Sustainability Report

2017/18ZEISS Group
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Performance Indicators 2017/18(1 October 2017 to 30 September 2018)

Around30,00042,900online courses completed on the
ZEISS Learning Platform

employees in almost 50 countries

Revenue in fiscal year (FY)

5.8 billion euros
2016/17 5.3 billion euros
2017/18

19,400training days
were completed via the eCademy

1,000More thanemployees participatedin sustainability events at ZEISS

158

new vocational trainees and students
enrolled in a cooperative education programin Germany

140

Aroundprojects in Germany were supported by the Carl Zeiss
Promotion Fund and the Education and Science Fund

46%

38%

reduction in (relative)
energy consumption ascompared to FY 2009/10

reduction in (relative)
water consumption ascompared to FY 2009/10

270

Aroundquality audits conducted on suppliers’ premises, including
occupational health and safety and environmental aspects

30%

reduction in (relative)
waste volume as comparedto FY 2009/10

47%

reduction in (relative)
CO2 emissions as comparedto FY 2009/10 (Scope 1 and 2)

200

Approx.
occupational safety
inspections2

Highlights from Fiscal Year 2017/18

2017
2018

10

11

12

1

2

3

4

5

6

7

8

9

	Week of Sight featured initiatives
and provided information on thesubject of vision and preventableblindness throughout the company

	
Publication of the first Sustainability
Report for the ZEISS Group andthe Group directive on occupational
health and safety	First sustainability conference
hosted by the Vision Care strategic
business unit in Guangzhou,
China, with employees from theAsia/Pacific region

More information available at:www.zeiss.com/responsibility	First participation in CDP
climate reporting(previously: Carbon Disclosure Project)	Basic compliance training
available worldwide as an eLearningin 14 languages

	Kick-off event for 2018 in Germany with a focus on “Rethinking
Education” and the first ZEISS MINTAwards (MINT = STEM: science, technology, engineering and mathematics)

	Internal “ZEISS Diversity Days”
campaign featuring 35 events in
14 countries	Pilot project with a new carpooling
app for employees in Germany

	German Management Team event
on “Sustainability as a Success Factor”
highlighted the relevance of this topic
to the company’s business	Company-wide environmental andoccupational health and safetytargets defined	Opening of a Green,
Safe & Responsible Experience
Center for employees andvisitors in China

	eLearning on sustainability
available on the global ZEISS
Learning Platform

3

Content

01
2

Performance Indicators 2017/18

3	Highlights from Fiscal Year2017/18
5	Foreword from the President &Chief Executive Officer
6

About the Report

7–12

Company Profile
and Business Model
9 	The Four Segments andTheir Products
11
Corporate Governance
12
Business Model

26–29
27
28
28
29

Integrity and Compliance
Compliance
Anti-Corruption
Political Influence
Data Privacy

02
13–25 Strategy and Sustainability
16 	Organizational Structure for
Sustainability
23 	How ZEISS Supports theAchievement of the Global
Sustainable Development Goals

30–34	Products and Value Chain
31	Product Safety and ProductDevelopment
33	Procurement and SupplierManagement04
42–48 Environment
43	Efficient Use of Natural
Resources
48
Environmental Compliance05
49–51	Social Engagement

52–59

GRI Content Index

60

Legal Information

03
35-41
36
37
38
40

Employees
Employee Involvement
Education and Training
Diversity and Equal Opportunity
Occupational Health and Safety

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Foreword from the President & Chief Executive Officer
Dear Readers,
For ZEISS, business success is closely intertwined with corporate
responsibility. Since 1889, the Carl Zeiss Foundation Statute has
set a clear course: In addition to business growth while also accepting responsibility for the company’s employees, it stipulates
the continued promotion of science and education as a corporate responsibility. Through its modern approach to sustainability,
ZEISS is building on these historic values and assuming responsibility for sustainable development with its business activities.
ZEISS product solutions for ophthalmology, neurosurgery and
ENT surgery drive medical progress and improve patients’ qualityof life. Eyeglass lenses from ZEISS help people around the world
enjoy better vision. And intelligent measuring systems fromZEISS enable precise inspections in quality assurance within theaerospace and energy industries, thereby contributing to the
production of safe and energy-efficient components. ZEISS
semiconductor manufacturing equipment is defining the micro­
electronics age and makes microchips increasingly powerful aswell as more energy- and cost-effective.

Further strengthening the impact of our activities in the broad
field of sustainability requires carefully documented and exact
reporting. To meet the European CSR reporting requirements, wehave published a separate Non-Financial Report for the first timethat has been reviewed by an auditing company. This Sustainability
Report supplements the Non-Financial Report. It was prepared inaccordance with the Global Reporting Initiative (GRI) standards,
covers relevant concepts and performance indicators for fiscal
year 2017/18 and thereby ensures transparent sustainability
management.
Sincerely,

Prof. Dr. Michael Kaschke
President and Chief Executive Officer

For ZEISS, impactful environmental protection begins at its own
facilities, which is why we have set specific reduction targets
for energy and CO2 emissions along with waste and water. Last
year, we were able to reduce our relative CO2 emissions by 47
percent as compared to our reference year 2009/10. By the endof the upcoming fiscal year, we intend to achieve a reduction of
50 percent. We have also established quantifiable targets foroccupational health and safety.

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About the Report (GRI 102-40, 102-45)
This Sustainability Report is intended for the ZEISS Group’s
customers, business partners, employees and investors as wellas interested stakeholders from industry, research, politics andsociety and especially those people who live in the vicinity of
our company’s facilities. The report illustrates how the company
contributes to sustainable development, which goals it has set
for itself, which structures have been put in place and which
actions it has taken. The report also addresses the company’s
legal obligations in different areas.
This Sustainability Report – the second published by the ZEISSGroup – references fiscal year 2017/18 (1 October 2017 to 30
September 2018). All relevant departments were involved in its
preparation, and the report has been approved by the Executive
Board. Unless stated otherwise, the statements and performanceindicators in the report refer to all ZEISS Group segments andall sites worldwide.
The report was prepared as per the standards set forth by the
Global Reporting Initiative (GRI), the internationally recognizedframework for sustainability reporting. This report has been
prepared in accordance with the GRI Standards: Core option. It
was made available to GRI for review by the GRI Materiality
Disclosures Service, which has confirmed the correct placementof the materiality disclosures (102-40 to 102-49) in the report.
The ZEISS Group publishes its Sustainability Report annually.

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Company Profile andBusiness ModelZEISS is an internationally leading technology enterprise operating in the optics andoptoelectronics industries. In the previous fiscal year, the ZEISS Group generated
annual revenue totaling more than 5.8 billion euros in its four segments Industrial
Quality & Research, Medical Technology, Consumer Markets and Semiconductor
Manufacturing Technology.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Today the ZEISS Group is represented in almost 50 countries.
About 30,000 employees worldwide work at more than 30
production sites, around 60 sales and service locations and about
25 research and development facilities. Founded in 1846 in Jena,
the company is headquartered in Oberkochen, Germany. The Carl
Zeiss Foundation, one of the largest foundations in Germany
committed to the promotion of science, is the sole owner of theholding company, Carl Zeiss AG.
The Annual Report 2017/18 provides information on the general
economic framework for the company’s development andlists the Group’s revenue by region in the Report on Economic
Position.

Manufacturing site
Sales and service site
Research and development site

8

Company Profile
and Business Model

BACK TOTABLE OF CONTENTS

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

The Four Segments and Their Products

MedicalTechnology

ConsumerMarkets

Consumer Products

Vision Care

Microsurgery

Corporatefunctions

Ophthalmic Devices

Research
Microscopy Solutions

Industrial
Quality &Research

Industrial
Quality Solutions

Process Control
Solutions

Semiconductor
Mask Solutions

Semiconductor
Manufacturing
Technology

Semiconductor
Manufacturing Optics

Strategic Business Unit

Segment

ZEISS Group

Serviceunits
Production
unit

Sales and Service Companies

Semiconductor Manufacturing Technology
With a wide product portfolio and globally leading know-how, theSemiconductor Manufacturing Technology segment covers a variety
of key processes in the production of microchips. ZEISS develops
and manufactures products using semiconductor manufacturing
technology, including lithography optics, photomask systems andprocess control solutions, key technologies for the manufacture of
extremely fine circuit path structures on silicon wafers – the material
from which the microchips are made. The technologies from ZEISS

enable further miniaturization of semiconductor structures, making
microchips smaller, more powerful, energy-efficient and cost-effective. The electronic equipment with which they are equipped fosters global progress in a variety of disciplines, including technology,
electronics, communications, entertainment, mobility, energy andartificial intelligence. With this segment, ZEISS is making a decisive
contribution to shaping the age of microelectronics and our digital
future. In the reporting year, the segment celebrated 50 years ofsemiconductor manufacturing technology at ZEISS.

Industrial Quality & Research
The products and solutions developed in the Industrial Quality &Research segment are focused on increasing productivity, quality
assurance in production and visualizing the tiniest of structures in
the area of science and research. The range of coordinate measuring machines, optical and multisensory systems, and software
solutions is complemented by comprehensive service offerings andinnovative technologies, such as 3D X-ray measure­ment in quality
assurance. They ensure perfect results, for example, in the automotive industry, mechanical engineering and aircraft construction,and in the plastics industry and medical technology. In the areaof science and research, the segment also covers the entire
spectrum of microscopy with light, ion, electron and X-ray microscopes. The solutions and services are used in the life sciences
and materials research, as well as for education and in clinicalpractice.
Medical Technology
The Medical Technology segment develops, manufactures,
markets and sells diagnostic and treatment systems, as well as
implants and consumables in the field of ophthalmology. In
addition, ZEISS offers visualization systems for microsurgery –for example, neuro/ENT surgery and dentistry. ZEISS aspires toimprove the diagnosis and treatment of diseases by constantly
enhancing its innovative products and applications. As a solutions
provider, the company plays an active part in the increasing
digitalization and systems integration in the health sector andcreates the conditions needed for efficient processes and effective
patient data management at its customers’ sites. 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.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Consolidated revenue by segment
Consumer Markets
The Consumer Markets segment stands for excellence in visioncare, photography, cinematography and sports optics. ZEISSdevelops, produces and sells solutions for the entire eyeglass
value chain. Alongside ZEISS precision eyeglass lenses, thisincludes devices for eye examinations and vision testing, digitalconsultation and measurement applications, as well as comprehensive services for eye care professionals. ZEISS is one of theworld’s largest manufacturers of eyeglass lenses and offers a
combined competence in eye and vision care that is unique theworld over. With its camera and cine lenses, binoculars, spotting
scopes and hunting optics, ZEISS offers discerning customers
high-end products and applications for their hobbies andprofessional needs.

Revenue by segment

2017/18

2016/17

Change over prior year in %€ million€ million

Adjusted for currency
influences

Semiconductor Manufacturing Technology

1,531

1,212

26

27

Industrial Quality & Research

1,549

1,538

1

4

Medical Technology

1,546

1,427

8

14

Consumer Markets

1,106

1,108

0

4

Other
ZEISS Group

85

63

35

35

5,817

5,348

9

12

2017/18

2016/17

Change over prior year in %€ million€ million

Adjusted for currency
influences

1,718

1,637

5

6

Consolidated revenue by region
Revenue by region and cooperation
partners

Europe, Middle East, Africa (EMEA)» Germany

596

608

-2

-2

Americas

1,263

1,316

-4

4

Asia/Pacific (APAC)

1,407

1,270

11

16

Cooperation partners

1,429

1,125

27

27

ZEISS Group

5,817

5,348

9

12

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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 corporate businessactivities and portfolio and provides central management andservice functions. The company is wholly owned by the Carl Zeiss
Foundation (Carl-Zeiss-Stiftung).
The Supervisory Board oversees the activities of the non-listedcompany’s six-member Executive Board. The Supervisory Board ofCarl Zeiss AG has 16 members. In accordance with the provisionsof the German Co-Determination Act (Mitbestimmungsgesetz),half the members are representatives of the sole shareholder –the Carl Zeiss Foundation – and the other half are representativesof the company’s employees.
The Carl Zeiss Foundation Statute governs the activities and accounting of its subsidiaries, the duties of the Executive Board andthe collaboration between the Executive and Supervisory Boards.
For example, when determining total compensation paid to theindividual members of the Executive Board, including any severance payments or pension payments, the Supervisory Board mustensure that the compensation paid is commensurate with theduties and performance of the board member and the company’s
financial position.
Further rules defining responsible and compliant corporate
governance within the company can be found in the ZEISS
Identity, Code of Conduct, governance and compliance guidelines, leadership principles and corporate directives.

The Carl Zeiss Foundation
The Carl Zeiss Foundation is the sole shareholder of Carl Zeiss AG.
This special ownership structure ensures stability: The Foundation
Statute prohibits the sale of shares, e.g. through an initial public
offering. In 1889 the physicist and entrepreneur Ernst Abbe created the Carl Zeiss Foundation, to which Carl Zeiss AG and SCHOTT
AG belong. The objectives of the foundation stipulated by Abbe
remain valid to this very day:» Safeguarding the future and responsible management of thetwo 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
With this unique corporate model, the Carl Zeiss Foundationand its two member companies made industrial and social history
in Germany. The Foundation uses the dividends generated byCarl Zeiss AG and SCHOTT AG to promote science – in particular
the natural and engineering sciences, and mathematics andinformation technology at universities in the German federal
states of Baden-Württemberg, Rhineland-Palatinate and Thuringia.
Today, the Carl Zeiss Foundation is one of Germany’s largest
foundations committed to the promotion of science.

For more information, visit:www.carl-zeiss-stiftung.de/english

Carl Zeiss Foundation
Heidenheim an der Brenz and Jena, Foundation acting as a shareholder
100 %

100 %

ZEISS
Group

SCHOTT
Group

Foundation company
Carl Zeiss AG
Oberkochen

Foundation company
SCHOTT AG
Mainz

Subsidiaries

Subsidiaries

ZEISS as a Partner to Researchers
For more than 100 years, over 30 Nobel laureates haveadvanced scientific progress with devices from ZEISS. For
example, Robert Koch discovered the causes of tuberculosis
and cholera and hence became the founder of modern
bacteriology. Christiane Nüsslein-Volhard was honored forher studies on the genetic control of embryonic development. The team consisting of Eric Betzig, Stefan W. Hell andWilliam E. Moerner performed groundbreaking work in thedevelopment of high-resolution microscopy techniques as thebasis for further progress in science and research.

