Sustainability
Report2016

2_Editorial

Dear Readers,

Ulrich Weiße
Head of Central Function
Corporate Sustainability & HSE

In what is now our seventh consecutive Voith Sustainability Report we would
like to take the opportunity once again to inform you about our sustainability
achievements. Through a new reporting approach we aim to improve the way weinform all of our various stakeholders in a way that best suits the respective target
group. The new report comprises three coordinated modules. Our sustainability
communication activities remain focused around the traditional report, which isaligned with key international standards. At the same time, with our new approach
we have supplemented it via our website with additional details on our company’s
material fields of action. Analysts, NGOs, and other interested parties will find further
facts and figures here. For those who want rapid and concise information on Voith’s
activities we have put together a new brochure entitled “Sharing Values – Creating
Value”, which outlines our company’s fundamental approach to sustainability andincludes selected highlights from the reporting period.
I would first like to say that we have achieved a lot once again in this reporting year.
We are on the home stretch regarding our planned reduction in energy consumption and the amount of waste we produce, and we even successfully crossed thefinish line in the reporting year in terms of our wastewater volume reduction goal.
Together with the experts from our newly established Voith Sustainability Advisory
Committee, we are currently working on setting new goals; among these, for the
first time we also want to set ourselves a specific carbon-reduction target.
With our new HSE (health, safety, and environment) organization, last year we laid
the basis for us to work on further improving our performance across the Group.
The relevant processes, and our new hse+ IT platform in particular, are now in placeand operational. Our performance in the area of occupational health and safety atVoith shows what potentials can be leveraged through a consistent and targeted
approach to sustainability. Whereas we still held a relatively midfield ranking in our
industry when we started reporting on our sustainability activities, we are now
leaders in this field – and have attained a position that we also aim to achieve in
our other material fields of action. We intend to be the benchmark in the field ofsustainability, both in our industry and in all the markets in which Voith is active.
Have I awoken your interest? Then I wish you a stimulating and inspiring read!

Sincerely yours,

P.S. We are very keen to know what you think about our new reporting approach:
Please let us know by e-mailing me at ulrich.weisse@voith.com. I would be delighted
to hear your feedback.

Voith Sustainabilit y Repor t 2016

3

Voith 2016
_Editorial_Foreword

2
4

1_What Underpins our Actions
Our ProfileStrategy & Organization
Values & ComplianceResponsibility for Society

8
11
17
20

2_Environment
Environmental Management ApproachPerformance in the Reporting Period

26
31

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

42
44
48
51

4_Products & Supply Chains
Product Responsibility
Responsibility in the Supply Chain 

60
72_The Report_Imprint & Contact 

78
79

Voith Sustainabilit y Repor t 2016

4

_Foreword

Dear Readers,
I am delighted to present to you today our new Voith Sustainability Report. It is now
our seventh report of this type since we began in the 2009/10 fiscal year to publish
our goals, systematically record our sustainability performance and thus make oursustainability activities transparent.

Dr. Hubert Lienhard
President and CEO

A lot has happened in the meantime: Our aspiration is to be the benchmark forsustainability – both in our industry and in our markets. To achieve this aim we
have continuously improved our sustainability performance, benefitting both theenvironment and our company in equal measure. In terms of energy, waste, andwastewater savings alone, compared to four years ago we are currently saving€11.0 million annually – with scope to improve this even further. Once again, it
proves that acting sustainably and economic success go hand in hand and are
inextricably linked.
With its 150-year business tradition, today Voith counts as one of Europe’s oldest
family companies. The fact that we can celebrate this in 2017 is also testament to our
executive managers’ commitment to consistently prioritize long-term success overshort-term trends. They have always set their sights on future generations, and indoing so have acted sustainably and responsibly right from the outset. With our new
corporate mission statement and the claim “Inspiring Technologies for Generations”
derived from this, we are reaffirming our commitment to this fundamental principle.
150 years of Voith means 150 years of quality and reliability. 150 years driven by theaim to always give our best. We will hold true to this philosophy as it has shaped, isshaping, and will shape our corporate identity. Voith’s long and successful history
empowers us – and with our current transformation, we are making ourselves fit
for the future.
In recent years, we have transformed our company significantly through our Voith
150+ success program to prepare Voith for the future. The reporting year that wehave summarized in this report was particularly characterized by this transformation.

