Wastewater
Management

Health, Safety & Environment

Community

Information Security
and Privacy

Supply Chain Management
and Practices

Product Quality/Standardisationof Business Processes

Supply Chain

Sustainability Strategy
and Risk Management

Business Ethics & Integrity

Topics are listed in alphabetical order within each priority category and do not represent specific ranking within the category.

Value Creation

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Sustainability at Nexteer

Engaging With Our Stakeholders
Communities

Customers•

Meetings with community leaders to alignNexteer resources with local needs••

Locally driven engagement initiatives byregion and locale

Meetings with key account managers,
customer directors, executive management,
and senior leadership••

Corporate giving and employee volunteerism

Voice of Customer Survey and OEM Supplier
Scorecards•

OEM Sustainability reporting initiatives

C

Manufacturingassessments andprocess plan reviews,
and audit•

Supplier Conference
and Surveys

Annual filings, Annual
Report, sustainability
reports and public
disclosures•

Annual General Meeting,earnings briefing meetings,
and quarterly global
conference calls•

Investor website
communications andsustainability surveys

TO
ES

•

I NV

Investors

We actively engage our
stakeholders on environmental,social, economic, and governancematters to create value in a
responsible way.

•

Technology
demonstrations
showcased leadership•

Global trade shows
and presentations at
industry events•

Joint participation ontechnical committees
and research teams

S•

Industry

U
LA
TO
R

Meetings with
suppliers’ leadership
teams

CUS
TO
ME
RS

USTRY
IN D

•

SUPPLI
ERS

Suppliers

IES
NIT
U
M
OM

RS

G
RE

EMPLOYEESRegulators•

Providing data andinformation to support
regulatory requirements•

Joint participation ontechnical committees andresearch teams•

Regulatory surveys

Employees•

Nexteer Annual
Sustainability/ESG Survey•

Annual Nexteer Strategy
Summit•Leadership calls andworkshops•

Corporate communications,intranet and external
communications•

Employee Engagement
Event and programmes

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics
Adhering to High Ethical Standards
In this section – Business Ethics
Ethics, Compliance & Integrity
Our People
Attracting & Retaining Top-Talent
Fostering Diversity, Equity & Inclusion

ETHICS, COMPLIANCE & INTEGRITYAt Nexteer, operating in an ethical and transparent way
is at the heart of who we are and what we do. Honesty,
integrity, and sound judgement are essential to our
reputation and success. We hold everyone at every
level of the business accountable for upholding ourcommitment to ethical conduct in personal and businessdealings. To remain the admired and credible partnerof choice to our customers and suppliers, we take any
potential violation of our high standard of trust andtransparency seriously and have put several measures inplace to preserve this culture of respect.

Strong Governance Practices
The Nexteer Board of Directors is responsible for andhas general oversight of the direction of management
and the conduct of business, including sustainability
and ESG-related issues. Our Board – composed ofeight directors with a variety of skills, qualifications, andviewpoints – provides oversight regarding Nexteer’s
sustainability/ESG strategy and material ESG aspects,
while the Board’s Audit and Compliance Committee
supports the Board’s oversight role with their subject
matter expertise in risk management and internal
controls (including material ESG aspects).
The Board’s Audit and Compliance Committee andits Remuneration and Nomination Committee arecomposed of a majority of independent non-executive
directors. Additionally, we believe that diversity among
directors is important for bringing unique perspectives
and competencies to the oversight of the Company’sbusiness, and this is reinforced through our Board
Diversity Policy. For more information about our Board
diversity and corporate governance, please refer to our2023 Annual Report.

At Nexteer we are committed to acting in accordancewith all applicable laws, and we are committed to
conducting our business with the highest degree of
integrity. Every employee is responsible for upholding
the standards established, including reporting violations
consistent with applicable laws.
Our global compliance standards and our Code of
Conduct help us achieve greater accountability to ourstakeholders and help us to continually improve ourcorporate governance and enterprise risk management
practices.
Our Code of Conduct reflects the standards that we
abide by as we conduct business. It outlines ourcommitment to doing business with integrity andprovides emphasis on growing areas of focus, including,but not limited to community involvement, discriminationand harassment, human rights, fair competition, diversity
and inclusion, global trade requirements, privacy, andsustainability.
We designed our Code of Conduct to deter wrongdoing
and to promote:•Honest and ethical conduct in personal and businessdealings•

Full, fair, accurate, timely and understandable
disclosure in Nexteer’s public communications andfiled documents•

C om pl i ance wi th appl i cabl e l aws, rul e s andregulations•

Prompt reporting of any Code of Conduct violation•

Accountability for adhering to the Code of Conduct

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

It is important that all our employees and relevant
stakeholders are empowered to report potential
violations of our standards so that we can investigate
and, if necessary, take corrective measures. To aid inthis effort, we offer a global ethics line (administrated bya third-party) via telephone and web-based forms (the“Ethics Line”), which serves as a reporting mechanism
and as a resource for relevant personnel or third
parties doing business with Nexteer to ask questions,seek guidance, and/or anonymously report suspected
misconduct where permitted by law. Reports received
through the Ethics Line are investigated and action istaken where appropriate. Our Ethics Line webpage canbe accessed here. During this reporting period, there
were no significant instances of non-compliance withlaws and regulations.

Anyone who believes a Nexteer employee, customer,
supplier, vendor, or any other third-party doing
business with Nexteer is in violation of applicable laws
is encouraged to report their concerns to our humanresources department who shall take prompt corrective
action. Employees also may report potential violations to
our Ethics Line or legal department.

Upholding Human Rights & Labour Standards

We provide annual training for 100% of all our salaried
workers globally on our Code of Conduct, and Nexteer’s
Board receives Code of Conduct training and a specificanti-corruption module. Nexteer’s anti-corruption training
is designed to help our workforce and Board of Directors
do the right thing when faced with ethical dilemmas andto comply with the Foreign Corrupt Practices Act (FCPA),
the UK Bribery Act, and other regulatory expectations.
Training is provided in an online course and available ineight languages that are commonly spoken throughout
our regions of operations.

HKEX B4, B4.1, B4.2
Nexteer aspires to lead and serve as a catalyst for action
through its commitment to human rights and dignity.
This means that:•

We respect and comply with applicable labour andemployment laws, including those pertaining todiscrimination, forced or compulsory employment,child labour, freedom of association, hours,
immigration, privacy, and wages.

•

We require our supplier partners to provide
safe products or services, comply with labouror employment laws, and prohibit any physicalpunishment as disciplinary action.

•

We use a third – party risk management tool tomonitor supply chains and expect our suppliers tocomply with our prohibition of the use of any formof forced labour, and every other provision of theircontracts with Nexteer regarding equitable and fairtreatment of workers. This includes the obligation by
Nexteer’s suppliers, to ensure all suppliers in their
supply chain also comply with these prohibitions.

•

We are firmly opposed to all child and forced labour.
We comply with all laws regarding forced and childlabour within our regions of operations. To date, wehave not had to take steps to eliminate or mitigate
the risk of child labour in our operations, as we havestrict employment practices surrounding this issue.

Preventing Corruption
HKEX B7, B7.1, B7.2, B7.3
Nexteer is committed to preventing incidents of bribery,
extortion, fraud, and money laundering. We follow global
policies that promote the highest ethical standards forbehaviour and compliance with laws and regulations
where we do business.

We comply with relevant anti-corruption laws andregulations applicable to us. We provide several channels
to report suspicious activity or behaviour, such assuspected incidents of corruption and bribery, including
direct reports to a supervisor or manager; reports toour human resources, legal, or other relevant functional
departments; and our Ethics Line where reports can bemade anonymously via telephone or web-based form in
multiple languages via telephone or website 24-hours aday, seven days a week, 365-days a year. In 2023, we
did not have any legal cases regarding corrupt practices
brought against us.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

OUR PEOPLEHKEX B1.1
At Nexteer, our people are the engine that drive our
success. Our workforce encompasses a diverse body ofapproximately 13,000 employees from many countries
and unique backgrounds who come together as One
Nexteer to innovate, collaborate and create. We work
every day to maintain a workplace that attracts top-talentand empowers employees to thrive through training anddevelopment, engagement and diversity, equity andinclusion (DE&I). Our decisions are guided by an overall
strategy and mindset that focuses on the fundamentals
to strengthen our resiliency and readiness for thechallenges ahead.

At Nexteer, we empower our people to learn,
grow, and ignite change. I’m proud of our hard
work in 2023 to embrace the diversity of ourglobal backgrounds and strengthen our One
Nexteer Culture.
Christine Fleis,
Director, Global Talent Management

Our Workforce
Total Workforce by Employment Type

(Full- and Part-Time Employees)

30Part Time
Employees

12,872
Full Time
Employees

12,902 Total Employees

Total Workforce by Geographical Region

North
America
6,537
50.7%

APAC
3,708
28.7%

EMEASA
2,657
20.6%

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

Total Workforce by Type (Full- and Part-Time Employees) and by Geographical Region
Geographical Region*

Full Time Employees

Part Time Employees

TotalsAPAC*
EMEASA**
North America

3,707
2,638
6,527

1
19
10

3,708
2,657
6,537

Total

12,87230

12,902

APAC: Asia-Pacific** EMEASA: Europe, the Middle East, Africa and South America

Total Workforce by Gender

Total Workforce by Age Group

Female3,383
26.2%

40 years old
and under
8,197
63.5%
41-59
years old
4,196
32.5%

Male
9,519
# of total
employees% of total
workforce

73.8%# of total
employees% of total
workforce

Over 60
years old509
4.0%

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

Employee Turnover
HKEX B1.2
Employee Turnover* Rate by Geographic Region
Geographical Region*

Turnover Rate (%)
2023

APAC
EMEASA
North America

13.3
13.3
35.2

Total

24.4

Employee turnover measures employees who leave the organisation voluntarily or due to dismissal, retirement,or related reasons.

Employee Turnover Rate by Gender and Age Group 2021–2023
Turnover Rate (%)

2021

2022

2023

GenderFemale
Male

30.2
21.3

40.3
24.3

30.8
22.2

Age Group
40 years old and under
41-59 years old
Over 60 years old

30.8
11.9
18.9

36.3
16.2
15.7

29.2
13.8
34.4

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

One Nexteer United Under One Vision
Our success is driven by a workforce united under one
vision. That vision statement: “We are the Leading
Motion Control Technology Company, Accelerating
Mobility to be Safe, Green, and Exciting” intentionally
starts with “We.” This is because together, as a
One Nexteer team, we will achieve great things.
Our constructive culture sets us apart. It drives
excellence, innovation, accountability, integrity, personal
development, and collaboration. We believe that nomatter who we are or what our role is, that each andevery employee exemplifies unique values and impacts
our success. We believe this change reflects ourtransformation mindset and deepening commitment toinnovating sustainable solutions in mobility.

Our Workplace Culture
We believe in empowering, energising, and exciting
places to work. Our employees’ experience matters;
as does their access to the right tools, resources, andenvironment that enable them to adapt, be agile, andreimagine relentlessly as we accelerate mobility in thisfast-paced industry. We foster a continuous learning
environment and facilitate opportunities where our
employees are encouraged to grow both professionallyand personally. We recognise our people and show
our appreciation for their contributions, and facilitate apositive, productive, and innovative climate.

ensure continued compliance with relevant laws andregulations. Training on our Code of Conduct is required
for all new hires and current employees annually.

ATTRACTING & RETAINING TOP-TALENT
We work diligently to ensure Nexteer is an excitingand empowering place to work. We attract top talentthroughout the communities in which we operate bycontinuously refining our suite of benefits and offeringsfor employees and offering competitive compensation.
Read more about benefits Nexteer offers including ourhealth, wellness and savings plans on our career web
page.
We collect feedback to improve how we may attract andretain talent through focus groups, surveys, and otherdirect feedback opportunities. We adjust our processes
based on this feedback so we may offer the best
possible experience to our candidates, new hires, andcurrent employees.

Employment Practices & Compliance

One of our core focuses to retaining talent remains
professional development. We empower employeeswith skills and competencies to grow and develop ona personalised career path within our company. We
also believe the greatest impact we can have on an
employees’ experience is through our leaders. This
is why we put great priority on the development andcoaching of our leadership globally.

HKEX B1

Talent Development

We are committed to acting in accordance with allapplicable employment laws and driving a workplaceculture of dignity, fairness and respect. This is why
all employees complete in-depth training each year
on our policies, practices, and employment laws.
Topics covered in this annual training and in our
employee handbook include: benefits, compensation,
discrimination, dismissal, diversity, equal opportunity, fairlabour practices, harassment, human rights, promotions,
recruitment, retention, rest periods, safety, working
hours and violence prevention. We are also committed
to fair and equitable hiring practices. At Nexteer, webase hiring, promotions, bonuses and other related
employment decisions on merit. We believe that every
employee has a role to play in maintaining the highest
standards of ethics and integrity. This includes reporting
known and suspected violations of applicable laws andconduct.

HKEX B3

We have several global compliance standards inplace, including our Code of Conduct, that help us toachieve greater accountability to our stakeholders andOur investment in the personal development and growthof our people remains a key priority and foundation
to Nexteer’s success. In 2023, Nexteer offered
Employee Development Workshops for employees andsecond year managers. These interactive workshops
incorporated LinkedIn Learning videos and engaging
conversations around talent development. The
workshops highlight the value of employee development
and provide practical advice, coaching, and resources,
such as our Employee Development Guide.
As part of our talent management programme, Nexteer’s
Learning and Development team delivers live and virtual
Performance Review workshops focused on helping
prepare employees and managers for performance
reviews. The focus of these workshops is on enabling
meaningful, clear, and effective performance review
assessments and supporting meaningful performance
conversations. The outcome of our workshops include
toolkits to apply their learnings further.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

Nexteer Global Career Framework
The Nexteer Global Career Framework organises jobs ina globally consistent way, helping to bring visibility to ouremployee’s strengths and clarity to career progression
and comparative position within the global company. It
improves alignment of expectations for employee skills
and competencies needed to meet business objectives,and it gives employees visibility into career paths andopportunities for development and growth.

