Challenge the limits
of imagination

Sustainability Report 2020/21
ZEISS GroupKPIs from
Fiscal Year 2020/21(1 October 2020 to 30 September 2021)

127

new vocational trainees and students enrolled ina cooperative education program in Germany

670

More thanmanagers andoccupational health and safety (OHS) officers
were trained in the use of new OHS software

1.6 million euros in funding from

Carl Zeiss AG and the ZEISS Promotion Fundfor around 160 projects at the sites in Germany

Goals to achieve by 2025
CO2 neutrality
in its own activities(Scope 1 and 2 emissions)

More than

35,000employees in almost 50 countries

Revenue in fiscal year (FY)

7.5 billion euros
2019/20 6.3 billion euros
2020/21-20% -15%
reduction in energy use(relative to value added)
as compared to fiscal year 2018/19

reduction in water consumption(relative to value added)
as compared to fiscal year 2018/19-10%

waste reduction(relative to value added)
as compared to fiscal year 2018/19

2

Contents

2	KPIs from
Fiscal Year 2020/21
3

Contents4	Foreword by the
Executive Board
5

Milestones from
175 Years of ZEISS

6Challenging the Limits of
Imagination

7

Interview with theHead of Sustainability

8

About the Report9	Company Profile
and Business Model
10
ZEISS at a Glance
11
The Four Segments andTheir Products
13
Corporate Governance
14
Business Model
15
16

Strategy and Sustainability
Focus Topics, Strategy andCorporate Governance17	Organizational Structure
for Sustainability
20
Results of the Materiality Analysis
21
Sustainability at ZEISS –Progress of the Activity Fields
26	How ZEISS Contributes to the
Global Sustainable Development
Goals

30
31
33
33
33
34
35

01

Integrity and compliance
Compliance
Anti-Corruption
Political Influence
Data Protection
Information Security
Tax

0236	Products andValue Chain
37
Product Development
38
Product Safety40
Procurement and SupplierManagement
42
Focusing on Human Rights
Due Diligence42	Implementing the German
National Action Plan for
Business and Human Rights (NAP)

44
45
45
47
48
50
51

54
55
58
62
64

65

03

Employees
Success through Employees
Employee Involvement
Attracting and Developing Employees
Diversity and Equal Opportunities
Work-life Balance
Occupational Health and Safety

04

Environment
Efficient Use of Natural Resources
Climate Protection at ZEISSFocus on Climate Risks
Environmental Compliance05

Social Engagement

69

GRI Content Index

77

Legal Information

3

BACK TOCONTENTS

Foreword by the Executive Board

Dr. Karl Lamprecht

Ladies and Gentlemen,dear Readers,We've reached the end of another special
year. Another year under the shadow of the
COVID-19 pandemic but also the year inwhich we celebrated our company's 175thanniversary. The past twelve months werevery successful. But one thing we need toremember however successful we are is that
we are a foundation-owned company. Thatmeans taking responsibility is a key part of ouridentity. Our job is to make sustainability afundamental component of our company anda topic we ourselves champion. In keepingwith this, we have incorporated sustainability
management into our ZEISS Agenda 2025.

With a view to implementing greater sustain­
ability in the company's day-to-day operations,
we have set up working groups on sustainable energy procurement and energy-efficient
infrastructure, sustainable product development, implementation of new environmentally sustainable business models, sustainability in procurement and logistics, and arestrengthening our social engagement andsocial business models. The working groups
work across organizational boundaries, using
ZEISS' swarm tactics to gain new insights andresults that can be implemented in day-to-day
operations.
There is no doubt that climate change is at
the heart of our actions. That's why we've set
ourselves a key goal: ZEISS aims to achievecarbon neutrality in its own activities worldwide by 2025. This new milestone supplements our existing goal of switching to green
power at our sites worldwide by 2022. Thisis how we're doing our part to help achieve
the global target set in the Paris Climate
Agreement. Another area we're focusing on
is circular economy, which will reduce theenvironmental impact of our use of resources.
To achieve this, more renewables and recycledmaterials are still being deployed, and cycles
closed. Water consumption and waste volume
relative to our value creation are also being
reduced.

As a foundation-owned company, we believe
it is especially important to help our employees achieve further qualifications. In keepingwith this, we are consistently expanding ourown digital learning platform, ZEISS CurioZ.
As of the reporting date (30 September 2021)
over 500 students and apprentices werestudying at ZEISS in Germany. In the past year,
our employees completed more than 200,000
online courses. We are delighted with boththese results. It's a similar story when we
consider diversity and equal opportunities at
ZEISS. We are determined to continue on
this path. The ZEISS Women Award, which
has been conferred for years, is just one
example of the many ways in which ZEISShonors exceptional female IT students.
For 175 years ZEISS has stood for intensive
collaboration with research and science.
That's why we launched the initiative "A Heartfor Science" in our anniversary year. The aim
is to encourage kids and teenagers to pursue
studies in science and conduct open-mindedresearch. The focus is on supporting dedicated employees as they promote the STEM
subjects in their local communities. Not only
has ZEISS long been supporting employees
within the company and in scientific workat schools and universities, it has also been
helping out people across the globe with avariety of healthcare projects. Like India's fightagainst cataract. Or ZEISS' support for modern
eyecare in the Australian outback. And many
more projects are in store.
I'd like to thank our employees for thesetruly impressive achievements over the past
year. Your dedication, knowledge, ideas andpro­active efforts have ensured that we canput our ideas into action, with the goal ofembedding sustainability throughout the company, rendering it measurable and developing
it further. That's how we help make the world
just that little bit better.
Stay healthy!
Yours, Karl Lamprecht

Dr. Karl Lamprecht
President and CEO of Carl Zeiss AG

4

BACK TOCONTENTS

Milestones from 175 Years of ZEISS

1846

1866

1889

1969

2013

Today

At age 30, Carl Zeiss opens aworkshop for precision mechanics
and optics in Jena. Thanks to his
connections to top natural scientists
from the prestigious Universityof Jena, he's able to quickly put
together a customer base.

Ernst Abbe joins the company.
He and Carl Zeiss place microscope production on a scientificand reproducible basis.

Following Carl Zeiss' death, Ernst
Abbe establishes the Carl Zeiss
Foundation, determining how thecompany will be managed andhow its profits will be utilized.

Photos of the Apollo 11 areshown around the world. ZEISS
lenses are used during the first
Moon landing.

Oscar-winning movies like theJames Bond blockbuster Skyfall,
Lord of the Rings, and Barry Lyndon
were all filmed with ZEISS lenses.

ZEISS is investing in the construction of the Innovation Hub
in Karlsruhe, establishing theInnovation Hub in Dresden andhas opened a new ZEISS Innovation Center in Dublin (California,
USA). In a few years, ZEISS willcomplete construction on its new
high-tech site in Jena. In the citywhere ZEISS was first established,
the company is merging local
units and paying tribute to its
founder Carl Zeiss more thanever before.

1847

1872

1905

1989/90

2020

Carl Zeiss builds his first microscope. The first instruments comewith 15 to 125x magnification.

Ernst Abbe publishes his epony­mous formula to limit the opticalresolution in a microscope thatis still used in modern-day micro­
scopy.

Robert Koch receives the Nobel
Prize. He discovers the pathogenthat causes tuberculosis using a
ZEISS microscope.

After the fall of the Berlin Wall,the ZEISS companies in Ober­kochen and in Jena grow into one
successful enterprise. For morethan 40 years, the two companies
developed independently.

ZEISS partners with Trumpf and
the Fraunhofer Institute to makea major contribution to thedevelopment of industrial series
maturity of EUV technology. This
unrivalled key technology canbe used to produce significantly
higher-performance and moreenergy-efficient and cost-effective
microchips than ever before.

This is where the limits ofthe physically and technicallypossible are being challenged.

5

BACK TOCONTENTS

Challenging the Limits of Imagination
The ZEISS Group's success story began 175
years ago, in a small workshop. On 17 November 1846, young mechanic Carl Zeiss opened
his workshop for precision mechanics andoptics in Jena, thus laying the foundation forwhat would become today's global technology
player ZEISS.

For 175 years, ZEISS has been developing innovations thatanswer the question "How can we push the limits of ourimagination?" In order to celebrate this vision, ZEISS has
engaged in discussions with pioneers and leading figuresfrom all over the world. They focus on the megatrends ofour time and the associated challenges. As part of the ZEISSBeyond Talks, they share insights into their work, as well
as visions, passions and topics that will have a major
impact on the future.
More information:www.zeiss.com/175"Our electron microscopes
offer million-fold magni­
fication and are capable ofmaking a human hair look
like it's 60 meters wide –that's as wide as a football
field."
Prof. Joachim Mayer
Materials scientist,
RWTH Aachen University"We need different rules,
different ways of sourcing
our food, in order to utilizematerials and energy."Prof. Antje Boetius
Microbiologist and researcher

Materials are technological pioneers. Those who want toproduce innovative cars, planes and renewable energy
systems need new materials with better properties thanthose currently in use.

Most people would tell you they love the sea. And so they'reoften confused when they learn that we're all having an impact
on the oceans already – all over the world in fact. In addition toCO₂, our oceans are being affected in other, less-obvious ways.

Part of our job as scientists involves considering the entire
materials life cycle; how they age during use and develop
defects that could result in their ultimate failure. This means
we have to look at the materials' microstructure. We needto characterize and develop a material's inner properties.
That's why we use microscopes capable of magnifying
materials up to 1 million times.

For example, in the number of disposable plastic containers
we use every day. This has a tremendous impact on the oceans.
And then there are the nanoplastics that find their way into
the oceans via precipitation. Or into agriculture. While agriculture
does happen on land, the fertilizers that we use on the fields
ultimately end up in the oceans, carried there by the rain andrivers. And then there's our food. A larger proportion of the
fish we eat is sourced from aquaculture than from the wild. If
aquaculture were not done sustainably, it would destroy man­groves, seaweed, and fjords.

This magnification actually enables us to see individual atoms.
This was not possible until the invention of the electron
microscope some 20 years ago.

So, my hope is that this combination of knowledge, technicaland social solutions prompts us all to take action for a better
tomorrow.

6

BACK TOCONTENTSInterview with the Head of Sustainability"ZEISS brings together
the environment,
business and social
topics in perfectharmony."

Dr. Nicole Ziegler

Buzzwords like climate protection and social
responsibility are key concerns at ZEISS. What do you
need to do to make sure that 35,000 people acrossthe globe are all pulling in the same direction?
As a foundation-owned company, taking responsibility forsocietal topics has been one of our major goals for decades –and that's something our employees are well aware of andvalue. So, we don't really need to motivate our colleagues inorder to implement our sustainability goals. This is certainly
true of climate change, and many colleagues already backour goal of being climate-neutral in all our own operations by2025 and have their own ideas for it. As we strive to operate
ever more sustainably, we create clear structures and plentyof transparency – toward our employees, our partners andour customers. The central Sustainability team is thus working
with the ZEISS units to drive the advancement and implementation of the sustainability strategy. Our sustainability programis being managed by two Executive Board members, which

underlines the importance of our company's efforts. We
always act as Team ZEISS and proactively involve our colleagues. One way we do this is with the ZEISS Sustainability
Week. This ZEISS wide campaign week has drawn attention
to the topic and made it obvious for employees that everyone
can act responsibly and thus help ZEISS be sustainably successful – all while providing inspiration for new projects!
Today, sustainability management is very muchdriven by climate protection. What is ZEISS doing toachieve this?
When procuring energy we focus squarely on green energy, both in Germany and at our sites worldwide. We attachtremendous importance to green power being truly green,
and insist on seeing certificates of origin and power purchaseagreements that attest to this. This is how ZEISS in Germany
is sourcing renewable energy from wind power, via suppliers
who have signed an agreement with the company. We're also
producing more and more of our own energy. In the year under review we finished construction on our biggest self-built
photovoltaics system to date – on the roof of the parking
garage at the Oberkochen site. The new system can cover
the average annual energy needs of around 200 homes. Other
examples include our construction projects in California andThuringia. Our new ZEISS Innovation Center in the USA ispowered by solar energy, and it features use-based lightand air controls and a heat recovery system. Meanwhile, astate-of-the-art facility is being built in Jena, the ZEISS hightech site. It was designed to meet the requirements for thegold certificate awarded by the German Society for Sustainable Building (DGNB). The amount of energy sourced via

district heating will be kept below ten percent; a closed-loop
geothermal system is being installed and the exhaust heatis being effectively deployed.
What does ZEISS understand by the term "social
responsibility" and how does it fulfill this responsibility?
We are adhering to our self-proclaimed obligation as afoundation-owned company: we take responsibility for our
employees, are committed to society and social issues andto the advancement of science and education. Cultural development, promoting a balance between work and family life,and lifelong learning are key topics in our day-to-day work.
The same applies to our efforts to become increasingly diverseand promote equal opportunities. But that's just one side of
the coin. The other side focuses on supporting people outsideZEISS. For example, we help up-and-coming young scientists
who we urgently need to tackle the challenges that lie ahead.
We support companies and people who campaign for better
access to healthcare and promote nature conservation by
actively assisting local conser­vationists. Our overarching aim
is easy to summarize: ZEISS brings together the environment,
business and social issues in perfect harmony.

7

BACK TOCONTENTS

About the Report (GRI 102-40, 102-45)
This Sustainability Report is intended for the ZEISS Group's
customers, business partners, employees and investors, aswell as interested stakeholders from industry, science, politics
and society, and especially those who live in the vicinity of ourcompany's locations. The report illustrates how the company
contributes to sustainable development, what goals it has set
for itself, which structures have been put in place and what
actions it has taken. The report also addresses the company's
legal obligations in different areas.
This Sustainability Report references fiscal year 2020/21(1 October 2020 to 30 September 2021). All relevant depart­ments were involved in its preparation, and the report has
been approved by the Executive Board. Unless stated other­wise, this report applies to the entire ZEISS Group as per thebases of consolidation for financial reporting; see Annual
Report 2020/21 p. 56.
The report was prepared according to the GRI Standards,
the internationally recognized framework for sustainability
reporting. This report was created in accordance with the Core
option of the GRI Standards. The report was made available to
the GRI for review by the GRI Materiality Disclosures Service.
It has confirmed the correct placement of the Materiality
Disclosures (102-40 to 102-49) in the report. The ZEISS Grouppublishes its Sustainability Report annually.

8

BACK TOCONTENTSCOMPANY PROFILE AND
BUSINESS MODEL

9BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

ZEISS at a Glance
For its customers, ZEISS develops, produces anddistributes highly innovative solutions for industrial metrology and quality assurance, micro­
scopy solutions for the life sciences and materials
research, as well as medical technology solutions
for diagnostics and treatment in ophthalmology
and microsurgery. The name ZEISS is also syno­
nymous with the world's leading lithography
optics, which are used by the chip industry tomanu­facture semiconductor components. Thereis global demand for trendsetting ZEISS brandproducts such as eyeglass lenses, camera lenses
and binoculars.
With over 35,000 employees, ZEISS operates in almost 50 countries
worldwide with around 30 production sites, 60 sales and service
companies and 27 research and development facilities. Foundedin 1846 in Jena, the company is now headquartered in Ober­kochen, Germany. The Carl Zeiss Foundation, one of the largest
German foundations committed to the promotion of science, is thesole owner of Carl Zeiss AG. ZEISS is divided into four segments:
Semiconductor Manufacturing Technology, Industrial Quality &Research, Medical Technology, and Consumer Markets. The ZEISSGroup encompasses a business portfolio that is divided into ninestrategic business units. The strategic business units are assigned
to the relevant segments. In fiscal year 2020/21, the ZEISS Groupgenerated revenues of 7.5 billion euros. The Annual Report
2020/21 provides information on the general economic framework
for the company's development and lists the Group's revenue by
region in the Report on Economic Position.

Around100

sites worldwide

13

percent ofrevenues invested
in research anddevelopment

Over

4,500

employees in
Research and Development

Around10,900patents worldwide

10

BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

The Four Segments and Their Products
Semiconductor
Manufacturing Technology

Industrial Quality &Research• Semiconductor
Manufacturing Optics• Industrial
Quality Solutions• Semiconductor
Mask Solutions• Research
Microscopy Solutions• Process Control
Solutions

MedicalTechnology

ConsumerMarkets• Ophthalmic Devices• Vision Care• Microsurgery• Consumer Products

Semiconductor Manufacturing Technology
With its product portfolio and globally leading know-how,the Semiconductor Manufacturing Technology segment
covers a variety of key processes in the production of micro­
chips. ZEISS develops and manufactures products using semiconductor manufacturing technology, including litho­graphy
optics, photomask systems, and process control solutions,key technologies for the manufacture of extremely fine circuit

path structures on silicon wafers – the material from which themicrochips are made. ZEISS technologies enable the continued
miniaturization of semiconductor structures, resulting in smaller
microchips that are more powerful and more energy-efficient.
The electronic equipment with which they are equipped fosters
global progress in a variety of disciplines, including technology,
electronics, communications, entertainment, mobility, energy
and artificial intelligence.

Industrial Quality & Research
The products and solutions developed in the Industrial
Quality & Research segment are focused on quality assurance
in production, increasing productivity, and visualizing andmani­pulating the tiniest of structures in the areas of scienceand research. The range of coordinate measuring machines,
optical and multi-sensory systems, software solutions, comprehensive service offerings and innovative technologies suchas 3D X-ray measurement in quality assurance, are used in
the automobile industry, aircraft construction and mechanicalengineering as well as in the plastics industry and medical
technology. In the areas of science and research, the segment
covers the complete range of microscopy solutions with light,
ion, electron and X-ray microscopy systems. The products
and solutions are used in biomedical sciences and materials
research, as well as in workflows in the electronics andpharmaceuticals industries.
Medical Technology
The Medical Technology segment develops, manufactures,
markets and sells diagnostic and treatment systems, aswell as implants and consumables for ophthalmology. Its
portfolio also includes visualization systems for neurosurgery,
ENT surgery and spine surgery, and dentistry. Solutions for
intraoperative radiotherapy supplement the product offering.
The segment aims to drive progress in medicine and assist
doctors all over the world in improving their patients' qualityof life. Digital technologies with which the segment wants
to shape the market for medical technology also play a role
here. The segment's activities are pooled primarily in the listed
entity Carl Zeiss Meditec AG, in which Carl Zeiss AG holds a
59.1% stake.

11

BACK TOCONTENTS

Company Profile
and Business Model

Consumer Markets
The Consumer Markets segment is synonymous with excellencein the areas of eye care, photography, cinematography, natureobservation and sports optics. ZEISS develops, produces andsells solutions for the entire eyeglass value chain. Alongside
ZEISS precision eyeglass lenses, this includes devices for eye
examination and vision testing, digital consultation andmeasure­ment applications and comprehensive services for eye
care professionals. ZEISS is one of the world's largest manu­
facturers of eyeglass lenses and offers a combined competencein eye and vision care. With its camera and cine lenses, bino­culars, spotting scopes and sports optics, ZEISS offers discerning
customers high-end products and applications for their hobbies
and professional needs.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Consolidated revenue by segment
Revenue by segment

2020/212019/20

Change compared to prior year as a %Adjusted for currency influences€ million€ million

Semiconductor Manufacturing Technology

2,298

1,833

25

26

Industrial Quality & Research

1,801

1,640

10

12

Medical Technology

1,951

1,647

18

22

Consumer Markets

1,394

1,099

27

30

Other
ZEISS Group

85

78

9

9

7,529

6,297

20

22

2020/212019/20

Change compared to prior year as a %€ million€ million

Adjusted for currency influences

1,953

1,746

Consolidated revenue by region
Revenue by region
and cooperations

Europe, Middle East, Africa (EMEA)» thereof Germany
Americas

12

13

602

588

2

2

1,416

1,180

20

28

Asia/Pacific (APAC)

2,020

1,738

16

18

Cooperations

2,140

1,633

31

31

ZEISS Group

7,529

6,297

20

22

12

BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Corporate GovernanceCarl Zeiss AG is the strategic management holding company
that manages the ZEISS Group. It develops the ZEISS Group'sbusiness activities and portfolio, and provides central management and service functions.
The Supervisory Board oversees the activities of the non-listed corporation's six-member Executive Board. In accordancewith the provisions of the German Co-Determination Act(Mitbestimmungsgesetz), it is represented by equal numbers
and comprises 16 people. Half its members represent the sole
shareholder – the Carl Zeiss Foundation – while the otherhalf represents the employees.
The Foundation’s statutes govern the activities and accountingof its subsidiaries as well as the duties of the Executive Boardand the collaboration between the Executive and Supervisory
Boards. For example, when determining total compensation
paid to the individual members of the Executive Board, including any severance or pension payments, the Supervisory Board
must ensure that the compensation paid is commensuratewith the duties and performance of the board member andthe company’s financial position.
Further bodies of rules defining responsible and compliant
corporate governance at the company are the ZEISS Identity,
the company's Code of Conduct, governance and complianceguidelines, leadership principles and corporate directives.