Voith Sustainabilit y Repor t 2016

5

From the sale of our industry services business, to fundamental changes at all Group
Divisions, especially at Voith Paper – arguably Voith is undergoing the most extensive transformation process of the past decade. We are taking our responsibility
seriously throughout this process too, and striving to make the necessary measures
as socially acceptable as possible for our affected employees.
At the same time, our new Group Division Digital Solutions is picking up speed.
There are now 1,500 employees working there on seizing the opportunities that
digitization offers Voith, and above all for our customers. In this area as well weare repeatedly adding value from combining long-term thinking with sustainablebusiness activities. As a result of this, in partnership with Boston Consulting Group
Digital Ventures we recently established a digital marketplace in North America
for the paper industry. The new platform is called merQbiz, and offers buyers andsellers from paper and pulp mills, paper brokers, and recycling companies a quick,safe, and efficient way to buy and sell recovered paper.
I am particularly delighted by the fact that we managed to improve our sustainability
performance further in the reporting year. We established a new organizational
structure for HSE (health, safety, and environment), and in doing so laid the basis forcontinuing to strengthen our capabilities in these areas. All our major energy, waste,
and wastewater KPIs (key performance indicators) are within our target corridors
and I am confident that we will achieve the objectives we have set ourselves.
The time has now come for us to set new goals. After all, we make progress throughthe will to improve constantly – a point that our company’s history unequivocallyconfirms. At Voith, sustainability will continue to be an aspiration, obligation, andchallenge we fully intend to meet. This report informs you about our specific achievements in the 2015/16 fiscal year. I wish you an enjoyable and informative read!

Sincerely yours,

Voith Sustainabilit y Repor t 2016

7

1_What Underpins
our Actions
Voith is a globally active technology
group. With our portfolio of production
plants, products and industrial services,
we actively serve five essential markets
worldwide: Energy, Oil & Gas, Paper,
Raw Materials, and Transport &Automotive. Our understanding ofsustainability is strongly influenced by
the tradition of Voith as a family-owned
company, and the way it has always
done business. This understanding
is at the core of our commitment to
conduct business in an environmentally friendly and fair manner, and thus
to secure long-term business success.
Voith Sustainabilit y Repor t 2016

8

1_What Underpins our Actions

1_What Underpins our Actions
1.1 Our Profile
Founded in 1867, Voith is now one of Europe’s largest family-owned companies.
The long-term focus of its owners has always been the driving force behind thecompany. Ensuring the company develops sustainably and profitably is the coreaim of the shareholders, Supervisory Board, and Corporate Board of Management.
This is also the aim pursued by our Group strategy. Our focus lies particularly on:• a diversified product portfolio based on industry megatrends• an international footprint and strong local roots• our innovative capabilities, and• our financial independence as a family-owned company.
This way we establish the basis for Voith’s long-term success – and at the sametime secure the prerequisites for ensuring the company can be handed on to thenext generation.

Location Overview (online) –http://voith.com/en/group/
global-presence-154.html

Overview of the GroupAs a global technology group active in over 60 countries, Voith maintains a worldwide network with around 120 production locations. Voith GmbH, headquarteredin Heidenheim/Brenz, Germany, is the operational management holding company
for the Group and is entirely family-owned. The Board of Management of Voith
GmbH is responsible for the Group’s strategic management and operations. The
Shareholders’ Committee and the Supervisory Board act as the advisory andsupervisory bodies respectively. The Supervisory Board also monitors the Boardof Management.
At the end of the reporting period the Group’s operating business is bundled in three
Group Divisions, which are each managed by legally independent managementcompanies.
• Voith Hydro is a turnkey provider that equips leading operators’ hydropower
plants around the world.
• Voith Paper is a system supplier to the paper industry, providing technologies,
products, and services covering the entire paper production process.
• Voith Turbo produces drive solutions as well as technical systems and components,
which are used around the globe in industrial plants as well as on railroads,
highways, and seaways worldwide.
We divested our majority stake in the former Group Division Voith Industrial Services
on August 31, 2016. We have treated this Group Division as a discontinued operationin accordance with the International Financial Reporting Standard (IFRS 5) since weannounced our intention to sell it.