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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 focused on
attractive future-oriented markets for optics, precision mechanics and optoelectronics. As a global technology enterprise, ZEISS
plays an active part in advancing cutting-edge technology anddrives the world of optics and related fields with its solutions.
A strategy consistently focused on continuous value enhancement is necessary both to ensure the sustainable businesssuccess of the ZEISS Group and to generate the necessary equity
through internal financing. The ZEISS mission statement is: “Asthe pioneer of science in optics, we continue to challenge thelimits of our imagination. With our passion for excellence, wecreate value for our customers and inspire the world in new ways.”This statement encapsulates the company’s fundamental
aspirations: ZEISS aims to leverage its strong customer focus
to consolidate and expand its position as a global technology
leader. With the commitment and expertise of its employees,
its innovative strength and culture of innovation, ZEISS shapes
the markets in which it is active. Moreover, the company
continues to work on internationalizing its business.
Its strategic program, the ZEISS Agenda 2020, is intended toalso make the company resilient and successful in the future.
In this context, the ongoing improvements to the company’s
customer offerings, competitiveness in all areas, digital solutions
and processes and collaboration as a global team all play a key
role.
Products and value chain
Optical and optoelectronic technologies will prove some of the
key technologies in the future. The technological and scientificapplications will increasingly penetrate all areas of life andimprove people’s lives. When developing new technologies andsolutions, ZEISS cooperates with renowned universities, research
institutes, customers and experts as part of global networks.
Suppliers and business partners around the world play a pivotal
role in ZEISS’ products and services and thus strongly impact thecompany’s sustainability performance.

ZEISS invests in innovations and solutions, and it secures its
innovative edge by means of patents. At the end of thereporting period, ZEISS held around 8,600 patents worldwide(prior year: Approximately 8,400). In the reporting period,
the company applied for new patents for approximately 450
inventions (prior year: Approximately 500).

ZEISS develops the products and solutions itself. When it comesto manufacturing, the company collaborates with partners that
supply either complete products or key components. Local purchasing organizations active around the globe source both production and non-production materials from local and inter­national
suppliers. The supplier base now includes 6,000 suppliers locatedin different countries around the world. The most important
suppliers include those for glass, electronic elements and components, metals, mechanical components, plastics, software andIT solutions. ZEISS business units generate more than 50 percent
of total purchasing volume with approximately 650 major suppliers that are located throughout EMEA, APAC and the Americas.
Depending on the business, market and customer segment,
ZEISS relies on different distribution channels such as sales andservice companies (SSCs), direct sales and distributors to give
all regions access to ZEISS solutions.
Business development
Continuous business development makes it possible to invest
in infrastructure and innovations, distribute a reliable dividend to
the Carl Zeiss Foundation and fairly compensate our employees
around the world. By paying taxes where value is created,
ZEISS has a direct impact on the future-oriented developmentof these different regions and the people who live there.

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Strategy andSustainability
As a company owned by a foundation, sustainability andbusiness success are inextricably linked at ZEISS. Sustainablevalue creation is a fixed component of the company’s strategy,
which focuses on innovative solutions that contribute topositive development in society and enables long-term,
profitable growth.

13

The ZEISS Agenda 2020 establishes the strategic framework for
future business development. Here, the focus of all activities isplaced squarely on the customer because ZEISS always aspires
to be their “preferred partner.” To live up to this goal, ZEISS not
only needs to meet the highest quality and service standards,
but also demonstrate that it operates responsibly above andbeyond the value chain.

ttof many people. This is another aspect that sets ZEISS apart asa pioneer in the field of scientific optics – namely, the profoundconviction that the company’s fundamental mission goes far
beyond simply generating profits.

5
SocialEngagement

Employees

Responsibility
at ZEISSduue cts
Ch andaintoP r alVuhö kte
el
w
uNow
pf
more
than
ever,
these
ambitions
govern the company that,
n
d
un
Um
gstogether
kette with its products, makes a significant contribution toresearchand development worldwide and improves the lives

environment that is open to innovation. Only companies that
respect the needs and motivations of others – particularly
customers, business partners, employees and local communitiesu–h andkcooperatewith them on an ongoingteel basis can achieveöwubusinesspf
long-term
success.
At
ZEISS,
ensuring
acceptance for
n
d
un
Um
g
our own activities
sket and assuming responsibility for the environteand society is an integral part of our business
ment, employees
philosophy. Behaving with integrity and in a lawful manner is thefoundation upon which the ZEISS business philosophy is built.
Yet in many areas, ZEISS goes even further and achieves evenmore.

dP ro crt s

WedP ro cs

our obligations include profitable growth, responsibility toward
our employees, a commitment to society and social issues aswell as the advancement of science and education.

Ansatz zurOur approach to sustainability
Verantwortung
ZEISS understands that growth is only possible in an intact

4
EnvironmentenIntegritätuComplia nd
nce

plian
ce

Goals and values
Verantwortung
As a foundation-owned company, social responsibility is one of
the most important goals shaping the ZEISS Group’s businessbei ZEISS
operations. Codified by the founder of the Carl Zeiss Foundation,

3
Employees

engagem t
l En
cia
So

Guidelines for daily activities
The ZEISS Group’s Code of Conduct, which went into effectiter worldwide in 2007, lays out
for all of the company’s
Mitarbelocations
binding principles that guide employees and management insocarrying out their daily activities in a responsible
manner. It covers topics such as the fair treatment of coworkers and business
partners, product safety, environmental protection and fighting
corruption. More detailed company directives are available forall the topics addressed in the Code of Conduct.

liches undhaftllsc ngagementseE
Ge ialeszliches undhaftllsc ngagementseE
Ge ialesz

Thus ZEISS’ commitment to sustainability is also intended togenerate interest in the company and its solutions among
tarbeiter Responsible behavior contributes greatly
relevant
Mistakeholders.
to the enormous trust customers place in the ZEISS brand. Thisis also the reason why ZEISSsoactively funds research and training
and helps solve social and health care problems. This is an
integral part of our corporate culture.

Strategy andSustainability

2
Products andValue Chain

IntegrityanComplia dnce

Company Profile
and Business Model

BACK TOTABLE OF CONTENTS

1
Integrity andCompliance

E

ro
n vi

nm

The approach taken by ZEISS to address, implement and integrate
the requirements for responsible and sustainable business practices in its day-to-day operations is divided into five key areas ofactivity: Integrity and Compliance, Products and the Value Chain,
Employees, Environment and Social Engagement.

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Drivers of innovation
With its innovations, ZEISS drives progress, efficiency and thesuccess of its customers – another basic requirement for its own
economic success. Thus ZEISS constantly strives to achieve aleading position worldwide in the evolution of existing products
and the development of new ones. As part of this process, innovation at ZEISS is always situated within the context of society
as a whole. The primary objective of all innovations is to meetcustomers’ current and future needs. The optical and optoelectronic technologies from ZEISS pave the way for new scientificfindings and many innovations in other industries. In the future,
life sciences like bionics and medical technology will become
increasingly vital for a modern society. The developments insemiconductor technology enable digitalization in industry andsociety. From intelligent sensor systems and different types ofrobotics to the artificial intelligence enabled by these technologies – all these innovations will increasingly shape how people
live and work. Since all advances and enhancements in research,
production and quality processes require more precise findings,
through its expertise ZEISS makes valuable contributions to thedevelopment of new solutions.

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue ChainContribution to global Sustainable Development Goals
ZEISS pledges its commitment to the global Sustainable Develop­
ment Goals that were adopted by the United Nations in the fallof 2015. A total of 17 goals show us the path to the future wewant to achieve by 2030 and call on companies, politicians andsociety to make their respective contributions. ZEISS wants to
do its part and has given thorough consideration to the global
Sustainable Development Goals and the role it can play (seepage 23).

3
Employees

4
Environment

5SocialEngagement

Growing External Requirements
As a global player, ZEISS meets a variety of requirements
for conducting business with integrity and in a legallycompliant, sustainable manner. These include national andinternational requirements pertaining to the observance ofhuman rights and implementation of climate protection
goals and guidelines like those listed in the European WEEE
Directive, which governs the collection, recycling andrecovery of electrical and electronic waste. In 2017, theEuropean Medical Device Directive created a legal frame­work intended to improve patient safety in Europe. This
directive replaced the previous Medical Device Directive
and sets high standards for the quality and safety of medical
products. The CSR reporting obligations, which also went
into effect in 2017, require transparency on environmental,social and employee matters, human rights, corruption andbribery. These only affect listed companies and hence only
pertain to the listed company Carl Zeiss Meditec AG.
Carl Zeiss AG complies with this reporting obligation by
publishing a separate Non-Financial Group Report onimportant non-financial aspects related to the ZEISS Group.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Organizational Structure for Sustainability
At ZEISS, ultimate responsibility for sustainability lies with the
Executive Board of Carl Zeiss AG. The Head of Corporate Auditing,
Risk and Quality Management oversees the implementation in
day-to-day operations and reports to the Chief Financial Officer.
The Responsibility at ZEISS work group was established in 2014
and is headed by a Central Sustainability Coordinator, who also
manages sustainability within the company.
The work group comprises representatives from Environmental
Protection, Communications, Human Resources, Supply Chain
Management, Corporate Strategy, Occupational Health and
Safety, Compliance and Sustainability Management. It meets
twice per month and ensures that the company takes a systematic approach to addressing the specific sustainability topics.
The work group cooperates with the Internal Process Owners
to firmly entrench sustainability topics within the organizationand to establish and cultivate a sustainability network at thecompany. In addition, it defines the content for the ZEISS Group’s
Corporate Sustainability Program. In the reporting period, themembers of this work group from Environmental Protection andOccupational Health and Safety discussed suggestions for specificgoals with the Executive Board, which then approved these.
To complement the work group’s efforts, an interdisciplinary
panel for sustainability management was started in 2018. This
comprises representatives from the individual segments andis organized by the Central Sustainability Coordinator. The
represen­tatives were appointed by the respective Management
Boards. As an agile platform, the panel ensures, together withthe central team, that the segments’ specific requirements
are considered in this centralized approach and simplifies communication between the segments.

Goals of the “Responsibility at ZEISS”
Work GroupThe Responsibility at ZEISS work group set itself the follow­
ing objectives for fiscal year 2017/18 based on ZEISS’established brand values and many years of preparation.
It continues to work on achieving these goals:» F urther develop the sustainability program and its
measurability» Improve sustainability performance» Increase transparency and traceability for internal andexternal stakeholders

Dialogue with stakeholders
To ensure the company’s continued business success, it is absolutely essential to incorporate the interests of stakeholders instrategic considerations and to win over stakeholders interested
in collaborating with ZEISS. The ZEISS Group implemented asystematic process to identify its key stakeholders. The company
concentrates on issues relevant to these stakeholders when communicating with them. These were determined within the scopeof a materiality analysis.
ZEISS receives questions about sustainability through manydifferent channels. Stakeholders, including customers, suppliers, interested members of the public and employees, have theopportunity to ask questions and express their concerns via the

ZEISS website. ZEISS has set up an email address specifically forthis purpose: responsibility@zeiss.com. Questions are either
answered by the central Responsibility at ZEISS project team,which is responsible for this topic, or forwarded to a specialist.
This way, ZEISS ensures that the requests are processed as
quickly as possible and with maximum accuracy.
Overall, ZEISS stakeholders expect greater transparency asconcerns sustainability issues. The publication of the ZEISSGroup’s first Sustainability Report in fiscal year 2017/18 was animportant step toward increasing communication with them.
It quickly provided many people with information on issues
relevant to them.
In fiscal year 2017/18, various stakeholders submitted inquiries
on a wide range of sustainability issues. The central teamcollected, processed and assessed these. There was considerable
interest in supply chain, environmental management, quality
as well as sustainable corporate leadership and acting withintegrity. Customers especially wanted to know about corporate
environmental management at the ZEISS Group, in particularwhether a certified environmental management system was inplace. They also wanted to learn what was being done to reduce
potentially hazardous materials. Responsibility along the supply
chain also played an important role, with questions about how
conflict minerals are handled and processes for ensuring humanrights are observed. The central team received questions about
fundraising opportunities, vocational training programs and theuse of internal company information for degree theses and otherprojects. There were also inquiries from a variety of research
institutes and universities as to whether ZEISS representatives
would be available to give keynote talks on sustainability.

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Memberships and Initiatives
As a global player, the ZEISS Group is active in many natio­
nal industry associations, participates in regional initiatives
and is involved in many associations that provide financial
support for colleges, universities as well as scientific andcultural institutions. The President and Chief Executive
Officer of the ZEISS Group, Prof. Dr. Michael Kaschke, is amember of the German Council of Science and Humanities.
In Germany, the company is involved in the Knowledge
Factory (Wissensfabrik) intercompany cooperation projectand is a long-term member of the Max Planck Society.
In addition, the company is a member of the association
East Württemberg Regional Alliance for Family (Regionales
Bündnis für Familie Ostwürttemberg e.V.) and is one of thesignatories of the Diversity Charter, an initiative to promote
diversity in German companies. At the international level,
ZEISS is a member of the “Vision Council”, a non-profit
trade association, and helps fight tuberculosis through theinitiative “Stop TB”.

Company Profile
and Business Model

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

Banks

Ongoing communication between ZEISS and banks

Carl Zeiss Foundation

Members of the Executive Board of Carl Zeiss AG sit on the Management Advisory Board of theFoundation, 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 like newsletters and social media

Employees and management

International communication channels, annual performance reviews, employee satisfaction surveys,
staff meetings, Dialogue Tours

Governments, including municipal and state
governments (Baden-Württemberg,
Thuringia)

Financial reporting, compliance reports, dialogue with Foundation representatives(i.e. with the ministers 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

Research institutes and universities

Partnerships with universities; funding for professorships, Ph.D. dissertations, bachelor theses andmaster theses; lectures given by managers at universities

Suppliers

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

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Definition and prioritization of material sustainability
issues (GRI 102-42, 102-43, 102-44, 102-46)
Those topics with high stakeholder expectations and which
also have a relevant impact on the employees, environmentand society are extremely relevant and part of this Sustainability
Report. In calendar year 2016, potential issues were identified
from different sources. These issues were then evaluated fromthe standpoint of different stakeholders, and an assessment
was performed to determine the significance of these issues for
ZEISS’ ongoing business success. The 15 topics defined as partof this process are now considered material issues for the ZEISSGroup.
In fiscal year 2017/18, the materiality analysis process was
further expanded by analyzing the effects of the company’s own
operations and the systematic documentation of stakeholders’different expectations. ZEISS intends to further enhance bothprocesses in fiscal year 2018/19.