The Nexteer Career Framework provides the foundation to:

Uniformly identify andorganise jobs globally

Clarify job responsibilities
from one job or level toanother,
facilitating clear job andperformance expectation

Define the natural developmentof people, including requiredcompetencies

Deliver HR and TalentManagement programmes

Execute pay and reward
programmes and strategy

Equipping Our Leaders
Further expanding on our competency management programme, in 2023 we aligned leadership competencies andmapped all leaders to a consistent set of global leadership competencies. “Nexteer’s Leadership Beliefs” define
what it means to be a Nexteer Leader and the kind of conduct that our leaders should exhibit. We believe that ourleaders should possess a high level of seven competencies (or skills and abilities) to be successful in their role. Eachleader is assessed against our seven competencies annually, to allow focus on development where opportunities
may exist.
In 2023, through monthly editions of the Influencer (leadership newsletter), we communicated the Nexteer
Leadership Beliefs with descriptions, insights, coaching, and recommended training resources. The Influencer isa great development tool for leaders that provides development advice, actionable ideas, and tools for Nexteer’s
leaders globally.

Our Seven Leadership Competencies

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

Employee Training
HKEX B3.1
The graphs below show the number and percentage of employees trained by gender and by employee category.
Number & Percentage of Employees Trained by Gender 2021-2023

Percentage of Employees
Trained in 2023

% of employees trained

76.5%

23.5%

# of employees trained

8,014

2,464

% of employees trained

76.9%

23.1%

# of employees trained

6,870

2,058

% of employees trained

75.4%

24.6%

# of employees trained

7,046

2,298

2023

10,478
Employees Trained

81.2%
of Employees Trained

2022

2021

0%

10%

20%

30%

Male

40%

50%

60%

70%

80%

90%

100%

FemaleNumber & Percentage of Employees Trained by Employee Category 2021-2023
2.5%% of employees trained

2023

1.5%

13.7%

48.0%

1,438

5,030

8.7%

46.7%

780

4,170

261

155

# of employees trained

0.8%# of employees trained

69
<1.0%
14.00%

45.00%# of employees trained

1,301

4,237

0%
Executive/Senior-Level

2.0%
36.00%

239

2021

207
3,588

3%
% of employees trained

2.3%
40.2%

114

2022

81
3,513

1%
% of employees trained

0.8%
33.5%

45
10%

20%

Mid-Level

30%

40%

Professional

194
3,328

50%
Sales

60%
Technicians

70%

80%

90%

Administrative

100%

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

2023 Average Training Hours Completed by Gender
HKEX B3.2

14.1

13.1
Average
Training Hours per Female

Average
Training Hours per Male

2023 Average Training Hours Completed by Employee Category

18.7

Executive/Senior-Level

23.5

Mid-Level

21.1

Professional

16.8

Sales

Technicians

Administrative

8.2
16.6

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

FOSTERING DIVERSITY, EQUITY & INCLUSIONAt Nexteer, we aim to maintain a culture where allvoices are heard and everyone feels empowered tocollaborate, innovate and thrive. We believe that thediverse backgrounds and experiences of our workforce
are what makes Nexteer unique, and allow us toinnovate, create and collaborate at such high levels. (Seeour workforce diversity data on page 16).

Celebrated International Women’s Day
On March 8, 2023, Nexteer Leaders
commemorated International Women’s Day by
convening an event with distinguished speakers
from throughout the organisation. These inspiring
leaders focused on embracing equity and defining
the differences between equality and equity.

Nexteer’s DE&I programme – RISE, stands for Respect,
Inclusion, Support, and Equity. In the last few years,
we’ve worked diligently to further build out thisprogramme by expanding it to our global locations andhosting annual DE&I events.

One Nexteer Culture Week Around the World:
Collaborating for Sustainable Growth
Nexteer hosted our 2023 One Nexteer Culture Week
around the world in October, introducing this year’s
theme of “Collaborating for Sustainable Growth.” Thestrength of our One Nexteer Culture lies in the diversityof cultural backgrounds that make us who we are. We allbring unique ideas, perspectives, and experiences, whichenable us to achieve greatness together. By embracing
our cultural differences across all three pillars of ourculture: People, Operational Excellence, and Enterprise
Growth, we create an environment where everyone
feels valued, respected, and included. Together, we
drive innovation, growth, and excellence every step of
the way. Several common global activities were offered
to connect employees around the world, as well as
events that further supplemented the collaboration andengagement of Nexteer teams. Activities included a fun
Nexteer trivia game called the “Culture Wheel Game”,
interactive Nexteer Scavenger hunts, updating profile
pictures with a One Nexteer Culture picture frame tocelebrate our cultural heritage, an interactive “2023
One Nexteer Culture Week” Viva Engage community,
availability of recognition cards to take a moment toappreciate teammates, a One Nexteer Culture Recipe
Book, a Local Traditions book, a Phrases that Make
No Sense When Translated Book, and multiple charity
events such as selling and wearing Nexteer pink support
breast cancer awareness shirts.

One Nexteer Culture Week around the World

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Business Ethics

Engagement & Inclusiveness Vision
All In Diversity – EMEASA Programme
ENGAGEMENTINCLUSIVENESS

Engaged People Go Beyond

All IN – Inclusive, Agile and Adaptable Culture

COMMUNICATION

Nexteer With Passion Programme
In Poland, we have a programme called “Nexteer
with Passion” where over 200 employees from
17 different groups get together to share their
passions: running, climbing, playing volleyball,
football, etc.
Our leadership teams support these events andencourage employees to share the experienceson social media platforms.

In 2023, we launched the EMEASA D&I
Committee with representatives from six
countries. We are tracking KPIs quarterly to focus
on increasing inclusion by creating open spaces
for discussions and enhancing the employee
experience. By embracing the diversity of ourunique workforce, we will attract and retain talent.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation
In this section – Value Creation
Generating Value through Innovation
Our Alignment with Industry Megatrends
Fostering Innovation through Awards & Recognitions
Product Responsibility

GENERATING VALUE THROUGH INNOVATION

Our Focus on Research & Development

Nexteer’s steady focus on innovation strengthens ourexisting portfolio of products while relentlessly buildingout our pipeline and innovating for the future.

HKEX B6.3

OUR ALIGNMENT WITH INDUSTRYMEGATRENDS
Convergence of megatrends is reinventing ourindustry. Our innovations solve motion control
challenges across all megatrends. Nexteer
has a robust, proven technology and productportfolio to support industry megatrends such as
electrification, software and connectivity, ADAS/ADand shared mobility.

Software &Electrification Connectivity
Electric Power
Steering
Steer-by-Wire
Columns &I-Shafts
Driveline
Software
R&D

ADAS &
Automated
Driving

SharedMobility

As of December 31, 2023, Nexteer’s global portfolio
includes 815 patent applications and 1,390 issued
patents. The sustained growth in issued patents is a
result of our robust applications in previous years and it
demonstrates our efforts for observing and protecting
intellectual property rights. Given our focus and history
of innovation, our patent portfolio continues to growand remain strong due to our sustainable developmentof future technologies. In 2023, 23% of granted
patents were related to our future product offerings ofSoftware-as-a-Product, SbW, and/or ADAS/AD enabling
technologies which ensure we are aligned to industry
megatrends.
Another 30% of our 2023 patent filings – a 58% yearover-year increase – were directly related to theseidentified trends. Our strong patent portfolio is proof of
our ability to maintain technological leadership in intuitive
motion control systems.
We are dedicated to protecting our intellectual property
rights, which are crucial to our business growth andability to differentiate ourselves from competitors.
Nexteer complies with all applicable intellectual property
laws and regulations. We actively apply for protection
for Nexteer’s intellectual property to guard our exclusive
rights. For 2023 metrics, CNXMotion is being includedin patent reporting due to dissolution of the Continental/
Nexteer joint venture.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

Global Issued Patents & Filings FY21-FY23
243

232

222
179

R&D and CAPEX FY21-FY23

189

193

$132

2021

2022

$298

$289

$271

$146

$170

2023

Global Patent Filings per Year

2021

Global Issued Patents per Year

Nexteer continued its growth in both customer andproduct expansion, leading to an engineering spending
increase totaling US$298 million. This increase allowed
the Company to maintain its current operations whileproviding further investment in our future productportfolio, namely in high output and dual pinion-assist
EPS, and SbW technologies, and increased systems
and software capability. Making investments in these
critical technology areas fuels our future and positions
Nexteer for expanded growth opportunities. Additionally,
Nexteer continues to create technologies that leverage
our design, development and manufacturing strengths
in advanced steering and DL systems to enable battery
electric vehicle (BEV) conversions. Year-over-year trends
in research and development and capital expenditures(Capex) are presented in the graph above.

2022

2023

Research & Development Spend (in US$ millions)*
Capex (in US$ millions)*

Note: Engineering and product development costcharged to income statement and development
costs capitalised as intangible assets.

Our people are the driving force behind Nexteer’s
innovation pipeline essential to our growth andprofitability. Currently, 90% (5% increase vs. 2022)
of engineering work is completed within the regionof manufacturing, allowing for real-time, efficientpartnerships with our global customers and suppliers.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

FOSTERING INNOVATION THROUGH
AWARDS & RECOGNITIONS
Nexteer continues to improve recognition processes
to adapt to its everchanging workforce. In 2023, welaunched a Road to Recognition reward system and an
Employee of the Month programme across our U.S.
Engineering department.
This programme was designed to motivate and reward
behaviours which promote our One Nexteer culture
and advance our strategic priorities. By taking the time
to recognise others and show appreciation for theircontributions, we encourage a positive, productive, andinnovative climate.
The Road to Recognition award system allows everyone
to participate in recognising one another for a job welldone. A tracking and display board was developed,
and monetary rewards are accumulated upon reaching
milestones.
The Employee of the Month programme was updated
to include all product lines and groups to recognise
employees that have shown exemplary work with apositive and supportive attitude. Employees of theMonth are recognised through a formal departmentwide email, a certificate, monetary award, and premiumparking for a month.

Photo from 2023 IP Recognition Award Luncheon
We also have a robust intellectual property award
programme. One highlight of the programme is theopportunity to be inducted into Nexteer’s Innovation Hallof Fame which recognises and rewards personnel who
have made significant intellectual property contributions
to enhance Nexteer’s competitive position. There areten levels of achievement within Nexteer’s Innovation
Hall of Fame, encouraging our employees to continue
innovating and advancing to higher levels throughout
their careers. Incremental awards are also given foreach point at a formal luncheon celebrating inventor
achievement.

Globalisation & Competency Development
In 2023, Nexteer continued our thoughtful global
footprint diversification and operational competency inlocations strategically important to our key customers.
Our facilities around the world support our approach of
producing in the region of consumption to ensure built-in
efficiencies, customer responsiveness and short supply
lines.

Nexteer Production System (NPS) & NPS Academy
NPS Academy provides hundreds of training sessions forinternal employees, customers, and suppliers each year.
NPS integrates Lean principles and standards into our
day-to-day business operations. This year we upgraded
the NPS and increased to 10 modules, including safety,
quality, talent development, lean layout and Capex
optimisation, PC&L (Production Control & Logistics),
software, TPM (Total Preventative Maintenance),
management control, continuous improvement andperfect launch.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

Prioritising Product Safety & Quality
HKEX B6

EMEASA Tychy NPS Academy
To date, Nexteer has implemented seven NPS
academies around the globe. These regional NPS
academies are located near manufacturing plants andimprove the local team’s training systems. Our NPS
Academy is the first place for every employee where webuild NPS into our DNA. Some NPS academies also play
additional roles such as working with local governmentand customers to provide trainings to outsidecompanies. NPS Academy also aims to develop strategic
vendors. At Tychy NPS Academy, for example, wehave established cooperation with other manufacturing
companies to exchange experiences related to Lean
Manufacturing training.

PRODUCT RESPONSIBILITYAt Nexteer we deliver world-class products that enablemobility to be safe, green and exciting. We do thisby prioritising product safety, compliance and quality
management. This is a shared commitment of all
Nexteer employees; all of us work together to meetthe needs of our customers and embrace sustainable
innovation.

Nexteer’s product lifecycle encompasses key businessprocesses from product inception, delivery of finishedproduct to post-production service parts. Our processes
ensure compliance with applicable laws and regulations
for each product, ensuring implementation andconformance. Additionally, Nexteer has a well-defined
Product Safety and Compliance process in place toidentify and manage any potential instances of noncompliance. This process is led by Nexteer’s Product
Safety and Compliance Council (PSCC) which evaluates
potential issues, ensures that cross-functional subject
matter experts are engaged, reviews risk assessments,
approves actions to be taken and communicatesaccordingly.
We reference industry-leading and structured problemsolving methodologies including Fast-X, DFSS, DRR, Six
Sigma and 3L5W. Nexteer’s problem-solving capabilities
and internal competencies are maintained throughinternal training and certification processes.

Quality Assurance Process
HKEX B6.2, B6.4
Our quality management system (QMS) meets
international standards like International Organization forStandardization (ISO) 9001 and International Automotive
Task Force (IATF) 16949. The QMS outlines:•

Our business system manual•

High-level policies providing guiding principles•

Process maps offering an overview of key businessprocesses•

Detailed procedures defining the method of
performing required activities

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

All key process maps have a defined set of metrics or
KPIs as measures of effectiveness and efficiency to alignwith IATF requirements for monitoring effectivenessof the organisation’s business system. Nexteer also
has systems in place to support relevant data collection
for key process measures which improves visibility for
performance reviews at a regular and defined cadence.
Powered by global dashboards for all Nexteer sites,
we continue to improve communication process andmanagement review consistency. Furthermore, applying
a Plan-Do-Check-Act methodology, we regularly review,monitor, refine and improve our QMS to incorporate
product and technology trends, optimise metrics, andembrace continual improvement. Through our QMS wemeet global governmental product safety complianceand reporting requirements and conform to applicablelaws and regulations of every country where we dobusiness. All our manufacturing facilities are IATFcertified and are supported by our technical centres,
service centres and corporate offices.
Nexteer reports and reviews quality metrics monthly,compiling all global data including customer complaint
information. Annual objectives are determined basedon prior year actuals, along with an improvement factor.
We evaluate performance on quality based upon thenumber of complaints. We also evaluate the severity
rating associated with the specific complaint failuremode to help improve upon the safety-critical nature of
our products.
In 2023, there were 131 product and service-related
complaints. Complaints are managed by using a
database and portal which allows for complaint entry.
This database is also used to document and manage thefull corrective action process from containment throughverification of effectiveness of corrective actions.