The Carl Zeiss Foundation
The Carl Zeiss Foundation is the sole owner of Carl Zeiss AG.
This special ownership structure ensures stability and enables
the company to create long-term perspectives. The Foundation
statutes prohibit the sale of shares through an initial public
offering, for example. In 1889, physicist and entrepreneur Ernst
Abbe created the Carl Zeiss Foundation to which both Carl Zeiss
AG and SCHOTT AG belong. The objectives of the Foundation
remain valid to this very day:» Safeguarding the future and responsible management of
the two Foundation companies» Fulfilling its special responsibility toward employees» Meeting its responsibility toward society through the commitment of its member companies to non-profit activities in theirsurrounding regions.
» Promoting science

Carl Zeiss Foundation

Foundation acting as a shareholder
100 %

100 %

ZEISS GroupSCHOTT Group

Foundation-owned
company
Carl Zeiss AG
Oberkochen

Foundation-owned
company
SCHOTT AG
Mainz

Subsidiaries

Subsidiaries

With this unique corporate model, the Foundation and its
two member companies made industrial and social history inGermany. Since 2004, the Foundation has received dividendsof 351 million euros from Carl Zeiss AG. The Foundation uses
the dividends generated by Carl Zeiss AG and SCHOTT AG
to promote science – particularly the natural and engineeringsciences, mathematics and information technology – atuniversities in the German federal states of Baden-Württemberg, Rhineland-Palatinate and Thuringia. Today, the Carl Zeiss
Foundation is one of Germany's largest foundations focusedon the promotion of science.
More information:www.carl-zeiss-stiftung.de/english

13

BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Business ModelZEISS has a broad and balanced business portfolio focusedon attractive future-oriented markets for optics, precision
mechanics and optoelectronics. The objective of portfolio
management is to ensure the sustainable business success of
the ZEISS Group. In keeping with this, the corporate strategy
is aligned with ongoing value increases. The ZEISS mission
statement is: “As the pioneer of science in optics, we continue
to challenge the limits of our imagination. With our passion
for excellence, we create value for our customers and inspire
the world in new ways.”
In the year under review, the new ZEISS Agenda defined new
focal points: #agenda25 uses the Focus Fields shape markets,
build networks and create impact to gain specific impetus
for the strategic advancement of the ZEISS Group. It brings
together the key elements of the portfolio strategy and thoseof each segment. The ZEISS Agenda underscores ZEISS'
aspiration to be a global technology leader and a market
shaper. The global Team ZEISS can use these Focus Fields
to help shape its customers' success.
Products and solutions
Optics and optoelectronics are two of the key technologies ofthe future. Technological and scientific applications will makeever more inroads into our lives and continue to improve
people's quality of life. When developing new technologies
and solutions, ZEISS partners with renowned universities,
research institutes, customers and experts through global
networks. Suppliers and business partners around the world
play a pivotal role in ZEISS’ products and services and thus
strongly impact the company’s sustainability performance.
ZEISS develops the products and solutions itself. When it comesto manufacturing, the ZEISS Group segments collaborate
with partners that supply either complete products or key components. Depending on the business, market, and customer
segment, ZEISS relies on different distribution channels such as
sales and service companies (SSCs), direct sales and distributors
to provide all regions with access to ZEISS solutions. More information about value creation and the supply chain is available
on pages 40 – 43.
Business development and investments
Positive business development makes it possible to invest in
infrastructure and innovations, pay a reliable dividend to theCarl Zeiss Foundation and fairly compensate employees aroundthe world. By paying taxes where value is created, ZEISS has adirect impact on the future-oriented development of different
regions and the people who live there (see also page 35). ZEISS
invests 13 percent of its revenue in research and development,
and uses patents to retain its innovative edge. At the end of thereporting period, ZEISS held around 10,900 patents worldwide(prior year: approximately 9,800). In the reporting period, thecompany applied for new patents for approximately 500 inventions (prior year: approximately 580).

technology enable digitalization in industry and society. Intelligent sensor systems, different types of robotics and artificial
intelligence increasingly shape how people live and work.
To promote its products' environmental sustainability, in its
approach to sustainable governance and in its sustainability
strategy ZEISS is focusing on aspects such as ensuring greater
resource efficiency and increased deployment of circularity
as part of the product development process. Further
information is available in the chapter titled "Products andValue Chain" on page 37.

ZEISS Partners with ResearchersZEISS has a long tradition of high expenditure on researchand development. This also represents our investment in
the future. Robert Koch, Christiane Nüsslein-Volhard, Eric
Betzig, Stefan W. Hell and William E. Moerner – for morethan 100 years, over 35 Nobel laureates have advanced
scientific progress using ZEISS systems. For example, Robert Koch discovered the cause of tuberculosis, establishingmodern bacteriology in the process.

Drivers of innovation
Through its research and development work, and the innovations this spawns, ZEISS helps its customers be efficient andsuccessful. But, these innovations are placed within the context
of society as a whole. The optical and optoelectronic technol­ogies from ZEISS pave the way for new scientific findings andmany innovations in other industries. Life sciences like bionics
and medical technology will become more and more vital for amodern society. And the developments in semiconductor

14

BACK TOCONTENTSSTRATEGY AND SUSTAINABILITY

15

BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Focus Topics, Strategy and Corporate Governance
As a foundation-owned company, sustainability
and business success are inextricably linked
at ZEISS. ZEISS aims to anchor sustainable value
creation as an integral part of its businessactivities, which focus on innovative solutions
that contribute to positive development in society and enable long-term, profitable growth.
Responsible behavior contributes greatly to thetrust that customers place in the ZEISS brand.
This is also the reason why ZEISS actively funds
research and training and helps solve socialand health problems.

Sustainability in the corporate strategy
ZEISS' commitment to sustainability is firmly anchored in its
strategy. The strategy also aims to improve the company'ssocial and environmental impact, view sustainability as a value
driver and leverage sustainability challenges as opportunities.
ZEISS will focus on three strategic topics:

To work on these strategic focus topics and on the further
integration of sustainability in key processes, a Group-wide
sustainability program was created as part of the ZEISSAgenda. Two Executive Board members are responsible forthe program, which is coordinated by the central Sustainability
department.

Climate actionZEISS aims to operate in a carbon-neutral way in
its own activities by 2025. Furthermore, ZEISS
will be looking at the emissions in its upstream
value chains. The company also aims to use energy as efficient­ly as possible. ZEISS has set specific targets to be achievedby 2025.

Five topic-specific working groups were formed as part of the
program. They work on the following topics:» Sustainable energy supply and energy-efficient infrastructure» Sustainable product development» Implementation of new environmentally sustainable businessmodels» Sustainability in procurement and logistics» Strengthening social engagement and social businessmodels.

Circular economy
ZEISS strives for a circular use of resources with aview to reducing the impact on the environment. To
achieve this, more renewables and recycled materials
will be deployed, and cycles closed. Water consumption andwaste volumes are set to be further reduced.
Value for society
Through its products, ZEISS aims to create added
value for a more sustainable society. That includes
providing as many people as possible with accessto high-quality healthcare. In order to achieve this, ZEISS willcontinue its existing activities and sponsorships. For example ineducation and research, human rights and diversity.

Approach to sustainable corporate leadershipZEISS believes the basis for the focus topics and the aims of theworking groups can be summarized as follows: growth is only
possible in an intact environment that is open to innovation.
At ZEISS, generating acceptance for the company's own activities
and assuming responsibility for the environment, employees
and society is thus an integral part of its business philosophy.
As part of sustainable corporate leadership, ZEISS is pursuing along-term holistic approach that will define day-to-day operations. This approach is split into five fields of action: employees,
the environment, social and societal engagement, integrity andcompliance, as well as products and value chain.

16Company Profile
and Business Model

BACK TOCONTENTS

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Organizational Structure
for Sustainability

nment
viro
En

Sustainability
at ZEISSgm rit yp li a n
an dce

The five fields of action comprising
the ZEISS approach to sustainablecorportate leadership

em

e
Int o
C

en

t

Products
Value Ch andain

Employees

S o cia

l En

g
ga

Goals, values and guidelines for entrepreneurial behavior
In its day-to-day operations, ZEISS pursues goals and values
that were set out by the creator of the Carl Zeiss Foundation.
These include profitable growth, responsibilities toward
employees, social and societal engagement, and the promotion of science and education. This attitude thus also meansthat the basis of ZEISS' own sustainable corporate leadershipmust be strict compliance with laws and regulations. The
ZEISS Group's Code of Conduct became effective in 2007
and was last updated in 2020. It sets out binding principles
for all of the company's sites. They help guide employees
and managers as they carry out their activities in a responsible
manner. The Code of Conduct contains rules on how todeal with employees and business partners fairly, on productsafety, the environment and occupational and environmental
protection as well as on combating corruption. More detailed
company directives are available for all the topics addressedin the Code of Conduct.
Contribution to the global Sustainable Development
Goals
ZEISS pledges its commitment to the global Sustainable
Development Goals (SDGs) that were adopted by the United
Nations in the fall of 2015. The 17 goals indicate what needs
to be achieved by 2030 and call on companies, politicians andsociety to play their part. ZEISS wants to do its part and has
given due consideration to the global Sustainable Development Goals and the role it can play. Read more about ZEISS'
contribution to the SDGs on page 26 – 29.

At ZEISS, responsibility for sustainability ultimately lies
with the Executive Board of Carl Zeiss AG. Its strategic andoperational implementation is the responsibility of the Headof Sustainability, who regularly reports to the CEO and isa member of the Corporate Strategic Development management team. Together with the Sustainability team, the Headof Sustainability is in charge of the ZEISS Group's central
and cross-divisional sustainability program. They also collaborate with those responsible for internal processes, e.g. fromthe Environment and Energy Management, Supply Chain
Management, and Compliance departments, to embedsustainability topics throughout the ZEISS Group.
The Sustainability team at Corporate Strategic Development
aims to strategically integrate sustainability within the entire
organization and render it measurable. To do this, the teamcollaborates closely with the different ZEISS units in order
to live up to the diversity of the ZEISS product portfolio andidentify the levers that make the greatest contribution tosustainable business practices. Moreover, in the year underreview ZEISS formed topic-specific working groups to implement the new ZEISS Agenda (see also p. 16).
As a supplement to the central Sustainability team, officers
were appointed to look after sustainability management
at each segment and at the Shared Production Unit. They
report directly to their segment's Management Board. They
ensure that a segment-specific sustainability strategy basedon the central approach is embedded and implemented, while
ensuring that the ZEISS Group's central sustainability approachconsiders the specific requirements of the units.

17Company Profile
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BACK TOCONTENTS

The sustainability officers at the units regularly meet with theHead of Sustainability to report on progress at the units andon ongoing initiatives.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

Dialogue with stakeholders (GRI 102-42, 102-43, 102-44)
To ensure the company's continued business success, it isessential to incorporate the interests of stakeholders in strategic considerations and acquire stakeholders for collaborative
partnerships with ZEISS.

3
Employees

4
Environment

5SocialEngagement

The ZEISS Group has implemented a systematic process to
identify its key stakeholders and focuses on issues relevant tothese stakeholders when communicating with them. This wasdetermined during a materiality analysis.
ZEISS receives questions about sustainability via different channels. Stakeholders including customers, suppliers, interested
members of the public and employees, have the opportunity to
ask questions and express their concerns via the ZEISS website.
ZEISS has set up a dedicated email address for this purpose:
responsibility@zeiss.com. Questions are either answered by the
Sustainability team or are forwarded to an internal expert.

Overview of Roles and Responsibilities

President and CEO
Target setting anddecision-making preparations,progress report

Decisions& Objectives

Head of Sustainability& central Sustainability teamStrategic guidance and support
during implementation

Report on progress
at segments and departments

Departments and committees
related to sustainability

Sustainability officers at thebusiness units

Supervisory Board &Audit Committee
Reports
on progress

Internal and external stakeholders attach great importanceto the transparency of the ZEISS Group's sustainability
activities. One key tool in this regard are the Sustainability
Reports and the Non-Financial Reports of the ZEISS Group. In
fiscal year 2020/21, there was considerable interest in climate
protection activities, product quality, sustainable corporate
leadership and ZEISS' implementation of the German Supply
Chain Act. Customers in particular are interested in productcarbon footprints and ZEISS' efforts to reduce potentiallyhazardous materials. More and more customers are using
external platforms that systematically request and evaluate
integrated sustainability information from companies. Responsibility throughout the supply chain, especially with regard
to processes, also played an important role in upholding
human rights. Employees often asked questions about thecompany's internal approaches and goals in relation to climate
protection and new mobility concepts.

18

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Company Profile
and Business Model

Memberships and Initiatives
As a global player, the ZEISS Group is active in manyindustry associations in Germany, participates inregional initiatives, and is involved in many associations that provide financial support for colleges,
universities, and scientific and cultural institutions.
Dr. Karl Lamprecht, President & CEO of the ZEISSGroup, is Chairman of the Aalen University Council
and a member of the Baden-Württemberg Board ofTrustees of Stifterverband für die Deutsche Wissenschaft, an innovation agency for the German scientificsector. In Germany, ZEISS is involved in the Wissensfabrik (Knowledge Factory) intercompany cooperation
project and is a longstanding member of the Max
Planck Society. The company is a signatory to theGerman Diversity Charter, an initiative to promote
greater diversity at German companies. On the global
level, ZEISS is a member of the non-profit trade association The Vision Council. It is also committed to theinitiative run by the World Health Organization (WHO)and the International Agency for the Prevention of
Blindness (IAPB), VISION 2020: The Right to Sight,
which aims to prevent blindness and has joined theglobal fight against tuberculosis with the initiative"Stop TB." ZEISS Industrial Metrology is also a Blue
Competence member of the German MechanicalEngineering Industry Association (VDMA) that promotes
sustainability in mechanical and plant engineering andpublicizes the industry's sustainable solutions.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

ZEISS Group stakeholders and communication formats (GRI 102-40, 102-43)
Stakeholder groups(listed alphabetically)

Key communication formats

Carl Zeiss Foundation

Executive Board members of Carl Zeiss AG sit on the Management Advisory Board of the Foundation,and the Chairman of the Supervisory Board sits on the Foundation Council

Company committees/unions

Staff meetings, Works Council committees

Customers(business customers and private consumers)

Consultations, training, global customer satisfaction survey via Net Promoter Score, external communication
channels such as newsletters and social media

Employees and managers

Internal communication channels, annual performance reviews, satisfaction surveys, company meetings,
Dialogue Tours

Financial institutions

Ongoing communication between ZEISS and financial institutions

Governments, including municipal and stateauthorities (Baden-Württemberg, Thuringia)

Financial reporting, compliance reports, dialogue with Foundation representatives (i.e. with the ministries
responsible for the scientific universities in the German federal states)

Investors

Personalized communication with the Investor Relations department, Annual Report, ZEISS website,
Sustainability Report, Non-Financial Report

Media

Press releases and conferences, trade shows and exhibitions, annual report, online presence, external
communication channels like newsletters and social media

Research institutes and universities

Partnerships with universities; funding for professorships, PhD dissertations, bachelor and master theses;
lectures given by managers at universities

Supervisory Board

Regular reporting at meetings of the Supervisory Board and its committees

Suppliers

Supplier meetings and audits, subject-specific dialogue, demand-driven supplier development, training andworkshops as part of development partnerships

19Results of the materiality analysis(GRI 102-49)
The material topics identified in fiscal year 2018/19
remained the same for fiscal year 2020/21 – with one
exception: this is the first time taxes were deemedmaterial issues. To take into account the rising importance of digitalization, the topic of information security
was also included in the report.

t

en

lic
ag h e sem
e nt

In fiscal year 2020/21, the topics defined in 2018/19
were verified in order to take the impact of new developments into consideration. All relevant departments andthe appointed unit representatives evaluated therelevance of the material topics that were identified in
the previous year. Respondents were able to add any
topics that were missing.

Sustainability
at ZEISSgm rit yp li a n
an d
ce

em

Produkteu
Wertschöpfun nd
gsk
et
t

z
und so

iale

nment
viro
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welt
Um

e
Int o
C

ce

2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Employees

e
Int o
C

beitende
Material sustainability
Mitarissues(GRI 102-43, 102-44,
102-46)e
All topics that are very important for the different
stakeholder groups of the ZEISS Group and whose own
business activitiesNachhaltigkeit
have a significant economic, socialand environmental impact are material for ZEISS and are
bei ZEISS
included in this Sustainability Report. A comprehensive
materiality analysis was conducted in fiscal year 2018/19.
g
Details on the procedure
are available fint the relevant
m rit ä tap li u n
c h En gslSustainability Report.
l
d
an
e
s
G es

Strategy andSustainability

Products
Value Ch andainCompany Profile
and Business Model

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1
Integrity andCompliancelE
S o ciang

ag

Results of the Materiality Analysis
Employees» Employer-employee relationship» Employee development, training
and further education» Diversity» Work-life balance» Occupational health and safety

Environment» Efficient use of natural resources» Circular economy» Climate protection» Environmental compliance

Social engagement» Promotion of scientific researchand education» Healthcare promotion» Regional involvement

Integrity and compliance» Business ethics» Legal compliance» Data protection» Taxes

Products and Value Chain» Product development» Product safety» Procurement and suppliermanagement» Human rights in the supply chain

20Company Profile
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3
Employees

4
Environment

5SocialEngagement

Sustainability at ZEISS – Progress of the Activity Fields
Integrity and Compliance (GRI 102-47)
Material issues

Aims» Legal compliance» Business ethics» Data Protection» Tax» Compliance with applicable law» Increased value orientation and behaving with integrity inaccordance with the ZEISS Group Code of Conduct» Protection of the ZEISS brandStatusSelected measures in FY 2020/21» Continuing the ZEISS Integrity Line for reporting open or anonymous
information about possible compliance violations» Revising the e-training on compliance» Creation of new training module on organizing compliant professional
training events with healthcare professionals» Internal evaluation of Group-wide processes for compliance inspections
for sales partners, incl. definition of relevant measures» Optimization of the compliance risk assessment tool(e.g. tool adaptation; manual for compliance officers).
» Performance and evaluation of the compliance self-assessment withcompliance officers and company heads» All employees take part in compliance basic training every two years

On Track
Achieved

21

Company Profile
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Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Products and Value Chain (GRI 102-47)
Material issues

Aims» Product safety» Sustainable productdevelopment» Procurement andsupplier management» Human rights in the
supply chain» Improved sustainability performance of ZEISS products andservices» Systematic anchoring of sustainability in productdevelopment process» Raising ZEISS supplier awareness on sustainability
requirements» Organizational and strategic expansion of sustainability
at Purchasing and in Supplier Management» Further development of logistics and shipping processes
to integrate sustainability aspects

StatusSelected measures in FY 2020/21» Piloting of life cycle assessments for selected products to calculate
environmental product footprints» Expansion of product development process regarding the assessment ofsustainability aspects at some ZEISS segments» Continuation of the cross-divisional team of specialists to focus on sustainableproduct and process development» New cross-divisional working group to strategically establish suppliermanagement incorporating different sustainability aspects» First gap analysis regarding the requirements of the German Supply Chain Act
with the existing ZEISS processes and initialization of a project group to develop
a roadmap» Carrying out a risk analysis for 652 strategically relevant suppliers» Compiling an annual report to evaluate the supply chain as concerns the originof conflict minerals based on the Responsible Minerals Initiative standard» Establishing guidelines to prioritize marine and rail transportation over air
freight

On Track
Achieved

22

Company Profile
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Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Employees (GRI 102-47)
Material issues