Company Profile
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Strategy andSustainability

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Products andValue Chain

Defining the impact
In order to better understand the effects of the company’s own
business activities, initially those topics were addressed that had
been identified in the previous materiality process. To assess
these effects, a questionnaire was prepared. The inputs acquired
were used to locate the impact along the value chain and toascertain the magnitude and probability of the effects. The
respective experts from the Responsibility at ZEISS work groupperformed the analysis, which they then discussed with thepanel for sustainability management. It was also possible toaddress those issues which had not been considered and include
them in the assessment. This resulted in a better understandingof where relevant effects emerge and where particular attention should be paid to the sustainability activities. This process
confirmed the material issues for reporting, and these remainunchanged in this Sustainability Report.

3
Employees

4
Environment

5SocialEngagement

Documenting stakeholder expectations
A systematic method for better documenting and incorporating
stakeholder expectations in the materiality process was developed
as part of an academic thesis and tested. Questionnaires wereprepared and sent to numerous stakeholders who, for eachsustainability issue, estimated how important its management isfor their readiness to cooperate with ZEISS and how pressing it
is for ZEISS to take up each issue. In addition, the stakeholders
could list topics which, in their opinion, ZEISS had not yet
addressed. The questionnaire was geared toward employees,
suppliers and investors. The assessment showed that those topics
ZEISS considered material issues were also extremely relevant for
stakeholders, even though the ratings from the different stakeholder groups varied.

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Integrity and Compliance (GRI 102-47)
Material issues

GRI topics

Goals

Selected measures in FY 2017/18

Location of impact»»Business ethics»»Legal compliance»»Anti-corruption, anticompetitive behavior,public policy, customer
privacy, socioeconomic
compliance»»Increased value orientation
and behaving with integrityin accordance with the ZEISSGroup’s Code of Conduct»»Compliance with applicablelaw in order to secure thetrust of customers andpartners»»Protection of the ZEISS brand»»Redesign of the Group-wide online courses on the Learning Management
System for basic compliance training and special training programs on
anti-corruption and fair competition»»The centralized assignment and tracking of participants in the Learning
Management System»»Overhaul of the Compliance Management Systems and the directive on giving
and receiving benefits»»Creation and publication of instructions on how to act in the event of a conflictof interest»»Efficient organization of data privacy at ZEISS in a uniform global structure»»Upstream value chain»»Downstream value chain

Goals

Selected measures in FY 2017/18

Location of impact»»Improved sustainability performance of ZEISS products
and services as well as in the
supply chain»»Continuation of the sustainability audits piloted in 2017 and the develop­ment of action plans in the event suppliers do not meet ZEISS sustainability
requirements»»Sustainability requirements in accordance with the Code of Conduct publishedby the Responsible Business Alliance (RBA) became part of contractual agreements with suppliers in FY 2017/18»»Design of an eLearning course for supply chain functions and suppliers on themost important content from the RBA Supplier Code of Conduct»»Creation of an annual report to evaluate the supply chain as concerns theorigin of conflict minerals based on the recognized report template fromthe Responsible Minerals Initiative and OECD (Organisation for Economic
Cooperation and Development) Guidelines»»Upstream value chain»»Downstream value chain

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

GRI topics»»Procurement standards »»Supplier environmental»»Product safetyassessment, freedom»»Material restrictionsof association andcollective bargaining,child labor, forced orcompulsory labor, supplier social assessment,
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Strategy andSustainability

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Environment

5SocialEngagement

Social Engagement (GRI 102-47)
Material issues

GRI topics

Goals»»Promotion of scientific »»Economic performance, »»Promotion of scientific knowlresearch and education
indirect economic imedge from preschool children»»Regional society
pact, local communities
to doctoral candidates»»Health promotion»»Improved patient quality oflife through solutions and new
standards in optometry andmedical technology

Selected measures in FY 2017/18

Location of impact»»Sociopolitical commitment at multiple schools throughout Germany to support »»Upstream value chain
the initiative 16+ MINT (MINT = STEM: science, technology, engineering and»»Downstream value chain
mathematics)»»Kick-off event for 2018 – “Rethinking Education,” first ZEISS MINT Awards forhigh school students and occupational trainees in honor of their outstanding
dedication to the STEM subjects»»Primary sponsor of the MINT Festival in Jena, Germany, an event celebrating
the sciences for grade school and high school classes»»Primary sponsor of the national physics competition, also providing support
for the national mathematics competition»»Support totaling over 500,000 euros from the Education and Science Fund foraround 25 projects in the natural sciences and engineering»»Continuation of existing programs to refurbish ZEISS products and donate
them to disadvantaged regions without sufficient access to medical care andthe five ophthalmology training centers in Indonesia, Nigeria, Paraguay, Sudan
and Tanzania (ongoing)

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Strategy andSustainability

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Employees

4
Environment

5SocialEngagement

Employees (GRI 102-47)
Material issues

GRI topics

Goals

Selected measures in FY 2017/18

Location of impact»»Occupational healthand safety»»Work-life balance»»Diversity (including
demographic changes)»»Employer relationships
and talent management»»Employment, labor/
management relations,occupational healthand safety, training andeducation, diversity
and equal opportunity,
non-discrimination,
freedom of associationand collective bargaining»»Global Team ZEISS:
Promote enhanced collaboration and the development of
all employees»»Reduce the performanceindicator for the number ofworkplace accidents (LTIFR)
to under 2.25 by fiscal year
2022/23»»Defining specific performance indicator targets to reduce the frequencyof workplace accidents»»Appointment of a Global Coordinator for Occupational Healthand Safety (OHS)»»158 young people began a vocational training program or a combined
degree-and-vocational-training program at ZEISS Germany»»First parent-child workspace, a pilot project, opened in Oberkochen»»Opportunity to work in other countries for a limited period of time(101 placements abroad in 37 different countries)»»Establishment of a Diversity work group with representatives from eacharea and region»»Diversity Days featuring 35 activities held in 14 countries»»Global roll-out of the ZEISS Learning Platform»»Internationalization of the eBooks available in German, English, Spanish
and Chinese»»Investments in the expansion of the eLearning offering»»In the company

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5SocialEngagement

Environment (GRI 102-47)
Material issues

GRI topics

Goals

Selected measures in FY 2017/18

Location of impact»»Environmental
compliance»»Climate change»»Efficient use of natural
resources»»Energy, water andeffluents, emissions,effluents and waste,environmental
compliance»»Economical use of all natural
resources to protect theenvironment»»50%* reduction in CO2emissions (Scope 1 and 2)»»50%* reduction in energy use»»40%* reduction in water
consumption»»30%* reduction in waste
accumulation»»Independent EH&S audits at major production facilities to review legal
compliance status»»Participation in CDP (previously: Carbon Disclosure Project) as the ZEISS Group»»Establishment of mandatory environmental targets for the ZEISS Group»»Continuation of several projects to conserve energy and resources at ZEISS
sites»»Upstream value chain»»In the company»»Downstream value chain* Reduction targets byfiscal year 2019/20
relative to the company’s
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Company Profile
and Business Model

Strategy andSustainability

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3
Employees

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Environment

5SocialEngagement

How ZEISS Supports the Achievement of the Global Sustainable Development Goals
In the fall of 2015, the United Nations adopted
the globally applicable Sustainable Development
Goals (SDGs) to be achieved by 2030. Private
industry is also called upon to do its part toensure fair development worldwide that creates
prosperity within the limits of what the planetcan sustain.
ZEISS has pledged its support for this agenda and wants to assist
with its implementation. The company is aware that all 17 goals
are important and require support. In order to concentrate on
those areas in which the company possesses particular influence
due to its business processes, product portfolio and services,
ZEISS has selected the following four goals.

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Company Profile
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Strategy andSustainability

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Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

3 Good Health and Well-being: Ensure healthy lives andpromote well-being for all at all ages.

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

Focus: Globally, 37 million people are blind, and 124
million suffer from a visual impairment
ZEISS is raising the bar in health care by offering solutions forophthalmology and medical technology and helps drive medical
progress by supplying microscopy products. The aim is to help
improve the lives of patients everywhere. Over the course of the“VISION 2020: The Right to Sight” initiative, ZEISS has supported
five diagnostic, treatment and training centers for ophthalmology
since 2005. In line with the idea of “helping people help themselves,” the objective is not only to provide access to state-ofthe-art medical technology in developing and emerging countries
through training centers, but also to establish locations where
health care providers are taught how to use state-of-the-art medical technology and apply it. These centers are located in Indonesia, Nigeria, Paraguay, Sudan and Tanzania.

Focus: Globally, 264 million children and adolescents are
not in schoolZEISS fosters aspiring young scientists – from small children
right up to doctoral candidates – through numerous educational
programs. ZEISS acts on the responsibilities set forth in its Foundation Statute, shares educational content in a comprehensible
manner and makes science easier to understand. Examples ofthis include the company’s involvement in schools and its microscope donations to various educational initiatives.

Focus: Over 50 percent of the world’s population does
not have sufficient access to basic health care services
The company also makes financial donations and in-kind donations in the form of ZEISS products and solutions through a variety
of different projects in order to give people around the globe
access to high-quality medical care.

Focus: In Germany, just 20 percent of the German population surveyed as part of a study believe that schools
adequately prepare students for life after graduation
With the goal of bringing young people closer to science andresearch, ZEISS has sponsored Jugend forscht, Germany’s oldest
and best-known competition for young researchers, for 20 years.
During the kick-off event for the “2018 Initiative – Rethinking
Education” (Initiative 2018 – Bildung Neu Denken), the company
also presented the MINT Awards to honor five projects by highschool students, vocational trainees and university students.

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Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

8 Decent Work and Economic Growth:
Promote sustained, inclusive and sustainable economic
growth, full and productive employment and decent work
for all.
Focus: 197 million people worldwide are unemployed
As a global technology company, ZEISS provides jobs to approximately 30,000 employees. They are offered a safe and motivating work environment, where hard work and dedication are
acknowledged and individual advancement is possible. A global
survey of employees conducted on a regular basis determines
the state of the corporate culture at ZEISS.
Focus: In more than 50 countries worldwide, humanrights are under siege or egregiously violated
When working with suppliers, the company has pursued acentralized approach for integrating sustainability aspects into
the supply chain since 2016. This approach focuses on compliancewith environmental and social standards at suppliers’ sites. To
monitor this, demand-driven assessments and audits are
conducted based on risk.

3
Employees

4
Environment

5SocialEngagement

12 Responsible Consumption and Production:
Ensure sustainable consumption and production patterns.
Focus: Humanity would require 1.7 Earths to sustain
current global consumption of resources
ZEISS continues to work on finding ways to use natural resources
as efficiently as possible and prevent pollution. This is achieved inpart through investments in measures to boost energy efficiency,
consistent waste reduction and the integration of environmental
aspects in product development.
One example of product-integrated environmental protection is
the ZEISS AirSaver, a performance package comprising softwareand a control module for lowering the compressed air consumption of measuring machines. The energy saved reduces CO2
emissions, cuts costs and, as a result, the package pays for itself
after only a few months.
In addition, refurbishment programs are in place for several
product groups, including electron microscopes. Older, preowned products are completely rebuilt in accordance withZEISS standards and made available for resale to customers(see page 32).

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01

Integrity andComplianceBusiness activities compatible with statutory
regulations and internal rules are an integral partof the ZEISS corporate culture. The company’s
mandate to act with integrity stems from thevalues that have been shaped by the history ofthis foundation company.
The company stands for integrity which customers, suppliers andbusiness partners trust. For this reason, legality, fair competition
and the proper treatment of business partners and employees
are indispensable elements of successful business operations.
This requires an open and respectful corporate culture which,along with an effective Compliance Management System,
ensures that any deficiencies at ZEISS are detected, identified
and corrected.

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Company Profile
and Business Model

1
Integrity andCompliance

Strategy andSustainability

2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Compliance

Early identiﬁcationof misconduct

2. D
et

nd

t
ec

r re

Organizational
and procedural
improvements

Processes to ensure integrity
The Compliance Management System has been established at
all companies within the ZEISS Group and features modules onleadership, risk assessment, standards, organization, training
and communication as well as oversight and controls. The core
processes are:» Prevent
A clearly structured catalogue of directives and mandatory
training seminars is used to continually raise awareness andprevent incidents from occurring.

po
es

Co

At ZEISS, compliance is organized on three different levels: On
the Group level the Chief Compliance Officer, who reports tothe Executive Board, and the Director Corporate Compliance areresponsible for the Compliance Management System. This area of
responsibility encompasses the design of the Compliance Management System and assisting with the identification and rectificationof all compliance violations that might jeopardize the reputationof the entire ZEISS Group. Each strategic business unit has appointed its own Group Compliance Officer, who coordinates complianceactivities for the particular area and its companies. In addition,
each individual company has its own local Compliance Officer,
who is responsible for implementing training measures on site andresolving any local compliance violations, and who serves as thepoint of contact for both employees and management.

t
en
ev

4.

Guidelines and structures
At ZEISS, the foundation for compliance management is the Codeof Conduct, which was first published in 2007 and most recently
updated in 2016. This describes the risks of conducting businessactivities and provides specific recommendations on how to act.
As the basis for entrepreneurial activity, the Code of Conduct is
mandatory for all employees and managers at the ZEISS Group
worldwide. It contains rules on various issues, including data protection, product safety, environmental protection and combating
corruption. More detailed company directives are available for all
the topics addressed in the Code of Conduct.

IT solutions
and trainings

1.
Pr

Legality means compliance with all laws and regulations andis the foundation of sustainable corporate governance. Yet
integrity cannot simply be decreed. Instead, it must be actively
put into practice by management, who act as role models, andbe enshrined in the corporate culture.

ct

3.