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains9

Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

Voith Digital Solutions was launched in April 2016 with a team of around 650 employees. Existing automation, software, IT, digitization, and sensor expertise from theGroup Divisions Voith Hydro, Voith Paper, and Voith Turbo is bundled and further
developed in this newly founded Group Division. Furthermore, Voith Digital Solutions
is also home to all of the Group’s digital ventures and start-up activities. This Group
Division is still in the start-up phase.
In accordance with how information is presented in our Annual Report, our Sustainability Report also focuses on the three core business segments of Voith Hydro,
Voith Paper, and Voith Turbo.
The 2015/16 Fiscal YearAt €4,252 million, Group revenues were at much the same level as in the previous
year (€4,302 million), whereby the three continuing Group Divisions increased theiroperating profit significantly in some cases. At Group level too, efficiency gains
achieved as part of the Voith 150+ success program are reflected in improved
profitability and return on investment. ROCE (Return On Capital Employed) at Grouplevel rose from 12.2 % the previous year to 12.9 % in the 2015/16 fiscal year. Our net
result, which stood at €–93 million the previous year owing to high expenditure on
restructuring measures, was once again positive in the reporting year and amounted
to €29 million.

AR 2015/16, p. 46 et seq.,
Group Strategy

AR 2015/16, p. 52 et seq.,
Business Development

FACTS & FIGURESKey Economic Figures
FACTS & FIGURESInternational Focus
FACTS & FIGURES
Financial Contributions

Voith 150+: Transformation of the Group Completed, Key Decisions Taken
We launched our Group-wide Voith 150+ success program way back at the startof the 2013/14 fiscal year. It aims to optimize our product and service portfolio,
increase our efficiency through process improvement, and further develop theVoith corporate culture. After all, only a financially sound company can remain
viable over the long term.

Total Revenues €4,252 million*

Group Revenues*

by Group Division

Voith Turbo
33 %by region

Voith Hydro
33 %Americas27 %in € million

4,302

4,252

2014/15

2015/16

Germany
12 %Rest ofEurope28 %Voith Paper
34 %

Asia
27 %

*Data excludes the discontinued Group Division Voith Industrial Services.

Other
6%

*Data excludes the discontinued Group Division
Voith Industrial Services.

Voith Sustainabilit y Repor t 2016

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1_What Underpins our Actions

We have now largely completed transforming our company. In doing so, we havelaid the basis for the Voith Group’s long-term competitiveness and further capacity
for growth well beyond our 150th anniversary in 2017.
The biggest change concerned the Group Division Voith Industrial Services, which
we put up for sale in February 2015. The divestment process was successfully
concluded in August 2016, and we continue to participate with a stake of 20 %.

AR 2015/16, p. 48,
Key Measures of theVoith 150+ Program

A targeted portfolio adjustment was made in the three other Group Divisions. This
included the sale of business units as well as the consolidation, reduction in size,or closure of locations which did not achieve planned profitability levels. In addition,
we engaged in restructuring measures and made capacity adjustments. Voith Paper
was the Group Division most affected; here there has been a reduction of 3,000
jobs over the past five fiscal years. In doing so, we took into account the profoundstructural changes in the paper-machine market. We also ensured redundancies
were handled fairly and responsibly in consultation with employee representatives.