Quality Week
Nexteer prides itself on maintaining a culture thatprioritises quality all year round. Quality Week
is an annual, global celebration of this culture.
In 2023, the Quality Week theme was “Wechoose quality in everything we do.” The week
was filled with opportunities for all employees toincrease their knowledge of the QMS and focus
on quality through daily communications, videos,team events and other activities.

HKEX B6.1, B6.4
Consumer Safety. Our products are considered safety
critical. As such, Nexteer has implemented a very
rigorous internal process to escalate and manage any
emerging product safety and compliance issues. The
PSCC is co-chaired by the global functional heads ofquality and engineering and is coordinated by the Safety
and Compliance Head with relevant functions. The
goal of this dedicated process is to ensure a flawlesscommunication path to the top of the organisation assoon as a potential safety and/or compliance issue isdetected anywhere in the world. Company subject
matter experts develop containment, conduct a root
cause investigation and implement corrective actions,and provide a risk assessment and communication
package for the customer and other interested parties.
To ensure awareness of this important process,we administer training throughout various functions
including engineering, quality, sales, legal, Global Supply
Management (GSM), operations and leadership.
The process is monitored through an online portal where
all cases are entered and tracked until closed. For 2023,
there were 4 recalls, which equated to 0.0127% of total
products sold. Each of these recalls required physicalreplacement of the part; however, robust traceability
made it possible to have minimal societal impact due tothe small amount of replacement material required.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

HKEX B6.5
Cybersecurity. Our steadfast focus on product safety
and quality has spurred the development of various
cutting-edge innovations that enhance customer
safety and cybersecurity. Our OEM customers arefocused on vehicle cybersecurity. We support themin this endeavour by enhancing the safety of oursteering systems through multi-layered cybersecurity
technologies and controls. Our cybersecurity
technologies consist of specifically designed hardware
modules at the semi-conductor level, as well as a multilayered cryptographic software structure that identifies
and authorises information and command flow between
the steering system and other in-vehicle or external
controllers. In other words, there is a system within
the system that is solely focused on identifying andvalidating steering commands.

Participating in Cyber Readiness
Programme
Nexteer is committed to having a strong
cybersecurity programme by working closelywith partners to embrace best practices insafety and security. Our participation in General
Motors’ and CRI’s Cyber Readiness Programme
certifies that the strength of our cybersecurity
programme is aligned with industry standards
and demonstrates our commitment tocollaborating across the extended enterpriseecosystem to bolster supply chain security.

We maintain a cybersecurity and data privacy team thatis equipped with experts that go above and beyond toensure the safety and security of company and customer
data.

Data Privacy. Nexteer respects the privacy of individuals
whose personal information we need to access, collect,process, use, transmit, disclose, and store while doing
business. In 2023, Nexteer Automotive Corporation
obtained Data Privacy Framework (DPF) verification bya third-party provider, which illustrates our adherence
to the EU-US privacy and data protection principles forcross-border data transfer. The new DPF replaces theprior Privacy Shield framework. Nexteer was one of
the early adopters ratified by the governing authority.
We institute a series of global information security anddata privacy policies and procedures, operating within
our Information Security & Privacy (IS&P) framework.
Recognition of the importance of data protection andprivacy not only applies to Nexteer, but also to our
suppliers as documented in the Nexteer SupplierRequirements (NSRs). Nexteer’s IS&P Council andour cross-functional subject matter experts continue
to monitor evolving trends in the global environment.
For example, the global IS&P function coordinateswith enterprise risk management and legal to manage
relevant risks, which ensures compliance throughappropriate people, process and technology safeguards,
controls and other measures.

Designing Products That Drive Sustainable Solutions in
Mobility
Nexteer is well positioned to meet OEMs’ and society’s
growing demands for clean technology. In a rapidlychanging regulatory environment and world, we
remain ahead of the curve by delivering solutions that
accelerate mobility to be SAFE, GREEN and EXCITING.
Our innovations help enhance road safety, preserve air
quality, support the low-carbon transition and more.
Our technologies are solving unique challenges thatenable the low-carbon transition through our focus on
expanding EV usage. We offer products and services
that address increased load requirements, packaging,durability and noise, vibration and harshness (NVH),
among others. These technologies span all productlines and demonstrate our commitment to advancing asustainable future.
Throughout 2023, we accelerated mobility to be GREEN
by designing solutions that enable EV use and emissions
reductions. In 2023, 83% of our revenue bookings
supported EV-related platforms.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

Nexteer’s SbW system is a centre link acrossall megatrends – unlocking advanced safety andperformance features and functionality. It also opens
new possibilities for vehicle mass reduction andpackaging flexibility. SbW replaces the mechanicalsteering connection between the hand wheel and roadwheels with algorithms, electronics, and actuators.
Nexteer’s SbW also emulates the “feel of the road,” andenhances manoeuvrability through our dynamic variable
steering ratio, while supporting traditional driving andvarying levels of AD across all vehicle types. SbW is ofparticular importance to the electrification megatrend asits under-hood packaging and front of dash design helps
solve packaging challenges due to EVs’ large battery
pack location.
On the DL front, we provide optimised solutions that
include compact and low mass halfshafts. EV platforms
have unique DL challenges due to their weight, low
noise level, high torque, and need for maximum
efficiency to support extended battery life. Nexteer
offers premium technologies that improve efficiency
and NVH performance while delivering maximum
torque under extreme acceleration conditions. Our
DL technology and decades of vehicle integration
experiences has positioned us to be a leader in the
expanding EV market.
Nexteer also offers a high output Rack-Assist EPS (REPS)
solution that nearly doubles the steering load capabilityof our industry-leading REPS – steering up to 24kN ofload compared with 10-17kN for a typical REPS system.
This system is capable of steering electric variations ofheavy vehicles such as full-size pick-up trucks, people
movers and light-commercial vehicles (LCVs) likedelivery vans.
In 2023, we launched our Modular Rack-Assist ElectricPower Steering (mREPS) system, which expands theCompany’s cost-effective, modular EPS offerings.
Our mREPS provides flexibility to efficiently meet
OEMs’ wide-ranging requirements for advanced
steering systems of heavier vehicles, such as EVs,
light commercial vehicles, etc. By leveraging Nexteer’s
existing, industry-leading EPS building blocks, mREPS
provides scalability, which in turn offers OEMs costand time-efficiencies including shorter development
times and higher rate of component reuse on vehicle
platforms. Nexteer’s mREPS also features a fullcylindrical integrated powerpack, which achieves
advanced safety and reliability within compact packaging
for SAE International (SAE) ADAS Levels 3 to 5.

By using Nexteer’s advanced technologies, our 60+
customers globally can pass on the advanced safety andperformance benefits, including fuel efficiencies, to thecustomer – while helping enable the transition to lowemission vehicles around the world.

Testing and Validation Through Virtual Simulation
Our engineers are also working behind-the-scenes
to drive innovation that will enable the step-by-stepchanges needed to shift how future vehicles operatesafely and conveniently. To do this, engineers aren’t justinnovating future automotive technologies, they’re alsoinnovating the way they work.
Virtual engineering – the practice of using simulationand other analytical tools to test and validate automotive
components – is becoming increasingly common forautomotive OEMs and suppliers. It’s often more efficientand cost-effective to use data-driven simulations
to accurately determine how to best integrate newcomponents into a vehicle before fabricating and testingthem in a real-world environment.
The virtual engineering process allows engineers toevaluate product design and performance to customer
requirements without the need for hardware or
prototype samples. This allows engineers to study
multiple load cases in a short period of time andsignificantly shorter than running the same load cases ina lab environment.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Value Creation

For example, we rely increasingly on simulation andmodelling technologies to test for the nearly infinite
number of scenarios. Through hardware-in-the-loop
stands and digital twins, we can simulate vehicle andenvironmental inputs – allowing software and electronic
control units to react to real-world driving conditions in alab environment.
Through virtual testing and validation, we’re enhancing
the engineering process beyond the constraints of inperson work – which benefits our customers through:•••Global Production Milestone of 100 Million
EPS
In 2023, we reached a global production
milestone of 100 million EPS systems – a key
technology enabling fuel efficiency and advanced
safety and performance. In addition, we achieved
several local EPS production milestones,
including:•

Saginaw, Mich., USA: 15 million REPS
systems•

Querétaro, Mexico: 20 million EPS systems

Faster design & development process – Quickly
evaluates design solutions; reduces or eliminatesvalidation testing•

Tychy, Poland: 15 million CEPS systems•

Suzhou, China: 12 million EPS systems

Optimised manufacturing processes – Build it rightthe first time

These milestones are a testament to our team’scommitment to producing high-quality, safetycritical steering systems for our customers
around the world.

Cost savings – Reduces product life cycle cost &reduces prototype sample cost

As the automotive industry continues to evolve, virtualengineering allows the teams driving innovation in our
technology to collaborate more efficiently and creatively –thus ushering in the future of mobility and greener
technology.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety
In this section* – Environmental, Health & Safety
Environmental Stewardship
Keeping Our People Healthy & Safe

ENVIRONMENTAL STEWARDSHIP

45

4 MILLION kWh
ANNUAL

9,470 tCO2e

PROJECTS

GHG EMISSIONSAVOIDED

ENERGY SAVED

82 MILLIONLITRESWATER SAVED

Environmental stewardship is at the cornerstone of ourbusiness as we believe it is fundamental in ensuringstrong overall performance. Through our environmental
programmes and initiatives, we drive greater efficiency
and transparency. We proactively explore new ways
we can reduce our environmental footprint, including
embracing renewable energy, monitoring resource use,phasing in the use of more efficient technologies andimplementing strategies that address climate change.

Our Global Environmental Policy in conjunction with
our EMS codifies our commitment to environmental
responsibility and encourages best-practices across all
our global locations. The Global Environmental Policy
outlines our commitment to environmental excellenceby:•Minimising our environmental impacts•

Promoting environmentally sustainable behaviour•

Encouraging environmental responsibility in ourselves,
our customers, suppliers, and stakeholders who are inconcert with our activities, products, and services

Environmental Management System (EMS)HKEX A2, A2.3, A3
Within our EMS we embrace ways we may enhance
efficiency; align with best practices, such as ISO 14001
standards; and not only ensure compliance but exceed
environmental laws and regulations when feasible.

*

Our Corporate EH&S function is responsible formanaging our EMS by driving environmental initiatives,
embedding environmental responsibility within ourhealth and safety practices, engaging team members,
and measuring our performance across all of ourglobal sites and manufacturing facilities. Reviews wereconducted at the various forums with leadership andcross-functional teams, regarding Nexteer’s developing
climate strategy and EH&S KPIs.

This section includes data of non-consolidating joint venture locations.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

At the time of 2023 Report publication, 96% of ourmanufacturing sites globally have achieved ISO 14001
certification.
In the pursuit of continuous improvement, we set
environmental goals that enhance performance andefficiency. We define a unit of production as a “fully
assembled unit” ready for sale. Our year-over-year goals
include:•Reduce our energy (electricity) use by 6% per unit ofproduction;•

Reduce our Scope 1 and Scope 2 GHG emissions by
6% per unit of production on an annual basis;•

Increase our landfill waste diversion rate by 2% perunit of production; and•Reduce water use by 2% on a per unit of production
basis.

As part of Nexteer’s overall strategic planning process,we regularly assess policies, practices and procedures
to minimise impact on the environment and natural
resources. We review and update our SMRF toaccount for our progress towards sustainability targets
and establish new goals and targets to advance oursustainability strategy.
We also complete risk planning with annual updates that
review financial coverage of any facility asset retirements
and environmental liabilities. We continuously work to
reduce and mitigate risks and improve the effectivenessof our EMS, our policies and our procedures. As a result,
we did not receive any environmentally based fines ormonetary sanctions in 2023.

By integrating environmental management into ouroperations, we can manage our impacts on theenvironment, conserve and reduce energy and water,
reduce and re-use our waste and reduce our GHG
emissions all while meeting local, regional and federal
laws and requirements.

Enhancing Energy Efficiency in our
Manufacturing Plants
In 2023, we achieved significant reductions innatural gas use due to process efficiency andelectrification of equipment. As an example,
our Saginaw, Michigan plants are transitioning
from natural gas furnaces to electric induction
hardeners.
Additionally, we continue to explore and share
best practices to improve energy usage andemissions from our manufacturing sites.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Our Approach to Climate Change
HKEX A4, A4.1
We continue to assess impacts of global climate change
and our environmental footprint. Nexteer responds to the
CDP Climate Change questionnaire annually including
supply chain data to requesting OEM customers. CDP’s
disclosure platform provides a mechanism for reportingin line with the TCFD recommendations.
The following is Nexteer’s approach to climate change(Governance, Strategy, Risk Management, Metrics& Targets) with reference to the HKEX Guidance on
Climate Disclosures, which is built upon the TCFD
recommendations.
Governance
Climate change is a material topic managed within our
three-tiered sustainability governance structure (seepage 9).
The Board maintains oversight of overall ESG andclimate issues such as sustainability reporting,materiality assessments, environmental performanceagainst our KPIs and targets, and strategy. The Audit andCompliance Committee supports the Board’s oversight
regarding risk management.
Groups within Nexteer with climate-related
responsibilities include management committee
and work teams, such as the Sustainability Steering
Committee, Sustainability Working Group andClimate Change Task Force. The CCTF includes
representation across operations, EH&S, legal, financeand risk management, investor relations, engineering,
manufacturing operations, sales, marketing, supply chain
and sustainability. Jointly, these groups (Climate Groups)
share responsibilities to identify and evaluate theimpacts of climate-related physical and transition risk.