R

Appropriate reaction
to individual casesof misconduct

Ensuring that all ZEISS business activities conform with the prevailing rules is the collective responsibility of the Executive Board andthe heads of the ZEISS companies. This includes observing dataprotection, customs and export provisions, laws pertaining to theenvironment as well as regulations on occupational and productsafety. Moreover, the periodic inquiry into compliance risks at
all ZEISS companies is an important part of risk management
throughout the Group. Regular internal and external audits andassessments are conducted to determine if all legal requirements
are being met.

» Detect
In spite of all the preventive measures, legal violations andcases of non-compliance can still occur within the company.
To identify such cases, employees are called on to actively
cooperate and should report suspected violations. Different
departments and experts, such as Corporate Security orInternal Auditing, also assist with the investigation of suspectedcompliance violations. Depending on the case, the company
can also avail itself of external assistance.
» Respond
The company then takes appropriate measures to immediately
eliminate unlawful behavior.
»C orrect
Depending on the type of misconduct, systematic or procedural
measures may be necessary to prevent recurrence.

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Company Profile
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MeasuresAll employees must complete and regularly repeat a basic
compliance training program, which includes passing a final
exam. This course covers the topics found in the ZEISS Codeof Conduct. Employees exposed to particular compliance risks,such as in purchasing, sales and marketing, as well as membersof management, must complete additional training modules on
the topics of anti-corruption and fair competition. The eTrainings
were completely revised in fiscal year 2016/17 and are available
in 14 languages. The new Learning Management System enables
the assignment of the course content to specific employees andthe centralized tracking of how many people have completed
the eLearnings.

Strategy andSustainability

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3
Employees

4
Environment

5SocialEngagement

Anti-Corruption

Political Influence

ZEISS is successful in competitive markets because its products
and services offer customers the right combination of priceand quality. Since it is aware that corruption impedes progress
and innovation, the company has issued clear rules to preventand battle corruption. These rules are a vital part of compliancemanagement as described above.

The government creates the framework for business operations.
Associations and interest groups help negotiate standards andcommon development goals. This is why ZEISS is a member ofacademic, industry and employer associations.

Internal company guidelines on granting and receiving benefits
such as gifts or invitations constitute an important component ofanti-corruption training. Using specific examples, a checklist for
employees helps them assess whether or not particular benefits
are permitted. Moreover, there are also obligatory directives
for auditing sales partners. These are supported by the auditing
tool from an external provider. The goal is to determine whether
sales partners were ever previously suspected of corruption or
involvement in a cartel, export control, money laundering or
similar crimes, or exhibit any other risk factors that could damageZEISS' reputation.

ZEISS explicitly affirms the independence and integrity of parliaments, parties and governments as the cornerstones of basic
democratic order and, in the company’s communications work,
repeatedly emphasizes that a free, democratic regulatory framework is necessary for successful business activities in a globalized
world.
The companies in the ZEISS Group do not make any financial
donations or other contributions to parties or political institutions,because the Carl Zeiss Foundation Statute stipulates that all
support must be politically and religiously neutral.

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Employees

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Data Privacy
ZEISS is aware of the importance of protecting personal data foran ethical, future-oriented business model. The company aims tooperate in compliance with international guidelines and nationallaw so that ZEISS remains a trustworthy partner for its customers,
suppliers, business partners and consumers.
Since an increasing number of companies and individual strategic
business units handle highly sensitive personal data like healthdata, evidence of dependable and appropriate data privacy practices are a requirement for business relationships built on trust.
Violations not only damage a company’s reputation, but can also
result in heavy fines.

Guidelines, structures and processes
International and national data privacy regulations provide thegeneral framework. These are supplemented by a compulsory
internal directive on handling personal data, which is applicableworldwide. All employees and partners are bound to secrecy andmust sign a declaration to this effect. From an organizational
standpoint, data privacy is integrated into Corporate Legal &Patents. Potential crisis scenarios are simulated as part of preventative crisis management. The Corporate Data Protection Officer,
who together with a two-person team defines principles andrules governing the protection of personal data and monitors
compliance, reports directly to the Chief Financial Officer.
Members of the Executive Board or the Management Boardfor the strategic business units are responsible for implemen­tation and compliance. To support these efforts, Corporate Data
Protection employs a data privacy management system. Eachcompany has a Data Protection Coordinator who is responsible
for training measures, acts as the local point of contact for allquestions from employees and management and remains incontact with the Corporate Data Protection Officer.

Measures and results
In light of new legal frameworks, especially the European
Union’s General Data Protection Regulation and China’s Cyber
Security Law, ZEISS needed to organize data protection within a
globally standardized structure. This process was completed in
May 2018. An eLearning module on the subject of data privacy
has been available in 14 languages since fiscal year 2016/17.
Following an update to the Learning Management System in
November 2017, it is now possible to track participation fromone central location.

Consistent Data Privacy Worldwide
To ensure a consistent level of data privacy in its business
operations, ZEISS observes the data protection standards
for the European Union in all markets where the company isactive as well as local requirements. The common data protection level is a hallmark of excellence for the entire Groupand a promise of quality for external partners, customers,
employees, suppliers and other stakeholders.

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02

Products andValue Chain
With its solutions, ZEISS constantly advances theworld of optics and helps shape technologicalprogress. With its passion for excellence, thecompany creates value for its customers and inspires
the world to see in new ways.

© Leone Luraghi

ZEISS offers a wide variety of highly specialized products that are
as diverse as its different customer groups and their particularrequirements – from hospitals and medical practices toresearch laboratories and technology companies andextending to automotive manufacturers and consumers.
For all of them, the name ZEISS is a promise of quality,
innovation, safety, reliability and responsibility. And formany of our customers, ZEISS also stands for better
health and improved quality of life.

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Product Safety and Product Development
ZEISS products and services contribute to medical advance­ments in neuro/ENT surgery and support physicians on every
continent in improving their patients’ quality of life. Eyeglass
lenses from ZEISS help people around the world enjoy better
vision, while intelligent measuring systems from ZEISS increase
efficiency in different sectors, including the automotive andaerospace industries. For example, state-of-the-art coordinate
measuring technology is used to inspect the fit accuracy ofdrive train components in vehicles to ensure low fuel con­sumption. For ZEISS, product responsibility means more thanjust innovative, effective and safe products. It also includes
responsible value chain creation from raw materials to
product sales.
Guidelines and structures
At ZEISS, creating safe products is a matter of course. ZEISS
requires that all applicable laws governing product safety,
both when the products are in use and being disposed of, be
implemented consistently. As part of a comprehensive risk
assessment during product development and production, ZEISS
ensures that, prior to a product launch, all necessary measures
have been taken to guarantee that customers and third parties
can use and dispose of the product safely. Instructions foruse and training help users operate ZEISS devices safely andsuccessfully. In addition, potential vulnerabilities are reviewed
within the scope of continuous market surveillance. As a result,
ZEISS is able to respond by implementing potential improvements and, if necessary, rapidly executing corrective measures.
The issue of product safety and its importance for the company’s
success are enshrined in the ZEISS Group’s Code of Conduct.
All applicable country-specific laws and guidelines for ZEISS’
primary markets lay the foundation for product development,

design and sales – in accordance with the applicable standards.
Individual specialists from ZEISS play an active role in their on­
going development by European and international committees
and standardization bodies and thereby bring fresh ideas toproduct development at ZEISS.

A checklist outlines the mandatory minimum content. The goalof this systematic focus on the development process is to givecustomers the right products and solutions with respect tocustomer expectations, customer benefit, quality, time and costs,
thereby achieving a significant competitive edge.

Within the ZEISS Group, guidelines and monitoring ensurecompliance with standards and rules. The responsibility for
product safety lies with the Executive Board or the Managing
Directors of the individual companies, respectively, as well aswith Safety Officers responsible for the particular product.
They must make the structures, resources and necessary skills
available to properly implement all mandatory legal requirements. The following principles apply worldwide:

ZEISS only releases products after successfully addressing the
aforementioned areas and the corresponding requirements.
In addition, ZEISS continuously strives to reduce the environ­mental impact within the product life cycle. The mandatory
checklists feature two related categories that must be observed
during development: The products’ environmental performanceand sustainability over the products’ entire lifetime. Based on
the company’s environmental principles, this approach to
product-integrated environmental protection constitutes anobligation to adhere to strict process management. This is how
the company ensures that all ZEISS products meet the applicable
environmental regulations and guidelines. In particular, ZEISS
ensures that:» P roduct safety requirements must be observed during every
stage of the product life cycle.
» C ustomer feedback must be used as the basis for productimprovements.
» Ongoing market surveillance is utilized to ensure that products
continue to meet the highest safety requirements.
» The safety of certain products must be verified by independent
organizations.
Processes
The Product and Solution Generation process is of funda­mental
importance. The purpose of this guideline is to both define
the minimum requirements for a modern develop­ment process
at the ZEISS Group and specify mandatory mini­mum content.

» Raw materials are used that are harmless to human healthand the environment.
» T he manufacture and use of products generate as few
effluents and emissions and as little waste as possible.
Objectives and results
ZEISS products must not endanger users’ safety or health.
To guarantee this, the applicable requirements are implemented
and, where needed, the necessary approvals are obtained tolaunch the products. The certification of relevant products byindependent testing centers ensures a higher safety standard.

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Updated minimum requirements governing the further integration of sustainability aspects in the product development process
became binding for the development of all ZEISS products on
1 October 2018.
Many of the ZEISS strategic business units have switched from
disposable to recyclable packaging for their products in recent
years. Recyclable packaging is most frequently used for products
from the Industrial Quality & Research and Semiconductor Manufacturing Technology segments delivered to customers within
Europe.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

3
Employees

4
Environment

5SocialEngagement

Product Refurbishment
Starting in fiscal year 2015/16, the Research Microscopy
Solutions strategic business unit began a program to refur­bish electron microscopes: Pre-owned systems are brought
up to date and then sold at a discounted price. Customers
receive a one-year warranty, and replacement parts areguaranteed for a period of five years. Since the start of the
program, around 70 electron microscopes have been refur­
bished. In fiscal year 2018/19, the program will be expanded
to include light microscopes. In addition to economic advan­
tages, this program benefits the environment: Refurbishment
reduces a system’s ecological footprint because the raw
materials used to produce it and the necessary energy are
spread out over a longer service life. The unit has beenable to draw on the experience of the Retrofit and Used
Machines departments at the Industrial Quality Solution
strategic business unit for its refurbishment program. Thisbusiness unit has been retrofitting existing systems at its
customers’ sites with the latest technologies since 2002.
In fiscal year 2017/18, over 400 refurbished systems
were sold thanks to on-site retrofitting and modernizedpreviously-owned machines. Revenue generated fromthese services totaled over 10 million euros.

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Employees

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Environment

5SocialEngagement

Procurement and Supplier Management
Due to the significant value creation along the supply chain, theprocurement process is critical to the long-term success of theZEISS Group. Local purchasing organizations active around theglobe source both production and non-production materials
from local and international suppliers. The company’s constantly
evolving supplier base now includes over 6,000 suppliers locatedin different countries around the world. ZEISS business units
generated more than 50 percent of total purchasing volume
with approximately 650 major suppliers that are located in thefollowing regions: 73 percent in EMEA, 14 percent in APAC and12 percent in the Americas.
Guidelines and structures
The company works very closely with its global supplier network to reduce the negative impact of its business operations.
For this, ZEISS takes a risk-based approach for the systematicmanagement of suppliers as concerns sustainability aspects. As
such, environmental and social aspects play an important rolein the selection of and collaboration with suppliers. In complex
supply chains, environmental pollution, inadequate occupational
health and safety standards, and child or forced labor all represent potential risks that ZEISS wants to proactively address. To
ensure its own requirements are fulfilled and the expectations ofcustomers, employees and society at large are met, ZEISS plays
an active role in ensuring that suppliers adhere to environmental
and social standards.
ZEISS suppliers must adhere to the provisions listed in theinternationally 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 RBA Code of Conduct is based on the

UN Guiding Principles on Business and Human Rights andinternational human rights standards like those issued by theInternational Labour Organization (ILO). ZEISS expects all suppliers
who have a direct business relationship with the company tomeet the minimum standards in the Code of Conduct. The
strategic suppliers outside of the ZEISS Group, who makeup around 50 percent of the company’s external purchasing
volume, must recognize the RBA or a similar code of conduct,adhere to it and inform their sub-suppliers and contractors of
the standards. Demand-driven assessments and audits are
conducted to monitor compliance with the Code of Conduct.
On principle, ZEISS does not enter into any business relationshipif there is evidence of human rights deficiencies.
In order to anchor the topic of human rights more strongly
within the company, ZEISS has assembled a work groupwith representatives from the Supplier Sustainability Team,
Corporate Human Resources and Sustainability Coordinators.
This group develops strategies for implementing the German
Federal Government’s National Action Plan for Business andHuman Rights (NAP) and ensures that these comply withstatutory requirements like the British Modern Slavery Act.
The integration of sustainability aspects in the supply chain ismonitored by the Supply Chain Expert Panel, which comprises
employee representatives from supplier management at thedifferent strategic business units. The Supplier Sustainability
Team, which also operates on a Group level, bundles different
activities for integrating sustainability aspects in supply chain
management, drives their development and supports theirimplementation in all strategic business units.