AR 2015/16, p. 47
Digital transformation
takes shape

Additionally, in the reporting period we decided to sell the stake in KUKA AG we
acquired at the end of 2014. After selling our shareholding, we achieved a cash
inflow of €1.15 billion. This liquidity inflow will be used to further develop the Group’s
portfolio, including the acceleration of the digital transformation of Voith, and canbe used flexibly both for organic growth as well as for attractive acquisitions.
Shared Services Established Successfully
Launched in October 2015, our new Shared Services organization is now establishedwithin the Group. The four Global Business Service Centers in Kunshan (Asia-Pacificregion), York (North America), São Paulo (South America) and Heidenheim (EMEA)
were established successfully during 2016, and the new structure is now up andrunning globally.
Standardized administrative activities are bundled in the Global Business Service
Centers. Each indirect activity also maintains competence centers for defining
global standards for Voith as well as for dealing with individual topics that require
specialist knowledge. In specific projects local business partners provide ourbusiness units with support, in line with our “one face to the customer” philosophy.
By bundling cross-divisional functions such as Purchasing, IT, Finance, Controlling,
Accounting, and HR, we have made our administration leaner and more efficient.
This provides effective support to operating units and releases them from scalable
processes, giving them the freedom to focus on their core business. The reorganization of cross-divisional functions will result in the need for fewer employees
in the individual divisions. The corresponding reduction of around 720 jobs wascompleted by the end of the 2015/16 fiscal year.

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains11

Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

1.2 Strategy & Organization
Sustainability at the Heart of Our Strategy
We make a measurable contribution to the sustainable development of our company, society, and the environment. In doing so we continue the tradition of thefamily-owned company Voith, which commits us to engage in business activities
in a way that promotes the environment, is fair, and promises long-term success.
In terms of sustainability, Voith intends to become the benchmark in its markets
and sectors – in the same way as we aim to play a leading role globally through our
products. It is an aspiration we intend to meet in all of our processes.
How Voith Organizes Sustainability
At Voith, sustainability is a cross-functional responsibility shared by our Corporate
Board of Management, Group Divisions, and Corporate Departments. Our new
Group Directive on Sustainability entered into force on December 15, 2015 andsets out the organization, responsibilities and principles underpinning our actions.
Our central Corporate Sustainability & HSE function provides the framework for the
strategic focus and organization of sustainability at Voith. It advises the Group companies and Corporate Departments, and further develops the topic as a strategic
issue. Corporate Sustainability & HSE is directly accountable to the President andCEO. It defines tools and methods to measure and control the Group’s activities,
such as the sustainability database and associated reporting tools. Furthermore
this central function holds direct responsibility for the global specialist organization
Health, Safety, and Environment (HSE), as well as the Sustainability Office.
The Corporate Sustainability Council (CSC) is the central management organ for
all of the Group’s sustainability activities. It comprises the Group Division’s Sustainability Officers. In the 2015/16 fiscal year this central control body convened
four times. The CSC prepares the bases for decisions and reports directly to
the Corporate Board of Management. In its controlling and monitoring function,
the central control body monitors the operational implementation of strategies,
goals, and measures in the Group Divisions and is responsible for data-gathering processes. The Group Divisions and relevant Corporate Departments(e.g. HR and Purchasing) are responsible for the operational implementation ofthese measures.
Business Partner Structure for Health, Safety and Environment
In accordance with the Shared Services system, in the reporting year we alsoestablished a business-partner structure for our HSE organization. The Center ofCompetence HSE now provides focused methods, tools, and standards under
one roof for our Group Divisions. Each Group Division is assigned one employee
from the Center of Competence HSE as a business partner. As the central point