The Board and its Audit and Compliance Committee
have oversight of risk management, such as withEnterprise Risk Management (ERM) and ESG processes.
Nexteer‘s global management committees and functions
such as sustainability, ERM, finance, internal audit andother teams, prioritise risks based on the magnitude andlikelihood of occurrence in Nexteer operations. Risks
are reviewed periodically with the frequency of review
dependent on the impact to the Company.
In 2023, the Climate Groups continued to collaborate
with internal and external stakeholders to understandclimate risks, explore opportunities and conduct
adaptation measures to increase resilience to thei m pacts of cl i m ate change (See the paragra phbelow titled Exploring Renewable Energy Solutions
for examples of adaption measures). In addition,
Nexteer’s EH&S functional leaders reported at regularcadence (e.g., monthly, quarterly, annually) at multiple
management forums to coordinate the development ofour climate roadmap and share updates regarding our
EH&S KPIs. Furthermore, at least annually, ESG-related
enterprise-level strategic priorities are reported to theBoard.
Strategy
Nexteer contemplates climate risks and opportunities
with reference to established frameworks andprocesses, including: – ISO 14001 EMS (annually byindependent third-party auditors and recertification every
three years), and – CDP (annual process). To position ourorganisation with climate resilience and in preparationof the transition to a low-carbon economy, we utilise across-functional physical risk assessment which includes
an inventory of GHG to assess transition climate risks
and to develop a climate roadmap. Such assessments
included climate scenario analyses and calculation of
cost of carbon aligned with applicable climate disclosure
guidance and practices.
In 2023 we used the results from our assessments to
support our business decisions, such as regarding ways
we may enhance our operational practices throughrenewable energy and energy efficiency.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Climate risks & opportunities: Below please find the results of our process which outline the climate-related risks
and opportunities that our organisation has identified over the short-, medium- and long-term.
Risks*

Opportunities

Short term (0-2 years)•

Emerging regulations across theglobe, such as carbon reduction
targets and enhanced reporting
requirements, may increase ourcompliance risk (T)•Continue evolving climate strategy
to meet government decarbonisation
targets

Medium term (2-5 years)•

Carbon cost mechanisms may
increase our costs and negatively
impact our revenue and customer
relationships (T)•Evaluate utility costs and cost of
materials•

Explore current market andtechnologies available to transition toa low-carbon economy, and monitor
market in the future•

Replace equipment with higher
thermal capacity to build resiliency inmanufacturing centres•

Review and revise standard operatingprocedures as necessary•

Require suppliers to provide overview
of climate-related risks or plan toaddress climate change risks in theiroperations

Long term (5+ years)•

Low-carbon economy market andtechnology may increase our costs
and negatively impact our revenue
and customer relationships (T)•Extreme weather events, specificallyheat waves, drought, tornadoes, andcyclones may result in equipment
shutdowns and/or supply chain
disruptions (P)* T = transition risk; P = physical risk
Impact of climate-related risks and opportunities
on Nexteer’s businesses and strategy: Findings from
our assessment have driven us to focus even more
intently on reducing our carbon footprint and de-risking
our operations. In 2023, we continued developing our
climate roadmap – our strategic plan to pursue emissions

reductions through renewable energy projects, energy
efficiency investments, ISO 50001 Energy Management
Systems, and value chain engagement. Throughout theyear we continued solar energy feasibility assessments
and enhanced our management system for tracking key
climate and environmental data.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Climate Scenario Analysis: Following HKEX’s Guidance on Climate Disclosures, we conducted a climate scenario
analysis. This analysis explored three scenarios aligned with the following Intergovernmental Panel on Climate
Change (IPPC) representative concentration pathways (RCPs): RCP 2.6, 4.5 and 8.5. By exploring multiple scenarioswith differing degrees of climate action, we analysed the potential physical changes to the climate as well aschanges to the operational landscape that may occur alongside the transition to a lower-carbon economy. The
findings from our current climate scenario analysis are summarised in the table below.
Scenarios

What to Expect

Example Trends for Nexteer

Aggressive Action,
RCP 2.6 A low emissions
scenario with a rapidtransition to renewableenergy, keeping global
temperature rise below
2ºC.

•

Immediate and aggressive action tolimit GHG emissions•

Heatwaves and flooding risk increase
before remaining stable•

Regulations and carbon costs are
significant••

Transformational impacts toeconomyRegulation like enhanced reporting
requirements and carbon pricing
are common and enforced throughlitigation•

Hold temperature increase to 1.5ºC
temperature increase•

Some delayed carbon policy andcarbon costs to limit GHG emissions••

Some climate change impacts but
limit to 2ºC temperature increase

Heatwaves and droughts become
more common which may mean
temporarily shutting down electricalsystems, reduced productivity, andadditional costs for raw materials andtransportation•

Regulation emerges around reporting,carbon pricing, and supply chain•

Tornadoes are an extreme risk which
may result in supply chain disruption•

Heatwaves, droughts, and cyclones/
typhoons become more common
which may disrupt manufacturing,material supply, and transportation•

Regulation, market, and reputationalrisk are low

Delayed Action, RCP 4.5
A stabilisation scenario
in which global GHG
emissions effects arestabilised shortly after theyear 2100.

Limited Action, RCP 8.5
A scenario with increasing
global GHG emissions overtime with no stabilisation.

•

Limited climate action•

No significant carbon legislation/cost•

4ºC temperature increase•

Catastrophic physical climate impact

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

These findings indicated that for all scenarios, mostof the risks identified were classified as low, with thegreatest number of high risks increasing in the 2050
decade. Overall, Nexteer saw a number of low andmoderate risks across all three scenarios, reflecting theresiliency of our physical assets. Most risks across all
regions were confined to three parameters: extreme
heat and heatwaves, tornadoes and typhoons/cyclones/
hurricanes. This is a direct result of the global nature of
our company, with most risk found in the supply chain
as opposed to Nexteer’s owned and leased assets.
Our transition risk assessment included calculation of
cost of carbon. Examples of risks we have identified
include policy and regulation, market and reputation, andtechnology. We will continue to evaluate these risks andtheir impacts in line with the TCFD recommendations,developing guidance from ISSB and HKEX on climate
disclosures, and update assessment results accordingly.
Risk Management
Our risk management process considers risks related
to climate change, such as weather events that disrupt
day-to-day operations, future trends that potentially
impact operations like precipitation patterns and sea
level rise, and other related risks and opportunities
like carbon taxes, reputation, cap and trade, andcustomer preferences. Through our established policies
and procedures we deploy appropriate risk-specificresponses – avoid, transfer, mitigate and share. Our risk
management process is outlined below:•

Review all top risks, identifying and evaluating
enterprise-level risks and opportunities.

•

Develop strategic priorities for certain top-level risks
and create KPIs and targets to manage these risks.

•

Identify and prioritise risks based on the impact
to the Company and the likelihood of occurrence.
We assign an inherent risk factor to each identified
risk. We develop mitigation strategies for risks thatexceed a certain risk factor threshold.

•

After implementing a mitigation strategy, we record
the remaining residual risk.

•

Senior management presents updates to the Board’s
Audit and Compliance committee annually regarding
all high priority risks and mitigation strategies.

Nexteer’s cross-functional teams collaborate to consider
best practices, partners with subject matter experts,
and learns from industry trends to continually improve.
Relevant information of risk mitigation strategy isincorporated into future site planning, supplier selection
process, and strategic development. Overall, Nexteer
aims to manage risk by balancing footprints, considering
the potential for market fluctuations, political changes,
supplier impacts and quality control issues.
Metrics & Targets
The key metrics we track and follow to assess climaterelated risks and opportunities include our Scope
1-3 GHG emissions, emissions intensity, energy
consumption, energy intensity, among others. These
metrics are publicly available in our sustainability report.
Internally we also track costs associated with climatechange such as insurance relating to weather andclimatic events, metrics with regards to our products
and services, and more.
Nexteer’s 2023 climate-related targets include goals
to reduce our annual GHG emissions on a per unit ofproduction basis by 6% and reduce annual energy usage
on a per unit of production basis by 6%.
To bolster our continuous improvement activities onenvironmental data collection, we engaged external subject
matter experts to conduct an independent evaluationof 2023 GHG emissions in accordance with the GHG
Protocol Corporate Accounting and Reporting Standard.
This process ensures the accuracy of data sources andcalculation methodology utilised to map, measure, andreport GHG emissions.

ALL IN POWER Energy Conservation Programme
In 2023, the EMEASA Division expanded
their ALL IN POWER Energy Conservation
Programme, to save energy usage. We willcontinue to leverage energy management
systems, technology and consider evaluating
utility submetering to improve quality of data.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

GHG Emissions
HKEX A1, A1.1, A1.2, A.1.5
Electricity usage (a Scope 2 source) continues to bea global leading contributor to our GHG emissions. In
2023, we aimed to reduce annual energy (electricity)
usage on a per unit produced basis by 6%. We achieved
a 10.5% improvement per unit produced from ourprevious year. For Scope 1 and Scope 2 GHG emissions
we achieved a reduction of 13.4% per unit produced
from the previous year surpassing our 6% goal. Our
performance was due to significant reductions in natural
gas use due to process efficiency and electrification ofequipment.

As emissions and energy consumption are closely interrelated, Nexteer continues to focus on energy efficiency
and usage at our global operational locations. Throughout
the year, our progress towards our target was reviewed
monthly with Management at our global meetings. In
addition, we have allocated resources to enhance ourdata quality, metric tracking, and performance to goals.
We have regular plant-level meetings to enhance data
management and conduct relevant trainings.

Renewable Energy Initiative for USA Operations
Nexteer Automotive and NorthStar Clean Energy broke ground on a 25-acre solar field at our USA Operationssite in Saginaw, Michigan (Saginaw Solar Field) in August 2023. Once complete in 2024, Saginaw Solar Field
will reduce operational costs through a renewable energy source with a fraction of the emissions compared to
traditional sources such as natural gas or coal. GHG emissions is estimated to be reduced 7,000 metric tonnes
annually, which is equivalent to saving about 780,000 gallons of gasoline per year.

The 25-acre Saginaw Site Solar project is a wonderful example of supporting our environmental goals throughthe reduction of GHG emissions, while improving competitiveness by generating lower cost electricity to support
our Saginaw operations. An additional benefit is this new solar field will be planted with wildflowers to create apollination field for our declining bee population. This project is truly a win for both Nexteer and the surrounding
community.
Steve Baird,
General Manager of Central Services, Lead of the Saginaw Site Solar projectNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Summary GHG Emissions by Scope

Our GHG emissions data includes Nexteer’s manufacturing and non-manufacturing locations. For definitions of thethree emission scopes, please refer to the Scope 1, Scope 2, and Scope 3 details below.

*

Metrics

2021(tCO2e)2022(tCO2e)2023(tCO2e)Change vs.
Prior Year (%)

Scope 1 GHG Emissions – Direct
Scope 2 GHG Emissions – Indirect
Scope 1+2 GHG Emissions Intensity(tco2e/1,000 Units Production)

45,200185,280

44,223179,972

39,210177,638-11.3%
-1.3%

7.9

6.8

5.9

-13.4%

Scope 3 GHG Emissions – Other Indirect

1,473,970

1,633,292

1,847,712

16.8%

Total GHG Emissions* (tCO2e)

1,704,450

1,857,487

2,064,560

11.1%

Scope 1 – Direct energy consumption arises from the utilisation of natural gas, propane, gasoline, and diesel fuel during
Nexteer’s operations, along with emissions of leaking Ozone Depleting Substances (ODS)/refrigerants. The fuels consumption
reporting follows the Greenhouse Gas Protocol and the US EPA Center for Corporate Climate Leadership’s Emission Factors
for Greenhouse Gas Inventories (September 12, 2023), and its emissions factors. The Ozone Depleting Substances reporting
follows the GHG Protocol methodology and uses the Global Warming Potential (GWP) factors from the 2021 IPPC Sixth
Assessment Report.
Scope 2 – (Utilising Market-based Methodology) – Indirect energy consumption arises from the consumption of purchased
electricity and steam heating. The energy consumption reporting follows the GHG Protocol with the Saginaw and Auburn Hills,
Michigan, US locations using emission factors developed by CMS Energy, DTE Energy and/or the Edison Electric Institute (EEI)
for each regional utility provider; our Mexico locations use an emission factor developed by their utility provider Iberdrola, withboth using Market-based emission factors; whereas all remaining facilities use IEA country emissions factors for calculation ofemissions of electricity using Location-based emission factors. Steam heating is calculated following the US EPA Center for
Corporate Climate Leadership’s Emission Factors for Greenhouse Gas Inventories (September 12, 2023).
Scope 3 – Other indirect emissions are calculated based on GHG Protocols and US EPA Center for Corporate Climate
Leadership’s Emission Factors for Greenhouse Gas Inventories (September 12, 2023) and US EPA Center for Corporate Climate
Leadership’s Greenhouse Gas Inventory Guidance for Indirect Emissions from Events and Conferences (December 2018), alongwith the GHG Protocol’s Comprehensive Environmental Data Archive (CEDA) Factors for the United States by VitalMetrics
Group for Purchased Goods & Services and the GHG Protocol’s Quantis Scope 3 Evaluator for Capital Goods.

Defining the Three Emissions Scopes

Scope 1 (direct) emissions are those that occur
within operational boundaries, such as boilers forsteam for production equipment, steam heating
and natural gas usage in heat treating furnaces.
Scope 2 (indirect) emissions are those that occur
from the use of purchased electricity, steam and/or heating/cooling supplied by grids, which tend tooccur outside of operational boundaries.
Scope 3 (other indirect) emissions occur indirectly
as a result of activities in our value chain. Scope
3 GHG emissions sources included in Nexteer’s
GHG inventory are GHG emissions occurring fromPurchased Goods & Services, Capital Goods,
waste generated in manufacturing operations,and business travel. We are committed tocontinual improvements to identify GHG reduction
opportunities, measure and track performance, andengage value chain partners to collectively manage
relevant Scope 3 categories, including collaboration
to further understand carbon footprints, as well as
potential climate risks and opportunities along ourvalue chain.