Processes
Within the scope of a risk-based approach, issues relevant tosustainability are a part of the supplier management process.
» N ew suppliers are selected on the basis of a self-assessment
questionnaire that includes questions related to occupationalsafety, environmental protection, energy efficiency and theacceptance of the RBA Code of Conduct. In addition, ob­
serv­ing the RBA requirements also constitutes a key part ofcontractual agreements.
» If a supplier is responsible for a significant share of value
created, ZEISS conducts an on-site supplier audit at the
supplier’s place of business to perform a supplementary risk
assessment. The goal is to get to know existing and future
partners better as well as identify and eliminate weak points
in the supply chain.
» M ajor suppliers undergo an annual evaluation that includes
occupational safety, environmental protection and energy
management criteria. The results are then discussed with the
suppliers in order to define enhancement measures. Aspects
such as occupational safety, fire prevention and environmental management have been a part of cross-divisional supplierquality audits since 2012.
» In accordance with established risk indices and the annual
purchasing volume, the assessments of major suppliers
determine if there are any potential sustainability risks. For
those suppliers with an increased risk, a comprehensive media
screening and a supplementary risk assessment are performed
before conducting any further business activities. This makes

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Company Profile
and Business Modelit possible to define additional steps, such as the completionof a sustainability self-assessment or an on-site audit. In theevent of insufficient compliance with ZEISS’ sustainability requirements, an action plan is agreed upon, with the company
monitoring and overseeing its implementation.
Within the scope of its due diligence obligations, ZEISS has alsoestablished a suitable process for identifying and assessing risks
in the supply chain for handling conflict minerals and draws on
the globally recognized templates from the Responsible Minerals
Initiative (formerly: the Conflict-Free Sourcing Initiative) whencommunicating with relevant suppliers.
Results
A standardized assessment was conducted in fiscal year 2017/18
to identify the sustainability risk of the major suppliers. In
preparation for potential on-site audits, those suppliers considered particularly high risk as a result of the initial evaluation
will be asked to fill out a sustainability survey in the future: The
Sustainability Supplier Self-Assessment Questionnaire. In orderto systematically identify risks in the supply chain pertaining tomodern slavery, the standardized STRT (Slavery & Trafficking Risk
Template) questionnaire was also piloted for the first time.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

In order to sensitize suppliers and key functions in supply chain
management to sustainability issues and to train them on how
to meet requirements, ZEISS developed an eLearning courseon the RBA Code of Conduct. In October 2018, this was madeavailable on the ZEISS Learning Platform, which suppliers canalso access.
ZEISS did not become aware of any violations or complaints
pertaining to human rights in the supply chain during the2017/18 fiscal year. All stakeholders were asked to report any
suspected cases.
Performance indicators
A total of 97 percent of suppliers that responded with respect
to their compliance with the RBA Code of Conduct (answers
were received from 77 percent of major suppliers contacted infiscal year 2017/18) confirmed their compliance with this or acomparable code of conduct.

3
Employees

4
Environment

5SocialEngagement

Alternative Logistics
Strategic business units like Research Microscopy Solutions
or Vision Care are increasingly testing alternative meansof transportation, especially for air freight. Since summer
2018, products from China are transported to Europe via theTrans-Siberian Railway. This pilot project is intended to show
under what conditions these more environmentally friendly
alternatives are also suitable for other product groups. At thesame time, the options are being reviewed to increasingly opt
for certain transportation routes and more frequently ship
products as sea freight. In addition to a reduced environmental
impact and cost savings, this also makes it possible to spreadout transportation risks more broadly. Key criteria for selecting
the mode of transportation are protecting the freight, flexibility
in terms of time and potential impact on the environment.

Since 2012, approximately 270 supplier quality audits have been
performed, which also covered aspects related to occupationalsafety and environmental management.

Based on the risk assessment and classification, ZEISS identified
six suppliers in the reporting year and had an interdisciplinary
and international team conduct on-site sustainability audits. This
involved a follow-up audit in Germany and five initial audits in
Asia. Deviations, particularly in the areas of occupational safety
and transparency concerning working conditions, were identified. A plan for corrective measures was instituted to rectify
them.

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03

Employees
In the competition for talents, ZEISS
positions itself as an attractive employer
and benefits from its reputation asa global and innovative foundationowned company with a strong focus
on values that have been enshrinedin the corporate culture since thecompany’s founding.
Achieving precision, innovation and unparalleled quality requires
motivated and qualified employees. In light of the demographic
change and the increasing shortage of skilled workers, a diverse
workforce and equal opportunities that are truly put into practicewill prove decisive competitive advantages. ZEISS is proactively
facing these challenges with a global recruiting strategy – fully inline with the ZEISS Agenda 2020. The goal is to make the company
more customer-oriented, more competitive and more digital while
also strengthening global collaboration as a team.

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5SocialEngagement

Employee Involvement
The more involved employees feel at the company, the more
motivated they are when working. In Germany, co-determination
is another tool for involving employees. Yet as a company active
around the globe, it is important to ZEISS that its central values
and concepts be put into practice at all sites worldwide.
Guidelines, structures and processes (GRI 102-41, 102-43)
Corporate Human Resources works with HR managers anddivision representatives to define standards and procedures forstrategic and overarching areas of activity and implements themwithin the scope of the department’s functional management
worldwide. This department is the Group Works Council’s main
dialogue and negotiating partner and is the point of contact for
all of the companies’ human resource departments.
Operational co-determination is well established at ZEISS, andthe principles of the Foundation Statute are enshrined at thesites in Germany. Statutory matters and those issues regulated bycollective wage agreements are negotiated with the respective
employee representatives. In addition, ZEISS regularly discusses
planned changes and initiatives with the employee represen­tatives’ committees.
In accordance with the provisions of the German Co-Deter­
mination Act (Mitbestimmungsgesetz), half the members of
the Supervisory Board of Carl Zeiss AG represent the sole share­
holder – the Carl Zeiss Foundation – while the other half represent
the employees. The Executive Board regularly reports to theSupervisory Board on current issues and planned operationalchanges. A European Works Council (EWC) is in place at
Carl Zeiss Vision International GmbH.

The Pulse Check, a survey of employees conducted on a regular basis, gives employees worldwide the chance to provide
feedback on issues affecting corporate culture anonymously.
The company uses this tool to measure the current state of thecorporate culture and determine where progress has alreadybeen made and which priorities should be set in the future. In
addition, the results of the survey are used to define specificrecommended actions for developing the corporate culture.
The most recent Pulse Check was held from the end of January
through February 2018. The results were presented to the
Executive Board and discussed with ZEISS employees. The Pulse
Check showed that more than 80 percent of all employees enjoy
working at ZEISS, and that 75 percent of employees would
recommend ZEISS as an employer. Both values had improved
since the previous survey. Nevertheless, ZEISS has set itself
the goal of further driving this positive trend through suitablemeasures on the corporate and departmental levels.
Measures and results
By launching the ZEISS Agenda 2020 initiative, the company
has established a clear strategy for the years ahead. In order tosuccessfully implement it, the strategy must go hand in handwith the development of the corporate culture. A reliable tool is
the Cultural Journey. Launched in 2008, it involves employees inshaping change processes.

ZEISS employees shared in the success for fiscal year 2017/18.
Employees in Germany received a gross bonus payment of 2,400
euros, which was paid out in October 2018 after the end of thereporting period. Employees at the majority of companies outside Germany also shared in the success for fiscal year 2017/18
on the basis of the country-specific regulations.

Global employee structure

Total

2017/18

2016/17

29,30926,944» Vocational trainees and students enrolled in acooperative education program

464

419

» Contract workers

967

1,052

» Part-time employees

1,483

1,398

» Employees with fixed-term contracts

1,354

997

Percentage of female employees

34%

34%

2017/18

2016/17

Germany

12,067

11,339EMEA (without Germany)

4,522

4,025

Americas

6,683

6,266

APAC

6,037

5,314

Employees by region
During fiscal year 2017/18, the Members of the Executive Board
presented the updated strategy set forth in the ZEISS Agenda
2020 and discussed it with employees in numerous Dialogue
Tours. Employees also addressed the necessary actions in numerous Team Summits, which are also part of the Cultural Journey.
For example, they discussed how to improve global collaborationand prepare the company for the digital future.

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Education and Training
A total of 158 young people began a vocational training
program or a combined degree-and-vocational-training
program in 2018 at the German locations Göttingen, Jena,
Oberkochen and Wetzlar. They are being trained in the fields
of industrial mechanics, precision optics, mechatronics andindustrial business management or are completing a combined
degree-and-vocational-training program – which marries theoretical knowledge with real-world application. For the latter
program, ZEISS cooperates with various universities. With its
sophisticated dual education system, ZEISS is contributing to
the development of society, above all at its German sites.
Advanced training includes focusing on the development ofmanagers. In addition to a mandatory program to prepare themfor their first leadership experience, ZEISS also promotes job
rotation for its employees. Postings abroad within the company
are enabled through a variety of different programs. Various
offerings to identify and develop talents support employees intheir professional careers, with special attention paid to their
particular skills. This way, ZEISS not only enables promisingcareers for managers, but also offers attractive career paths for
specialists.
Both young talents and seasoned professionals can participate
in special development programs to enhance their leadership skills
and establish professional contacts at international networking
events. This prepares them for new challenges and ultimately
increases ZEISS’ appeal as an employer, which plays an extremely
important role in combating a lack of skilled workers. With awide range of training and education programs – for example, inthe form of web-based seminars – ZEISS also offers employees
in other countries professional development opportunities.

Guidelines, structures and processes
Corporate Human Resources (CHR) is responsible for training andeducation, talent management and management development.
The department works closely with the local human resource
departments within functional teams, service areas and projects.
To support the ongoing education of all employees, the eCademy
learning platform was established, providing access to a wide
variety of different educational formats – from face-to-faceevents to courses that are entirely online. Known as the Group
Learning Program, it has been available since fiscal year 2016/17– initially only to German-speaking locations – and offers morethan 150 different training modules. Globally, the program has
been enhanced with numerous eBooks that are available fordownload on the learning platform.
Measures and results
At the end of the reporting period, ZEISS employed a total of
464 vocational trainees and students in a combined vocationaltraining-and-degree program in Germany (previous year: 419).
To ensure that young talents remain interested in ZEISS over
the years ahead, the company stays in touch with approximately
10 percent of its best interns through a retention program.
Ultimately, approximately 560 young people completed a technical or business-related internship at the company’s German
locations or wrote their thesis at ZEISS. In addition, approximately
150 high school students had the opportunity to explore their
future career options as part of a high school internship.

New Smart Production Expertise
The digital future will require new expertise and skills. Witha pilot project at the company’s site in Oberkochen, ZEISS
is preparing to meet the needs of Smart Production throughvocational training, instructing students in cutting-edge
methods and taking an innovative approach to teaching.
The new course is called “Networked Production,” andin the future all ZEISS vocational trainees in Germany will
have to complete it to ensure they are ready to tackle the
manufacturing challenges of tomorrow. Course participants learn how a modern, networked production facility
functions and what skills employees will need in the years
to come. As part of a project, they must organize themselves as a cross-functional team and manage the processes
themselves. Before this, the vocational trainees learn project
management and Lean Production basics in a blendedlearning course. A professionally structured, pedagogicallysound process that teaches participants skills and social
competencies encourages teamwork between technical andbusiness fields underpins these efforts.

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Environment

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Diversity and Equal Opportunity
Performance indicators
Figures on the use of the ZEISS Learning Platform infiscal year 2017/18» Number of active users in Germany who have completed atleast one online course: 27,394

With around 30,000 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, experiences,leadership and work styles, cultural backgrounds, nationalities
and lifestyles. This is a tremendous advantage, because diverse
teams are more creative and solution-oriented. Thus diversity
strengthens the company’s ability to innovate and plays a keyrole in the implementation of the ZEISS Agenda 2020.

»8
 3,307 online courses completed globally
At the same time, diversity in all its forms is crucial to theglobal success of an international company like ZEISS – because
employees are familiar with the markets, understand customers’
different needs and know how to respond to business partners’
cultural practices and customs. This greatly contributes to local
acceptance and trust in the company.

» Number of eBook downloads: 18,100

Learning figures for Germany*
Fiscal year (FY)
Total no. of courses
completed
Total no. of participantdays**2017/18

2016/172015/16

27,394

21,134

11,86827,23318,76718,328*	These statistics include face-to-face training sessions for FY 2015/16 andeLearnings booked via the learning platform in Germany for FY 2016/17.
In FY 2017/18, the ZEISS Learning Platform was rolled out worldwide and thestatistics adjusted accordingly. The figures do not contain any training sessions
related to professional training or partnerships with universities.
**	Based on the estimated length of the training course (one participant-day
corresponds to 7.5 training hours) and not including travel or preparation time.

Guidelines, structures and processes
Both the Foundation Statute as well as the ZEISS Code of Conduct prohibit all forms of discrimination, whether due to “ethic
or social origin, skin color, gender, age, familial status, disability,
religion, nationality, sexual identity or any other features” (ZEISSCode of Conduct). ZEISS further emphasized its commitment todiversity by signing the Diversity Charter in July 2017. The goalof this business initiative under the patronage of German Chancellor Angela Merkel is to promote the acceptance, appreciationand inclusion of diversity in the German work environment.
When it comes to its strategy for promoting diversity, ZEISS
focuses on five aspects in particular:

1. Professional background: Being open to different professional
careers and educational backgrounds.
2. Internationality: Employees from different cultures and withdifferent nationalities should work in an atmosphere ofmutual respect and esteem.
3. G enerations: The work environment needs to be organized sothat different generations can work together successfully.
4. Gender: Everyone should receive the same opportunities,
regardless of gender.
5. Workplace culture: An open and flexible workplace culture
should allow all employees to achieve the right work–lifebalance.
CHR, which reports directly to the Executive Board, is responsiblefor implementing the diversity strategy. It receives support fromthe Diversity work group, which is composed of representatives
from different business areas, employee representatives and international colleagues. Executives and management are obliged tomodel integrity through their own behavior, inform employees
about the rules, monitor compliance with these rules and rectify
violations. Local human resource departments assist CHR withclarifying and resolving any violations. Since fiscal year 2017/18,
a new reporting system has been in place for documenting casesof discrimination.

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Objectives and results
The main objectives are to better integrate international
employees at German locations and support the professional
development of women. In fiscal year 2017/18, the focus wason onboarding and the improved integration of international
employees. The work group for monitoring and implementing
these objectives is made up of representatives from various
strategic business units and regions and meets every six weeks.
In order to openly address problems and make suggestions for
improvement, a discussion was held between the President &CEO and 25 international employees.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

In fiscal year 2017/18, ZEISS was named a ‘family-friendly
company’ by the Success Factor: Family (Erfolgsfaktor Familie)
business network.
Global age structure of the ZEISS Group in
fiscal year 2017/18
Age distribution

Male

FemaleTotal

Under 30

3,666

2,295

5,961

30 to 49

10,875

5,545

16,42050 and older

4,696

2,232

6,928
29,309In order to create a corporate culture that promotes, recognizes
and appreciates diversity, the following initiatives were launched,continued or expanded in Germany during the reporting year:» Expansion of the cooperation network for international
employees and their family members»W omen’s Business Lunch as an initial networking opportunity
for women in leadership positions in Oberkochen, Jena andBerlin3
Employees

4
Environment

5SocialEngagement

Diversity Equals Success
At ZEISS, diversity means being open to and supporting
difference. In honor of the Diversity Days event held from
21 May through 5 June 2018, the internal diversity website
was launched and 35 activities were organized in 14
countries. Workshops on diversity as a factor behind theability to innovate were held along with networking
events for women in management positions and for new
employees, language lunches to give employees the chanceto speak their native language and much more. Employees
from around the globe submitted short videos in which
they shared their ideas and views on diversity. Within thescope of the dimensions ‘work culture’ and ‘working
conditions,’ a parent-child workspace was created at thesite in Oberkochen as a pilot project. This workspace isintended to help employees maintain a healthy work-lifebalance by providing parents with the opportunity to bring
their children to work so that they can better meet theirprofessional and familial obligations.