Aims» Employer-employee
relationship» Employee training andprofessional development» Diversity» Work-life balance» Occupational healthand safety» Further strengthening and expanding the relationshipbetween the company and its employees» Acquiring new employees and ongoing employee
development» Reinforcing collaboration and promoting diversity at
the company» Encouraging a positive work-life balance» Standardizing and ongoing improvement of internal
processes for occupational health and safety to reduce
accident frequency and severity» Reducing the number of work-related accidents acrossthe Group (KPI LTIFR) to below 2.25 by the end of 2023
» Rollout of an integrated software solution for the occupational
health and safety management system in Germany by fiscal
year 2020/21» Rollout of the software solution worldwide for global accident
reportingStatusSelected measures in FY 2020/21» Ongoing advancement of the Cultural Journey – Walk the Talk to improve
collaboration and personal development opportunities for employees» Further transformation of HR organization and processes» Launching a training or cooperative education program at ZEISS in Germany
for 127 young people» Mentoring program for women at Aalen University, Ernst Abbe University in
Jena and the University of Jena
» Continuing the cooperation network for international employees and theirfamily members» Conferring of the ZEISS Women Award for outstanding students of IT,
business information systems and media information systems» Expanding the flexible working hours and workplace models» Launch of a digital childcare offering» Concluding a partnership for free of charge preventive healthcare measures» Establishing an organizational structure and hygiene concept for protecting
employees' health during the COVID-19 pandemic» 101 fire safety inspections and 101 occupational safety inspections wereconducted in Germany» Training 679 managers and occupational health and safety officers

On Track
Achieved

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Company Profile
and Business Model

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Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Environment (GRI 102-47)
Material issues

Aims» Efficient use
of natural resources» Circular economy» Environmental protection» Environmental compliance» Efficient use of all natural resources to protect theenvironment» 20% reduction in relative energy use* by fiscal year 2024/25» 15% reduction in relative water consumption*
by fiscal year 2024/25» 10% reduction in relative waste accumulation*
by fiscal year 2024/25» CO₂ neutrality in Scope 1 and 2 by fiscal year 2024/25» Switching to a carbon-neutral energy supply at the main sites
worldwide by fiscal year 2021/22» Standardizing energy and emissions data collection in Europe
via a platform solution by fiscal year 2020/21

Reduction targets by fiscal year 2024/25 relative to thecompany's own value creation (reference year: fiscal year
2018/19)1

StatusSelected measures in FY 2020/21» Continuing several projects, initiatives and measures for conserving energy
and resources at ZEISS sites» Initiation and evaluation of strategic measures at ZEISS business unit level» Expansion of green power purchasing at international ZEISS sites» Procurement of renewable energies from wind turbines in Germany aspart of direct power purchasing agreements (PPAs))» Continuing the company suggestion scheme for measures to conserve
resources at eight sites» Offsetting carbon emissions resulting from air travel and the use of natural
gas and district heating» Implementation and gradual rollout of a platform solution for collecting
energy and emissions data worldwide» Participation in CDP climate reporting» Independent EH&S audits at major production facilities to review legal
compliance status» First analysis of key Scope 3 emissions categories

On Track
Achieved

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Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Social Engagement (GRI 102-47)
Material issues

Aims» Promotion of scientificresearch and education» Regional involvement» Health promotion» Promotion of scientific knowledge from preschool children to
doctoral students» Improved patient quality of life through solutions and new
standards in optometry and medical technology

StatusSelected measures in FY 2020/21» Carl Zeiss AG sponsors over 100 projects with 1.6 million euros» Involvement in future initiative for modernizing the Deutsches Museum in
Munich» Donation to German Optical Museum in Jena
» Launch of the initiative "A Heart for Science"» Funding six ophthalmology training centers in Indonesia, Paraguay, Nigeria,
Sudan, Tanzania, India and Uganda» Opening of an eye clinic in the Australian outback» Opening of the ZEISS Innovation Hub in Dresden» Supporting Birdability, to support inclusion in birdwatching

On Track
Achieved

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Strategy andSustainability

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Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

How ZEISS Contributes to the Global Sustainable Development Goals
In the fall of 2015, the United Nations adopted globally applicable Sustainable Development
Goals (SDGs) to be achieved by 2030. There are
only nine years left. That's why private companies are being called on to play their part. That's
the only way to ensure fair development worldwide that creates prosperity within the limits ofwhat the planet can sustain. ZEISS has pledged
its support for this agenda and wants to assist
with its implementation.
ZEISS is aware that all sustainability goals are important andrequire support. In order to focus on the areas in which ZEISS as
a company is capable of having a particularly big impact, in fiscal
year 2018/19 an analysis was conducted of the 17 primary goals
and 169 sub-goals. It is still valid for ZEISS today. In it, six goals
were identified where ZEISS can have the greatest impact on
people, the environment and society through its business processes, product portfolio and services.
SDG 3 – Health and well-being
SDG 4 – Quality education
SDG 8 – Decent work and economic growth
SDG 9 – Industry, innovation and infrastructure
SDG 12 – Responsible consumption and production
SDG 13 – Climate protection measures

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Quality education: Ensure inclusive and equitable quality education and promote lifelong
learning opportunities for all.

Health and well-being: Ensure healthy lives
for all people of all ages and promote theirwell-being.

The focus is on around 43 million people worldwide
who are blind and 295 million who suffer from a severe
visual impairment. Roughly 90 percent of those affected live in the world's poorest countries.
ZEISS is raising the bar in healthcare with its solutions for ophthalmology and medical technology, and helps to drive medical
progress in ophthalmology and microsurgery with its products.
The aim is to help improve the lives of patients everywhere.
ZEISS is determined to do its part for society in the fight against
preventable blindness and since 2005, has equipped six diagnosis, treatment and training centers with devices for eye care.
In line with the principle of “Helping people help themselves”
the training centers aim to provide access to state-of-the-art
medical technology in developing and emerging countries. This
creates the necessary scope for teaching people how to use
state-of-the-art medical technology and use it for treatment purposes. The centers are located in Nigeria, Indonesia, Tanzania,
Paraguay, India and Sudan.

3
Employees

Focus: Around half of the world's population does nothave sufficient access to basic healthcare.
The company makes in-kind donations in the form of ZEISS
products through a variety of different projects in order to give
people around the globe access to high-quality medical care.
ZEISS also uses its ZEISS VISUHEALTH platform to further its
mission. The platform addresses the challenges of risingpatient numbers in underprivileged regions. For instance, itbrings together three ophthalmic centers in major cities inIndia by providing some 60 mobile screening stations spreadthroughout the country. Patients can visit a screening station
to have photos taken of their retina, which are then uploaded
to the platform and examined by an ophthalmologist at oneof the major eye clinics.

Focus: Germany needs some 140,000 new STEM
employees.
ZEISS fosters aspiring young scientists – from kindergarten kids
right up to doctoral candidates – through numerous educational
programs. In this way, ZEISS acts on the responsibilities set forthin its foundation statutes, shares educational content in an easily
understandable way, and makes science easier to comprehend.
Examples include the company's involvement in schools and its
microscope donations to various educational initiatives, as wellas its support for Germany's regional "Jugend forscht" contest
for young, talented achievers in the STEM fields. With the goalof bringing young people closer to science and research, ZEISS
has been sponsoring Jugend forscht, Germany’s oldest and bestknown competition for young researchers, for more than 20
years.
During the "ZEISS 175" anniversary year, a variety of funding
drives and commitments were launched in a bid to encouragechildren and young people to consider a career in the sciences
and conduct open-minded research. These have been pooled
in a new initiative "A Heart for Science." The initiative aims to encourage young people aged between 12 and 18 to get involvedin the natural sciences and technology and will be pursued forseveral years at international level.

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4
Environment

5SocialEngagement

Industry, Innovation and Infrastructure:
Creating a resilient infrastructure, promoting
broad-spectrum and sustainable industrialization and supporting innovation.

Decent work and economic growth:
Promote sustained, inclusive and sustainableeconomic growth, full and productive employment and decent work for all.
Focus: Over 200 million people worldwide are unemployed.
As a global tech company, ZEISS employs more than 35,000
people. They are offered a safe and motivating work environment, where hard work and dedication are acknowledged
and individual advancement is possible. Worldwide, ZEISS
consistently trains several hundred apprentices and students
pursuing dual study programs. This prepares them to enter
the job market. ZEISS also conducts a regular global employee
survey to determine how people think it is helping to shape its
own corporate culture (see page 46).

3
Employees

Focus: In more than 50 countries worldwide, humanrights are either under siege or egregiously violated.
The ZEISS Group is conscious of its responsibility to upholdhuman rights. When working with suppliers, ZEISS has therefore been pursuing a centralized approach for integrating sustainability aspects into the supply chain since 2016. The approach focuses on compliance with environmental and social
standards at suppliers' sites. To monitor this, demand-driven
assessments and audits are conducted based on risk. In recent years ZEISS has been driving the implementation of thefive core elements of the German government's National Action Plan for Business and Human Rights (NAP). Based on thisZEISS has already taken the first steps towards complying with
the German Supply Chain Act (see pages 42 – 43).

Focus: Innovation is one of the cornerstones of thetransformation toward circular and decarbonized business.
ZEISS invests in upgrading its sites worldwide and supports
the company's development and innovative power by making
above-average investments in research and development. At
13% of revenue (2019/20: 13 percent), research and development investment has remained at a constantly high level ascompared to the previous year, testifying to the ZEISS Group's
continued strong focus on innovation. As a result, ZEISS is able
to offer its diverse customers the right solutions from its broad
portfolio of products. They include intelligent quality control
systems for networked production, or the world's only semiconductor exposure systems. ZEISS lithography optics lay thefoundation for progress in advancing global digitalization andwith it, the basis for modern infrastructures and communication and production structures. Revolutionary extreme ultraviolet (EUV) technology, for example, enables the productionof microchips that are ever higher-performing and energy-efficient. That protects the environment: chip manufacturers report 50% energy savings with EUV technology as compared tothe current technology.

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Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

Responsible consumption and production:
Ensuring sustainable consumption and production patterns.

Climate protection measures:
Implementing measures now to combat climatechange and its impact.

Focus: Humanity would require 1.7 Earths to sustain
the current global consumption of resources.
ZEISS continues to work on finding ways to use natural resources
as efficiently as possible and prevent pollution. A cross-divisional working group for sustainable product development aims tosystematically integrate products and solutions into the development process. Aspects including circular economy, alternative
materials and ways of increasing energy and resource efficiency
during product manufacturing and use were all taken into account.
This is being done through investment in measures to boost energy efficiency, consistently reduce waste and integrate sustainability aspects into product development. In addition, refurbishment programs are in place for several product groups, including
electron microscopes and measuring machines. Pre-owned
products are overhauled in accordance with certified ZEISS standards, equipped with new technology, and made available tocustomers again (see page 38 and 61).

Focus: The measures already taken by policymakers andcompanies around the world have achieved just onethird of the emissions reductions needed.
SDG 13 calls upon states and governments to include effective
measures for combating climate change in their national policy. However, effective climate protection can only be achieved
through a concerted effort and if companies support it too. ZEISS
believes it has a responsibility and makes a contribution to theglobal target set in the Paris Agreement of limiting global warming to below 2°C. ZEISS has derived some ambitious measures todo this: Indirect emissions from the energy procured at its main
production sites are set to be carbon neutral by 2022. And by2025 energy at all ZEISS sites worldwide and the direct emissions
from combustion processes in its own plants or vehicles are toachieve CO₂ neutrality (see also page 58).

3
Employees

4
Environment

5SocialEngagement

ZEISS is taking different approaches to achieve these goals. It
is focusing on reducing energy consumption in a bid to lower
emissions. Moreover, ZEISS avoids emissions by using renewableenergies and purchasing green power through power purchasing agreements or from suppliers with certificates of origin. ZEISS
also wants to expand its power generation base. ZEISS compensates for unavoidable emissions or those that can be reduced by
supporting selected projects. To manage the emissions producedby the upstream value chain, ZEISS assessed its Scope 3 emissions for the first time in the reporting year. A reduction target
will be set on this basis.

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BACK TOCONTENTS01

INTEGRITY ANDCOMPLIANCE

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Compliance"The trust that internal and external stake­holders
place in the integrity of our global businessactivities is a prerequisite for sustainable businesssuccess and a key feature of the ZEISS brand.
Our Group-wide Compliance Management
System is the central tool for ensuring
compliance with all legal requirements andinternal rules."Ulrich Hoffmann, Chief Compliance Officer, Carl Zeiss AG

Business activities in line with statutory regulations and internal rules are an integral part of the ZEISS corporate culture.
The company's aspiration to act with integrity stems from thevalues that were shaped by its history as a foundation-owned
company. For this reason, legality and the fair treatment ofbusiness partners and employees are indispensable elementsof successful business operations. The ZEISS ComplianceManagement System helps to identify and correct any errors. Equally important is an open and respectful corporate
culture, which is anchored at the company and championedby the management. ZEISS is thus also facing the challenges
associated with rising regulatory requirements, as well as the
specific requirements of our business partners.

are responsible for the Compliance Management System.
This area of responsibility includes the design of the ComplianceManagement System as well as assistance with the identification and rectification of significant compliance violations thatmight jeopardize the reputation of the entire ZEISS Group. All
strategic business units also have appointed Group Compliance Officers, who coordinate the compliance activities intheir particular area and its associated entities. In addition, allindividual companies have their own local Compliance Officers, who are responsible for implementing training measureson-site and resolving any local compliance violations. The
Compliance Officers are the contact persons on compliance
topics for employees and managers alike.

Guidelines, structures and processes
At ZEISS, the foundation for compliance management is
the ZEISS Code of Conduct, which was first published in 2007
and last updated in July 2020. It describes the risks inherent
in business activities, provides specific recommendations on
how to behave and is binding for all ZEISS managers andemployees worldwide. The ZEISS Code of Conduct contains
rules on various issues, including data protection, productsafety, environmental protection and combating corruption.
More detailed company directives are available for all the
topics addressed in the ZEISS Code of Conduct. These include
guidelines on assessing distribution partners, granting andaccepting benefits such as gifts or invitations, and the
directive on properly dealing with competitor companies.

The Executive Board and managing directors of the ZEISS
companies bear the overall responsibility for acting in accordance with the rules in all ZEISS business activities. These
include compliance with data protection, customs and export
control provisions, environmental regulations as well as regulations on occupational and product safety, and combating
corruption.

At ZEISS, compliance is organized on three different levels:
at Group level, the Chief Compliance Officer, who reports tothe Executive Board, and the Head of Corporate Compliance

Moreover, the periodic inquiry into compliance risks that
may exist, for example, due to conflicts of interest, export
control law, data protection and corruption, at the ZEISS
companies is an integral part of Group-wide risk management.
Regular internal audits and assessments, are conducted toevaluate compliance with the legal requirements. An external
audit is conducted each fiscal year.
A Compliance Management System has been established
for all units in the ZEISS Group. It enables the systematic

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Company Profile
and Business Model

1
Integrity andCompliance

Strategy andSustainability

2
Products andValue Chain

2. D
et

nd

1.
Pr

Early detectionof misconducttec

4. Correct
Depending on the type of misconduct, systemic orprocedural measures may be necessary to prevent
recurrence.

t
en
ev

r re

Organizational
and procedural
improvements

po

es

Co

3. Respond
The company takes appropriate measures toimmediately remedy unlawful behavior.

IT solutions
and training4.

2. Detect
In spite of all the preventive measures, legal violations
and cases of non-compliance can still occur within thecompany. To identify such cases, employees are called
on to actively cooperate and should report any suspectedviolations. Various departments and experts, such as
Corporate Security and Internal Auditing, also support
investigations of suspected compliance violations.
Depending on the case, the company can also rely on
external support.

4
Environment

5SocialEngagement

uously working on ways to provide these employees access to
ZEISS CurioZ.

management of all compliance measures and encompasses
these core processes.
1. Prevent
A clearly structured framework of policies and mandatory
trainings for all employees and compliance officers raises
awareness and prevents incidents.

3
Employees

ct

3.

R

Appropriate reaction
to individual casesof misconduct

Core processesof the compliancemanagement system

All employees and Executive Board members must complete abasic compliance training on the ZEISS Code of Conduct every
two years, including a final test. Employees who work in areas
where they may be highly exposed to compliance risks, suchas in Purchasing, Sales and Marketing, as well as managers,
must complete additional trainings on anti-corruption and faircompetition. The majority of ZEISS employees have accessto online compliance training via the ZEISS CurioZ learning
platform. The trainings are currently available in up to 13
languages. Employees who still have no access to the online
trainings receive in-person training. However, ZEISS is contin-

Internal and external stakeholders alike have the opportunity
to use the ZEISS Integrity Line whistleblower system openly
or anonymously to report any indicators on possible com­plianceviolations. The ZEISS Integrity Line is available in 23 languages
and can be found on the website at www.zeiss.com/
sustainability/compliance and on the ZEISS intranet.
Objectives and measures
ZEISS' primary aim in terms of compliance is to act in line withstatutory regulations and internal rules. Compliance violations
not only endanger the company's reputation, but can also involve consequences under criminal law or sales slumps. An upto-date training program is essential. In fiscal year 2020/21 thebasic compliance training on the ZEISS Code of Conduct andthe compliance trainings on "Fair Competition" and "Anti-Corruption" were revised and a new training on the appropriate
way to run professional training events with healthcare professionals was compiled and rolled out. The Group-wide compliance due diligence process for distribution partners was alsointernally checked in regard to actuality and practicability, andsuitable measures, such as adapting contract templates, were
defined. The Compliance Risk Assessment tool was optimized:
By means of a pre-selection, risks of all risk categories can now
additionally be reported as "compliance-relevant.” This allows
risks to be handled appropriately. An accompanying manual
helps the Compliance Officers to use the tool and evaluate
compliance risks. The internal review of the ZEISS ComplianceManagement System is scheduled for fiscal year 2021/22 andwill be based on the new DIN ISO 37301 standard.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Anti-Corruption

Political Influence

Data Protection

Knowing that corruption impedes progress and innovation,
ZEISS has issued clear rules to prevent and battle corruption.
The anti-corruption rules are a vital part of compliancemanagement as described above.

The government lays key foundations and creates rules forbusiness activities. Associations and interest groups help
negotiate standards and common development goals in thiscontext. This is also why ZEISS is a member of academic,
industry, and employer associations. The company explicitly
affirms the independence and integrity of parliaments, parties,
and governments as the cornerstones of basic democraticorder and repeatedly makes it clear that a free, democraticframework is necessary for successful business activities in a
globalized world.

ZEISS is aware of the importance of protecting personal
data to ensure an ethical business model both today and in
the future. Ever more ZEISS units are handling highly sensitive
personal data like healthcare information. For this reason,
proof of legally compliant and reliable data protection is arequirement to remain a reliable partner for customers, suppliers, partners and consumers. Furthermore, this prevents bothdamage to the company's reputation and high fines.

To raise employee awareness of the topic, ZEISS has compiled
internal company policies on granting and accepting benefits
such as gifts or invitations. The policies are an importantcomponent of the "Anti-Corruption" training. A check­-list
provides specific examples to help employees assess whether
or not particular benefits are permitted.
Moreover, there are internal policies for screening distribution
partners. This is supported by a screening tool supplied by
an external provider. The goal is to determine whether distribution partners have been suspected of corruption or cartel
deals, export control, money laundering or similar crimes,
or exhibit any other risk factors that could damage ZEISS'
reputation.

The ZEISS Group does not make financial donations or othercontributions to parties or political institutions. And there's
a good reason for that: the Carl Zeiss Foundation statutes
stipulate that all support must be based on political and religious neutrality.

Guidelines, structures and processes
National and international regulations create a framework fordata protection – and the European Union's data protection
standards are particularly relevant. These are supplemented
by a mandatory internal guideline for handling personal data,
which is applicable worldwide. From an organizational standpoint, data protection matters are handled as a standalone
division of Corporate Legal & Patents. The Corporate Data
Protection Officer works with an eight-person team to define
principles and rules governing the protection of personal data,
support and provide advice for their implementation, andmonitor compliance. They report to the Chief Financial Officer.
Executive Board members and/or the managing directors of
ZEISS companies and the heads of business units are responsible for implementation and compliance. To support theirefforts, Corporate Data Protection operates a data protection
management system. Each individual company has a Data
Privacy Coordinator who is responsible for training measures,is the local contact person for all employees' and managers'
questions and maintains open communication with Corporate
Data Protection.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Information Security
Measures and results
ZEISS emphasizes the importance of a uniform level of dataprotection worldwide. Alongside the steeply rising challenges
posed by product digitalization, increasing global regulation
drives the further development of data protection processes at
ZEISS. The focus is on aspects like extended rules and regulations such as the Data Security Law of the People’s Republic ofChina (DSL), the updated rules on cross-border personal datatransfer to third-party EU states, national laws such as the
LGPD in Brazil, POPEIA in South Africa or court decisions, e.g.
in connection with the validity of the EU-US Privacy Shield. In
the reporting year, ZEISS thus assessed over 3,000 internal andexternal cross-border data transfers and adapted its internal
processes as per the new conditions. Furthermore, the ZEISSGroup defined binding corporate rules for internal datatransfer based on consistent standard contract clauses. These
rules are currently being assessed in line with the certification
process of the European supervisory bodies.
During the reporting period, more than 100 inquiries andcomplaints were answered regarding the guaranteed data
subject rights of the persons affected, such as data deletion,
retransfer, disagreement and correction.