Summary of Energy Use by Fuel TypeHKEX A2.1
The table below presents a breakdown of our energy
usage in kWh for 2023. Even with increased production
volumes, our overall energy usage in 2023 decreased by
6% when compared to 2022. On a per unit of production
basis, our energy use decreased by 29.7%.
In 2023, 28% of our global energy use was fromrenewable sources. We continue to advance ourclimate roadmap strategy across global operations
based on a portfolio of energy efficiency measures,
solar projects, and power purchase agreement (PPA)
initiatives. Additionally, efforts like our PPA in Mexico
are supporting regional and community goals to green
the electric grid.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

2021
EnergyConsumption
(kWh)

2022
EnergyConsumption
(kWh)

2023
EnergyConsumption(kWh)Change (%)

Natural Gas
Fuel Oil
Coal
Electricity
Heat
Steam
Cooling
Gasoline
Diesel
Propane235,568,420
00352,446,837
5,841,949
001,931,745
2,142,152
3,360,046

231,886,575
00339,898,791
4,019,725
002,121,529
2,194,879
2,987,708

200,132,586
00339,487,370
2,019,446002,168,802
1,898,135
2,450,380-13.7%
0.0%
0.0%
-0.1%
-49.8%
0.0%
0.0%
2.2%
-13.5%-18.0%

Total Energy Use (kWh)601,291,150

583,109,207

548,156,719-6.0%Energy Use Intensity(kWh/Unit Production)

21.7

21.04

14.8

-29.7%

Energy Source

Our energy data includes manufacturing and non-manufacturing locations for applicable energy sources.

Advancing Renewable Energy
Throughout 2023, our regions worked to evaluate renewable energy options with a mindset of implementing
opportunities aligned with business and environmental objectives. In 2023 our Plant in Tychy, Poland began
construction of photovoltaic panels on the building roof and in the parking lot, with anticipated operation in 2024. In
addition, we are assessing the feasibility of onsite solar projects at various global locations, such as Kenitra, Morocco.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Summary of Air Pollutant Emissions (US only)

Waste

HKEX A1, A1.1

HKEX A1, A1.3, A1.4, A1.6

To comply with all applicable emissions laws andregulations, our air emissions are reviewed periodicallyby each manufacturing facility based on air discharge
permits or regulatory reporting requirements. At thetime of this report, only the Saginaw, Michigan, US,facility is required to monitor its annual air emissions.
Overall, our air pollutant emissions decreased from 2023
due to process equipment reductions.

As a global automotive manufacturer, we produce
hazardous and non-hazardous waste, much of which isrecycled, reused and recovered. Some forms of waste
are sent to landfills. All our hazardous and non-hazardous
wastes are properly characterised, handled, transported
and disposed of, and all plants work to minimise waste
generation. In general, our hazardous and non-hazardous
wastes are treated and discharged to publicly owned
wastewater treatment plants; treated, solidified andlandfilled; burned for energy recovery; or recycled –some as a direct feedstock in other industries.

Pollutant (lbs)

AmmoniaCO
Lead
NOX
PM10 (Primary)*
PM2.5 (Primary)
SO2
VOC
*

2021

2022

2023*

Change(%)

1,633
10,3070.26
107,854
62,1523,880
547
75,416

1,570
9,648
0.25
67,121
58,394
3,764
394
14,947

1,298
7,137
0.2
61,71923,793
3,161
398
14,526-17.3%-26.0%-20.0%-8.0%-59.3%-16.0%
1.0%-2.8%

In 2023, the PM 10 primary emission number was
reduced due to obtaining equipment specificemissions factors, with the remaining pollutant
emissions reductions due to decreased use ofnatural gas.

Every year, we aim to divert total waste from thelandfill by 2% per unit of production from the previous
year. In 2023, we produced 4,667 tonnes of hazardous
waste and 36,061 tonnes of non-hazardous waste.
This amounts to 0.0001264 tonnes of hazardous waste
per unit of production and 0.0009765 tonnes of nonhazardous waste per unit of production. In 2023, we
generated 1,746 tonnes of hazardous and non-hazardous
waste globally that was sent to a landfill which was a
33.84% decrease from the prior year. On an intensity
basis, this works out to 0.0000473 tonnes of landfilledwaste per unit of production – a decrease of 40.43%
from 2022. In 2023, we reused, recycled, composted
and recovered 91% of our waste streams.

Improving our Waste Management
In the US, two waste projects werecompleted in 2023 to reduce the disposalof oils. The process for certain maintenanceactivities on furnaces with quench oils was
modified to collect and reclaim approximately
19,000 gallons per year of this quench
material. In addition, collection and testing
activities were modified to reduce the loss ofover 35,000 gallons of power steering fluid
during product testing activities.

41

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Nexteer participation in Earth Day and World Environment Day
Our plants in different regions celebrated World Environment Day in June 2023 with various internal andexternal programmes. Employees in Kenitra, Morocco participated in planting trees at the Nexteer facility andat a neighbouring primary school. This initiative highlights the importance of sustainably managing our natural
resources and engaging our communities. Employees also completed a school clean up walk to collect litterat a local primary school. An environmental mini-book, referencing eco-gestures each employee can adopt toprotect the environment was presented to each employee. As a final gesture, employees were tasked to placea card expressing their commitment to take on environmental protection on the commitment tree located in
the main lobby of the plant.
Our Nexteer Mexico employees sealed their commitment to the environment by taking plants to their homes
to demonstrate living clean and sustainable practices every day.

Summary of Hazardous & Non-Hazardous Waste Treatment

Treatment Method

2021
Treatment
Treatmentof Globalof Global
Hazardous Non-Hazardous
Waste (tonnes) Waste (tonnes)

2022
Treatment
Treatmentof Globalof Global
Hazardous Non-Hazardous
Waste (tonnes) Waste (tonnes)

2023
Treatment
Treatmentof Globalof Global
Hazardous Non-Hazardous
Waste (tonnes) Waste (tonnes)

Reuse
Recycling
Composting
RecoveryIncineration
Landfill
Other
Deep Well Injection
On-Site Storage

184
1,018
0
1,804
974
28
629
0
247

2,635
28,236
25
279
129
2,330
45
0
2

229
1,140
0
1,141
1,148
27
333
0
208

2,451
26,734
24
289
125
2,612
46
0
1

311
1,237
0
1,141
1,432
9
368
0
169

2,686
31,133
25
333
135
1,737
11
0
1

Total Waste (tonnes)

4,883

33,683

4,227

32,282

4,667

36,0610.0001664

0.0011475

0.0001277

0.0009753

0.0001264

0.0009765

Waste Generation Intensity

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Packaging
HKEX 2.5
The types of packaging materials we use for finishedproducts are directed by our customers’ packaging
specifications, which we are required to follow. Most ofthese types of packaging materials are easily recyclable
and reusable such as paper, cardboard, and plastic. As
the recycling and reuse of packaging materials occurs
at our customers’ locations, we are unable to track the
total volume of packaging materials that are recycled orreused. However, with various customers and suppliers
we eliminate unnecessary packaging by using reusablebins and dunnage.
For our incoming shipments from our suppliers, we work
to minimise packaging materials that are required to bedisposed of in a landfill. Any incoming wood pallets orboxes, cardboard boxes, shrink-wrap, banding (plastic or
metal) or plastic containers are recycled as applicable atour global locations.
At this time, Nexteer has no policies on the procurement
and usage of raw materials that would minimise theimpact on the environment and natural resources. Ourcurrent focus is on establishing long-term relationships
with ethical suppliers who provide quality materials atfair prices. Any requirements for sustainable raw material
procurement policies will continue to be monitored aspart of our stakeholder requirements.

43

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Water
HKEX A2, A2.2, A2.4
Water serves vital functions in our manufacturing
processes including non-contact cooling water, parts
washing, heating, as drinking water, and landscaping.
We continued to track and review water-related topics
through our environmental KPIs and CDP Water
Questionnaire.

At the time of 2023 Report publication, we do not have
any water sourcing issues globally. Each new location
goes through a due diligence process including anevaluation of water resources. We believe access toclean water is fundamental. All our facilities include afully functioning water supply, adequate sanitation, andhygiene (WASH) services for employees.

India’s Focus on Water Conservation and Reuse
Every year, we aim to reduce our water consumption
by 2% on a per unit of production basis. In 2023, weconsumed 735,725,115 litres of water globally which
was a 6.8% decrease from the prior year. On an intensity
basis, this works out to 19.9 litres per unit of production– a decrease of 16.7% from 2022. We achieved ourwater reduction intensity target by implementing
several water reduction projects, estimated to save over
82,000,000 litres of water annually. Going forward, we
will continue to improve our processes and implement
additional water conservation and efficiency programmes
to achieve our targets.
Our environmental engineers are responsible for
performing environmental and water-related risk
assessments as part of our ISO 14001 EMS at eachmanufacturing location. The process starts by applying
a contextual understanding of our operations, including
issues that can affect the intended outcomes of the
EMS and our compliance obligations. These risks areprioritised based on the magnitude and likelihood of
occurrence in the Nexteer operations. Relevant risks
are reviewed periodically with the frequency of review
dependent on its type and impact to the Company.

India is focusing on water conservation andreducing purchases of water by constructing
onsite demineralization (DM) and reverse
osmosis (RO) plants at their production
facilities. A demineralized water system wasinstalled at our plant in Bengaluru to improveparts production performance over use of
RO water. In Pune, the reuse of existingRO wastewater in the cooling tower wasdeveloped to reduce water that was previously
purchased and trucked in to the site.
This reduced the purchase of approximately
2,592,000 litres of water. Our plant in Chennai
installed a RO/DM system to reduce drinking
water and RO water purchases.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Summary of Total Water Use by Source
Water Sources
Groundwater
Municipal water supplies or other waste
utilities
Rainwater collected directly and storedby the plant
Surface water, including water from wetlands,
rivers, lakes and oceans
Water from another organisation
Total Water (Litres)

2021

2022

2023

Change (%)

10,507,000

14,348,000

14,174,000-1.2%

973,478,463

744,190,916

684,128,575

-8.1%

1,000

0

0

0.0%

0
16,313,526

0
31,174,000

037,422,540

0.0%
20.0%

1,000,299,986

789,712,916

735,725,115

-6.8%

34.1

23.9

19.9

-16.7%

Water Generation Intensity

Land Use & Biodiversity
HKEX A3, A3.1
Nature and Biodiversity is one of various topics managed
within our three-tiered sustainability governancestructure and is incorporated into our annual materiality
assessment process. Our approach addresses
the operational impacts on consumption of natural
resources. As we build or lease facilities globally, we relyon lessons learned, best practices and external advisors
to minimise the impacts on the local environment andbiodiversity, including native wildlife and their habitats.
We prevent the introduction of invasive species throughvarious means, such as shipping requirements usingwood pallets. Any changes in water withdrawal ordischarge follow our legal permits. During 2023, Nexteer
manufacturing plants have not had any manufacturing or
pollutant release activities that have negatively affectedany species or caused an area to be negatively impacted.

45

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

HKEX B2, B2.3
Our global Health and Safety Policy outlines guiding
principles for our global facilities and reinforces ourcommitment to H&S excellence. Our Health and
Safety Policy, together with our health and safety
management systems, emphasises the role of every
Nexteer employee in identifying H&S risks, collaborating
on solutions, and implementing actions. Our health andsafety management systems are built upon a foundationof 25 safety topics, including:•

Leadership roles and responsibilities•

Promoting a culture of health and safety•

Developing and implementing emergency control
plans

•

Ergonomics and industrial hygiene•

Hazardous energy control•

Machine safeguarding•

Proper use of personal protective equipment

ic Th

inkin

g”

05 Safety Benchmark
04

rateg
f “St
levelso

Fostering a Safety-first Cultureasing

Our focus on health and safety (H&S) is reflected in ourcompany vision statement, we accelerate mobility
to be SAFE by putting safety first – always. This
commitment extends to our products and services
that enhance safety and security on the road, and to
our people across all our global locations. We protect
each employee, visitor, and contractor on our premises
through proactive programmes that achieve safeand healthy working conditions. H&S is everyone’s’
responsibility and we all play a critical role by embracing
our “Speak up” Safety culture. All employees areencouraged and recognised for our mindset of “if theysee something, they need to say something.”

We focus on preventing re-occurring incidents byimplementing robust measures and dashboard systems
to monitor and achieve zero injuries, illnesses andfatalities. We live and lead a culture of H&S throughongoing education, training and awareness. All
employees are encouraged to “Speak-Up for Safety”
if they witness or are privy to unsafe acts or working
conditions.

Incre

KEEPING OUR PEOPLE HEALTHY & SAFE

03
02
01

Safety Culture

Management Systems

Injury Prevention

ComplianceApproaches to Safety Management

Each of our locations completes an annual H&S selfassessment and is subject to corporate audits toverify compliance. To ensure compliance, membersof the plant staff – also called our “Health and Safety
Champions” – are assigned one or more of the 25
H&S topics in our health and safety management
systems. When plant audits are conducted, they
consist of thorough plant walkthroughs and interviews
with these champions. Beyond our efforts to ensurecompliance with applicable health and safety laws
was well as regulations and rules in the countries
where we operate, we pursue and maintain
ISO 45001 occupational health and safety certifications
for Nexteer’s global footprint. Our global facilities
received 65 National Safety Council awards in 2023 –including a Corporate Culture of Safety Award –demonstrating our commitment to H&S excellence andmaintaining a safety-first culture.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Global Lost Workday Case Rates by YearHKEX B2.1
The number and rate of work-related fatalities that
occurred in each of the past three years, including 2023,
are reported as follows.