» A mentoring program for women in Oberkochen and Jena topromote equal opportunity» A cooperation network for childcare and care for relatives toenable a better work-life balance

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Occupational Health and Safety
For ZEISS, guaranteeing a healthy work environment and a safe
workplace is a fundamental obligation toward its employees.
This also applies to employees from non-ZEISS companies acting
on behalf of ZEISS. ZEISS promotes its employees’ health andperformance through comprehensive safety measures and occupational health examinations. In doing so, the company avoids
compliance risks and ensures productivity.
Guidelines, structures and processes
Safety in the workplace and protecting the health of all employees
are principles enshrined in both the Foundation Statute and
the ZEISS Code of Conduct. The Chief Financial Officer, as amember of the Executive Board, is responsible for occupational
health and safety. The respective heads of all ZEISS business units
are responsible for occupational safety and, consequently, forthe development, implementation, auditing and continuous
improvement of health and safety performance. The respon­­si­bilities of all ZEISS employees and managers are described ina corporate directive or Corporate Standard Operating Procedure.
All companies in the ZEISS Group are obligated to appoint an
OHS (Occupational Health and Safety) Officer in writing. The dutiesof the OHS Officer can differ as a result of local legis­lation, but
always include advising management and assessing occupational
health and safety risks. Furthermore, all ZEISS employees are called
on to actively promote occupational safety and report risks totheir supervisors or the respective OHS Officer. The company units
organize their own training programs on occupational healthand safety, which are the responsibility of the respective managers.
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 doso, an occupational safety and health protection handbook –which must be implemented throughout Germany – is available.
It regulates fundamental processes and procedures. Occupational health and safety management at ZEISS sites in Germany
encompasses all sites, including the non-ZEISS employees commissioned by these facilities. Their contractors must consent toZEISS’ directive on external companies prior to accepting
the commission. Eleven sites, including two in Hungary andtwo in China, have been certified as per OHSAS 18001, theinternational management standard for occupational safety. An
occupational health and safety management system based on
the requirements stipulated in OHSAS 18001 has been implemented at all other ZEISS sites in Germany. ZEISS promotes
occupational health management primarily in Germany, butthere are also individual initiatives at international sites. Insofar
as health management contributes to a modern workplace andgood working conditions, it is also an important factor whenrecruiting young talents.
Moreover, Occupational Safety Committees (OSC) subject tostatutory control have been formed at German sites. They
convene each quarter to discuss occupational safety issues andaccident prevention. Company management is responsible
for organizing the OSC. This task falls to the Member of the
Executive or Management Board responsible for occupationalsafety or the appointed site manager for occupational healthand safety. The committees also include members of the Works
Council, a company physician, an occupational health and safety
expert, safety officers and, if applicable, a representative forhandicapped employees. Since this includes at least one

re­presentative from company management, the committees
can also make decisions.
Objectives and results
The main objective is to reduce the frequency and severity ofoccupational accidents. In order to compile these data worldwide and be able to better manage preventive measures in the
future, new performance indicators were introduced in fiscal
year 2016/17. These data were first compiled for June 2017.
The Executive Board has set the following goal for all production
units within the ZEISS Group: A Lost Time Injury Frequency Rate
(LTIFR) of less than 2.25 for all the ZEISS Group’s production units
by the end of fiscal year 2022/23. In fiscal year 2017/18, the
LTIFR was 3.96, and there were no fatal workplace accidents.
In addition, a global coordinator for Occupational Health and
Safety (OHS) was appointed in October 2017. The Head of the
Occupational Health and Safety department took on this role inaddition to his functional management responsibility for Germany.
Performance indicators
To determine the performance indicators, 45 business units
with over 23,000 employees supply statistics on the frequency
and severity of workplace accidents on a monthly basis.
Additional employees who primarily work in administrationand sales outside of Germany are currently not included in thedata because of their lower estimated risk potential. The following performance indicators are available for all regions:»L ost Time Injury (LTI): A severe workplace injury that mustbe treated by a physician who is neither employed nor undercontract with ZEISS, and which causes the person affected to40

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Performance indicators for fiscal year 2017/18
LTI

LTIFR

SVR

LCDR

Target hours» L
 ost Time Injury Frequency Rate (LTIFR): Workplace
accidents per one million hours worked (this corresponds
to 500 full-time employees) within a defined period of time
(frequency).

Germany

96

4.04

20

80

23,777,556

EMEA (without
Germany)

22

4.93

14

70

4,463,492

Americas

53

4.32

15

66

12,273,269

APAC

9

1.82

7

12

4,956,545» S
 everity Rate (SVR): Describes the average severity of allaccidents that occurred in a certain time period.

Total

180

3.96

17

68

45,470,862

» Lost Calendar Day Rate (LCDR): Describes the number oflost calendar days (LCD) per one million hours worked (thiscorresponds to 500 full-time employees) within a defined
period of time.
» T arget hours: (In the contracts of employment) agreed
working hours.

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Environment
Effective environmental protection and the
responsible use of resources are core objectivesof the ZEISS Group. ZEISS sees potential toincrease its competitiveness by adhering to thehighest standards, as well as for innovation,
new business ideas and cost optimization.
As an optics and optoelectronics company, the ZEISS Group
seldom uses environmentally critical materials and production
methods. As a responsible company, this makes the
Precautionary Principle all the more important for ZEISS: Thismeans preventing environmental impact whenever possible.
A key aspect is the efficient use of materials and energy – fromproduct development, manufacturing and sales and extending
all the way to a product’s use by the customer. This way, ZEISS
also helps protect the climate, since every reduction in energy
consumption also decreases CO2 emissions.

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Efficient Use of Natural Resources
Raw materials, semi-finished goods, preliminary products,
energy and water are all used to manufacture the company’svarious products. This generates emissions, effluents andwaste that cannot subsequently be reused in the manufacturing process. ZEISS continues to reduce its consumption
and emissions and has set specific targets. The use of natural
resources is accompanied by certain risks, including a scarcityof the necessary natural resources or a negative impact on theenvironment resulting from mining, processing and disposing ofmaterials. In addition, rising energy, material, or waste disposal
prices can adversely affect the company’s competitiveness. Thus
ZEISS continuously optimizes its business processes in line withenvironmental and economic aspects and organizes them sothat increasingly fewer resources and less energy are required
relative to value added. The integration of environmental aspects
in product development (see page 31) should, for the most part,make end-of-pipe activities unnecessary. Wherever possible,
ZEISS endeavors to close material cycles and take into accountthe idea of resource efficiency with the resources it uses. In orderto advance new approaches to resource efficiency, ZEISS offered
four years of support to the Industrial Resource Efficiency thinktank at the Karlsruhe Institute of Technology (KIT) beginning inJuly 2017.
ZEISS selects and uses raw materials, technologies and production
processes based on their environmental compatibility and theassociated environmental risks. Wherever possible, potentiallyhazardous materials are replaced with less problematic substances.
Recyclability is a key factor when selecting a material. Waste thatcan neither be prevented nor recycled is disposed of properly.
In doing so, ZEISS selects the most environmentally friendly
disposal method that is also economically viable.

Guidelines, structures and processes
ZEISS considers compliance with stringent environmental
standards to be one of the company’s fundamental duties. To
ensure that the company continues to improve its environmental
performance, ZEISS first drew up global environmental principles
back in 1998. To implement them, the company utilizes anEnvironmental Management System in accordance with theinternational ISO 14001:2015 standard. The environmental
performance requirements are laid out in an internal directiveon environ­mental protection that all ZEISS units worldwide must
adhere to. The directive was updated in fiscal year 2016/17.
The Chief Financial Officer of Carl Zeiss AG bears overallre­sponsibility for the implementation of the ZEISS Group’s
Environmental Management System. An Environmental Officer
appointed at the Group level assists the business units with theimplementation and helps them identify suitable measures.
Additional appointees are designated at each site. At the endof the reporting period on 30 September 2018, 32 business
units at 16 of the ZEISS Group’s production facilities(FY 2016/17: 16) had been certified by external auditors inaccordance with ISO 14001.

“Environmental Protection” Work GroupTo foster the exchange of information and best practices
among sites in Germany, the Environmental Protection workgroup for the ZEISS Group was established in 2002. Officers
for the integrated management system, environmental
officers, environmental coordinators, representatives fromthe waste management, wastewater technology and utilities
management divisions, hazardous materials officers andspecialists for environment, health and safety (EHS) all takepart in the meetings. The work group meets at least once
per year. Since its founding, 26 meetings have been held.

An employee suggestion program has been established at eightZEISS sites in countries like China, the US and Germany. The
employees’ submissions are assessed based on their feasibility,
impact and efficiency. For ZEISS, relevant ideas include suggestions for conserving energy, reducing materials usage, finding
substitutes for hazardous chemicals and improving efficiency.
Ideas from employees which meet ZEISS’ stipulated criteria arehonored with a small financial award and frequently receive
recognition on a local level.

43

BACK TOTABLE OF CONTENTS“Green, Safe & Responsible” Initiative
In fiscal year 2017/18, the Vision Care strategic business unit
started the Green, Safe & Responsible Initiative with the goalof further improving its own performance in the following
areas: The environment, occupational health and safety
and social engagement. The initiative has established workgroups for the Environmental, Occupational Health and Safety
and Energy Managers from the respective production sites
worldwide, who utilize these weekly meetings to discuss theirexperiences and exchange ideas. During fiscal year 2017/18,
more than 120 individual activities were started as part ofthe initiative, with about half of these targeting environmental improvements. In order to make these measures moretangible, an Experience Center was opened for employees atthe company’s location in Guangzhou, China. Here they canlearn about a variety of topics, including the latest developments in occupational health and safety.

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

EnergyZEISS energy management is tasked with keeping energy-­
related KPIs stable or improving them, even if the production
quantities increase. Here the focus is on all of the company’s
operational processes, machines, systems and equipment alongwith its buildings and infrastructure. This is how, despite an increasing number of employees and growing revenues, ZEISS has
been able to keep energy consumption more or less constantand even significantly reduce consumption at certain facilities.
At several locations, ZEISS produces solar energy for its own use.
A potential switch to renewable energy is currently under review.
All of the ZEISS Group’s sites within the European Union havebeen certified as per ISO 50001, the internationally valid standard for energy management. Each of these units has appointed an Energy Manager who is responsible for maintaining thesystem with the goal of continuously improving energy-related
performance. Systematically exploring and implementing measures to save energy is how ZEISS is also meeting the goals of
the Paris Agreement (see page 45).

3
Employees

4
Environment

5SocialEngagement

Water and effluents
Water comes primarily from the public drinking water supply andis used for manufacturing and cleaning processes, for cooling or
as sanitary water. Consistently reusing water in rinsing processes
and the internal circulation of water in production, cleaning andcooling systems has significantly reduced water consumption in
the past years.
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 quality
standards are defined by the local laws on water and effluents.
Regular internal inspections ensure these standards are observed,
and appropriate measures are implemented in the event of
discrepancies.
Waste
As systematic waste prevention is a top priority at ZEISS – notleast for financial reasons – it has been possible to reduce thevolume of waste as per value added since the reference year
2009/10. In fiscal year 2017/18, the relative and absolute volume
of waste increased, which was due in part to ongoing construction projects. A distinction is generally made between waste forrecycling and waste for disposal, as well as between hazardousand non-hazardous waste.

44Company Profile
and Business Model

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Objectives and results
In March 2018, specific reduction targets to be achieved by fiscal
year 2019/20 were set together with the Executive Board of theZEISS Group: A 50 percent reduction in CO2 emissions and energy consumption, a 40 percent reduction in water consumption
and a 30 percent reduction in waste accumulation relative tothe company’s own value added. The reference year is fiscal year
2009/10 for all three targets.
Target by
FY 2019/20*

Reduction achieved
in FY 2017/18*

Reduction in (relative) CO2
emissions (Scope 1 and 2)

50%

47%

Reduction in (relative)
energy consumption

50%

46%

Reduction in (relative)
water consumption

40%

38%

Reduction in (relative)
waste volume

30%

30%

Target* Relative change over reference year 2009/10

All of the business units certified in accordance with ISO 14001
have set their own goals for improving their environmetal
performance as part of their area-specific environmental
programs. These goals are developed based on the respective
business unit’s specific circumstances (such as products andprocesses). A regular, usually annual, review within the units is
conducted to monitor the achievement of these goals.

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

Standardized Packaging for Eyeglass Lenses
In order to save material, ZEISS has standardized the packaging for eyeglass lenses and also reduced the number of different types of packaging from 163 to six. Environmentallyfriendly material is used for the boxes. This standardization
has also simplified the packaging and delivery processes.
This measure enabled ZEISS to save the equivalent of two
million plastic bags or 70 tons of packaging material in fiscal
year 2017/18.

Smart Technology for Monitoring Energy
Consumption
China Mass Manufacturing in Guangzhou, China, has
implemented a Smart Energy Metering System tobetter analyze and optimize energy consumption. This
includes the entire site as well as individual processes
and machines. The energy meters enable precise energy
consump­tion monitoring and also indicate whether amachine is functioning reliably or is becoming inefficient.
The installation of the system required an investmentof 20,000 euros.