The security of the information systems used at ZEISS is of great
importance for business operations and the success of digitalproducts and services. The trio comprising trust­worthiness,
integrity and availability of information and systems describes
the overarching goals of the ZEISS information security management system (ISMS).

In the period under review, ZEISS received over 40 requests
from customers in relation to its information security measures.
They were handled by the Regional Information Security
Officers from Corporate Security.

The ISMS is managed by Corporate Security and creates theframework for all information processing in the ZEISS Group.
Since late 2021, the ISMS has been certified to ISO 27001
for the centrally provided services related to information
technology and information security equipment, mechanisms
and processes. It is guided by the rules enshrined in international rules, regulations and standards (e.g. China's Cyber Security
Law, NIST Cyber Security Framework, VDA ISA/TISAX). Thisway, ZEISS ensures an appropriate level of security that is inline with the requirements of ZEISS customers.
In the past two years, ZEISS has established a Security Operation Center at its site in Bangalore, India, in order to monitor
the ZEISS IT systems around the clock, intervene in the eventof discrepancies and thus minimize any potential damage. In
addition, the company is relying on a network of security
engineers to address security in a rapidly evolving environmentof agile software and product development. This involves software developers who are being trained in information security
as per the "security by design" principle.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Tax
Taxes are very important for ensuring a functioning welfare
state, its future and its people. As a foundation-owned company, ZEISS is aware that it needs to actively take responsibility
for society so that it can play its part to help sponsor the community. This also means that taxes are paid at the site of value
creation and that consistent compliance is ensured with theapplicable national laws.
Guidelines, structures and processes
At ZEISS, the guidelines for handling taxes are defined by theGroup-wide tax strategy. It stipulates that tax-related OECDrules like the "arm's-length principle" are applied during internaland external transactions and that the local transfer price rules
and guidelines are complied with. The tax strategy is notevaluated at regular intervals but in fact in connection with aparticular incident. The Corporate Tax department uses a tax
strategy to review compliance with the regulations and isgenerally involved in decisions of considerable importance.
This includes acquisitions of companies, other acquisitions,arrangements related to existing parts of companies, or theestablishment of transfer pricing concepts. Ultimate responsibility
for complying with the tax strategy lies with the Chief Financial
Officer.
For specific transactions ZEISS relies on process guidelines thatdefine duties and responsibilities in greater detail. Employees
working in the Tax department are trained through external
formats and internal knowledge sharing on specialist subjects
and in line with their needs. At ZEISS, tax-related risks aremonitored as part of the Group-wide risk management process. Risk field checks are defined annually and their efficacy
is assessed. In addition, potential tax risks – such as thoserelating to acquisitions or new regulatory requirements likecountry-by-country or DAC6 reporting – are identified using
a general tax compliance system. The risks are consistently
monitored in a quarterly risk report and, where necessary,measures are passed and implemented to reduce the risks.
Internal and external stakeholders can use the ZEISS Integrity
Line whistleblower system to identify possible complianceviolations openly or anonymously.
The information about the tax burden published in the ZEISSGroup's Annual Report is assessed and verified by an auditing
company. An explicit external audit report dedicated solely totaxes is not available.
ZEISS is a partner that attaches importance to transparency,
fairness, trust, reliability and respect. This applies in particular
to its collaboration with tax authorities. Within the scope oftax law ZEISS represents its own interests through its memberships to the finance and tax committee of the IHK Ostwürttemberg and the DIHK, Berlin, in specialist tax groups andother panels.
Results
During the reporting period, ZEISS accrued tax expenses in theamount of 395 million euros (prior year: 265 million euros).
The Group's global tax rate was 27 percent in fiscal year
2020/21.

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02

PRODUCTS AND
VALUE CHAIN

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and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Product Development"ZEISS stands first and foremost for
innovative solutions that help our customers
be successful. We filed 500 new patents in
the reporting year alone. Precision, reliability
and exceptional quality form the basis forour success. But that's not all: for years
sustainability has been growing in importanceand it is now one of the key parameterswhen it comes to product development andmanaging the supply chain."Dr. Ulrich Simon, Head of Corporate Research andTechnology, Carl Zeiss AG

ZEISS offers a wide variety of highly specialized productsthat are as diverse as its different customer groups and their
particular requirements. These range from hospitals, doctor's
offices and eye care specialists to research labs, tech companies, car manufacturers and end consumers. For all of them,
the name ZEISS is a promise of quality, innovation, safety,
reliability and responsibility – and for many, ZEISS also stands
for better health and improved quality of life. In order to keep
this promise and meet the needs of these different customers both today and in the future, right from the start ZEISS
has been conducting its own comprehensive research anddevelopment activities. Its collaborations with partners such asuniversities and the work of diverse teams have a tremendous
impact on its success. The potential environmental impact andan aspiration to ensure a circular economy are increasingly
shaping the product development process.

In addition, ZEISS continuously strives to reduce the environmental impact of the entire product life cycle and leverages
fields of research from circular economy in its innovation management. ZEISS' goal is to extend the service life of its products through the relevant service, repair, and refurbishment
programs. Thus, the mandatory checklists contain two related
categories that must be taken into account during development: the environmental performance of the products and theevaluation of different sustainability requirements throughout
the entire product life cycle. Based on the company’senvironmental principles, this approach to product-integrated
environ­mental protection constitutes an obligation to adhere
to strict process management. This is how the company ensures that all ZEISS products meet the applicable environmental regulations and guidelines (see the chapter titled Environment, page 64). In particular, ZEISS ensures that:

Guidelines, structures and processes
The Product and Solution Generation Process (PSGP) is offundamental importance. It is managed by the Corporate
Research and Technology department. The rules associatedwith the PSGP are binding for all ZEISS units, define the minimum requirements for a modern development process at
the ZEISS Group and specify mandatory minimum content,
which is outlined by a checklist. The goal of this systematic
focus on the development process is to give customers theright products and solutions with regard to their expectations,benefits, quality, reliability, time and costs. ZEISS products
are only launched if the requirements defined for the development process have been taken into consideration.

» The raw materials used are harmless to human health andthe environment» The manufacture and use of products generate as few
effluents and emissions and as little waste as possible
Objectives and results
ZEISS has set itself the goal of providing innovative solutions
that focus on customer needs, make technologies more efficient and increase quality of life. In doing so, ZEISS aspires toalways manufacture safe and reliable products of high quality.
500 new patent applications were filed during the reporting
period. This underscores the company's enormous capacity forinnovation.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Product Safety
As part of the new ZEISS Agenda and the associated strategic focus on sustainability, a working group was formed toanchor sustainability more systematically in product develop­
ment. That's the only way ZEISS can reduce the negative
impact created through resource and energy usage. The
aim is to specifically evaluate energy efficiency, suitability forclosed-loop material flows or alternative materials whendeveloping new products. Some business processes were
evaluated in the reporting year, e.g. in terms of how sustainability aspects can become a focus of the product development process. This resulted in the creation of relevant pilot
projects. For example, compiling product carbon footprints
for individual products.

Environmental Technology Award in
Baden-Württemberg for Retrofitting
Retrofitting is the process whereby systems and machines
are modernized so that they meet all of today's relevant
criteria. This also eliminates the need to produce, transport and install a completely new system or machine.
This is a sustainable practice as it reduces material consumption, extends a machine's life cycle and minimizes
energy consumption. One example of this are the ZEISS
portal measuring machines that have been in use for as
many as 20 years. The matching Retrofit package enables
machines and systems to be upgraded to the latest
series technology. This permits measuring performanceenhancements, the systems are brought into line withthe currently applicable occupational health and safety
standards, and all models consume much less energy. In
particular, it is no longer necessary to handle large andheavy parts such as granite measuring tables weighing
up to 11 tons or a steel base weighing over 200 kilos. In
fact, this Retrofit package from ZEISS is so inspiring that
it was honored with the 2021 Environmental Technology
Award in Baden-Württemberg in the "Materials Efficiency" category. The jury was especially impressed that theRetrofit package is so comprehensive and complex – andincludes a traceability and circular process for replaced
or expanded parts.

A multitude of legal stipulations relating to the development,
production, approval and sales of the products serve to guarantee their safety. It is imperative that these rules are adhered
to as defective products may harm users. In addition, thecompany's reputation may suffer.
For ZEISS, the challenges come from both increasing regulatory requirements on product safety and ever greater productand application complexity. Digitalization plays a particularly
important role in this context. So at ZEISS, product safety
begins in the development stage, continues through the procurement and production process and remains an important
aspect when the product is being serviced, or being operated
by the customer.

Guidelines, structures and processes
ZEISS requires all applicable laws governing product safety to
be implemented consistently. Responsibility for product safety
and its importance for the company's success are therefore
enshrined in the ZEISS Group’s Code of Conduct. Within the
ZEISS Group, specifications and monitoring ensure compliancewith laws, standards and guidelines. Responsibility for productsafety lies with the Executive Board or the managing directorsof the individual companies, as well as with the employees incharge of a particular product. They must make the structures,
resources and necessary skills available to properly meet alllegal and internal ZEISS requirements.
An important tool for ensuring product safety is the quality
management system. It is based on the international standard
ISO 9001 and covers all ZEISS units. Multiple sites have their38

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Company Profile
and Business Modelsystems and processes certified by authorized testing authorities. To meet the specific requirements of medical devices,various sites of the ZEISS segments Medical Technology,
Consumer Markets and Industrial Quality & Research have
implemented a quality management system certified to ISO
13485. This is also verified as part of an independent, external
certification process.
And as part of a comprehensive risk assessment during
product development and production ZEISS ensures that,prior to a product launch, all measures have been taken toguarantee that all those involved can use the product safely.
Operating instructions, training sessions, security features
for products, as well as different kinds of support andopportunities for dialogue, help users operate ZEISS devices
safely. Some products require approvals before they can be
deployed. Certification by independent testing centers ensuresa high safety standard.
One set of guidelines applicable across all ZEISS units enables
employees to deal with customer issues and complaints. In
these cases, the guidelines provide for suitable measures thatare being implemented and pursued. ZEISS can thus quickly
identify potential for product improvements and take therequisite corrective measures without delay.
In recent years, information security has become a key
product safety aspect due to the increasing digitalization of
ZEISS' product portfolio. That's because ZEISS products andservices result in rising amounts of sensitive data. This includes
health-related patient information, confidential research findings and even secret drafts of electronic devices or vehicles.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

To protect this information, ZEISS relies on the trio of confidentiality, integrity and data availability. The cross-­segment
Digital Product Security Expert Group (DPSEG) launched by
Corporate Security plays a key role: it promotes discussion
among developers on security issues and defines guidelines on
the security of digital products and services. It thus drives theintegration of the principles security by design and privacy bydesign in product development in order to ensure information
security across the entire product life cycle.
Objectives and results
To ensure the safety and quality of its products, the ZEISSGroup relies on an effective management system that has
been certified accordingly at numerous sites. At the end of
fiscal year 2020/21, a total of around 100 business units
had been certified to ISO 9001 and 17 business units to
ISO 13485. Conformity with the requirements is regularly
verified at all certified locations by conducting independent
monitoring audits in line with the requirements.

3
Employees

4
Environment

5SocialEngagement

Remote Work in Practice
Working remotely is tremendously beneficial for global
companies in particular: fewer business trips mean fewer
CO₂ emissions, and new ways of learning and collaborating. ZEISS is focusing ever more on virtual reality (VR)solutions, including training sessions for service engineersfrom different areas: equipped with a headset, controllers and sometimes with VR headsets, the engineers canuse these virtual devices to get to know all the relevant
components and practice tricky tasks. This helps them
gain insights into complex machines and thus develop
a more well-oiled routine for their service missions. The
first project was rolled out in 2019 and there's now anentire portfolio dedicated to virtual training options.

In the reporting period, ZEISS anchored standards to integrate
ongoing security inspections in software and product develop­
ment processes. Moreover, a process for dealing with safetyincidents related to information security was also created andpiloted. In the fiscal years ahead, the process will be rolled out
in the ZEISS Group. Moreover, as part of the Security Engineer
Program, a training concept was devised to provide employees
at the ZEISS units with targeted professional development.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Procurement and Supplier Management
Due to the significant amount of value created along the
supply chain, the procurement process is critical to the ZEISSGroup’s long-term success. Purchasing organizations aroundthe globe source both production and non-production materials from local and international suppliers. ZEISS business units
generated around 45 percent of total purchasing volume with
652 strategically relevant suppliers who are the focus of arisk-based approach and are located in the following regions:90 percent in EMEA (Europe, Middle East, Africa), 3 percent in
APAC (Asia/Pacific), and 6 percent in the Americas.
Guidelines and structures
The company works very closely with its global networkof suppliers to reduce the negative effects of its business
operations. To do this, ZEISS takes a risk-based approach tothe systematic management of suppliers with regard tosustainability. Environmental and social aspects play an increasingly important role in the selection of and collaboration
with suppliers. In complex supply chains, environmental
pollution, inadequate occupational health and safety standards, human rights violations and child or forced labor all
represent risks that ZEISS wants to proactively address.
In recent years ZEISS has been driving the implementationof the five core elements of the German government's
National Action Plan for Business and Human Rights (NAP).
This way, ZEISS has already taken steps toward adhering to
the associated German Supply Chain Act (LkSG) (see page42). A newly formed project group is focusing squarely on the
LkSG. It is working on a method to compare the requirementsof this law with the existing processes and to prepare theintegration of the required measures into these processes.

The Supplier Sustainability Team, which operates at Grouplevel within the Supplier Quality department, pools different
activities for the operational implementation of sustainability aspects in supply chain management, thus supporting
the ZEISS units. The Supplier Quality Expert Panel acts as asteering committee. The panel is composed of representatives
from the ZEISS units and the Head of the Supplier Quality
department. Group Management is informed of and involvedin corresponding reporting lines.
Moreover, a variety of working groups have been formed
to drive the integration of certain sustainability topics in ZEISS'
supply chain. A newly formed cross-functional working groupis focusing on designing supplier management in relation todifferent sustainability aspects, from risk management andthe reduction of packaging to supplier development. Anotherworking group is focusing on conformity with different
international laws related to human rights. These include the
British and the Australian Modern Slavery Act.
ZEISS categorically rejects all forms of forced and child laborand actively works to ensure that environmental and social
standards are met at its sites and in its supply chain. ZEISS
suppliers must adhere to the provisions listed in the inter­nationally recognized Code of Conduct from the Responsible
Business Alliance (RBA). These serve as minimum standards
for human rights, health and safety, environmental protection
and business ethics. The Code of Conduct is based on the
UN Guiding Principles on Business and Human Rights. Added
to that are international human rights standards like theInternational Labour Organization (ILO) standards.

Processes
Within the scope of the risk-based approach at ZEISS, relevant
sustainability issues are also a part of the supplier management process. Furthermore, processes are needed in order toraise awareness for sustainability requirements in the supply
chain both internally and externally and to address any violations of these requirements.
» New suppliers are selected on the basis of a self-assessment
questionnaire that includes questions related to occupational safety, environmental protection, energy efficiency andthe acceptance of the RBA Code of Conduct or a similarcode of conduct. Strategically relevant suppliers must recognize the RBA or a similar code of conduct and adhere toit. They are also obligated to share the standards with theirsub-suppliers and contractors. As a rule, ZEISS does notenter into any business relationship with any suppliers who
violate human rights. Information sharing and agreements
pertaining to services, quality and various sustainability
aspects are supported by the supplier portal.
» In accordance with the established risk indices and theannual purchasing volume, strategic suppliers are assessed
to determine if there are any potential sustainability risks.
This risk assessment is based on the established Corruption
Perceptions Index, the Human Development Index, theEnvironmental Performance Index and on industry risks.
In order to plan further activities, a list of priorities will becompiled in consultation with the ZEISS units and actionplans discussed. This makes it possible to define further
action such as conducting on-site sustainability audits atparticularly high-risk suppliers' sites. During these audits

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Company Profile
and Business Model

compliance with the RBA Code of Conduct is assessed. In
preparation for an on-site sustainability audit, suppliers are
asked to complete a Sustainability Supplier Self-Assessment
Questionnaire to assess their own sustainability performance. The sustainability survey on the ZEISS Supplier Portal
is part of the supplier self-assessment.
» Strategically relevant suppliers undergo an annual evaluation using a software tool that includes occupational safety,
environmental protection and energy management criteria.
Aspects such as occupational safety, fire prevention andenvironmental management have been part of cross-divisional supplier quality audits since 2012.
» In the event of insufficient compliance with ZEISS’ sustainability requirements, an action plan is agreed upon, with thecompany monitoring and overseeing its implementation.
The requirements must be made known so that they can be
met. To this end – and in order to encourage people to act
sustainably at the company – ZEISS has created an e-learning
module for employees and suppliers on the RBA Code of
Conduct. One focus is on upholding human rights.
Internal and external stakeholders can use the ZEISS Integrity
Line whistleblower system on the company's website to reportany human rights violations within the ZEISS supply chain (seealso the chapter on Integrity and Compliance on page 32).
Conflict Minerals Reporting
Within the scope of its due diligence obligations, ZEISS has alsoestablished a process for identifying and assessing risks in theStrategy andSustainability

1Integrity andCompliance2
Products andValue Chain

supply chain with regard to dealing with conflict minerals. Conflict minerals are mined in conflict or high-risk areas, sometimes
under illegal, inhumane conditions. ZEISS does not directly
purchase metals such as tantalum, tungsten, tin or gold, butdoes demand that its direct suppliers do not use any ores fromconflict areas. To support this effort, ZEISS collects risk-based
information. As part of its annual reporting the company
relies on the globally recognized standards of the Responsible
Minerals Initiative (formerly known as the Conflict-Free Sourcing
Initiative) in its communications with relevant suppliers. ZEISS
uses the available means and information to verify data on
these smelting works in order to identify possible risks and raise
supplier awareness for this topic.

3
Employees

4
Environment

5SocialEngagement

Approximately 50 supplier audits were performed worldwide,
covering aspects related to occupational health and safety andenvironmental management. International sustainability audits
could not be performed due to the pandemic. Going forward,
ZEISS aims to take additional needs-based measures.
No violations or complaints pertaining to human rights in the
supply chain or at its own sites were reported via the ZEISSIntegrity Line.

Objectives and results
To systematically anchor social and environmental sustainability in the supply chain, an international working group
was formed as part of the cross-divisional ZEISS sustainability
program in the current fiscal year. It has created a program,defined specific targets for supplier management and suggested additional measures that can create an impact in the
supply chain as part of the ZEISS Agenda.
At the end of fiscal year 2020/21 72 percent (prior year: 91
percent) of the 652 (prior year: 510) strategically relevant suppliers had replied or confirmed via the supplier portal that they
will comply with the RBA Code of Conduct or an equivalent
code of conduct.1 ZEISS assessed the sustainability risks posedby the strategically relevant suppliers using the aforementioned risk assessment. In order to take into consideration
new and changing requirements, ZEISS is currently working
on adapting the sustainability risk assessment for suppliers.

Due to the rising number of strategically relevant suppliers and the expansion of
the supplier portal, the cover rate fell in the reporting year.