0.30
0.22

Number and Rate (per 100 workers) of
Work-Related Fatalities
Year
Number
2021
2022
2023

0
0
0

0.20

Rate
0
0
0

HKEX B2.2
At Nexteer, we track and report on our global lost
workday case rates, our total global recordable incident
rates, and our total work-related injury and illness rates
on a monthly and annual basis. The lost workday caserate describes the number of lost workday cases per
100 full-time employees in a given time frame. The lost
workday case rate accounts for occupational injuries
or illnesses which result in an employee being unable
to work a full assigned work shift. Fatalities are notfactored into this rate.
In 2023, we experienced a decrease in our lost workday
rates, recordable rate, and work-related injury/illness
case. In Fact, Nexteer not only achieved a year overyear improvement, but we also demonstrated our best
performance on record globally. Nexteer is committed
to the health & safety of everyone. Through robust
training, designing in safety in our equipment prior to its
plant arrival, and effective auditing processes we ensure
all workers are safe on our premises. We also trackwork-related injury and illness rates, which represent
minor injuries and illnesses that do not require medical
treatment beyond first aid – and therefore, no days
away from work. First aid can generally be performed byany person regardless of medical training or licencing.
Treating a work-related injury and illness case may entail
dispensing over-the-counter medication at the strengthor dosage dictated on the label, or providing hot or cold
therapy, massages or drinking fluids to relieve heatstress. We continue to experience reductions over timein our work-related injury and illness rate.

2021

2022

2023

Global Recordable Incident Rates per Year
0.82
0.68
0.58

2021

2022

2023

Total Work Related Injury/Illness Case per 100 Employees
3.75
3.30
2.37

2021

2022

2023

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

H&S Training & Awareness
At Nexteer, safety education starts on the first day of employment. Employees receive six hours of safety awarenesstraining prior to walking out on the manufacturing floor. This awareness training provides an understanding of how to
identify, report and mitigate risks.
Several elements of this type of training include:

Awareness training is then followed with on-the-job
training, department-specific training, and orientation;
which may cover additional details about personal
protective equipment, standardised work instructions
and job-specific hazards. Nexteer continues to provide
certified health and safety training on an ongoing basis.
All employees receive weekly safety nudges, participate
in monthly safety talks, and complete specific training
modules based on their job.

The graph below showcases average hours of healthand safety training per employee by region for the last
three years.
Ensuring that all employees are properly trained inhealth and safety is a top priority for Nexteer, more than
63,000 safety training hours were completed in 2023.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety

Summary of H&S Training Hours by Region
North America
Training Hours per Employee

Asia-PacificTraining Hours per Employee

4.26

2023
2022

7.04

2021

5.05
0

2.69

2023

5

EMEASA
Training Hours per Employee
5.62

2023

2022

4.21

2022

6.04

2021

4.41

2021

6.08

10

0

World Day for Safety & Health at WorkOn April 28th, Nexteer Automotive Kenitra
celebrated annual World Day for Safety and
Health at Work for the third consecutive
year. Through this global celebration we
aim to raise H&S awareness to help prevent
workplace accidents and the onset ofoccupational diseases.
Nexteer Kenitra’s World Day for Safety and
Health at Work 2023 focused on stop andfix and personal protective equipment for aculture of safety and health.
We engaged employees by hosting several
collaborative workshops and learning
exercises including:•

Quality word search: to strengthen our
corporate safety culture•

E rg on o mic w o r k s h o p : to p ro motegestures and postures to adopt in theworkplace•

Safety DOJO game: to raise awarenessof the risks that our teams may suffer
during their daily tasks•

Awareness game: to keep in mind thehealth and safety absolutes

Nexteer’s Ergo Cup Competition

2023 marked Nexteer’s 17th year hosting its annual
Ergonomic competition. The Nexteer Ergo Cup is anaward that recognises the development of innovativeergonomic solutions and education within Nexteer.
Awards are given for team-driven ergonomic workplacesolutions, engineering/ergonomist-driven workplacesolutions, and ergonomic programme improvement
initiatives. In addition to the three Ergo Cup awards,
the judges awarded six Ergo Excellence Awards in thefollowing categories:•

Most Innovative•

Greatest Simplicity•

Greatest Potential for “Read Across”•

Greatest Ergonomic Risk Reduction•

Continuous Improvement•

Designing it Right

5

10

0

5

10

The objective of this annual competition is to recogniseergonomic innovation and generate enthusiasm forcreating a workplace that fits the employee, insteadof forcing the employee to fit the workplace. These
projects are posted in a searchable online database topromote global information sharing. To date, there areover 950 ergonomic lessons in the database, easily
searchable by product family and location. There are 20
different categories of type of project, like carts, handtools, lifting devices, layouts, packaging, and fixturing
just to name a few.
In 2023, the annual competition included 41 entries from
Nexteer facilities in the United States, Mexico, Poland,
India, and China.
•

This year’s Engineering Ergo Cup winner was a
new tool design that eliminated a pinch grip for theoperator and contact stress to the fingers. This new
tool had ergonomic features to assist the operator
and improved the operators cycle time.

•

The Team Ergo Cup winner was awarded to alocation that redesigned an assembly station andpack-out area that had generated some medical
visits. The team consisted of operators, industrial
engineers, manufacturing engineers, quality
engineers, controls engineers, maintenance, andoperation leaders. As a team, they evaluated thecurrent job using a risk factor cheque list, thenthey worked on developing solutions. The results
addressed all risk, utilised a robot that has multiple
end-effects, that interacts with the assembly stationin supporting the operator and eliminated lifting aheavy, awkward part. Their work generated look
across projects within their plant, but also the globe
as a best practice.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Environmental, Health & Safety2023 Saginaw Safety Calendar Colouring Contest

Empowering Employees to Put Safety FirstOne of our proudest safety traditions at Saginaw,
Michigan, is our annual safety calendar contest. Each
year, we ask employees if they would like to sponsor
any of their children, grandchildren, nieces or nephews
in the contest.

At Nexteer, employees are empowered to share theresponsibility of maintaining a safe work environment.
We believe that all injuries are preventable, and weequip our employees with the training, equipment andsupport to maintain a safe work environment.

Contestants across six categories based on age groupsubmit hand-drawn artwork about the importance ofsafety. In 2023, we received 67 submissions. Children
provided drawings on a wide range of important safety
topics, including fire prevention, stranger danger,internet safety, seat belts, gloves and glasses. There
was a winner in each age group, and each winner thisyear received a Kindle Fire tablet.

Our Safety Principles encourage everyone to be
responsible and accountable for recognising andcorrecting unsafe acts or unsafe conditions. At facilities
around the world, our safety expectations require
employees to follow established safety procedures,
including hazardous energy control and machinesafeguards, work permits and specialised safety
procedures for high-risk activities, personal protective
equipment as specified, and reporting all unsafe
conditions and all injuries and illnesses to prevent similar
incidents or conditions from occurring in the future.
Our Environment, Health & Safety Handbook provides
requirements for working at or visiting an Nexteer site.

This year Nexteer Saginaw partnered with a local
community Children’s Museum for a pizza party anda night at the museum just for contestant and theirfamilies. Winners were recognised and given a blown-up
copy of their artwork. With this fun competition, Nexteer
brought to life our motto that “safety is everyone’s job,”
while helping to educate the next generation about theimportance of safety.

Photos from our 2023 Safety Calendar Contest.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Supply Chain
In this section – Supply Chain
Our Suppliers & Partners
Supply Chain Disruption & Risk Management

HKEX B5.1

OUR SUPPLIERS & PARTNERS
The relationship between Nexteer and its suppliers
is one that is built on loyalty and reciprocity. We haveestablished meaningful, long-term relationships with
our suppliers in the industry. Our suppliers bring uniquecapabilities that we do not have internally, and we
depend on supply partners to succeed globally.

Nexteer’s Suppliers by Region

845

320

total number of direct material suppliers

133

NORTH
AMERICAEUROPE

4

AFRICA28
SOUTH
AMERICA360
ASIA
PACIFIC

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Supply Chain

Our Supplier Expectations
HKEX B5, B5.3
Both our Nexteer Supplier Requirements and General
Terms and Conditions (GT&Cs) are part of every request
for quotation and purchase order. They communicate
our policy on managing social and environmental risks
throughout our supply chain.
Environmental. We expect our entire supply chain toadhere specifically to the principles contained within
Nexteer’s Corporate Social Responsibility SupplierPrinciples, which are outlined within our NSRs. New
suppliers must electronically acknowledge our CSR
Supplier Principles upon system set-up. Specifically, theCSR Supplier Principles:•••

Communicate to our suppliers our commitment toenvironmental responsibility, which includes striving
towards increasingly efficient use of raw materials,
energy, water, and other inputs.
Expect suppliers to communicate an Environmental
Policy Statement reflecting their commitment to theiremployees.
Encourage suppliers to seek environmental training
and strongly recommend registration to ISO 14001.

•

Source renewable energy•

Manage waste appropriately•

Conduct environmental testing•

Train employees and sub-contractors

Social. Furthermore, our NSRs reflect our commitment
to the welfare and the health and safety of ouremployees and contractors, and delivering socially andenvironmentally responsible products to our customers.
We have a moral and ethical responsibility to respecthuman rights throughout our supply chain. And assuch, we comply with all applicable laws, government
regulations, and rules in the countries where we
operate.
Like the principles enforced in our Nexteer’s Codeof Conduct, we expect our suppliers to uphold andenforce policies and standards that demonstrate theircommitment to ethics, integrity and human rights. These
include but are not limited to the following standards:
1. Providing a safe and healthy working environment
2. Offering competitive wages and benefits
3. Establishing reasonable working hours

By agreeing to the NSRs, suppliers are required, uponrequest, to provide evidence of adherence to theserequirements, including any government environmental
regulatory requirements like audit or testing results. If
a supplier is found to be non-compliant with our CSR
Principles, the supplier must implement corrective actionplans to remain compliant. In the event the supplier fails
to respect these principles, Nexteer reserves the rightto impose penalties up to and including the exclusion of
the supplier from Nexteer’s supply chain.
Reflecting our own commitment to environmental
responsibility, we expect all products manufactured byour suppliers – and the applied materials and substances
within the process – to meet environmental standards
for design, development, distribution, use, disposal or
recycling. This includes encouraging suppliers to do thefollowing wherever they can:•Reduce energy use and emissions•

Reduce water use

4. Allowing freedom of association
5. Providing training and supporting development of
employees
6. Intolerance of harassment, discrimination, and forced
and child labour
We encourage all suppliers to seek training in corporate
compliance and responsibility, ethics and diversity andinclusion. In addition, suppliers must operate honestly
and equitably in accordance with laws pertaining toterrorism, money laundering, corruption and conflict ofinterest, anti-competitive business practices, protectionof intellectual property, and export controls. Suppliers
are required, upon request, to provide evidenceof adherence to these global requirements. Noncompliance may result in the supplier being removed
from Nexteer’s supply chain.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Supply Chain

Quality. Additionally, we expect the entire direct material
supply chain to adhere to the IATF 16949 Quality
Management Standard. We verify the certification
status of all direct material suppliers prior to engaging
in business. Specifically, the IATF standard requires
the implementation of corporate responsibility policies,
which include complying with an anti-bribery policy, an
employee Code of Conduct and an ethics policy. If any
supplier is not certified to the IATF standard by a thirdparty certification body, Nexteer validates compliance tothe IATF standard as needed via a risk-based model thatconsists of the supplier’s quality standing, safety criticalfeatures of the part provided, and quality certification
status of the supplier.

•Global Supplier Conference: We hosted our Global
Supplier Conference in Queretaro, Mexico for morethan 200 supplier representatives. The event focusedon strengthening our collaboration and strategicalignment with our supplier partners in order tocontinue accelerating innovation, strengthening
supply chain resiliency and delivering quality andvalue for our OEM customers. 95 suppliers wererecognised for Perfect Quality and five suppliers
were recognised for Superior Customer Service.

Building Positive Supplier Relationships
HKEX B5.2
To maintain and grow our relationships with our
suppliers, we hosted several supplier engagement
events in 2023, including:••Annual Supplier Sustainability Survey: As part ofour materiality assessment, we survey our suppliers
annually to hear about their sustainability efforts
and what they consider important in the Nexteer
relationship. In 2023, more than 100 suppliers
participated, and common themes included climatechange and labour practices to promote awarenesson environmental and social topics.
Supplier Golf Outing: In 2023, we held our annual
fundraising golf event in collaboration with our
suppliers to support future workers and talent. To
date, since 2014 the event raised approximately
US$213,000 toward 137 scholarships to Nexteer
interns, high school seniors, college students andstudents pursuing skilled trades.

Our Leadership in Global Supplier Conference.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Supply Chain

How We Assess Suppliers
HKEX B5, B5.2, B5.3
Our GSM function continues to enhance our process
to assess and monitor potential environmental, socialand other business risks along our supply chain.
We conduct manufacturing capability assessment
audits (onsite/virtual) with direct material suppliers. In
addition, all our direct material suppliers are required
to annually self-certify to our CSR Supplier Principles,
which is completed by answering a self-assessment
questionnaire (SAQ) and submitting supporting evidence.
During 2023, the SAQ was administrated through asustainability module contained within our supply chain
management electronic platform. The SAQ will help us
further engage suppliers on various ESG topics. Failure
to comply with SAQ requirements results in a new
business hold.
Nexteer reserves the right to conduct audits of suppliersubmissions on a risk-based approach and/or GSM’s
functional assessment. Compliance to the Nexteer CSR
Supplier Principles is a requirement of a new businessaward. In 2023, 192 suppliers’ SAQs were reviewed by
Nexteer for compliance. As we continue to evolve ourefforts to understand and measure our carbon footprint,
including that of our suppliers, we expect to adjust our
Supplier CSR Principles and the SAQ.

Encouraging Environmentally Responsible Practices
HKEX B5.4
As Nexteer manufactures safety-critical products,
we adhere to the required customer and engineering
specifications to ensure automotive safety standards
are met. GSM purchases direct material according
to the approved specification and follows definedprocesses to implement changes provided incustomer specifications for environmentally preferable
considerations. Meanwhile, we can directly impact
environmentally friendly products and services in the
supplier selection process, by ensuring suppliers weselect have implemented sustainable measures intheir business practices, as described above. In 2023,
Nexteer issued a carbon emissions questionnaire to all
direct material suppliers with the goal of understanding
scope 3 emissions related to our purchased goods.
Understanding this data will assist our team in engaging
and collaborating with our suppliers to reduce carbon
emissions.