3
Employees

4
Environment

5SocialEngagement

Climate protection at ZEISSThe ZEISS Group aims to help limit global warming and supports
the goals set forth in the Paris Agreement as well as the resulting national targets. As part of risk management, the company
regularly assesses the risks and opportunities associated withclimate change. More specifically, this includes the possible impactof emissions trading, plans to introduce a CO2 tax and otherregulatory developments. The company also monitors potential
physical phenomena, such as extreme weather resulting fromclimate change, that could affect both its own sites and thoseof its suppliers. Currently, however, these risks are categorized ashighly unlikely.
The company can also leverage opportunities afforded by its
own products in particular, e.g. with the ZEISS AirSaver, which
reduces the compressed air consumption of measuring machines(see page 25). At the same time, the company’s businessprocesses are being examined to determine where and how
CO2 emissions can be reduced the most effectively. Energy
management and increased efficiency in production open up
new potential, such as by effectively preventing the unnecessary
use of materials and implementing just-in-time logistics.
In fiscal year 2017/18, ZEISS also participated in CDP (previously:
Carbon Disclosure Project) climate reporting for the first time. As
a consequence, the process for capturing energy and emissions
data was improved. For its disclosures, which include a financial
assessment of the risks and opportunities, ZEISS was, on a scaleof A to D, given a score of “B” by CDP. The results are publicly
available at www.cdp.net.

45

Company Profile
and Business Model

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Performance indicators
The performance indicators for energy,
water, waste and CO2 emissions are recorded and consolidated globally at ZEISS.
They include all of the ZEISS Group’s
major production sites (61 sites varying
in size and activities). The CO2 emissions
are recorded as per ISO 14064-1, whichtakes the Greenhouse Gas Protocol into
account.

318

191

2015/1650

100

5SocialEngagement(-44%)

171(-46%)

150

200

250

300

956

641

2015/162016/172017/18350

Energy consumption [in MWh] / € m value added
Relative change as compared to reference year 2009/10 in %

0

200

400

(-33%)

612(-36%)

595(-38%)

600

800

1,000

Water consumption [in m3] / € m value added
Relative change as compared to reference year 2009/10 in %2017/18

2016/172015/16

2009/10

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

514

504

483

500

Value added for ZEISS
overall [€ m]

2,998

2,822

2,532

1,572

Energy consumption[in MWh] / € m value
added

171

178

191

318

Relative change overbase year 2009/10
in %

-46

-44

-40

0

46

4
Environment

2009/10(-40%)

178

2016/17

0

3
Employees

Water consumption

2009/10

Fiscal year (FY)* At ZEISS value added is defined as the sum ofEarnings before Interest, Taxes, Depreciation andAmortization (EBITDA) and personnel expenses.

Strategy andSustainability

2
Products andValue Chain

Energy consumption

2017/18

The following charts show the respective
values from the past fiscal years in relation to value added* and the percentagechange since fiscal year 2009/10.

1
Integrity andCompliance

332
150
1
32

percent reduction in (relative) energy
consumption in fiscal year 2017/18
as compared to 2009/10

Fiscal year (FY)2017/18

2016/172015/16

2009/10

Water consumption[in 1,000 m³]

1,783

1,727

1,622

1,503

Value added for ZEISS
overall [€ m]

2,998

2,822

2,532

1,572

Water consumption[in m3] / € m value
added

595

612

641

956

Relative change overbase year 2009/10
in %

-38

-36

-33

0

38

percent reduction in (relative)
water consumption in fiscal year
2017/18 as compared to 2009/10

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Company Profile
and Business Model

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Starting in fiscal year 2017/18, separate
statements are published for Scope 1 andScope 2 emissions. The emissions were
calculated with current emissions factors as
per the VDA list (updated January 2018).

2
Products andValue Chain

Waste volume

8.25

2009/10

5.68

5SocialEngagement

4

8

79

2016/17(-30 %)
6134

2015/16(-34 %)

5.78

2017/18
2

4
Environment

2009/10(-31 %)

5.44

2016/17

0

3
Employees

CO2 emissions (Scope 1 and 2)*

2015/16* The figures shown here differ from those published in
the Sustainability Report 2016/17 because, starting infiscal year 2017/18, the current emissions factors fromthe German Association of the Automotive Industry(Verband der Automobilindustrie, abbr. VDA), updated
in January 2018, are used to calculate the CO2 emissions(GRI 102-48).

Strategy andSustainability

1Integrity andCompliance2017/18
10

Waste [in t] / € m value added
Relative change as compared to reference year 2009/10 in %0(-41%)

73(-45%)

71(-47%)

50

100

150

CO2 emissions [in t] / € m value added
Relative change as compared to reference year 2009/10 in %Fiscal year (FY)2017/18

2016/172015/16

2009/10

Fiscal year (FY)2017/18

2016/172015/16

2009/10

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

17,327

15,34014,393

12,975CO2 emissions[in t]» Scope 1» Scope 2

213,308

206,466

199,870

210,223

Value added for ZEISS
overall [€ m]

2,998

2,822

2,532

1,572

Value added for ZEISS
overall [€ m]

2,998

2,822

2,532

1,572

Waste volume[in t] / € m value added

5.78

5.44

5.68

8.25

CO2 emissions[in t] / € m value added

71

73

79

134

Relative change overbase year 2009/10
in %

-30

-34

-31

0

Relative change overbase year 2009/10
in %

-47

-45

-41

0

30

3,092
14,234

percent reduction in (relative) waste
volume in fiscal year 2017/18 ascompared to 2009/10

47

30,524
182,784

percent reduction in (relative)
CO2 emissions in fiscal year
2017/18 as compared to 2009/10

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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 guidelines is
considered essential to fulfilling our promise of quality – andis one of our main obligations to customers, stakeholders andowners.
Guidelines, structures and processes
Environmental Officers for the various sites are responsible forcompliance with laws, stipulations for government approvaland other rules related to the environment. The Environmental
Officers at ZEISS’ individual facilities store the particular specifi­
cations in the management system, e.g. by creating site-specificprocedural and work instructions.
Regular external and internal audits and, at ISO 14001-certified
units, compliance checks are performed to ensure all statutory
requirements are met. The results are then included in the annual
management reviews. ZEISS also expects business partners that,as suppliers or service providers, have a direct business relation­
ship with the company and its production facilities to fullycomply with environmental laws and regulations as well internal
guidelines.
The company monitors whether such contractual agreements
are being put into practice by conducting on-site audits, bothplanned and as a result of specific incidents.
Chemical management
Through effective chemical management, ZEISS ensures thathazardous 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 aresupported by the sites’ occupational safety specialists andEnvironmental Protection Officers. A substance database andlist of hazardous materials form the basis of the Group-wide
information system for hazardous substances used at the company. This is also how ZEISS ensures that only those chemicals
are used that are registered for the EU in accordance with
REACH (Registration, Evaluation, Authorization, and Restrictionof Chemicals) and are authorized for use. In addition, care istaken to only use substances that have not been identified as
Substances of Very High Concern whenever possible.
Material safety data sheets provide users with information on
how to safely handle chemical products, thereby helping toensure that chemicals are employed in a manner that is bothsafe and environmentally sound. ZEISS requires its suppliers tomake the most up-to-date material safety data sheets available.
Before introducing new hazardous substances, ZEISS takes careto ensure that suppliers observe the list of prohibited and de­clarable substances included in a factory standard and requests
the corresponding certificates of conformity.
Substance restrictions
To implement the EU directive on the Restriction of Hazardous
Substances (RoHS), ZEISS introduced the legal regulations in2005 with the help of a software application to monitor the
relevant chemicals. This is now in use at all areas of the company. Suppliers must confirm that the supplied materials, substances and mixtures are compliant with the applicable directives,laws and regulations. The suppliers are asked to submit certificates of conformity for verification. These are a requirement
for product approvals as part of the CE conformity assessment

process. With the CE marking, the manufacturer or distributor
declares that the product meets the applicable requirements.
Conformity requires that certificates of conformity be available
for all items in the parts list for a product. If there is any doubt,
ZEISS conducts its own chemical analysis of the supplied components.
Disposal
Modern technologies consist of a complex combination of materials and components. When not disposed of properly, these cancause major environmental and health issues. In accordance with
the European Union’s Waste Electrical and Electronic Equipment(WEEE) Directive, which governs the collection, recycling, andrecovery of electric and electronic devices, ZEISS has entered into
EU-wide agreements to ensure legally compliant disposal. The
company is registered as a commercial distributor of electricaland electronic devices in all EU countries.
Goals
For the company, the legally compliant operation of its facilities
is a primary goal. This is associated with the objectives of preventive emergency management as well as preventive maintenance, which saves retrofitting costs.

48

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05

Social Engagement
As per its responsibility as a foundation company,
ZEISS promotes scientific and technologicalprogress in its four segments and advocates forbetter living conditions worldwide through its
business activities.
For more than 125 years, the Carl Zeiss Foundation Statutehas set a clear course, defining social engagement as animportant corporate responsibility. The company focuses on
health, education, science, its commitment to social and culturalissues and the environment.
Tasked with this duty, ZEISS assumes an active role in society andmakes an important contribution to sustainable development
at its sites. ZEISS works together with cooperation partners andalso makes financial and in-kind donations to scientific, cultural,social and environmental causes. As a global technology leader,
ZEISS stands for innovation and the spirit of research at its sites
and, as such, creates a climate that enables its customers andpartners to perform at their peak to improve the lives of countless
people. Thanks to the company’s dynamic growth, the numberof jobs around the world continues to grow. When organizational changes are required, they are carried out in a manner thatis as socially responsible as possible in accordance with regional
standards and spread out over a longer period of time.

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BACK TOTABLE OF CONTENTS

Company Profile
and Business Model

Guidelines, structures and processes
When it comes to the structures and processes of social engagement, there are three clearly distinct organizational levels as well
as different areas of support.
As the sole stockholder of Carl Zeiss AG and SCHOTT AG, theCarl Zeiss Foundation carries out non-profit activities. Particular attention is paid to providing sustainable, balanced support.
These are defined by the Foundation Statute and financed by
the dividend payments from the companies ZEISS and SCHOTT.
The ZEISS Group makes donations as per a defined process.
The guidelines are laid out in an internal policy that applies tothe entire company. The Carl Zeiss Promotion Fund and the
Education and Science Fund are additional means of supporting
societal advancement. They supported around 140 projects infiscal year 2017/18. In addition, the strategic business units andthe subsidiaries in Germany and abroad conduct their own
activities. This allows them to best pursue their own interests
in projects eligible to receive funding and take regional aspects
into account.
There are also initiatives that have been launched at individualsites or in other areas, or as a result of employee civic
engagement. These activities usually receive indirect support
from ZEISS, and the company and managers show theirsincere appreciation to the employees involved in the form ofcredited working hours and the opportunity to organize using
the company’s internal structures. In September 2018, ZEISS washonored by the German state of Baden-Württemberg’s Ministry
for the Interior as a “volunteer-friendly employer in the fieldof civil protection” (Ehrenamtsfreundlicher Arbeitgeber im
Bevölkerungsschutz).

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

Areas promoted
The areas promoted are research and education, health, society
and nature conservation.
Scientific research and education
With the Education and Science Fund established by the company
in 2013, ZEISS aspires to foster future generations of naturalscientists, from preschoolers to doctoral candidates. Support is
aimed at initiatives that promote education among young people– primarily high school students who have not yet selected adegree program and university students who have not yet
entered the workforce – and their scientific skills, as well as
projects and initiatives at universities and research institutes.
The focus is on natural sciences and engineering, particularly
optics and photonics. In fiscal year 2017/18, more than 500,000
euros was used to fund nearly 25 projects.
Two fund managers from Corporate Human Resources andCorporate Research and Technology manage the budget for
donations and the applications for support. They decide which
requests receive funding based on fixed criteria, in accordancewith the budget and in consultation with the Executive Board.
The areas of focus for donations are critically examined about
every two years and changed if necessary.

3
Employees

4
Environment

5SocialEngagement

12,000 Square Meters for Innovative Ideas
For over 10 years, ZEISS has partnered with the Karlsruhe
Institute of Technology (KIT) and continues to strengthen
this cooperation so that, by working together, they can spuron the transfer of technology and foster an entrepreneurial
mentality. In April 2018, the cornerstone was laid for a new
innovation center: The ZEISS Innovation Hub @ KIT. The
building will cover a total of 12,000 m2 that can be usedin many ways – as office space, meeting areas, labs andproduction facilities. It will offer space for quickly transforming innovative ideas and the latest research findings
into market-ready products that will benefit businesses andsociety. Moreover, the hub will open up career opportunities
for graduates – ideally at the Hub itself: Along with ZEISS
and KIT, start-ups and carve-outs are expected to use thislocation. A large part of the new building will house thecompany Nanoscribe, which specializes in high-precision
3D printing. This was KIT's first carve-out back in 2007, andZEISS has been one of its stakeholders since 2008. ZEISS isinvesting approximately 30 million euros in the Innovation
Hub and assumes the construction and operating costs.

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BACK TOTABLE OF CONTENTSFighting Tuberculosis with Microscopes
ZEISS is committed to fighting deadly infectious diseases
by utilizing its know-how. Since tuberculosis microscopy
improves diagnosis and thereby assists in the fight against
this disease, the Research Microscopy Solutions strategic
business unit supports the organization Stop TB. The
initiative, launched in 2001, sets out to make high-quality
diagnostics, treatment and health care available to anyone
at risk of tuberculosis. In cooperation with the Foundation
for Innovative New Diagnostics (FIND), ZEISS has developed
a special microscope for this purpose: The ZEISS Primo StariLED enables the reliable diagnosis of tuberculosis, even inareas without a power supply. Public health care institutionsin those countries the World Health Organization has named
most affected by this disease can purchase the microscopeat a reduced price.

Modern Ophthalmic Techniques
Together with the Christoffel Mission for the Blind, ZEISS
has supported one of the eye clinics run by Fundación Visionin Paraguay for many years. In February 2018, a new special
training center was opened to teach modern ophthalmic
techniques. The training and continuing education of ophthalmologists is a key component for taking targeted actionin the battle against preventable blindness in remote regions.