1

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Company Profile
and Business Model

Focusing on Human Rights
Due Diligence
In June 2021 the German Parliament passed
the German Supply Chain Act (LkSG). This
resulted in affected companies, including ZEISS,
having to integrate due diligence into theircorporate processes by 2023 to safeguard
human rights. ZEISS has already taken someaction toward ensuring this.
The LkSG is closely based on the five core elements of theGerman National Action Plan on Business and Human Rights(NAP) from 2016 that aims to uphold human rights in the supply
chain and in the company's own processes. Companies basedin Germany were called on to voluntarily implement the NAP.
However, one survey showed that only around one fifth of thecompanies surveyed had sufficiently implemented the various
elements of the NAP. This prompted the law to be drafted. In
some ways, the new LkSG goes beyond the NAP. In recent years
ZEISS has been working on implementing the NAP's coreelements, so the first steps toward compliance with the
LkSG have already been taken. In order to meet all the requirements of the LkSG, in the reporting year ZEISS formed a new
project group. The project group is responsible for comparing
the requirements with the existing processes, compiling aroadmap for taking the requirements into account and making
suggestions to integrate necessary measures. The processes are
set to be adapted in fiscal year 2021/22. The project group also
holds discussions with internal stakeholders who keep an eye
on other legal requirements like the British and the AustralianModern Slavery Act.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Implementing the German National Action Planfor Business and Human Rights (NAP)

1.

2.

Policy statement on the respectof human rights The ZEISS Codeof Conduct makes explicit reference
to the ILO's core labor standards
and recognizes the principles of the
RBA Code of Conduct. ZEISS does
this to emphasize that human rights– such as the ban on forced labor or
slavery, and human trafficking, theban on child labor and discrimination – apply to employees and business partners alike. Further information is available in the chapter titled"Integrity and Compliance" startingon page 31.

Procedure for determining actual and potential negative
effects on human rights (riskanalysis): Considering ZEISS' business environment, the company
has developed approaches for determining cases of actual and potentially disadvantageous effects onhuman rights. For the first time infiscal year 2018/19, HR staff wereasked about human rights risks. It
was found that employees believe
there is a low risk of human rights
violations at ZEISS. Nevertheless, toraise awareness for potential risks,measures included a new e-learning
course for employees and suppliers.
As part of the annual risk analysis,
potential risks relating to the human rights of strategically relevant
suppliers are assessed using vari-

ous indices and additional criteria
as defined by ZEISS (see Processes,
page 40). In particular, violations ofoccupational health and safety regulations are possible risks that could
arise in ZEISS supplier industries.

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BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3.

4.

5.

Measures for avoiding negative
effects on those concerned,
and evaluating measures: The
results of the risk analysis are usedin the further planning of systematic measures. On this basis, ZEISS
carries out sustainability audits on
its suppliers and supports their efforts to create appropriate plans forcorrective measures. In the past
negative effects were identified in
the form of deficiencies in the areasof occupational safety and transparency concerning working conditions.

Reporting: The ZEISS Group's exist­ing reporting and communications
formats provide the appropriate
amount of information on the identified risks and measures. The Sustainability Report, the ZEISS website
and the Non-Financial Report are
the key reporting formats.

Complaints mechanism: Since
November 2018, the global ZEISSIntegrity Line has been available tointernal and external stakeholders
for submitting information on possible human rights violations. In consultation with stakeholders such as
the Works Council, it is available in
23 languages on the ZEISS website,
creating an anonymous, effective
complaints mechanism to supplement the existing processes for
dealing with suspected violations(see the "Compliance" chapter on
page 32).

3
Employees

4
Environment

5SocialEngagement

43

BACK TOCONTENTS

03

EMPLOYEES44

BACK TOCONTENTS

Company Profile
and Business Model"More than 35,000 people in almost 50
countries work for ZEISS in a variety of areasand positions. We are all united by sharedvalues, the drive to pursue new avenues and an
approach based on responsibility and equality.
All of that makes us an attractive employer for
ambitious talents as we strive to counter the
shortage of skilled workers."
Susan-Stefanie Breitkopf, Head of Corporate Human Resources,
Carl Zeiss AG

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Success throughEmployees

Employee Involvement

Precision, innovation, and unparalleled quality can only beachieved with motivated and qualified employees. In light ofdemographic change and the increasing shortage of skilledworkers, the diversity and equal opportunities championed at
the company are key competitive advantages. ZEISS is facingthese challenges through clear approaches to personnel andcultural development and by pursuing a global recruitment
strategy. This is set to make the ZEISS Group even more customer-oriented, more competitive and more digital. Further
important aspects of ZEISS' responsibility toward its employees are co-determination within the company, and promoting
a healthy work-life balance.

The more involved employees feel at the company, the more
motivated they will be. In Germany, co-determination is thetool used for involving employees. As a globally operatingcompany, ZEISS also takes into account the different agreements on co-determination concluded around the world.
Moreover, ZEISS regularly conducts a global employee survey
to keep its finger on the pulse of the general mood.

In the reporting year, the COVID-19 pandemic presented ZEISS
employees with a new set of challenges. ZEISS was able torely on existing plans for Group-wide crisis management andon the experiences and tools established in the prior year. Digital tools for virtual collaboration and flexible working models,alongside other measures like an adapted process for shifthandovers in production, have helped to maintain business
operations.

Guidelines, structures and processes (GRI 102-41, 102-43)
More than 35,000 people in almost 50 countries work for
ZEISS. The corporate function Human Resources is the main
partner for dialog and negotiation for employee representatives and the point of contact for the HR departments at all
ZEISS units. It works with HR managers and division representatives to define standards and procedures for strategic andoverarching areas of activity and implements them within thescope of the department’s functional management worldwide.
Operational co-determination is firmly enshrined at ZEISS in
Germany. Alongside the principles contained in the Foundation
statutes, it is one of the basic conditions for ensuring a highlevel of employee satisfaction. ZEISS negotiates with therespective employee representatives on those issues regulated by legal stipulations or collective wage agreements. In
addition, ZEISS regularly discusses planned changes withincommittees made up of employee representatives, thus going
above and beyond the statutory requirements in Germany.
In accordance with the provisions of the German Co-Determination Act, half the members of the Supervisory Board ofCarl Zeiss AG represent the sole shareholder – the Carl Zeiss

45

BACK TOCONTENTS

Company Profile
and Business Model

Foundation – while the other half represents the employees.
The Executive Board regularly reports to the Supervisory Board
on current issues and planned operational changes. The
European locations of Carl Zeiss Vision International GmbHsend employee representatives to the European Works
Council (EWC).
Objectives and results
ZEISS aims to further strengthen and expand the relationshipbetween the company and its employees. Every two years,
ZEISS uses a global and anonymous employee survey – Pulse
Check – to measure the development of the corporate culture
and the implementation of its associated strategy. The survey
is also a key indicator of ZEISS' attractiveness as an employer
and it reflects the prevalence of the values SERVE – EMPOWER– ACT – WIN in day-to-day operations. The last Pulse Checksurvey in 2020 showed that 84 percent of people enjoy working at ZEISS and that 75 percent of them would recommend
ZEISS as an employer. Further information is available in the
ZEISS Sustainability Report 2019/20. The next Pulse Check will
be run as scheduled in 2022.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

In the past, ZEISS has paid out a bonus to all eligible employees, allowing them to share in the company's successful
business development. For fiscal year 2020/21 a record profit
participation bonus in the amount of 4,200 euros was paidout to eligible employees at the company's German sites atthe end of the reporting period in October 2021. Some ZEISS
sites outside Germany have their own country-specific rulesthat also allowed employees to share in the success of fiscal
year 2020/21.

3
Employees

4
Environment

5SocialEngagement

Global employee structure

Total

2020/212019/20

2018/19

35,37532,201

31,260» Part-time employees

1,863

1,787

1,725

» Employees with fixed-term
contracts

1,698

1,512

1,511

Trainees and students in acooperative study program

552

520

517

Contract workers

1,103

967

952

New recruits1

5,025
34 %

Percentage of female employees

34 %

34 %

Turnover rate2 (Germany)

2.6 %

1.7 %

1

T he term "new recruits" refers to ZEISS employees worldwide, excluding GOM
GmbH and Carl Zeiss Vision Portugal. This key figure is being reported for the
first time in FY 2020/21. It does not include trainees or temporary employees.

2T he term "turnover rate" refers to all ZEISS employees in Germany excluding
those at GOM GmbH and was first published in FY 2019/20. The KPI does notinclude resignations due to limited-term employment contracts, retirement, early
retirement, or death.

Employees by region

Germany

2020/212019/20

2018/19

14,848

13,692

13,310EMEA (excl. Germany)

4,818

4,628

4,589

Americas

7,913

7,010

6,950

APAC

7,796

6,871

6,411

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BACK TOCONTENTS

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Attracting and Developing Employees
ZEISS invests continually in the recruitment, promotion andprofessional development of its employees, showcasing
itself as an attractive employer in the battle to gain talented
individuals and counter the shortage of skilled workers. It
always aims to recruit many skilled workers and managers
from its own ranks. This creates attractive opportunities for
professional development and helps qualified, motivatedemployees stay loyal to the company over the long term.
Structures, guidelines and processes
Corporate Human Resources is responsible for training,strategic personnel development and talent management.
It works closely with local HR departments within functional
teams, service areas, and on projects. CurioZ is the ZEISS
venture that focuses on learning at ZEISS. Through the CurioZ
digital learning platform, ZEISS contributes to the professional development of its employees. Using a variety of formats
and offerings – ranging from in-person and online courses
to blended learning, e-books and audio books – CurioZ
specifically promotes the expansion of expertise, knowledge
and skills. In order to attract new employees, the company isalso leveraging target group-oriented global and local online
channels like LinkedIn, YouTube, WeChat and Research­Gate.
It is also taking part in careers events and giving presentationsat universities to elevate its reputation as an international
employer. The measures' efficacy can be seen in the consistently positive results the company achieves in employer
rankings. These include the Trendence list of Germany's most
attractive employers for graduates and young professionals,
and the certifications "Great place to work" in India and"Top Employer“ in China.

ZEISS offers plenty of training opportunities and works withvarious universities with cooperative education programs. In
the reporting period, a total of 125 young people began a
vocational training program or a cooperative study program at
the German sites in Göttingen, Jena, Oberkochen and Wetzlar.
Students are being trained in areas such as industrial mechanics, precision optics, mechatronics and industrial business
management, or completing a cooperative study program inbusiness information systems, international business or data
science. With its sophisticated cooperative study offering,ZEISS is contributing to the development of society, especiallyat its German sites.

Employees also took the opportunity to work abroad for
ZEISS to further develop their skills in fiscal year 2020/21. At
present, 37 employees from Germany are working in 18 countries worldwide. At the same time, 18 employees from abroad
have been assigned to work in Germany. Assignments in third
countries, which see US-based employees working in places
like China or being posted from India to Mexico and Japan,
are becoming increasingly important. Plans for assignments
abroad have been impacted by the COVID-19 pandemic, withsome taking longer to implement and others having to be
postponed. In general, however, a slightly positive development was observed.

Numerous programs also support up-and-coming scientists andseasoned professionals in their careers. They pay special attention
to individual skills and the further development of competencies.
One focus is on the development of managers. In addition to a
mandatory program to prepare managers for their first leadership experience, ZEISS promotes job rotation for its employees –including assignments abroad. ZEISS also offers attractive careers
for R&D, innovation, and service and support staff.

In the year under review, the CurioZ team advanced its learning platform, defining focus learning paths for cross-discipline
and increasing relevant knowledge and skills. This includes
topics related to the digital transformation and entrepreneurship. Furthermore, the "Learning from Experience" initiative
was launched. It enables the formation of expert teams witha view to sharing individuals' knowledge with the entire company. They work with CurioZ to come up with standardized
solutions and processes as well as best practices for ZEISS.
Digital participation for employees in production and operational areas is important to ZEISS. In the reporting year thefoundations were laid to offer all these employees in Germany
an electronic account to access their digital ZEISS workstation
application via a variety of devices. The project is scheduled
to be complete by fiscal year 2021/22.

Measures and results
At the end of the reporting period, ZEISS employed a total of
522 vocational trainees and students enrolled in a cooperative study program worldwide (2019/20: 520). In fiscal year
2020/21 around 490 (2019/20: 500) young people completed
a technical or business-related internship at the company's
German sites or wrote their thesis at ZEISS. In addition, roughly
188 (2019/20: 200) high school students had the opportunity
to explore their future career options as part of a high schoolinternship.

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Company Profile
and Business Model

BACK TOCONTENTS

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Diversity and Equal
Opportunities
Figures on Learning – Worldwide

New Learning for the Digital Workplace

Figures on the use of the ZEISS CurioZ learning platform infiscal year 2020/211» Number of active users worldwide who completed at least
one online course: 27,148 (14,754 in Germany)1» 213,130 online courses completed worldwide(78,866 in Germany)» Number of downloads from the ZEISS e-library:
23,858 (of which 18,280 e-book downloads and 5,578
audio book and MicroTalks downloads)

Figures on learning in Germany
2020/212019/20

2018/19

Total
Share of men
Share ofwomen

94,73573%
27%

91,23074%
26%61,740
74%
26%

Total
Total
number of participant Share of men
days2
Share ofwomen

34,92275%
25%

30,56076%
24%

24,722
76%
24%

Fiscal year (FY)
Total no.
of completed
courses	The number of active users refers to ZEISS employees. Customers andsuppliers, who can also use the platform, are not included in the figures.
2	Based on the estimated length of the training course (one participant day
corresponds to 7.5 training hours) without travel or preparation time1

The digital training program "Digital Transformation @ZEISS" aims to prepare employees for the digital transformation. The focus is on digital business models that allow
employees to transform their day-to-day work and create
added value for ZEISS. Participants can either tackle theonline learning modules individually or in small groups,
as team challenges. The training program is enrichedwith expert talks from key figures in business and science,
allowing ZEISS to share vast amounts of knowledge on
the digital transformation. This basic program will be
supplemented with additional training paths in the future,
which will be more closely tailored to the needs of theparticular target groups.

With over 35,000 employees in almost 50 countries, diversity
is part and parcel of everyday life at ZEISS. The company isshaped by a diverse array of skills, mentalities, leadership andwork styles, cultural backgrounds and lifestyles. This isa great advantage because diverse teams are more creativeand solution-oriented, which helps them innovate. That's why
the company is continuing to focus on equal opportunities
while actively promoting diversity among its workforce.
At the same time, diversity is another key to the global successof an international company like ZEISS. That's because em­
ployees know the markets, understand customers’ different
needs and can respond to business partners’ cultural practices
and customs. This plays a major role in securing local acceptance and trust for the company.
Guidelines, structures and processes
Around the globe, ZEISS stands for diversity, tolerance andopenness, and categorically rejects all forms of violence. These
values help to create a peaceful, prosperous and modern worldin which everyone is equal before the law.
The company rejects intolerance, racism, violence and extremism. This commitment is anchored in the Foundation statutes
and in the ZEISS Code of Conduct. It prohibits all forms of
discrimination, whether due to "ethnic or social origin, skincolor, gender, age, marital status, disability, religion, nationality,
sexual identity or any other features." The ZEISS Integrity Linewas created to assist in the event of violations of the Code of
Conduct. It can also be used to provide information anonymously. Further information can be found in the "Compliance"
chapter on page 32.

48

BACK TOCONTENTS

Company Profile
and Business ModelZEISS strengthened its commitment to diversity by signing theDiversity Charter in July 2017. This business initiative aims topromote recognition, appreciation and the inclusion of diversity
in the German workplace.
Corporate Human Resources is responsible for managing
activities that promote diversity. It has the support of multiplecommittees and reports to the Executive Board. Executives
and management are obliged to model integrity through theirown behavior, inform employees about the rules, monitor
compliance with these rules and rectify any violations. Local HR
departments assist Corporate Human Resources with clarifying
and resolving any violations.

Mentoring for Greater Diversity
The Diversity@MED initiative includes a mentoring
program that 50 mentor pairs took part in during the reporting year. As for the mentees, women in management
positions in particular took part alongside up-and-coming
managers. One aim of the mentoring program is to shift
perspectives and reassess issues. Learning from others'
experiences is another area of focus. Moreover, diversity
workshops were run at the segment to raise awarenessfor blind spots in their own perception. After all, studies
show that these unconscious prejudices may mean that
not all talents are given the same opportunities and sovaluable skills and good ideas are not taken into account.
The Diversity@MED initiative is designed to help step up
diversity in the teams.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

When it comes to its strategy for promoting diversity, ZEISS
focuses on five aspects in particular:
1. Professional background: Employee acceptance fordifferent professional careers and educational backgrounds.
2. Internationality: Employees from a wide variety ofcultures and nationalities deserve to work in an atmo­s­phere of mutual respect and esteem.
3. Generations: The work environment needs to beorganized so that different generations can work together
successfully.
4. Gender: Everyone should have the same opportunities,
regardless of gender.
5. Workplace culture: An open and flexible culture enables
all employees to achieve the right work-life balance.

3
Employees

4
Environment

5SocialEngagement

Objectives and results
ZEISS aims to ensure that all employees can collaborate
successfully and appreciate one another – regardless of theirprofessional background, age, gender, origin and working
culture. To strengthen the diversity that ZEISS embraces, infiscal year 2020/21 the company and its employees in Germany
continued to pursue the following initiatives:» Cooperation network for international employees and theirfamilies» ZEISS Women Award for outstanding students of IT,
business informatics and media informatics» A network for new employees that enables networking
across divisional and departmental boundaries, promotes
knowledge sharing and helps new employees settle in at
ZEISS
Due to the COVID-19 pandemic, ZEISS has rolled out additional measures in the virtual realm. Examples include an interview
with the Head of HR at the ZEISS Medical Technology segment
and a well-known entrepreneur, or the Diversity Calendar in
the USA. In order to raise awareness among employees avariety of diversity topics were presented in specific months.

49

Company Profile
and Business Model

BACK TOCONTENTS

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Work-life Balance
Global age structure of the ZEISS Group in FY 2020/21
Age distribution

Male

FemaleTotal

Under 30

4,449

2,520

6,969

30 to 49

13,5706,826

20,39650 and older

5,412

2,598

8,010

ZEISS Women Award for Young Womenin IT
Women are still very much underrepresented in IT. The
ZEISS Women Award therefore aims to draw attention to
women in IT and present them as role models. The ZEISSWomen Award was born of the Saxonia Woman Award
that has been presented since 2011. If you're a woman
and are currently working on your bachelor's, master's or
PhD thesis, then you're eligible to apply. The winners are
selected by a jury composed of successful women fromthe worlds of science and business. In 2021 Elke Büdenbender, wife of German president Frank-Walter Steinmeier, became the award's sponsor. The three ZEISS WomenAward winners received staggered cash prizes.

The opportunity to balance work and family life at different
stages of one's personal life and career is a key part of how
ZEISS supports its employees. The goal is to increase employee
satisfaction and the company's appeal as an employer. Not
least of all due to the COVID-19 pandemic, the topic of "workand personal life" has taken on lasting importance. This leads
to greater needs in terms of flexible working hours and telecommuting through the largely still limited childcare options.

Objectives and results
In addition to expanding flexible working hours and workplace models, in fiscal year 2020/21 in Germany, the works
council and the employees implemented measures that makeit easier to balance work and family life:

Guidelines, structures and processes
Overall responsibility for promoting a work-life balance lies
with Corporate Human Resources. Usually, needs are assessed
and relevant measures are taken in a decentralized way at
the regional companies. In Germany the Human Resources
department is currently in discussions with the works council,
the employees and representatives from the different Germansites. In fiscal year 2020/21 the focus was on support forfamilies, particularly during the pandemic-induced school anddaycare closures.

» Reduced-price access to children's vacation programs andswimming courses for employees' kids

» Launch of a digital childcare offering for all employees andincrease in the number of available daycare places» Expansion of the consultation offering for employees caring
for family members and continuation of consultation offering on childcare
The employees and their families who have been affectedby the COVID-19 pandemic received consultations and took
advantage of further work-related and individual measures.