SUPPLY CHAIN DISRUPTION & RISKMANAGEMENT
We proactively monitor for potential risks to supply
chains through a subscription to a third-party risk
management tool. The Nexteer team mobilises
company resources to quickly take action to mitigate
the impact of supply chain disruptions and works with
regional leadership to align and allocate product asnecessary. Examples of recent disruptions include force
majeure events such as an earthquake in Japan and a
war in Gaza which shut down the Suez canal causing
increased delivery time on sea shipments. During
these significant disruptions, Nexteer maintained close
contact with suppliers and carriers, aligned the Nexteer
manufacturing network, and engaged with customers
to minimise impacts throughout the extended value
chain. In response to a supply chain disruption that took
place in 2023, we stabilised production on behalf of a
struggling supplier and resourced to alternative suppliers
capable of a quick production ramp-up. Furthermore,
we conduct reviews of management action plans with
our Enterprise Risk Management Committee to ensure
continued cross-functional collaboration to improve
supply chain risk management framework and practices.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Community
NEXTEER CARES FOR ITS COMMUNITIESIn this section – Community
Our Approach to Community Engagement
Nexteer Cares for Its Communities

Nexteer has a long and proud history of engaging in thecommunities where we live and work. For 118 years
we’ve been giving back through volunteerism, corporate
giving, fundraising, local partnerships and more.

OUR APPROACH TO COMMUNITYENGAGEMENTHKEX B8, B8.1
Our approach to acting as a responsible corporate citizen
and engaging in our local communities is stipulated
in our Nexteer Cares policies. The policies outline
how we demonstrate our commitment to community
involvement and how we assess community needs interms of financial and/or contributions of our time.
Our volunteerism and charitable engagement support
three focus areas:•

Proactive community involvement. Forging
partnerships that enhance our relationship with thecommunity through active participation in various
board and committee positions. We strive to partnerand be a catalyst for positive results.

•

Careers and education. Hosting programmesthat help create career awareness and build skills
for work readiness opportunities for the youth
in our communities and strengthen educational
opportunities. As a leading technology company,
we place a particular focus on expanding accessto science, technology, engineering, mathematics(STEM) education. We promote access to STEM
resources and opportunities for the development of
the future workforce.

•Strengthening neighbourhoods. Supporting
revitalisation, beautification and sustainability efforts,
and promoting diversity and inclusion in the places
where we live and work.

HKEX B8, B8.2
In the past seven years, we’ve contributed over US$2
million and more than 107,000 employee volunteer
hours to support charitable causes and community
programmes globally. In 2023, we contributed over
US$200,000 and our employees volunteered about
16,200 hours of time to local charitable efforts. We
are proud of this legacy and look forward to fostering
additional engagement and investment in the years tocome.
In 2023, Nexteer employees took part in numerous
Nexteer Cares initiatives designed to keepneighbourhoods clean, residents healthy and students
learning. The following are a few highlights from theyear.

2023 Global Community Highlights by Focus Area:
Proactive Community Involvement
Supporting Kids and Volunteers in Gansu Earthquake
A magnitude-6.2 earthquake jolted the remote andmountainous places in Qinghai and Gansu Province ofChina. After the quake, the freezing conditions wereaffecting survivors and rescuers. Nexteer China acted
quickly and partnered up with local charity associations
and police departments to send over 400 coats andsome food. All supplies were handed out in only a few
days.

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Community

Helping after a hurricane
Nexteer Mexico employees in Queretaro donated over
1,200 pieces of food, hygiene & cleaning products tofamilies affected by Hurricane Otis in Acapulco, Mexico.

Serving hot meals
Members of the Nexteer Saginaw Early Career Network– a development group for young professionals under 35– helped strengthen the community by serving over 635
hot meals to local residents at Saginaw’s East Side Soup
Kitchen.

Careers and Education
STEM Commitment and FIRST® Robotics Competition
Our largest STEM initiative continues to be FIRST ®
Robotics. Nexteer engineering employees mentor andvolunteer for the FIRST® LEGO League, FIRST® Tech
Challenge (FTC), and FIRST ® Robotics Competition(FRC) to prepare the young people of today for theworld of tomorrow. The vision of FIRST® is to transform
our culture by creating a world where science andtechnology are celebrated and where young people
dream of becoming science and technology leaders.
In 2023, we celebrated our 23rd consecutive year of
hosting a regional Nexteer READY SET LEGO State
Qualifying Tournament. Through these tournaments,
more than 10,000 students have participated andgained direct STEM robotics experience, and many havequalified for the FIRST® Championship Competition. In
addition to our mentor and volunteer efforts, Nexteer
donated more than 400 previously used laptops to
support these teams.
Providing books
The Nexteer Mexico team in Queretaro hosted a
Doughnuts for a Cause event to help Zorro Rojo –a nonprofit organisation that supports children withlearning disabilities – buy books to support children in
improving their reading and promote the “Nexteer One
leadership model” among employees.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Community

Hosting educators
Nexteer and the Great Lakes Bay Regional Alliancehosted over 30 Great Lakes Bay Region Educators foran onsite visit at our test track and labs to help connectclassroom-to-career learning. Educators could connect
with each other, new ideas and practical classroom
applications in STEM education.
Infrastructure for education
Nexteer Pune Plant 83 donated seven computersand five LED TVs for a computer lab and classroom in
Government Zilla Panchayath School of Gosashi, Pune in
Maharashtra.

5th Nexteer Library in China
We built the fifth Nexteer Library this year in Lintao, asmall county in Gansu province of China, and we also
added new books for the other four Nexteer Libraries.

A new facility
Our Nexteer Mexico team supported the opening of an
educational facility for students with disabilities at the
Universidad Autonoma de Queretaro.

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Community

Strengthening Neighbourhoods
High impact events
Our One Nexteer team in India made a huge impact
during their Community Service Day by helping plant
300+saplings, cleaning up plastic and other trash froma pilgrimage hill near Pune, cleaning and painting anorphanage and a school in Chennai and Bangalore, anddonating 250+ units of blood to local blood banks.

Clean-up and planting
As part of our Earth Week celebrations, members from
our Nexteer Saginaw team helped the Saginaw BasinLand Conservancy with a local community cleanup
project and helped plant over 200 trees.

Gardening to help kids
The hearts and hands of our Nexteer Poland teammade a tremendous and positive impact by supporting
an institution through gardening activities for disabledkids. Through the power of teamwork, we have made asignificant difference in their lives.

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices
HKEX ESG REPORTING GUIDEHKEX Aspect & KPIs

Relevant Nexteer
Focus Area

2023 Response
Reference

A1: Emissions
Provide information on the policies and compliance with
relevant laws and regulations that have a significant
impact on Nexteer relating to air and greenhousegas emissions, discharges into water and land andgeneration of hazardous and non-hazardous waste

Environmental, Health &SafetyGHG Emissions, Waste

A1.1: The types of emissions and respective emissions
data

Environmental, Health &SafetyGHG Emissions
Summary of Air
Pollutant Emissions(US only)A1.2: Direct (Scope 1) and energy indirect (Scope 2)
greenhouse gas emissions (in tonnes) and, whereappropriate, intensity (e.g., per unit of production
volume, per facility)

Environmental, Health &SafetyGHG Emissions

A1.3: Total hazardous waste produced (in tonnes) and,
where appropriate, intensity (e.g., per unit ofproduction volume, per facility)

Environmental, Health &SafetyWaste

A1.4: Total non-hazardous waste produced (in tonnes)
and, where appropriate, intensity (e.g., per unit ofproduction volume, per facility)

Environmental, Health &SafetyWaste

A1.5: Description of emission target(s) set, and steps
taken to achieve them

Environmental, Health &SafetyGHG Emissions

A1.6: Description of how hazardous and non-hazardous
wastes are handled, and a description of reduction
target(s) set, and steps taken to achieve them

Environmental, Health &Safety

Waste

Focus Area: Environmental

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

HKEX Aspect & KPIs

Relevant Nexteer
Focus Area

2023 Response
Reference

A2: Use of resources
Provide information on Nexteer’s policies on theefficient use of resources, including energy, water andother raw materials

Environmental, Health &SafetyEnvironmental
Management System
Summary of Energy Use
by Fuel TypeGHG Emissions
Water

A2.1: Direct and/or indirect energy consumption by type(e.g., electricity, gas or oil), in total (kWh in ’000s)
and intensity (e.g., per unit of production volume,
per facility)

Environmental, Health &SafetySummary of Energy Use
by Fuel Type

A2.2: Water consumption in total and intensity (e.g., perunit of production volume, per facility)

Environmental, Health &SafetyWater

A2.3: Description of energy use efficiency target(s) set,and steps taken to achieve them

Environmental, Health &SafetyEnvironmental
Management System
Metrics and Targets

A2.4: Description of whether there is any issue insourcing water that is fit for purpose, water
efficiency target(s) set, and steps taken to achievethemEnvironmental, Health &SafetyWater

A2.5: Total packaging material used for finished products(in tonnes) and, if applicable, with reference to perunit produced

Environmental, Health &SafetyPackaging

A3: The Environment and Natural Resources
Provide a description of Nexteer’s policies on minimising
the company’s significant impact on the environment
and natural resources

Environmental, Health &SafetyEnvironmental
Management System,

A3.1: Description of the significant impacts of activities
on the environment and natural resources and theactions taken to manage them

Environmental, Health &SafetyLand Use & Biodiversity
Land Use & Biodiversity

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

HKEX Aspect & KPIs

Relevant Nexteer
Focus Area

2023 Response
Reference

A4: Climate Change
Provide a description of policies on identification andmitigation of significant climate-related issues whichhave impacted, and those which may impact Nexteer

Environmental, Health &SafetyOur Approach to
Climate Change

A4.1: Description of the significant climate-related issues
which have impacted, and those which may
impact Nexteer, and the actions taken to manage
them

Environmental, Health &SafetyOur Approach to
Climate Change

B1: Employment
Provide information on the policies and compliance with
relevant laws and regulations that have a significant
impact on Nexteer relating to compensation anddismissal, recruitment and promotion, working hours,
rest periods, equal opportunity, diversity,
anti-discrimination and other benefits and welfare

Business Ethics

Employment Practices &ComplianceB1.1: Total workforce by gender, employment type(for example, full- or part-time), age group andgeographical region

Business Ethics

Our People

B1.2: Employee turnover rate by gender, age group andgeographical region

Business Ethics

Our People

B2: Health and Safety
Provide information on the policies and compliance with
relevant laws and regulations that have a significant
impact on Nexteer relating to providing a safe
working environment and protecting employees fromoccupational hazards

Environmental, Health &SafetyKeeping Our People
Healthy & Safe

B2.1: Number and rate of work-related fatalities
occurred in each of the past three years including
the reporting year

Environmental, Health &SafetyKeeping Our People
Healthy & Safe

B2.2: Lost days due to work injury

Environmental, Health &SafetyKeeping Our People
Healthy & Safe

B2.3: Description of occupational health and safetymeasures adopted, how they are implemented
and monitored

Environmental, Health &SafetyKeeping Our People
Healthy & Safe

Focus Area: Social

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

HKEX Aspect & KPIs

Relevant Nexteer
Focus Area

2023 Response
Reference

B3: Development and Training
Provide information on the policies improving
employees’ knowledge and skills for discharging
duties at work. Description of training activities

Business Ethics

Talent Development

B3.1: The percentage of employees trained by genderand employee category (e.g., senior management,
middle management)

Business Ethics

Employee Training

B3.2: The average training hours completed per
employee by gender and employee category

Business Ethics

Employee Training

B4: Labour Standards
Provide information on the policies and compliance with
relevant laws and regulations that have a significant
impact on Nexteer relating to preventing child andforced labourBusiness Ethics

Upholding Human
Rights & Labour
Standards

B4.1: Description of measures to review employment
practices to avoid child and forced labourBusiness Ethics

Upholding Human
Rights & Labour
Standards

B4.2: Description of steps taken to eliminate suchpractices when discovered

Business Ethics

Upholding Human
Rights & Labour
Standards

B5: Supply Chain Management
Provide information on Nexteer’s policies on managing
environmental and social risks of the supply chain

Supply Chain

Our Supplier Expectation

B5.1: Number of suppliers by geographical region

Supply Chain

Our Suppliers &Partners

B5.2: Description of practices relating to engaging
suppliers, number of suppliers where thepractices are being implemented, how they are
implemented and monitored

Supply Chain

Building Positive
Supplier Relationships

B5.3: Description of practices used to identify
environmental and social risks along the supply
chain, and how they are implemented andmonitored

Supply Chain

How We Assess
Suppliers

How We Assess
Suppliers
Our Supplier
Expectations
How We Assess
SuppliersNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

HKEX Aspect & KPIs

Relevant Nexteer
Focus Area

2023 Response
Reference

B5.4: Description of practices used to promote
environmentally preferable products and services
when selecting suppliers, and how they are
implemented and monitored

Supply Chain

Encouraging
Environmentally
Responsible Practices

B6: Product Responsibility
Provide information on the policies and compliance with
relevant laws and regulations that have a significant
impact on Nexteer relating to health and safety,
advertising, labelling and privacy matters relating to
products and services provided and methods of redress

Value Creation

Prioritising Product
Safety & Quality

B6.1: Percentage of total products sold or shipped
subject to recalls for safety and health reasons

Value Creation

Consumer Safety

B6.2: Number of products and service-related
complaints received and how they are dealt with

Value Creation

Quality Assurance
Process

B6.3: Description of practices relating to observing andprotecting intellectual property rights

Value Creation

Our Focus on Research &Development

B6.4: Description of quality assurance process and recall
procedures

Value Creation

Quality Assurance
Process
Consumer Safety

B6.5: Description of consumer data protection andprivacy policies, how they are implemented andmonitored

Value Creation

Cybersecurity

B7: Anti-Corruption
Provide information on the policies and compliance with
relevant laws and regulations that have a significant
impact on Nexteer relating to bribery, extortion, fraud
and money laundering

Business Ethics

Preventing Corruption

B7.1: Number of concluded legal cases regarding
corrupt practices brought against Nexteer or its
employees during the reporting period and theoutcomes of the cases

Business Ethics

Preventing Corruption

B7.2: Description of preventive measures and whistleblowing procedures, how they are implemented
and monitored