Company Profile
and Business Model

Strategy andSustainability

1Integrity andCompliance2
Products andValue Chain

HealthZEISS is raising the bar in health care by offering solutions forophthalmology and medical technology and is helping to drive
medical progress by supplying microscopy products. The aim isto help improve the lives of patients everywhere. Furthermore,
the company makes financial donations and in-kind donationsin the form of ZEISS products and solutions through a variety
of different projects in order to give people around the globe
access to high-quality medical care. One example of ZEISS’ longterm commitment to improving global health is the “Back toBush” program it launched in 2007, which gives disadvantaged
areas, particularly in the outback regions of Australia and Oceania, access to better surgical equipment.
Nature conservation
For ZEISS, protecting plants and animal species is particularly
important: Binoculars and spotting scopes from ZEISS allow
people to get closer to nature, and they have an excellent reputation among nature lovers around the globe. ZEISS works withprofessional associations to support many conservation activities
and educational programs for children and adults as well as research programs for the protection of endangered species. ZEISS
also sponsors BirdLife International’s scientific work on the “Red
List of Birds.” On this list, the partnership of bird conservation organizations with a total of 13 million members records all of theendangered bird species, including their conservation status. The
figures are reported to the International Union for Conser­vationof Nature and Natural Resources (IUCN) and form the basis for
impactful conservation efforts.

3
Employees

4
Environment

5SocialEngagement

Regional society
The stable growth of the company and the expansion of its
international activities lead to investments in the developmentof innovation, production and service structures. This creates
new jobs and vocational training positions and also generates
contracts for local suppliers not working in the field of hightechnology. In turn, the company’s development and production
services for customers in the individual regions make possible
an increase in scientific, technological, social, medical andenvironmental services.
The Carl Zeiss Promotion Fund, which was founded in 2011 inhonor of the 20th anniversary marking the reunification of theGerman ZEISS sites, supports regional projects within Germany.
The Executive Board Office is responsible for planning andmonitoring the budget for donations and receives assistancefrom the Corporate Brand & Communications department in
the organization and processing of inquiries. A fund manager
evaluates the funding applications and makes a decision basedon fixed criteria and in accordance with the available budget.
This person reports directly to the Executive Board, which determines the budget. The sponsorship program covers the company's
German sites in Aalen, Göttingen, Jena, Oberkochen andWetzlar. In the past seven years, more than 800 projects havereceived support totaling around six million euros.

51

BACK TOTABLE OF CONTENTSGRI Content Index

For the Materiality Disclosures Service, GRI Services reviewed that the GRI content index is clearly presented and thereferences for Disclosures 102-40 to 102-49 align with appropriate sections in the body of the report.

GRI standard

Page reference

Comments

General Disclosures
GRI 101: Foundation 2016
GRI 102: General Disclosures 2016

Organizational Profile
GRI 102-1: Name of the organization

P. 8 (Company Profile)GRI 102-2: Activities, brands, products, and services

P. 7, 9, 10 (Company Profile, The Four Segments and Their Products)

GRI 102-3: Location of headquarters

P. 8 (Company Profile)GRI 102-4: Location of operations

P. 8 (Company Profile)GRI 102-5: Ownership and legal form

P. 8 (Company Profile)GRI 102-6: Markets served

P. 7–10, 30 (Company Profile, The Four Segments and Their Products, Products and Value Chain)

GRI 102-7: Scale of the organization

P. 7, 36 (Company Profile, Employees by region), Annual Report 2017/18: P. 43

GRI 102-8: Information on employees and other workers

P. 36 (Global employee structure, Employees by region)

GRI 102-9: Supply chain

P. 12, 33 (Products and Value Chain, Procurement and Supplier Management)

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. 27, 31, 42 (Compliance, Product Safety and Product Development, Environment),
Annual Report 2017/18: P. 34

GRI 102-12: External initiatives

P. 17, 23 (Memberships and Initiatives, How ZEISS Supports the Achievement of the Global Sustainable
Development Goals)

GRI 102-13: Membership of associations

P. 17, 28 (Memberships and Initiatives, Public Policy)

Strategy
GRI 102-14: Statement from senior decision-makerP. 5 (Foreword)

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

P. 13–15, 19–22 (Strategy and Sustainability, Material Sustainability Issues)

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

P. 14, 27 (Goals and values, Compliance)

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GRI standard

Page reference

Comments

Governance
GRI 102-18: Governance structure

P. 11, 36 (Corporate Governance, Employee Involvement), Annual Report 2017/18: P. 16–18

GRI 102-19: Delegating authority

P. 16, 27, 29, 43 (Sustainability Organization, Compliance, Data Privacy, Efficient Use of Natural Resources)

Stakeholder Engagement
GRI 102-40: List of stakeholder groups

P. 6, 17 (About the Report, ZEISS Group stakeholders and communication formats)

GRI 102-41: Collective bargaining agreements

P. 36 (Employee Involvement)

GRI 102-42: Identifying and selecting stakeholders

P. 18 (Definition and prioritization of material sustainability issues)

GRI 102-43: Approach to stakeholder engagement

P. 17, 18, 36 (ZEISS Group stakeholders and communication formats, Definition and prioritization ofmaterial sustainability issues, Employee Involvement)

GRI 102-44: Key topics and concerns raised

P. 18 (Definition and prioritization of material sustainability issues)

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

P. 6 (About the Report), Annual Report 2017/18: P. 98–102

GRI 102-46: Defining report content and topic Boundaries

P. 18 (Definition and prioritization of material sustainability issues)

GRI 102-47: List of material topics

P. 19-22 (Definition and prioritization of material sustainability issues)

GRI 102-48: Restatements of information

P. 47 (CO2 emissions [Scope 1 und 2])

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

No changes during reporting period
P. 6 (About the Report)

GRI 102-51: Date of most recent report

January 2018

GRI 102-52: Reporting cycle

P. 6 (About the Report)

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

P. 60 (Legal Information)

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

P. 6 (About the Report)

GRI 102-55: GRI content index

P. 52–59 (GRI Content Index)

GRI 102-56: External assurance

None

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Comments

GRI 201 Economic Performance 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 12, 14, 49 (Business Model, Strategy and Sustainability, Social Engagement)
GRI 201-1: Direct economic value generated and distributed

P. 7, 50, 51 (Company Profile and Business Model, Social Engagement), Annual Report 2017/18: P. 42

GRI 201-2: Financial implications and other risks and opportunities due to climatechangeP. 45 (Climate Protection at ZEISS)GRI 203 Indirect Economic Impacts 2016
GRI 103 Management Approach 2016 (including 103-1, 103-2, 103-3)

P. 20, 49–51 (Social Engagement)

GRI 203-1: Infrastructure investments and services supported

P. 50, 51 (Scientific research and education, Health, Regional society)

GRI 205 Anti-corruption 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 26–28 (Integrity and Compliance, Anti-Corruption)
GRI 205-2: Communication and training about anti-corruption policies andprocedures

P. 28 (Anti-Corruption)

GRI 205-3: Confirmed incidents of corruption and actions taken

ZEISS does not report cases of corruption and actions taken as
these disclosures are subject to confidentiality agreements.

GRI 206 Anti-competitive Behavior 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 26–28 (Integrity and Compliance, Anti-Corruption)
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 as these disclosures are
subject to confidentiality agreements.

GRI 302 Energy 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 22, 42–46 (Environment, Efficient Use of Natural Resources, Guidelines, structures and processes,
Objectives and results)
GRI 302-1: Energy consumption within the organization

P. 46 (Performance Indicators)

GRI 302-3: Energy intensity

P. 46 (Performance Indicators)

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GRI 303 Water and Effluents 2018
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 22, 42–46 (Environment, Efficient Use of Natural Resources, Guidelines, structures and processes,
Objectives and results)
GRI 303-1: Interactions with water as a shared resource

P. 44 (Water and effluents)

GRI 303-2: Management of water discharge related impacts

P. 44 (Water and effluents)

GRI 303-5: Water consumption

P. 46 (Performance Indicators)

GRI 305 Emissions 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 22, 42, 43, 45, 46 (Environment, Guidelines, structures and processes, Objectives and results)
GRI 305-1 Direct (Scope 1) GHG emissions

P. 46, 47 (Performance Indicators)

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

P. 47 (Performance Indicators)

GRI 305-4: GHG emissions intensity

P. 47 (Performance Indicators)

Market-based Scope 2 values cannot be reported because there
is no access to the individual energy suppliers' emissions factors.
Starting in fiscal year 2017/18, separate statements are publishedfor Scope 1 and Scope 2 emissions (calculated using alocation-based approach with current emissions factors as per
the VDA list, updated Jan. 2018).

GRI 306 Effluents and Waste 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 22, 42–46 (Environment, Efficient Use of Natural Resources, Guidelines, structures and processes,
Objectives and results)
GRI 306-2: Waste by type and disposal method

P. 47 (Waste, Performance Figures)

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. 22, 48 (Environment, Environmental Compliance, Guidelines, structures and processes, Objectives)
The legal proceedings pertaining to the unapproved discharge of
wastewater at the site in Oregon, USA were concluded in fiscal
year 2017/18.

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GRI 308: Supplier Environmental Assessment 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 25, 33, 34, 48 (Products and Value Chain, Decent Work and Economic Growth, Procurement andSupplier Management, Guidelines, structures, Processes, Environmental Compliance, Results)
GRI 308-1: New suppliers that were screened using environmental criteria

P. 33 (Processes)

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

P. 34 (Results)

GRI 401 Employment 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 21, 35, 36 (Responsibility toward Employees, Employees)
GRI 401-1: New employee hires and employee turnover

Currently, ZEISS cannot report the turnover because these data
are not available. The company has started collecting therelevant data. The turnover rate will be reported starting in FY
2019/20.

GRI 402 Labor/Management Relations 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 21, 35, 36 (Responsibility toward Employees, Employees, Employee Involvement)
GRI 402-1: Minimum notice periods regarding operational changes

P. 36 (Employee Involvement)

GRI 403 Occupational Health and Safety 2018
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 21, 40 (Responsibility toward Employees, Occupational Health and Safety)
GRI 403-1: Occupational health and safety management system

P. 40 (Occupational Health and Safety)

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

P. 40 (Occupational Health and Safety)

GRI 403-3: Occupational health services

P. 40 (Occupational Health and Safety)

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

P. 40 (Occupational Health and Safety)

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

P. 40 (Occupational Health and Safety)

GRI 403-6: Promotion of worker healthP. 40 (Occupational Health and Safety)

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

P. 48 (Environmental Compliance)

GRI 403-9: Work-related injuries

P. 40, 41 (Occupational Health and Safety)

Comments

Currently, ZEISS cannot report the number of work-related
accidents for non-ZEISS employees because these data are notavailable. The company plans to start collecting the relevant data
in FY 2019/20.

GRI 404 Training and Education 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 21, 35, 37 (Responsibility toward Employees, Employees, Training and Education)
GRI 404-1: Average hours of training per year per employee

P. 38 (Key figures)

ZEISS cannot provide disclosures broken down by gender andemployee category because the data are not available. ZEISS has
set up a data collection process and initially plans to break thesedata down by gender with a focus on Germany beginning in FY
2018/19.

GRI 405 Diversity and Equal Opportunity 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 21, 35, 38, 39 (Responsibility toward Employees, Employees, Diversity and Equal Opportunity)
GRI 405-1: Diversity of governance bodies and employees

P. 36, 39 (Global Employee Structure, Global Age Structure), Annual Report 2017/18: P. 5, 18

GRI 406 Non-discrimination 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 21, 38 (Responsibility to Employees, Diversity and Equal Opportunity)
GRI 406-1: Incidents of discrimination and corrective actions taken

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

GRI 407 Freedom of Association and Collective Bargaining 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 21, 33, 34, 36 (Integrity and Compliance, Responsibility toward Employees, Procurement andSupplier Management, Employee Involvement)
GRI 407-1: Operations and suppliers in which the right to freedom of association andcollective bargaining may be at risk

P. 33, 34, 36 (Procurement and Supplier Management, Performance indicators, Employee Inclusion)

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GRI 408 Child Labor 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 33, 34 (Integrity and Compliance, Procurement and Supplier Management)
GRI 408-1: Operations and suppliers at significant risk for incidents of child labor

During the reporting period, ZEISS did not become aware of any
significant risks of child labor incidents at sites belonging to
ZEISS or its suppliers.

GRI 409 Forced or Compulsory Labor 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 33, 34 (Integrity and Compliance, Processes, Procurement and Supplier Management)
GRI 409-1: Operations and suppliers at significant risk for incidents of forced orcompulsory labor

During the reporting period, ZEISS did not become aware 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 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 20, 49-51 (Social Engagement, Guidelines, structures and processes, Regional society)
GRI 413-2: Operations with significant actual and potential negative impacts on local
communities

P. 42, 48 (Environment, Environmental Compliance)

GRI 414 Supplier Social Assessment 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 25, 33, 34 (Products and Value Chain, Decent Work and Economic Growth, Procurement andSupplier Management, Guidelines and structures, Processes, Results)
GRI 414-1: New suppliers that were screened using social criteria

P. 34 (Procurement and Supplier Management)

GRI 415 Public Policy 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 28 (Integrity and Compliance, Political Influence)
GRI 415-1: Political contributions

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GRI 416 Customer Health and Safety 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 30–32 (Products and Value Chain)
GRI 416-1: Assessment of the health and safety impacts of product and service
categories

P. 31, 32 (Product Safety and Product Development)

GRI 418 Customer Privacy 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 27, 29 (Integrity and Compliance, Compliance, Data Privacy)
GRI 418-1: Substantiated complaints concerning breaches of customer privacy andlosses of customer data

ZEISS did not become aware of any relevant incidents during thereporting period.

GRI 419 Socioeconomic Compliance 2016
GRI 103 Disclosures on Management Approach 2016 (including 103-1, 103-2, 103-3) P. 19, 26, 27 (Integrity and Compliance, Compliance)
GRI 419-1: Non-compliance with laws and regulations in the social and economic
area

Annual Report 2017/18: P. 36

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Legal Information
Carl Zeiss AG
73446 Oberkochen
Phone: +49 73 64 20-0
Fax:
+49 73 64 20-68 08
Email: responsibility@zeiss.com
www.zeiss.com
Editorial Team: Corporate Auditing,
Risk & Quality Management and Brand &Communications
Design & Layout: Corporate Brand &Communications
Concept and Text
akzente kommunikation undberatung GmbH

Disclaimer
This report contains certain forward-looking statements concerning the development 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 a deviation. There are no plans to update theforward-looking statements for events
that occur after the end of the reporting
period.
Apparent addition discrepancies may
arise throughout this Sustainability Reportdue to mathematical rounding.
This is a translation of the originalGerman-language Sustainability Reportof the ZEISS Group. The ZEISS Group shallnot assume any liability for the correctness of this translation. If the texts differ,
the German report shall take precedence.

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