By offering Group-wide agreements on flexible workplacedesign and working hours, ZEISS is helping its employees tocombine their work and family life in the best possible way.
Agreements on working models are reached with the relevant
works council.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Occupational Health and Safety
For ZEISS, guaranteeing a healthy work environment and asafe workplace are fundamental obligations toward its employees. This obligation also applies to employees of third-party companies acting on behalf of ZEISS. ZEISS promotes its
employees' health and performance through comprehensive
safety measures and occupational health examinations. In
doing so, the company reduces compliance risks and ensures
productivity.
One of the biggest challenges in terms of occupational healthand safety in the reporting year was in dealing with the
COVID-19 pandemic. The structures and processes createdin the previous year continued to be based on these foundations. The previous year's measures continued to apply.
They included compliance with social distancing and hygiene
rules, mandatory masks, travel guidelines and rules on the useof shared spaces. The defined measures were implemented
by segment-specific task forces, meaning the segments andcountries were able to respond according to their particularsituation as needed.
Guidelines, structures and processes
Occupational safety and protecting the health of all employees are principles enshrined in both the Carl Zeiss Foundation
statutes and the ZEISS Code of Conduct. At Executive Board
level, the Chief Financial Officer is responsible for this topic.
The respective managing directors of all ZEISS business units
are responsible for the continuous improvement of occupational health and safety performance as well as the implementation of Group-wide policies. Group-wide guidelines set out
the obligations and state that the management must provide
evidence at the annual management review that:» All relevant laws and stipulations related to occupational
health and safety have been complied with, fulfilled andmonitored» All employees have taken part in general training on occupational health and safety
The operational responsibilities of all ZEISS employees andmanagers with regard to occupational health and safety
are outlined in a corporate policy. A Global Coordinator for
Occupational Health and Safety (OHS) has been appointed.
All ZEISS Group entities are obligated to appoint an OHS
Officer in writing. The duties of the OHS Officer may differ
as a result of local legislation, but always include advising
management and assessing occupational health and safety
risks. Appropriate training is organized by each company unit.
Furthermore, all ZEISS employees are called on to actively
promote occupational safety and report risks to their supervisors or the respective OHS Officer. In addition to reporting near accidents and unsafe situations, the relevant lineman­agers at German sites are obligated to carry out a cause
analysis and define and implement measures if necessary.
On request, occupational safety experts and/or company
physicians can assist with defining these measures.
To ensure ongoing communication on occupational healthand safety topics, the Chief Financial Officer, Head of Corporate Auditing, Risk and Quality Management and the global
OHS coordinator meet at regular intervals. The Chief Financial Officer is informed about the frequency and severity ofwork-related accidents at ZEISS. A globally consistent KPI was
designated for this purpose.

In Germany, the Head of Occupational Health and Safety
takes on an advisory role for all locations pursuant to Germany’s
Act on Occupational Physicians, Safety Engineers and Other
Occupational Safety Specialists (Arbeitssicherheitsgesetz).
To this end, a set of rules has been compiled to regulate
fundamental processes and procedures. All companies inGermany are obligated to implement them and they havebeen integrated into the ZEISS management system. As a rule,occupational health and safety management at ZEISS sites
in Germany encompasses all sites and covers the non-ZEISS
employees commissioned by the sites. Therefore, contractors
must consent to ZEISS' directive on external companies priorto accepting the commission.
As per the German Law on Occupational Health and Safety,
ZEISS must form safety committees (OSCs) at each business
unit. They are to meet every quarter to discuss topics related
to occupational health and safety and accident prevention.
Since at least one representative from each company management team belongs to an OSC, it is not only an advisory committee, but also a decision-making body. The committees also
include members of the works council, company physicians,
occupational health and safety experts, safety officers and, if
applicable, a representative for handicapped employees.
A total of 19 business units at three German sites and teninternational ZEISS sites are certified in accordance with ISO
45001, the international standard for occupational health andsafety management systems. An occupational health and safety
management system based on the requirements stipulated in
ISO 45001 has been implemented at all other ZEISS sites inGermany.

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BACK TOCONTENTS

Company Profile
and Business Model

Each month, 30 business units in Germany and 30 inter­national production sites with a total of around 28,300
employees supply statistics on the frequency and severity ofwork-related accidents. The OHS coordinator reviews thestatistics together with the head of the business unit and theemployee who submitted the figures. Monitoring plausibility improves reporting quality and more firmly anchors the
topic of occupational health and safety within the company.
The frequency and severity of work-related accidents among
employees who primarily work in administration and sales
outside of Germany are currently not included in the data
because of their lower estimated risk potential.
Occupational Healthcare Management (BGM) in Germany ismanaged by Corporate Human Resources. Initiatives are also
being run at sites worldwide. In the year under review, ZEISSin Germany forged a partnership with health insurer BARMER,
whereby employees are offered preventive health measures
free of charge. These include tailored measures for a variety of
employee groups, such as production employees working in
shifts or out in the field. Corporate Human Resources ensuresthat the offer is available to all employees in Germany.
Due to the COVID-19 pandemic, thus far the focus has beenon virtual offerings. These include access to an online gym
as well as webinars like "Active lunch break," "Stress relief fortrainees" and "Resilience for managers."

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain"ZEISS Vaccinates" Pilot Project
As of May 2021, ZEISS was one of twelve companies totake part in a pilot project for administering COVID-19
vaccinations in Baden-Württemberg. As per the conditions stipulated by the Ministry for Social Affairs in
Baden-Württemberg, ZEISS and the Group Works Council
have resolved to limit vaccinations for employees to thoseworking in the production areas at the Ostalb sites. It was
not usually possible for these employees to telecommuteand thus to help protect against infection in the workplace. Over 1,100 ZEISS employees from the production
areas at the main and south factories in Oberkochen andat the Aalen site had the opportunity to avail of the voluntary vaccinations during the first phase of the vaccination drive in Germany. This restriction was later lifted and
ZEISS was able to offer the voluntary COVID-19 vaccinations to all employees at its German sites. ZEISS supported
many vaccinations at the ZEISS sites via its own medical
personnel in Oberkochen, and with many volunteers
on-site. ZEISS was thus able to help combat the pandemic. Around 7,000 vaccination doses were administered in
the year under review.

* However, due to reporting cultures that vary from country to country, it can be assumed that some work-related accidents are
not reported in the same way as they are at the ZEISS locations in Germany. Such effects are not factored into the performanceindicator of reported work-related accidents.

3
Employees

4
Environment

5SocialEngagement

Since summer 2021 the working groups in Germany comprising healthcare professionals, works council members,
representatives for handicapped employees, occupational
health and safety, the company medical center and HR departments have had access to a "toolbox." The working group
selects and implements healthcare measures for employees.
These include prevention courses, modules for healthcare days
or offers for specific target groups on exercise, nutrition andmental health. Corporate Human Resources supplies the toolbox that accompanies them and helps to manage their work.
Objectives and results
The ZEISS Group's main objective is to reduce the frequency
and severity of workplace accidents. The Executive Board aims
to achieve a lost time injury frequency rate (LTIFR)* of less than
2.25 for all the ZEISS Group's production units by the end of2023. The interim goal for fiscal year 2020/21 to achieve avalue of less than 3.0 has been met (LTIFR = 2.32*). This meansa significant improvement was made compared to the previous
year (LTIFR = 2.65).
There were no fatal work-related accidents in the reportingyear. Most of the accidents that occurred within the ZEISSGroup in Germany were caused by personal conduct such as
not following work instructions or not paying attention. ZEISS
primarily responds to this challenge by organizing training for
managers and running information campaigns to raise employee awareness. The COVID-19 pandemic and the working
model adjustments it gave rise to, e.g. telecommuting, had no
major impact on the accident figures in fiscal year 2020/21, as
evidenced by the data.

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The ZEISS Group aims to increase the level of standardizationin its internal processes related to occupational health andsafety. For this reason, in fiscal year 2020/21 the launch of thepreviously piloted occupational health and safety management software was expanded to all German sites. This means
work-related accidents, near accidents and critical situations
can all be reported and monitored. This also simplifies theplanning and documen­tation of safety training, the creationof risk assessments and documentation and ensures full transparency of the measures derived from occupational healthand safety and fire safety inspections. 679 managers andoccupational health and safety officers were trained to use the
new software in the past fiscal year. Following implementationin Germany, the goal is to use the software to establish an
accident reporting system worldwide. This is set to be completed by the end of fiscal year 2021/22.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Performance Indicators for Occupational Health and Safety in Fiscal Year 2020/21
LTI

LTIFR

SVR

LCDR

Target hours

Germany

70

2,38

10,4

24,7

29.403.275

EMEA (excl.
Germany)

26

5,32

15,2

80,8

4.885.747

Americas

27

1,84

53,4

98,5

14.635.888

APAC

6

0,90

14,6

13,2

6.647.893

Total

129

2,32

20,5

47,7

55.572.803

» Lost Time Injury (LTI): A severe workplace injury that must be treated by a physician
who is neither employed by nor under contract with ZEISS, and which causes the person
affected to be unable to work on the following day (absence due to injury ≥ 1 calendarday).
» Lost Time Injury Frequency Rate (LTIFR): Work-related accidents per one million
target working hours (corresponds to 500 full-time employees) in one fiscal year
(frequency). Commuting accidents are not included.
» Severity rate (SVR): Describes the average severity of all accidents that occurred in a
specific time period.
» Lost Calendar Day Rate (LCDR): Describes the number of lost calendar days (LCD) per
one million target hours worked (this corresponds to 500 full-time employees) within a
specific time period.
» Target hours: Total number of target working hours.

53

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ENVIRONMENT54

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and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Efficient Use of Natural Resources"Our central goal is to further unite economy
and ecology – from product development toapplication at our customers' sites. Climatechange is of course the company's primaryconsideration. This is a topic where we took amajor step forward in the past year in termsof our green energy supply."
Dr. Uwe Hamm, Head of Chemicals / Materials andEnvironmental Officer, Carl Zeiss Jena GmbHRaw materials, semi-finished goods and preliminary products,
as well as energy and water, are all used to manufacture thecompany's various products. Emissions, wastewater and waste
are generated that cannot subsequently be reused in the
manufacturing process. The use of natural resources comeswith various challenges, including a scarcity of the necessary
natural resources or a negative impact on the environment
resulting from the extracting, processing and disposing ofmaterials. In addition, the rising price of energy, raw materials,
other materials, or waste disposal can adversely affect thecompany's competitiveness.
ZEISS therefore optimizes its business processes in line withenvironmental and economic aspects and organizes them sothat as few resources as possible are required. ZEISS also takes
environmental aspects into account, from product development through deployment at customer sites in order to render
many end-of-pipe activities superfluous (see page 37).
Guidelines, structures and processes
ZEISS continues to work on reducing its consumption andemissions in order to counter the negative impact on theenvironment and our climate. To do this, in the reporting year
the company set itself new environmental targets with regard
to water, waste, energy and CO₂ emissions that it aims toachieve by fiscal year 2024/25.
ZEISS began taking the more efficient use of resources into
consideration early on. Back in 1998 the company set out
globally applicable environmental principles. To implement
them, the company uses an environmental management
system in accordance with the international ISO 14001

standard. The environmental performance requirements arelaid out in a standard operating procedure on environmental
protection that is binding throughout the Group.
The Chief Financial Officer of Carl Zeiss AG bears overall
responsibility for the implementation of the ZEISS Group's
environmental management system. An Environmental Officer
appointed at Group level assists the ZEISS business units with
the implementation and helps them identify suitable measures.
Additional officers are appointed at each site. At the end of
the reporting period on 30 September 2021, 33 business units(previous year: 32 business units) at 15 of the ZEISS Group's
production facilities were certified to ISO 14001:2015.
A company suggestion scheme for employees is in place ateight ZEISS sites in countries like China, the US and Germany.
The submissions are assessed based on their feasibility, impact
and efficiency. In the year under review, suggestions were
submitted to improve energy efficiency, conserve water andchemicals, and reduce the amount of waste. Employees can use
an internal website to find out how to submit their suggestionsand view the latest statistics on the ideas presented. Ideas from
employees which meet ZEISS' stipulated criteria receive a small
financial reward and often recognition at local level.
For many years, the Environmental Protection working groupof the ZEISS Group has successfully facilitated the sharing of
information and best practices between the sites in Germany.
These meetings are held at least every year and are attended
by officers for the integrated management system, environ­mental protection officers, environmental coordinators,
representatives from the Waste Management, Wastewater

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Technology and Utilities Management departments, hazardous materials officers and environment, health and safety
specialists (EHS), and representatives from the central Sustainability team.
Water and effluents
Water is a valuable resource that is becoming increasingly
scarce in many parts of the world due to climate change.
It is therefore a top priority to use it responsibly. ZEISS procureswater primarily from the public drinking water supply anduses it for manufacturing and cleaning processes, and ascooling and sanitary water. Effluents resulting from production
processes are treated in the company's own internal treatment plants and then subsequently drained into the municipal
sewer system. The relevant quality standards at all sites aredefined by local laws and official requirements. The supervisory bodies responsible for these are actively involved. The
implementation of measures for saving water – above all in
conjunction with permits for water treatment plants – isa clear statutory requirement that is implemented on an on­
going basis. Regular internal inspections ensure strict com­pliance with these standards.
ZEISS supports measures to save water at all its sites,
especially in regions characterized by a dry climate. These
include the eyeglass lens factory in Mexico and the assemblyplant in California. Another example is India, where water
scarcity is a major problem during the country's hot summers.
For this reason, ZEISS has installed a rainwater collection
system on the roof of its production facility in Bangalore.
During the monsoon season water is collected, stored andtreated so that it can be used for the industrial production

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

processes. This saves as many as 692,000 liters of watereach year. ZEISS conserves water even at sites where water isplentiful. The site in Mátészalka, Hungary, is just one example.
Every year, more than 4,000 m3 of water is saved thanks toemployee suggestions. The eyeglass lenses that are produced
here must be polished. This is a process that requires water.
Small valves make it possible to more precisely apply water
to the lenses, thus reducing water consumption. This method
was inspired by the drip irrigation systems used to water
gardens.
Materials
When selecting and using raw materials, technologies andproduction processes, ZEISS considers their environmental
compatibility. This primarily concerns product development(see page 37). But ZEISS is always looking for greener alternatives and processes for its production facilities.
As an optics and optoelectronics company, the ZEISS Group
primarily uses materials and production processes that have a
low environmental impact and are easy to monitor. Wherever
possible, potentially hazardous materials are replaced with lessproblematic substances.
Moreover, recyclability is a key criterion when selecting a material. The aim is to close material cycles. For example, measures
for reducing the amount of residual oil on metal chips are taken
at the Oberkochen site. By treating the metal chips, residual
coolant is separated and the chips are compacted. This enables
the metal chips to be recycled at higher value and the residual
coolant can also be reprocessed.

3
Employees

4
Environment

5SocialEngagement

Waste
Circular economy is a key part of using resources responsibly.
This means consistently looking at production and the product's entire life cycle. This way, particularly durable products
are a major way to avoid waste in the downstream supply
chain. In keeping with this, ZEISS runs service, repair andrefurbishment programs for its products in order to increase
their service life. Further information is available in the chapter
titled "Products and Value Chain" on page 38.

Resource-saving Sunglasses
The majority of sunglass lenses are made of plastic
because it's light, affordable and relatively robust. In a
bid to reduce the amount of fossil fuels it uses, ZEISSSunlens has developed new, more resource-saving
sunglass lenses. In terms of their mass balance, Plano
sunglass lenses comprise 39 percent bio-based materials
instead of the fossil fuels that were previously used.
This organic base material is sourced from the waste
generated by agriculture and the wood industry.

To manage the waste produced at its sites, the ZEISS Group
operates a waste management system whereby waste is
generally avoided, minimized or recycled. This is taken into
consideration during production and process planning. All
managers are urged to work toward these goals. If it is notpossible to avoid or recycle waste, the company aspires to56

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and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

use it to produce energy. Waste that can neither be prevented
nor recycled is disposed of properly. ZEISS selects the mostenvironmentally friendly disposal method that is also economically viable.

expenses. During the same period, the amount of waste
generated is projected to be reduced by 10 percent relative
to the company's own value added. The reference year for all
targets is fiscal year 2018/19.

Key performance indicators for water and waste are recorded
and consolidated globally at ZEISS. They include all of theZEISS Group's major production sites (67 sites varying in size
and activities).

Objectives and results
In the year under review ZEISS set itself new reduction targets
related to water consumption and waste. The Executive Board
approved these in October 2021. Water consumption is set
to fall by 15 percent relative to the company's value added
by fiscal year 2024/25 as a sum of EBITDA and personnel

In the reporting year, ZEISS achieved the target value forthe reduction in water consumption by fiscal year 2024/25:
as compared to the reference year 2018/19, it was possible
to reduce relative water consumption by 17 percent. Now,
the goal is to sustain this improvement or surpass it in the
coming years. In the same period, absolute water consumption increased slightly due to the company's growth.

Moreover, all of the business units certified in accordance with
ISO 14001 set their own targets for improving their environmental performance as part of their area-specific environmental
programs. One aim is for the solvent demand to have a defined
annual quantity or to not exceed a certain amount per manufactured product.

Waste Reduction in Electron Microscope
PackagingElectron microscopes are highly sensitive systems thatmust be protected during transportation. Until now,the finished systems have been shipped to customers
wrapped in five different packaging layers made of various sheets. These sheets offer benefits such as antistatic
protection, with bubble wrap providing shock resistance.
An employee-run initiative at the Cambourne site helped
to reduce the number of packaging layers. Moreover, theamount of plastic and cardboard waste generated during
electron microscope production was also reduced bydeploying reusable plastic crates wherever possible.

The reduction in relative water consumption can be attributedin part to the reuse of water in rinsing processes and theinternal circulation of water, e.g. in production and cleaningsystems. In the reporting year, the very high value added also
played a major role: with just a slight increase in absolute
water consumption, ZEISS was able to achieve significantly
more value added as compared to the reference year.
In the reporting year, ZEISS was able to reduce the relative
amount of waste by 14 percent as compared to the reference
year 2018/19. Thus, ZEISS has achieved the target value forthe reduction in waste by fiscal year 2024/25. Here, too, theaim is to sustain this improvement or surpass it. In the same
period, however, the absolute amount of waste increased byjust under five percent. The reason for the reduction in therelative amount of waste is the significant increase in value
added as compared to the reference year.

57Company Profile
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1
Integrity andCompliance

Strategy andSustainability

2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Climate Protection at ZEISSWater consumption1 

Waste volume

2018/192018/192019/20

2019/20

2020/212020/212024/25
100

200

300

400

500

Water consumption [in m3 / € m value added]
Target set for 2024/25
2020/212019/20

2018/19

1,905

1,777

1,901

Total value added
ZEISS2 [€ m]

4,399

3,541

3,623

Water consumption[in m3 / € m value added]

433

502

525

Relative change to reference
year 2018/19 [in %]

-17

-4

0



16
125
1,763

ZEISS collected water consumption data by source for the first timein the reporting year. Since the water consumption data for the
Oberkochen site was not complete at the time of publication, we
have made estimates for this site based on the value of theprevious year.
2
At ZEISS, value added is defined as the sum of earnings before
interest, taxes, depreciation and amortization (EBITDA) andpersonnel expenses.
1

600

0

1

2

3

4

5

6

Waste [in t / € m value added]
Target for 2024/25

Total water consumption[in 1,000 m³]» of which groundwater» of which surface water» of which third-party water

Fiscal year (FY)(-10 %)

2024/25(-15 %)0

One of the most pressing tasks at present is to reduce theimpact of climate change. ZEISS adheres to the global goal
stipulated in the Paris Agreement of limiting global warming
to below 2°C and has taken its own measures in order toachieve this.

2020/212019/20

2018/19

Waste volume [in t]» Hazardous» Non-hazardous

20,624
4,611
16,013

20,266
3,616
16,64919,684
3,757
15,926

Total value added at ZEISS2
[€ m]

4,399

3,541

3,623

Waste volume[in t / € m value added]

4,69

5,72

5,43

Relative change to reference
year 2018/19 [in %]

-14

5

0

Fiscal year (FY)In the year under review, ZEISS set itself the goal of achievingcarbon neutrality in its Scope 1 and Scope 2 emissions by2025. Scope 3 emissions were defined for the first time in the2020/21 reporting period. ZEISS plans to set reduction goals
for these, too.
Guidelines, structures and processes
When it comes to reducing its emissions, ZEISS takes a threepronged approach that involves prevention, reduction and– if there are no other options or if not economically viable –compensation. ZEISS views Scope 1 and Scope 2 emissions as
top priorities.
The best way to reduce emissions is to not produce them inthe first place. To this end ZEISS has given top priority toenergy-saving measures. ZEISS Energy Management is tasked
with keeping energy-related KPIs stable or improving them,even if production quantities increase. 100 companies in the
ZEISS Group in the European Union and the UK have beencertified as per the ISO 50001 international standard for energy
management. Each of the units has appointed an Energy
Manager who is responsible for continuously improving
energy-related performance. The focus is on all of the company's (production) processes, machines, systems and equipment,along with its buildings and infrastructure.