Business Ethics

Preventing Corruption

B7.3 Description of anti-corruption training provided todirectors and staff

Business Ethics

Preventing Corruption

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

HKEX Aspect & KPIs

Relevant Nexteer
Focus Area

2023 Response
Reference

B8: Community Investment
Provide information on the policies on community
engagement to understand the needs of thecommunities where Nexteer operates and to ensure
its activities take into consideration the communities’interests

Community

Our Approachto Community
Engagement

B8.1: Focus areas of contribution (e.g., educational,
environmental concerns, labour needs, health,culture, sport)

Community

Our Approachto Community
Engagement

B8.2: Resources contributed (e.g., money or time) tothe focus area

Community

Nexteer Cares for its
Communities

Nexteer Cares for its
Communities

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

GRI INDEXStatement of use

Nexteer Automotive has reported the information cited in this GRI content index
for the period of January 1 2023, to December 31, 2023, with reference to the GRI
Standards

GRI 1 used

GRI 1: Foundation 2021

Title

Disclosure

GRI Standards Disclosure Title

2023 Response Reference

General2-1

Organisational details

Annual Report, Corporate Profile

2-2

Entities included in the organisation’ssustainability reporting

About This Report

2-3

Reporting period, frequency andcontact point

About this Report2-4

Restatements of information

About this Report

2-5

External assuranceThis report has not beenexternally verified

2-6

Activities, value chain, and otherbusiness relationships

About Nexteer

2-7

Employees

Our People

2-9

Governance structure andcomposition

Annual Report, Corporate
Governance Report2-10

Nomination and selection of thehighest governance body

Annual Report, Corporate
Governance Report

2-11

Chair of the highest governancebody

Annual Report, Corporate
Governance Report

2-12Role of the highest governance bodyin overseeing the management of
impacts

Managing Sustainability at
Nexteer

2-13

Delegation of responsibility for
managing impacts

Managing Sustainability at
Nexteer

2-14

Role of the highest governance bodyin sustainability reporting

Managing Sustainability at
Nexteer65

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

Title

Disclosure

GRI Standards Disclosure Title

2023 Response Reference

2-15

Conflicts of interest

Annual Report, Directors’ Report,
Corporate Governance Report
Business Code of Conduct

2-16

Communication of critical concerns

Annual Report, Corporate
Governance ReportCompany Website
https://www.nexteer.com/

2-17

Collective knowledge of the highest
governance body

Annual Report, Corporate
Governance Report

2-19

Remuneration policies

Annual Report, Corporate
Governance Report

2-20

Process to determine remuneration

Annual Report, Corporate
Governance Report

2-22Statement on sustainable
development strategy

Leadership Message

2-23

Policy commitments

Our policy commitments include
the following (several policies
are publicly available, whileothers are internal documents):–

Business Code of Conduct–

Supplier Code of Conduct–

Environmental Policy–

Health and Safety Policy

2-24

Embedding policy commitments

Business Code of Conduct

2-26

Mechanisms for seeking advice andraising concerns

Strong Governance Practices

2-27Compliance with laws andregulations

Ethics, Compliance & IntegrityNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

Title

Disclosure

GRI Standards Disclosure Title

2023 Response Reference

2-28

Membership associations

Some of our membershipassociations include:

2-29

Approach to stakeholder
engagement–

Automotive Industry Action
Group (AIAG) Environmental
Sustainability Advisory Groupand China Quality Advisory
Committee–

Board.Org – CSR Council–

Business Leaders for
Michigan–

EcoVadis–

European Associationof Automotive Suppliers(CLEPA)–

Hang Seng Corporate
Sustainability Benchmark
Index

–

Inforum–

MICHauto–

Michigan Chamber ofCommerce–

Michigan Manufacturers
Association Environmental
Policy Committee Council–

National Safety Council–

NQC/Supplier Assurance–

Original Equipment Suppliers
Association (OESA)–

Silesia Automotive andAdvanced Manufacturing(SA&AM Cluster) – Poland(local Silesian)–Society of Automotive
Engineers International–

Society of Automotive
Engineers Women’sEngineering Committee

Stakeholder Engagement

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

Title

Disclosure

GRI Standards Disclosure Title

2023 Response Reference

Material Topics

3-1

Process to determine material topics

Our Approach to Materiality

3-2

List of material topics

Our Approach to Materiality

3-3Management of material topics

Throughout the full Sustainability
Report201-1

Direct economic value generated anddistributed

Annual Report, Consolidated
Balance Sheet

201-2

Financial implications and other risks
and opportunities due to climatechangeOur Approach to Climate Change

201-3

Defined benefit plan obligations andother retirement plans

Annual Report, Notes to
the Consolidated Financial
Statements

Indirect
Economic
Impacts203-2

Significant indirect economic impacts

Our Nexteer Cares Approach

Anti-corruption

205-2

Communication and training
about anti-corruption policies andprocedures

Preventing Corruption

205-3

Confirmed incidents of corruption
and actions taken

Nexteer had no confirmed
incidents of corruption in 2023

Anti-competitive
Behaviour

206-1

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

Nexteer had no legal
proceedings associated with
anti-competitive behaviour
regulations in 2023

Energy302-1

Energy consumption within theorganisation

Summary of Energy Use by Fuel
Type

302-3

Energy intensity

Summary of Energy Use by Fuel
Type

302-4

Reduction of energy consumption

Summary of Energy Use by Fuel
Type

302-5

Reductions in energy requirements
of products and services

Designing Products That Drive
Sustainable Solutions in Mobility

Economic
PerformanceNEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

Title

Disclosure

GRI Standards Disclosure Title

2023 Response Reference

Water

303-1

Interactions with water as a sharedresource

Water

303-5

Water consumption

Water

Biodiversity

304-2

Significant impacts of activities,
products, and services on
biodiversity

Land Use & Biodiversity

Emissions305-1

Direct (Scope 1) GHG emissions

GHG Emissions

305-2

Energy indirect (Scope 2) GHG
emissions

GHG Emissions

305-3

Other indirect (Scope 3) GHG
emissions

GHG Emissions

305-7

Nitrogen oxides (NOX), sulphuroxides (SOX), and other significant air
emissions

Summary of Air Pollutant
Emissions (US only)

306-1

Waste generation and significant
waste-related impacts

Waste

306-2

Management of significant wasterelated impacts

Waste

306-3

Waste generated

Waste

306-4

Waste diverted from disposal

Waste

306-5

Waste directed to disposal

Waste

Supplier
Environmental
Assessment

308-1

New suppliers that were screenedusing environmental criteria

Our Supplier Expectations

Employment

401-1

New employee hires and employee
turnoverOur People

Waste

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

Title

Disclosure

GRI Standards Disclosure Title

2023 Response Reference

Occupational
Health and
Safety403-1

Occupational health and safety
management system

Keeping Our People Healthy &
Safe

403-2

Hazard identification, risk
assessment, and incident
investigation

Keeping Our People Healthy &
Safe

403-4

Worker participation, consultation,and communication on occupational
health and safety

Nexteer’s Ergo Cup Competition

403-5

Worker training on occupational
health and safety

H&S Training & Awareness

403-6

Promotion of worker health

Safeguarding Employee Health403-8

Workers covered by an occupational
health and safety management
systemKeeping Our People Healthy &
Safe

403-9

Work-related injuries

Keeping Our People Healthy &Safe403-10Work-related ill health

Keeping Our People Healthy &
Safe

404-1

Average hours of training per year
per employee

Employee Training

404-2

Programs for upgrading employee
skills and transition assistanceprograms

Talent Development

Diversityand Equal
Opportunity

405-1

Diversity of governance bodies andemployees

Our Workforce

Supplier Social
Assessment

414-1

New suppliers that were screenedusing social criteria

Our Supplier Expectation

Customer Healthand Safety

416-1

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

Prioritising Product Safety &Quality

416-2

Incidents of noncomplianceconcerning the health and safety
impacts of products and services

Prioritising Product Safety &Quality

Training and
Education

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

SASB REPORTING INDEX
Nexteer included SASB disclosures where similar information is provided in our Sustainability Report and other public
documents. Below is a partial list of the SASB disclosures for the Auto Parts Industry and our responses (if alreadydeemed available under our primary reporting framework, pursuant to HKEX ESG Reporting Guide).
Topic

Accounting MetricCode2023 Response
Reference

Energy Management(1) Total energy consumed,(2) percentage grid electricity,(3) percentage renewable

TR-AP-130a.1

GHG Emissions

Waste Management(1) Total amount of waste frommanufacturing, (2) percentage
hazardous, (3) percentage recycled

TR-AP-150a.1

Waste

Product Safety

Number of recalls issued; total
units recalled

TR-AP-250a.1

Prioritising Product
Safety & Quality

Materials Sourcing

Description of the managementof risks associated with the use ofcritical materials

TR-AP-440a.1

Packaging

Competitive Behaviour

Total amount of monetary losses
as a result of legal proceedings
associated with anti-competitive
behaviour regulations

TR-AP-520a.1

Nexteer had no legal
proceedings associatedwith anti-competitive
behaviour regulations in
2023

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Reporting Indices

UN SDGSThe 2030 Agenda for Sustainable Development was adopted by all United Nations Member States in 2015, andprovides a shared blueprint for achieving peace, prosperity, and environmental sustainability now and for generations
to come. At the heart of this agenda are 17 global goals, known as the United Nations Sustainable Development
Goals (UN SDGs).
While these goals are an urgent call for action by all countries working together in global partnership, we believe all
global companies like ours also have a role to play in achieving this important agenda. In the table below, we havemapped our five sustainability focus areas to the most relevant targets within these 17 goals and provided examplesof the type(s) of impacts we are making to contribute to their achievement.
UN SDG

Relevant
Nexteer
Focus Area

Most Relevant SDG Targets

Examples of Nexteer’sContributions

3.6 By 2020, halve the number ofglobal deaths and injuries from roadtraffic accidents

Culture:3.9 By 2030, substantially reduce thenumber of deaths and illnesses fromhazardous chemicals and air, waterand soil pollution and contamination

Recognition:••

Culture of Health and Safety

International Recognition for
Health and Safety

Workforce:•

Nexteer Global Code of
Conduct•

GovernanceSuppliers:•

Nexteer SupplierRequirements

Communities:•

Giving Back Throughout theYear

Products:•

Product Responsibility

Environmental Management:•

GHG Emissions

•

Water

•

Hazardous and
Non-Hazardous Wastes

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

UN SDG

Relevant
Nexteer
Focus Area

Most Relevant SDG Targets

Examples of Nexteer’sContributions

4.3 By 2030, ensure equal accessfor all women and men to affordable
and quality technical, vocational
and tertiary education, including
university

Communities:

4.5 By 2030, eliminate genderdisparities in education and ensure
equal access to all levels of
education and vocational training forthe vulnerable, including persons
with disabilities, indigenous peoples
and children in vulnerable situation

5.1 End all forms of discrimination
against all women and girls
everywhere
5.5 Ensure women’s full andeffective participation and equal
opportunities for leadership at alllevels of decision making in political,
economic and public life•

Investments in STEM andProvision of Scholarships•

Community engagement andsupport for expanding accessto STEM education to young
girls and women•

Steering the Future Fund•

Giving Back Throughout theYear

Workforce:•

Nexteer Global Code of
Conduct•

Respect, Inclusion, Support,
Equity (RISE) programme•

All In DE&I programme

5.b Enhance the use of enabling
technology, in particular informationand communications technology,
to promote the empowerment ofwomen

Suppliers:

7.2 By 2030, increase substantiallythe share of renewable energy in the
global energy mix

Operations:

7.3 By 2030, double the global rateof improvement in energy efficiency
7.a By 2030, enhance international
cooperation to facilitate accessto clean energy research andtechnology, including renewableenergy, energy efficiency andadvanced and cleaner fossil-fueltechnology, and promote investment
in energy infrastructure and clean
energy technology••

Nexteer SupplierRequirements

Energy efficiency

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NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

UN SDG

Relevant
Nexteer
Focus Area

Most Relevant SDG Targets

Examples of Nexteer’sContributions

8.5 By 2030, achieve full andproductive employment and decent
work for all women and men,
including for young people andpersons with disabilities, and equalpay for work of equal value

Workforce:•

Nexteer Global Code of
Conduct

Supply Chain Management:•

Nexteer SupplierRequirements and General
Terms and Conditions•

Supplier CSR Principles

9.4 By 2030, upgrade infrastructure
and retrofit industries to make themsustainable, with increased resourceuse efficiency and greater adoptionof clean and environmentallysound technologies and industrial
processes, with all countries taking
action in accordance with theirrespective capabilities

Operations:•

Nexteer Innovation Hall ofFame

9.5 Enhance scientific research,
upgrade the technological capabilities
of industrial sectors in all countries,
in particular developing countries,
including, by 2030, encouraging
innovation and substantially
increasing the number of researchand development workers per 1
million people and public and private
research and development spending•

Patents filed and issued•

Serving the electric vehicle
market11.6 By 2030, reduce the adverse
per capita environmental impact of
cities, including by paying special
attention to air quality and municipal
and other waste management

Operations:•

New state of the art training
facilities

Innovation:

Communities:••

Investments in Science,
Technology, Engineering andMath disciplines and research

GHG emissions

Innovation:•

Electrification•

Products and services thatenable emissions reductions

NEXTEER AUTOMOTIVE GROUP LIMITED SUSTAINABILITY REPORT 2023

Reporting Indices

UN SDG

Relevant
Nexteer
Focus Area

Most Relevant SDG Targets

Examples of Nexteer’sContributions

12.2 By 2030, achieve thesustainable management andefficient use of natural resources

Operations:12.4 By 2020, achieve theenvironmentally sound managementof chemicals and all wastes
throughout their life cycle, in
accordance with agreed internationalframeworks, and significantly reduce
their release to air, water and soil
in order to minimise their adverse
impacts on human health and theenvironment
12.5 By 2030, substantiallyreduce waste generation throughprevention, reduction, recycling and
reuse

•

Environmental Management
SystemSupply Chain Management:•

Supplier CSR Principles

75