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Reliable and consistent energy and emissions data form thebasis for managing consumption. In the reporting year ZEISS
set up a global energy data platform in order to continue improving the energy and emissions data collection process. It is
designed to collect data on all ZEISS sites worldwide with significant energy consumption. By the end of fiscal year 2020/21
around 150 sites had already been included in the program.
The platform will now be rolled out at the remaining sites.
ZEISS aims to procure any energy that cannot be saved fromrenewable sources. The company is doing this in two ways:
through its own production process and by purchasing green
power. To produce its own energy, ZEISS is expanding its
photovoltaic and geothermal systems.
In Germany, green power can be sourced from wind energy
via power purchase agreements (PPAs). In this case, green
power is purchased straight from the source as part of longterm agreements that offer planning reliability. Green poweris thus purchased from certified providers. ZEISS has defined
strict quality criteria to this end. ZEISS only sources green
power that has been listed in official registers and categorically rejects green power from nuclear power or large hydro­
electric power stations. What's more, ZEISS prioritizes
its options by system age and technology, place of origin
and additional characteristics. For instance green power,
which is generated through solar and wind energy fromsystems that are no more than five years old and which has
the "OK-Power" or "EcoEnergy" label, is preferred.
This change is accompanied and strategically driven by the"Green Infrastructure" working group as part of the Group-

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

wide sustainability program of the ZEISS Agenda. It aims toensure a green power supply at all of its main sites and toextend its own energy generation to green power.
ZEISS compensates for certain emissions that are either unavoidable or very hard to avoid for economic reasons, such as
the sourcing of gas and district heating, by supporting selected
projects. ZEISS only supports compensation projects that meetinternationally recognized standards: the CER Gold Standard,
the VER Gold Standard, the Verified Carbon Standard (VCS) in
connection with the Climate, Community & Biodiversity (CCB)
standards, and the VCS in connection with the Social Carbon
Standard. In the reporting year ZEISS focused more closely on
its Scope 3 emissions. These emissions are produced in the
supply chains, e.g. through the mining of raw materials, theproduction of primary products or their transport to ZEISS. This
also includes waste disposal, commuting and business trips.
To gain a better understanding of the Scope 3 emissions andto reduce them in a targeted way, they were analyzed for the
first time in the reporting year with respect to the upstream
value chain. ZEISS has been fully compensating for a portion of
the Scope 3 emissions, namely CO₂ emissions created throughbusiness flights since October 2019.
Objectives and results
ZEISS aims to achieve carbon neutrality in its Scope 1 andScope 2 emissions by fiscal year 2024/25. By fiscal year
2021/22 indirect emissions from energy procurement (Scope2) at the company's main sites are to be CO₂ neutral. By fiscal
year 2024/25, energy at all ZEISS sites worldwide and the
direct emissions from combustion processes in its own systems
or vehicles (Scope 1) will follow. In the context of CO₂ reduc-3
Employees

4
Environment

5SocialEngagement

tions, ZEISS also set a new target for reducing its relative energy consumption in the reporting year. The target was approvedby the Executive Board in October 2021: Energy consumption is
expected to fall by 20 percent by fiscal year 2024/25 relative toits own value added. The reference year is fiscal year 2018/19.
In the reporting year, ZEISS was able to reduce its relative energy consumption by five percent as compared to the reference
year 2018/19 – this is due especially to the significantly higher
value added. Absolute energy consumption increased in thesame period of time by around 14 percent. In addition to thecompany's growth, this was due to the start of operations in a
new production hall at the Oberkochen site. ZEISS was able toreduce the Scope 1 and Scope 2 CO2 emissions it produced byalmost 70 percent.
As part of energy procurement, the company continued topurchase green power in the reporting period. Since all Germansites were supplied with green power in 2019/20, this form ofenergy procurement was expanded to ZEISS' sites worldwide infiscal year 2020/21. To meet its energy requirements, calculatedon the basis of consumption data and projections, the company procures green energy – to the greatest possible extent– via a global tender. Certificates of origin and power purchaseagreements (PPAs) were used to do this. ZEISS purchased a
total of some 397 GWh of green power. This corresponds to ashare of some 98 percent of the ZEISS Group's total calculated
energy consumption. In Germany, ZEISS has been sourcing
renewable energy from wind power through PPAs since 2021,
i.e. via suppliers who have signed a direct and individual agreement with the company. These wind power systems produce
energy directly for ZEISS.

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BACK TOCONTENTS

Company Profile
and Business ModelIn terms of the supply with its own energy from photovoltaic
or geothermal systems, the biggest ZEISS-built photovoltaic
system yet was built on the roof of the parking garage at theSouth Factory in Oberkochen during the reporting year. The
new system will generate some 680,000 kilowatt hours of
power every year. This is equal to the average annual power
consumption of around 200 family homes. During the reporting
period the company compensated for roughly 46,000 tons of
CO₂ emissions. The performance indicators for energy and CO₂
emissions are recorded and consolidated globally at ZEISS. They
include all of the ZEISS Group's major production sites (67 sites
varying in size and activities). The CO₂ emissions are recorded
as per ISO 14064-1, which takes the Greenhouse Gas Protocol
into account.
As part of the first-ever collection of data on Scope 3 emissions
in the year under review, ZEISS defined key categories forthe upstream value chain. An external partner helped thecom­pany perform a environmentally expanded multi-regional
input-output analysis. Purchasing data from fiscal year 2019/20
from the merchandise management system was used to do
this. The result: The majority of Scope 3 emissions come frompurchased goods and services. ZEISS has set itself the goal of
improving its data collection process to find ways to reduce
Scope 3 emissions and set reduction targets.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

CO2 emissions (Scope 1 and 2)2

3
Employees

4
Environment

5SocialEngagement

CO2 emissions (Scope 3)3

250,000
200,000
150,000
100,000

Fiscal year (FY)2019/20

Scope 3 emissions [in t]» Purchased goods and services» Capital goods» Fuel and energy-related activities» Company-generated waste» Flights

830,470
693,165
98,241
24,936
2,234
11,893

Total value added
at ZEISS1 [€ m]

50,000

Scope 3 emissions[in t/ € m value added]

0

3,541
235

50,0002018/192019/202024/25

2020/21

Compensation: ZEISS aims to achieve CO₂ neutrality in its Scope 1
and 2 emissions by fiscal year 2024/25. Since ZEISS cannot avoid all
CO₂ emissions, it will compensate for the remaining GHG emissions. The
CO₂ emissions presented here for fiscal year 2024/25 and the respective
compensations are based on estimates.
Net emissions: Net emissions refer to the difference between theCO₂ emissions that ZEISS produces and the CO₂ emissions that havebeen compensated for. The figure refers only to Scope 1 and Scope 2
emissions.
CO₂ emissions

2020/212019/20

2018/19

CO2 emissions [in t]» Scope 1» Scope 2

37,86331,356
6,507

124,783
31,94592,838208,30231,624
176,678

Total value added
at ZEISS1 [€ m]

4,399

3,541

3,623

9

35

57

31,583

26,8600

Fiscal year (FY)

CO2 emissions[in t / € m value added]
CO2 compensation[in t]

1

 t ZEISS, value added is defined as the sum of earnings before interest, taxes,A
depreciation and amortization (EBITDA) and personnel expenses.

2


Since
fiscal year 2018/19 ZEISS has been collecting data on Scope 1 and Scope
2 emissions both marked-based and location-based. Market-based emissions
calculations are done using specific emissions factors relating to the energy
providers. Average emissions factors from the respective federal state weretaken into account to collect location-based emissions data. To this end, ZEISS isusing the latest emissions factors as per the VDA list (updated January 2018).
The market-based emissions are reported for the first time in this Sustainability
Report. The location-based Scope 1 and Scope 2 emissions amounted to264.324 t in 2020/21, 236.043 t in 2019/20, and 234,791 t in 2018/19.

3


ZEISS
calculated its Scope 3 emissions for the first time in the reporting year.
Purchasing data from fiscal year 2019/20 from the merchandise management
system was used to do this. For more information about the calculation see thetext above.

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Strategy andSustainability

Energy consumption

2019/20
2020/21(-20 %)

2024/25
20

40

60

80

100

120

140

160

180

Energy consumption [in MWh / € m value added]
Target for 2024/25

2020/212019/20

2018/19

Energy consumption[in GWh]» Electricity» Gas» Heating oil» District heating

633

555

549

426
171
1
35

369
156
1
28

366
153
2
29

Total value added
ZEISS1 [€ m]

4,399

3,541

3,623

144

157

152

-5

3

0

Fiscal year (FY)

Energy consumption[in MWh/€ m value added]
Relative change to reference year
2018/19 [in %]1

2
Products andValue Chain

Greater Energy Efficiency Thanks to ZEISS
Lithography Systems

2018/1901Integrity andCompliance

Manufacturing semiconductors for servers, smartphones
or self-driving cars – to name just three examples – is very
energy-intensive. Highly productive lithography systems
optimized to deliver maximum throughput can help
achieve incredible savings. That's why, in the future, ZEISS
will be collecting quantitative data on lithography optics
and sustainability aspects during the development process
and optimizing these in order to produce lithography systems in a more energy-efficient and resource-saving way.
Meanwhile, increasing miniaturization of the semiconductor structures results in chips that require less energy. Thisway, EUV (extreme ultraviolet) chips that were produced
using the latest generation of lithography optics are 30
percent more energy-efficient than chips produced withthe latest generation of DUV (deep ultraviolet) optics. This
allows for an even higher performance of end devices
without increasing their carbon footprint.

3
Employees

4
Environment

5SocialEngagement

ZEISS also uses its products to ensure that energy is saved,
thus reducing downstream Scope 3 emissions. This applies tothe ZEISS CONTURA measuring machine that enables energy
savings of up to 40 percent, or the retrofitting of old ZEISS
portal measuring machines through Retrofit packages. Moreinformation about this is available in the chapter titled"Products and Value Chain" on page 38.
ZEISS also continued pursuing its program for refurbishingmicroscopes in the reporting period. This involved pre-owned
systems being updated and then sold at a discounted price.
Customers receive a one-year warranty, and replacement parts
are guaranteed for a period of five years. Since the program
was launched in 2015/16, around 136 electron microscopes
and 356 light microscopes have been refurbished, including 13
electron microscopes and 146 light microscopes in the reporting year. In addition to economic advantages for our customers, the program reduces a system's carbon footprint because
the raw materials used to produce it and the necessary energy
are spread out over a longer service life.
In fiscal year 2020/21, ZEISS once again participated in the
CDP (previously: Carbon Disclosure Project). For the 2021 CDP
report, which also contains a financial assessment of risks andopportunities, the CDP gave ZEISS a rating of "B", based on ascale of A to D (2020: "A-"). ZEISS aims to maintain or expand
this high level in the future. The results have been published atwww.cdp.net.

 t ZEISS, value added is defined as the sum of earnings
A
before interest, taxes, depreciation and amortization(EBITDA) and personnel expenses.

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Products andValue Chain

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Employees

4
Environment

5SocialEngagement

Focus on Climate Risks
ZEISS' business activities impact the climate by producing
greenhouse gases. At the same time, climate change is also
having an impact on ZEISS as a company. ZEISS intends toencounter the risks and opportunities resulting from climatechange in a holistic way. Based on the recommendations of
the Task Force on Climate-related Financial Disclosure (TCFD)
with its four pillars, the company presents excerpts of its
management approaches and measures related to climate
risks and opportunities. The complete approach is available
in the 2021 ZEISS CDP climate report.

1. Governance
The Executive Board's responsibility for climate-relatedrisks and opportunities
The Executive Board of Carl Zeiss AG is responsible for approving all climate policy measures and specifying and monitoring
their targets. It receives information as part of the annual
Sustainability Report and releases the relevant reports. The
Head of Sustainability has been regularly reporting on themeasures and their progress to the President & CEO and theentire Executive Board. Further, central Risk Management
discusses the company's entire risk report and process –including theoretical and physical climate risks – with the
Executive Board on a quarterly basis.
The role of management in assessing and handlingclimate-related risks and opportunities
The Head of Sustainability is responsible for topics related
to sustainability. She is responsible for recommending
environment-related targets for the ZEISS Group, such as
those for emissions reductions or the climate strategy.
This is done in close coordination with the environmental
protection officers of the ZEISS Group. The status of implementation of sustainability targets is discussed every six
months by the Chief Financial Officer and Head of Corporate
Audit, Risk Management and Quality Management. These
discussions focus on how to manage climate-related risks andopportunities. Information on these risks and opportunities isalso regularly shared between the central Sustainability teamand the central Risk Management team.

2. Risk management
Assessing and managing climate-related risks
ZEISS systematically analyzes and evaluates several risk categories. These include climate risks. Risks are viewed as urgent if
they will have an impact within one year. Medium-term risks
are those that will have an impact in one to three years. Longterm risks are those that will have an impact in more than three
years' time and possibly even in ten years' time or later.
When it comes to the risk analysis and assessment, special
emphasis is placed on potential economic effects and how
likely they are to occur. The quantified and classified risks areassessed on their risk-bearing capacity. The greater the potential financial impact or probability of occurrence, the higher
ZEISS prioritizes the management of the risk. The central
Sustainability team, the Head of Corporate Audit, Risk Management and Quality Management, and the central Risk
Management team jointly decide how to manage the risks.
Depending on the individual case, risks will be accepted, regularly inspected, transferred or measures will be taken to reducethem. Moreover, ZEISS has added a due diligence process ontransitory and physical climate risks to its M&A processes in aneffort to take aspects such as the risk of flooding at potentialsites into consideration.
In order to minimize the possible effects of climate change suchas extreme weather events, ZEISS uses business continuity plansthat are checked and updated at regular intervals.

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and Business Model

3. Strategy
Climate-related risks and opportunities and theireffects on the business model
Both physical and transitory risks can have an impact on ZEISS'
business model. The former are a direct or indirect result ofclimate change, while the latter are caused by the transformation toward a decarbonized economy. ZEISS believes the key
physical risks include more frequent extreme weather events
that could negatively impact the company's production facilities or supply chain. ZEISS also monitors transitory risks suchas emissions trading, the CO₂ tax policy and other regulatory
developments. In the long term, ZEISS expects oil, gas and coal
to become very scarce. The reasons for this lie in decreasing
supply and new laws. One example of this is the new German
CO₂ tax.
The increasing push from politics, industry and civil society
to reduce greenhouse gas emissions offers opportunities for
ZEISS' operations. For example, the e-mobility trend generates
demand for measuring and testing solutions. ZEISS is taking
advantage of other opportunities such as the further development of microscopes that help to increase the reliability ofenergy systems and reduce the need for repairs. Intelligent
measuring systems from ZEISS also enable increased efficiency
in sectors such as the automobile and aerospace industries,
thus helping to conserve natural resources.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

has been pushed at various levels as part of the sustainability
strategy of the new ZEISS Agenda since the current fiscal year.
The aim is to use adapted products and business models to
support customers as they implement their climate goals.
4. Targets and key performance indicators
The main key performance indicators and targets for climate
protection are listed under "Objectives and results" on pages
59 – 61.

3
Employees

4
Environment

5SocialEngagement

Green Buildings at the Innovation Hubs
During the year under review, ZEISS completed construction
on the new ZEISS Innovation Center in Dublin, California(USA). The building can accommodate around 750 ZEISS
employees and meets the highest standards in environmental protection and sustainability. The building is powered bysolar energy, supported by use-based light and air controls
and a heat recovery system. Equipment for rainwater collection and retention, along with wetland enhancement andmaintenance, are reflected in the sustainability approach
applied to the outdoor areas. Over the next few years,
the ZEISS high-tech site in Jena, a cutting-edge facility, will
be built on an area of some 80,000 square meters. ZEISS
aims to use the new facility to achieve the gold certificate
from the German Society for Sustainable Building (DGNB),
where the focus is on ecology, economy and socio-cultural
aspects. To do this, the facility's entire life cycle is taken into
consideration. In practice, that means the amount of energy sourced from district heating is expected to fall to below
ten percent. As a result, a closed-loop geothermal system
is being installed that utilizes heat and cooling generated
from the ground. The concept also includes the highly
efficient use of exhaust heat. Added to that are an on-sitecombined heat and power (CHP) plant and a photovoltaic
system, to name just two more examples.

In its strategic planning, ZEISS always considers the customer
expectations and regulatory requirements that are changing
with regard to climate change. That's why climate protection
has become part of the Group-wide sustainability program that63

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Environmental Compliance
At ZEISS, strict compliance with all relevant laws worldwide,
as well as international and national standards and directives,is the foundation of daily business success. It is also a prerequisite for complying with the declared quality promise and isthus a fundamental obligation toward all stakeholders.
Guidelines, structures and processes
One major challenge of environmental protection – particularly
with regard to waste, chemicals, water and wastewater – iscomplying with laws, stipulations for official approval andother rules related to the environment. Environment officers
at the sites ensure that the relevant rules and regulations arelogged in the management system and that all processes arein compliance with the law. If action is required, the environmental officers must make the necessary arrangements.
This may be done by issuing a site-specific procedural orwork instruction. Regular internal and external audits as wellas compliance checks ensure compliance with the legal andinternal requirements. If this results in ways to optimize
processes and actions, ZEISS will define concrete measures.
The implementation is assessed through regular sequential
audits and their results are included in the annual management reviews.
ZEISS expects its suppliers and other service providers to fullycomply with environmental laws and regulations and with
its internal guidelines. The company monitors whether suchcontractual agreements are being put into practice by conducting on-site audits, both planned and as a result of specificincidents. More information about this is available in thechapter titled "Products and Value Chain" on page 41.

Chemical management
Through its chemicals management activities, ZEISS ensuresthat hazardous substances and materials are handled safely
throughout the entire process chain and, in doing so, protects
employees and the environment. The respective system
operators are responsible for handling chemicals safely. These
employees are supported by the on-site occupational safety
specialists and environmental protection officers. A substance
database and list of hazardous materials form the basis of theGroup-wide information system for hazardous substances usedat the company. This is how ZEISS ensures that only chemicals that are registered for the EU in accordance with REACH(Registration, Evaluation, Authorization, and Restriction ofChemicals) are used and authorized for use. In addition, considerable care is taken to only use substances that have notbeen identified as substances of very high concern wheneverpossible.
Material safety data sheets provide users with information on
how to safely handle chemical products, helping to ensure thatchemicals are used in a manner that is both safe and environmentally sound. ZEISS obligates its suppliers to make the most
up-to-date material safety data sheets available. Before introducing new hazardous substances, ZEISS ensures that suppliers
observe the list of prohibited and declarable substances listed ina factory standard and requests the corresponding certificatesof conformity.

Substance restrictions
ZEISS meets the requirements of the EU directive on the
Restriction of Hazardous Substances (RoHS) with the help ofa software application to monitor the relevant chemicals. This
software is now used at all the ZEISS segments. Suppliers must
confirm in writing that the materials, substances and mixtures
they supply are compliant with the applicable directives, laws
and regulations.
Disposal
Modern technologies consist of many materials and components. Due to their complex structures, hazardous substances
can be potentially overlooked when not disposed of properly,
thus resulting in major environmental and health issues. In
accordance with the European Union's Waste Electrical andElectronic Equipment (WEEE) Directive, which governs thecollection, recycling, and recovery of electric and electronic
devices, ZEISS has entered into an EU-wide agreement with adisposal contractor to ensure legally compliant disposal. The
company is registered as a commercial distributor of electricaland electronic devices in all EU countries.
Targets
The company's top priority is to operate its facilities in alegally compliant manner. This is associated with the objectives of preventive emergency management and preventive
maintenance, which saves retrofitting costs.

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05

SOCIAL ENGAGEMENT

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Social and Societal Engagement"Our task as a foundation-owned company
is to ensure our business success and takeresponsibility for our employees, as well as oursocial and societal engagement and promotescience and education. We take action at local
and global level to achieve this. Through oursocial engagement we work with partners tooffer disadvantaged people practical assistanceand more opportunities."
Joachim Kuss, Head of Communications at ZEISS Consumer
Markets and Head of the Social Engagement working group

Since 1889, the Carl Zeiss Foundation statutes have established a clear course. In addition to business growth andaccepting responsibility for the company's employees, they
stipulate social engagement and the continued promotion ofscience and education as a corporate responsibility. ZEISS thus
has the express company mission of using its core business toimprove the lives of people everywhere. ZEISS therefore raises
the bar in healthcare by offering solutions for ophthalmology
and medical technology and helps drive medical progressby supplying microscopy products. ZEISS also helps to train
tomorrow's scientists by supplying microscopes to education
facilities.
Tasked with this duty, ZEISS assumes an active role in society
and makes a contribution to sustainable development at its
sites. Furthermore, the company makes financial and in-kind
donations in the form of ZEISS products and solutions througha variety of different projects in order to give people aroundthe globe access to high-quality medical care.
Structures, processes and results
The ZEISS Group's societal engagement is governed by clear
policies: three different organizational levels provide sponsorship.
As the sole stockholder of Carl Zeiss AG and SCHOTT AG, theCarl Zeiss Foundation carries out non-profit activities. Its nonprofit activity is defined by the Foundation statutes andfinanced by the dividend payments from the two companies.
Particular attention is paid to providing sustainable, balanced
support.

The ZEISS Group provides sponsorship as part of a definedprocess. The guidelines are laid out in an internal policy thatapplies to the entire company. One vehicle for supporting
scientific research and education, healthcare, nature conser­
vation and regional companies in Germany is the ZEISS
Promotion Fund. ZEISS uses it to encourage people to get
involved in the natural sciences, from preschool children rightup to PhD students, as well as to fund social and culturalprojects. Fund managers oversee the funding budget andthe applications for sponsorship. Together with the relevantcolleagues from the different corporate divisions, they decide
which applications for donations or sponsoring to accept inaccordance with the budget, and consult with the Executive
Board of the ZEISS Group as needed.
The third level comprises initiatives like donation campaigns
that are launched through global employee civic engagement.
ZEISS normally runs these activities itself. The company andmanagers show their sincere appreciation to the employees
involved and get the opportunity to organize themselves using
the company's structures.
In fiscal year 2020/21, Carl Zeiss AG invested a total of 1.6
million euros into 106 projects (previous year: almost 1 million
euros in 107 projects). 98 of these projects received sponsorship of more than 800,000 euros from the ZEISS Promotion
Fund. These higher sums are the result of participation in the
future initiative for the modernization of the Deutsches
Museum in Munich to mark ZEISS' 175th anniversary. In theyears ahead, 500,000 euros will be donated annually to makea total of five million euros. The German Optical Museumin Jena will receive another 250,000 euros. A sponsorship

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Company Profile
and Business Modelamount at the level of the previous years has been earmarked
for fiscal year 2021/22. Approximately 40 percent of thesponsorship is set to be put toward the STEM subjects for kids
and students.
Sponsorship areas
Social engagement at the ZEISS Group aims to promoteresearch and education, healthcare, conservation and regional
companies.
Scientific research and education
Alongside business growth and accepting responsibility forthe company's employees, the Carl Zeiss Foundation statutes
stipulate high standards for societal engagement. ZEISS in
Germany uses the Education and Science Fund establishedin 2012 under the umbrella of the ZEISS Promotion Fund tosponsor newcomers in the natural sciences. At the heart of
the ZEISS Promotion Fund are initiatives to promote education
among young people. The spotlight is on college students
who have not yet entered the world of work and those whoare choosing their field of study, their scientific skills as well as
projects and initiatives at universities and research institutes.
The focus is on the natural sciences and engineering, particularly optics and photonics.
The ZEISS Innovation Hub in Dresden is also helping to shapetechnological progress. The first research project that focuseson organoid models has already been launched together with
Dresden Technical University, the Dresden University Hospital,
the Leibniz Institute and the Max Planck Institute. Organoid
models are artificially produced organ-like microstructures that
open up whole new opportunities in areas like medication

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chaindevelopment. ZEISS plans to quickly grow the Innovation Hub
in terms of both its focus topics and its workforce. Other topic
areas are being looked at. These include digital technologies,
microelectronics and IT, artificial intelligence, nanotechnology
and materials research.
Another important measure that aims to breathe life into thestatutes' requirements is the initiative launched in the company's anniversary year titled "A Heart for Science." The initiative
aims to systematically encourage kids and young people toengage with science and conduct open-minded research.
ZEISS is hoping to appeal to young people aged between 12
and 18 in particular. Scientific events at schools, collaborations
with local organizations and the involvement of ZEISS employees and products on-site are all part of it.
Healthcare
ZEISS raises the bar in healthcare by offering solutions forophthalmology and medical technology and helps to drive
medical progress by supplying microscopy products. The aim
is to help improve the lives of patients everywhere. As a result,
ZEISS supports people across the globe through a variety of
projects, one of these being the fight against cataract. Thisdisease affects approximately one third of all blind people
worldwide. Together with the Christoffel Blind Mission (CBM)
and a local partner, the Poona Blind Men's Association, ZEISS
is supporting a new training center for treating cataracts
in Pune, India. The center's mission is to train ophthalmologists and medical personnel throughout the country inphacoemulsification, a modern surgical technique. Doctors
continued to receive training in the year under review.
ZEISS and the Development Service for German Eyecare

3
Employees

4
Environment

5SocialEngagement

Professionals (Entwicklungsdienst Deutscher Augenoptiker,
EDA) also opened a comparable training center in Kyamulibwa(Uganda) and successfully trained local experts.

An Eye Clinic in the Outback
In the year under review, ZEISS made a donation to help
deliver modern eyecare to those living in the Australianoutback. To this end, the company donated systems
to the value of some 1.5 million Australian dollars. The
eye clinic in Broome has removed the need for doctors
to take weekly flights to the outback as well as deliver
systems there from densely populated areas. Here's aninteresting fact: the Kimberly region with its roughly
38,000 people will be the site of the new hospital, which
will be built in the rooms of a former hostel. The region
itself is considerably larger than Germany. As a partner,
not only does ZEISS help deliver medical care to people
living in these remote regions, but the clinic itself doubles up as a training center for budding doctors who cangain experience in Broome.

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Eyecare Services for Disadvantaged
RegionsMore than two billion people across the globe haveno access to eyecare. Since 2015, ZEISS has been committed to improving this situation in one of the world's
most severely affected regions: India. Over 800 million
people are living there, in underserved rural areas. ZEISS
uses the Aloka Vision Programme to supply basic eye
care to people in ten states across the country. A varietyof partners, simple digital platforms and an optimized
supply chain make it possible to perform several thousands of eye exams, and several thousand pairs of glasses are sold each month. Despite the limitations inducedby the pandemic, in the fourth quarter of 2020/21 alone
Aloka helped 60,500 patients. Another example of thiscollaboration is the Lifeline Express in India, a hospitaltrain that makes stops in remote parts of the country toprovide treatment to those in need completely free ofcharge. ZEISS is a reliable partner, offering eye exams
and eyeglasses to people across India. A third example
is the Drishti Eye Care System in Nepal. Drishti Eye Careis an eye hospital focusing on diagnosing and treating
non-refractive visual impairments in children. The aim
is to help at least 10,000 children each year. ZEISS also
provides the equipment needed to perform the eye
screenings and covers treatment costs.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

Nature conservation
For ZEISS, protecting plant and animal species is particularly
important. Binoculars and spotting scopes from ZEISS have an
excellent reputation among nature lovers around the globe
and they enable people to get closer to nature. In collaboration
with professional associations, the company supports numerous
nature conservation activities, educational programs for children
and adults, and research programs to protect endangered animal species. ZEISS also sponsors BirdLife International’s scientificwork on the Red List of Birds. The partnership among multiple
bird conservation organizations with more than 10 million members uses the list to record all endangered bird species, including
their conservation status. The figures are reported to the International Union for Conservation of Nature and Natural Resources(IUCN) and used as the basis for effective conservation efforts.

3
Employees

4
Environment

5SocialEngagement

Regional involvement
ZEISS' strong position and a portfolio tailored to megatrends
lead to investments in innovations and digitalization, and in
the expansion of a modern infrastructure. This creates newjobs and vocational training positions, and also generates
contracts for local suppliers in fields other than high technology. The company's development and production services forcustomers in the individual regions therefore enable scientific,
technological, social, medical and environmental services togrow.
In Germany, the ZEISS Site Fund supports regional projects,
under the umbrella of the ZEISS Promotion Fund. The sponsorship program covers the company's German sites in Aalen,
Göttingen, Jena, Oberkochen and Wetzlar.

Involvement in Birdwatching

Wooden Crates for School Furniture

As a charitable organization, Birdability aims to sharethe joys of birdwatching with everyone – particularly
with handicapped people. For instance, a map will help
to keep track of wheelchair-suitable trekking paths andparking options at observation points. Another option
are virtual events that will allow handicapped people togo birdwatching from the comfort of their own homes.
ZEISS supports Birdability with financial donations andsupplies birdwatching optics.

Some ZEISS devices and systems are safely packed in wooden crates before they're shipped around the world. But once
unpacked at their destination, they create large amountsof waste wood. In order to effectively utilize this valuable
resource, the ZEISS site in Bangalore, India, has turned thewood into benches, desks and chairs for local schools. Eachschool bench holds three kids, and ten benches are enoughto supply an entire classroom. The team in India has alreadyproduced more than 100 benches and 30 desks. It also has
long-term plans to build 30-40 pieces of furniture every
month, which could create jobs for regional carpenters.

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BACK TOCONTENTSGRI Content Index

The report was made available to the GRI for review by the GRI Materiality Disclosures Service.
The GRI Services Team has confirmed the correct placement of the Materiality Disclosures (102-40 to 102-49) in the report.

GRI Standard

Page reference

Comments

GRI 101: Foundation 2016
GRI 102: General Disclosures 2016

Organizational Profile
GRI 102-1: Name of organization

p. 10

GRI 102-2: Activities, brands, products, and services

p. 10-12

GRI 102-3: Location of headquarters

p. 10

GRI 102-4: Location of operations

p. 10

GRI 102-5: Ownership and legal form

p. 10

GRI 102-6: Markets served

p. 10,12, 37

GRI 102-7: Scale of the organization

p. 2, 10, 46; Annual Report 2020/21: p. 26

GRI 102-8: Information on employees and other workers

p. 46

GRI 102-9: Supply chain

p. 14, 40-41

GRI 102-10: Significant changes to the organization and its supply chain

No significant changes during the reporting year

GRI 102-11: Precautionary Principle or approachp. 31-34, 38, 39, 55-57; Annual Report 2020/21: p. 41

GRI 102-12: External initiatives

p. 17, 19, 26, 42, 43

GRI 102-13: Membership of associations

p. 19, 33

Strategy
GRI 102-14: Statement from senior decision-makerp. 4

GRI 102-15: Key impacts, risks, and opportunities

p. 14, 16-25, 62, 63

Ethics and Integrity
GRI 102-16: Values, principles, standards, and norms of behavior

p. 13, 17, 31-33, 38, 40-42, 48, 51

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Corporate Governance
GRI 102-18: Governance structure

p. 7, 13, 16-18, 42; Annual Report 2020/21: p. 20, 21, 24

GRI 102-19: Delegating authority

p. 7, 16-18, 31, 33, 42, 55, 56, 62, 64

Involving Stakeholders
GRI 102-40: List of stakeholder groups

p. 8, 19

GRI 102-41: Collective bargaining agreements

p. 45

GRI 102-42: Identifying and selecting stakeholders

p. 18

GRI 102-43: Approach to stakeholder engagement

p. 18-20, 45

GRI 102-44: Key topics and concerns raised

p. 18, 20

Reporting PracticeGRI 102-45: Entities included in the consolidated financial statements

p. 8; Annual Report 2020/21: p. 107-112

GRI 102-46: Defining report content and topic boundaries

p. 20

GRI 102-47: List of material topics

p. 21-25

GRI 102-48: Restatements of information

None

GRI 102-49: Changes in reporting
GRI 102-50: Reporting period

None
p. 8

GRI 102-51: Date of most recent report

January 2021

GRI 102-52: Reporting cycle

p. 8

GRI 102-53: Contact point for questions regarding the report

p. 77

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

p. 8

GRI 102-55: GRI content index

p. 69-76

GRI 102-56: External assurance

None

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Material issues
GRI Standard

Page reference

Comments

GRI 201 Economic Performance 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 14, 16-18, 62, 63, 66

GRI 201-1: Direct economic value generated and distributed

p. 2, 10, 12, 66; Annual Report 2020/21: p. 50

GRI 201-2: Financial implications and other risks and opportunities due toclimate change

p. 62, 63

GRI 203 Indirect Economic Impacts 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 14, 16, 17, 25, 27-29, 66-68

GRI 203-1: Infrastructure investments and services supported

p. 28, 66-68

GRI 205 Anti-corruption 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 21, 31-33

GRI 205-2: Communication and training about anti-corruption policies
and proceduresp. 31-33

GRI 206 Anti-Competitive Behavior 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 21, 31-33

GRI 206-1: Legal actions for anti-competitive behavior, anti-trust,and monopoly practices

ZEISS does not report on legal actions for anti-competitive behavior, anti-trust or monopoly practices asthese disclosures are subject to confidentiality agreements.

GRI 207 Tax 2019
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 14, 21, 35

GRI 207-1: Approach to tax

p. 14, 35

GRI 207-2: Tax governance, control and risk management

p. 35

GRI 207-3: Stakeholder engagement and management of concerns related to tax

p. 35

GRI 207-4: Country-by-country reporting

There is no detailed country-by-country report as revealing this data would expose competitorrelevant information. In the ZEISS Group management report and Group financial report, all legallyrequired information about corporate income taxes is provided. All required information is sharedwith the relevant tax authority.

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GRI 302 Energy 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 24, 29, 37-40, 55, 56, 58-61, 63

GRI 302-1: Energy consumption within the organization

p. 61

GRI 302-3: Energy intensity

p. 61

GRI 303 Water and Effluents 2018
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 24, 37, 55-57, 63, 64

GRI 303-1: Interactions with water as a shared resource

p. 56

GRI 303-2: Management of water discharge-related impacts

p. 56

GRI 303-3: Water withdrawal

p. 56

Currently, ZEISS does not report on water extraction or water consumption broken down by regions ofwater stress. It does not differentiate between freshwater and other water. This information is collected at
individual sites but is impossible to consolidate to yield worldwide statistics.

GRI 305 Emissions 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 24, 29, 37-40, 55, 56, 58-63

GRI 305-1: Direct (Scope 1) GHG emissions

p. 60

GRI 305-2: Energy indirect (Scope 2) GHG emissions

p. 60

GRI 305-3: Other indirect (Scope 3) GHG emissions

p. 60

GRI 305-4: GHG emissions intensity

p. 60

GRI 306 Waste 2020
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 24, 29, 37, 38, 40, 55-58, 64, 68

GRI 306-1: Waste generation and significant waste-related impacts

p. 56-58, 64

GRI 306-2: Management of significant waste-related impacts

p. 56-57, 64

GRI 306-3: Waste generated

p. 58

GRI 307 Environmental Compliance 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)
GRI 307-1: Non-compliance with environmental laws and regulations

p. 24, 64
ZEISS was not informed of any relevant incidents during the reporting period.

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GRI 308 Supplier Environmental Assessment 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 28, 40, 41, 64

GRI 308-1: New suppliers that were screened using environmental criteria

p. 40

GRI 308-2: Negative environmental impacts in the supply chain and actions taken

p. 40, 41, 43

GRI 401 Employment 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 23, 45-47, 49

GRI 401-1: New employee hires and employee turnoverp. 46

Currently, ZEISS cannot report the turnover outside Germany as this data is not available.
A corresponding data collection has been initiated.

GRI 402 Labor/Management Relations 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 23, 45, 46, 50

GRI 402-1: Minimum notice periods regarding operational changes

p. 45, 46

GRI 403 Occupational Health and Safety 2018
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 23, 51-53

GRI 403-1: Occupational health and safety management system

p. 51-53

GRI 403-2: Hazard identification, risk assessment, and incident investigation

p. 51-53

GRI 403-3: Occupational health services

p. 51, 52

GRI 403-4: Worker participation, consultation, and communication on occupational
health and safety

p. 51, 52

GRI 403-5: Worker training on occupational health and safety

p. 51-53

GRI 403-6: Promotion of worker healthp. 51, 52

GRI 403-7: Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships

p. 64

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GRI 403-9: Work-related injuries

p. 52, 53

Since the LTIFR target applies until 2023 and is control-related, ZEISS shall continue reporting this key
figure in the interests of comparability. At this time, no predictions can be made as regards thecollection and reporting of further data on work-related injuries. Currently, ZEISS cannot report the
number of work-related accidents for non-ZEISS employees because this data is not available. The datacollection planned for FY 2019/20 and 2020/21 was postponed due to the COVID-19 pandemic andwill now be launched in FY 2021/22.

GRI 404 Training and Education 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 23, 45, 47-50

GRI 404-1: Average hours of training per year per employee

p. 48

GRI 405 Diversity and Equal Opportunity 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 23, 45, 48-50

GRI 405-1: Diversity of governance bodies and employees

p. 46, 50; Annual Report 2020/21: p. 4-5, 24

GRI 406 Non-discrimination 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 23, 42, 45, 48, 49

GRI 406-1: Incidents of discrimination and corrective actions taken

ZEISS does not report on cases of discrimination and corrective actions taken as any disclosures onthese matters are subject to confidentiality agreements.

GRI 407 Freedom of Association and Collective Bargaining 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 23, 40-43, 45, 46

GRI 407-1: Operations and suppliers in which the right to freedom of association andcollective bargaining may be at risk

p. 40, 41, 45, 46

GRI 408 Child Labor 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)
GRI 408-1: Operations and suppliers at significant risk for incidents of child laborp. 16, 22, 40-43
During the reporting period, ZEISS was not informed of any significant risks of child labor incidents atsites belonging to ZEISS or its suppliers.

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GRI 409 Forced or Compulsory Labor 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 40-43

GRI 409-1: Operations and suppliers at significant risk for incidents of forced orcompulsory labor

During the reporting period, ZEISS was not informed of any significant risks of forced or compulsory
labor incidents at sites belonging to ZEISS or its suppliers.

GRI 413 Local Communities 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 25, 27, 66-68

GRI 413-2: Operations with significant actual and potential negative impacts on
local communities

p. 55, 64

GRI 414 Supplier Social Assessment 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 16, 22, 28, 40-43

GRI 414-1: New suppliers that were screened using social criteria

p. 40

GRI 414-2: Negative social impacts in the supply chain and actions taken

p. 40, 41, 43

GRI 415 Public Policy 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 21, 33

GRI 415-1: Political contributions

p. 33

GRI 416 Customer Health and Safety 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 22, 38, 39, 64

GRI 416-1: Assessment of the health and safety impacts of product andservice categories

p. 38, 39

GRI 416-2: Incidents of non-compliance concerning the health and safety impacts
of products and services

ZEISS was not informed of any relevant incidents during the reporting period.

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GRI 418 Customer Privacy 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 21, 31-34, 39

GRI 418-1: Substantiated complaints concerning breaches of customer privacy
and losses of customer data

ZEISS was not informed of any relevant incidents during the reporting period.

GRI 419 Socioeconomic Compliance 2016
GRI 103: Management approach 2016 (including 103-1, 103-2, 103-3)

p. 21, 31-35, 39

GRI 419-1: Non-compliance with laws and regulations in the social andeconomic areas

Annual Report 2020/21: p. 42-45

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Legal Information

DesignAndreas Hauber,
Corporate Brand & Communications

Disclaimer
This report contains certain forwardlooking statements concerning thedevelopment of the ZEISS Group. At thepresent time, ZEISS assumes that theseforward-looking statements are realistic.
However, such forward-looking statements are based both on assumptions
and estimates that are subject to risks
and uncertainties, which may lead to theactual results differing significantly fromthe expected results. ZEISS therefore
assumes no liability for such deviations.
There are no plans to update theforward-looking statements for events
that occur after the end of the reporting
period.

Concept and Text
akzente kommunikation undberatung GmbHApparent addition discrepancies may
arise throughout this Sustainability Reportdue to mathematical rounding.

Carl Zeiss AG
73446 Oberkochen, Germany
Phone: +49 (0) 73 64 20-0
Fax: +49 (0) 73 64 20-68 08
E-mail: responsibility@zeiss.com
www.zeiss.com
Editor-in-Chief
Florian Proksch, Dr. Roya Akhavan,
Strategic Corporate Development
Melanie Kiefer,
Corporate Brand & Communications77