Voith Sustainabilit y Repor t 2016

12

1_What Underpins our Actionsof contact, this business partner is available to the Board of Management of eachGroup Division to answer any HSE-related questions.
Our operating units remain responsible for implementing health, safety, andenvironment activities locally. Through the Center of Competence HSE they aresupported by experienced experts to continually improve their health, safety, andenvironmental performance. By leveraging potential synergies we are continuallyworking on optimizing service costs. At the same time, as skilled partners theseexperts can be called upon to identify risks and systematically reduce them througha continual improvement process. In the majority of cases the expert functions
are divided into Occupational Health & Safety, and Environment, with one HSE
expert each supporting several regional Voith companies depending on their size.
Duties include providing support with annual safety briefings and risk analyses, local
approval of hazardous substances, and incident analyses.
The Heads of the regional HSE service organizations and the members of the Centerof Competence HSE form the HSE Steering Team. It meets biannually and is chairedby the Head of the Corporate Sustainability & HSE central function.
With our new HSE organization we now have a uniform global organization for
health, safety, and environment with standardized processes, a powerful global IT

Sustainability, Health, Safety, and Environment Organization

CEO

Head of Sustainability & HSE

Advisory Board
Sustainability

Corporate
Sustainability
CouncilCentral Management
Organ for Sustainability Activities

VH

VP

Voith Sustainabilit y Repor t 2016

VT

Sustainability
OfficeControlling,
Reporting,Communication,
Strategy

Center ofCompetence HSE
Methods, Tools,
and Standards

VH

VP

VT

HSE
Services

EMA

North SouthAmer- Amer- APAC
ica
ica

EcologicalBusiness
Management
Energy andResource
Management

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains

13

Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Societysystem, and a Group-wide certified HSE management system. This results in greater
effectiveness, lower complexity, and increased acceptance among employees andother stakeholders.
Sustainability Approach Implemented Systematically
Six fields of action integrate sustainability management within the Group. This
includes the twin aim of sustainable corporate governance and striving for profitable
growth. Our sustainability approach also includes responsibility for our products, theenvironment, our employees, and for society. We also regularly publish our goals as
part of our sustainability reporting activities, and document our level of achievement.
Currently, our goals are based on our own aspirations as well as our key stakeholders’ demands. Essentially, the goals are based on the results of our Stakeholder
Survey 2016 and the materiality analysis derived from that. We will incorporate
international and national action plans in the goal-setting process, as part of therevision of our approach in the current fiscal year.
We take a systematic approach to the implementation of our Sustainability Strategy.
As part of our quarterly reporting the CSC regularly checks the achievement ofsustainability goals at Group and Group Division level. The report contains a detailed
list of measures which describes the tasks, responsibilities and deadlines for therespective operational level.
Progress in the Reporting Period
Following the successful rollout of our new HSE organization, in the fiscal year we
worked to establish the new structures across our Group. All the vacancies in the
new organization have now been filled, and our integrated HSE IT system hse+ isalso being used around the world. Over 97 % of Voith employees worldwide are
now supported or coordinated directly by our HSE organization. The remaining 3 %of the Voith workforce are covered by qualified external service providers who arecoordinated and integrated by the respective regional HSE service organization.
This mainly concerns countries where we have few local employees.
At the end of the 2015/16 fiscal year all Voith locations had been incorporated in
the HSE organization, as planned. This also enabled us to establish the basis for a
global matrix certification system in the areas of health, safety, and environment way
back in June 2016 – a whole year earlier than planned. All certified Voith locations,
including holdings, are now part of our global Voith HSE Matrix certification system.
Like our HSE management system, these locations are certified according to ISO
14001 and OHSAS 18001.

Environment chapter
pp. 26–39

FACTS & FIGURESEBM and HSE Data
Collection

FACTS & FIGURES
Certifications

Voith Sustainabilit y Repor t 2016

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1_What Underpins our Actions

It is now important to ensure that the corresponding change process is handled
successfully in the company. We currently assume that the new organization will
have been fully embedded in our company, and that the relevant processes andstandards will be utilized by all employees within the next two to three years. To
support this process we established an international information and training
program for the 2016/17 fiscal year. As part of this, the main objective of the HSE
Steering Team is to strengthen personal contact with experts locally, and in doing
so to stabilize and continuously improve the organization.
The focus is on providing information for• a shared understanding of the HSE culture• training courses for uniform application of the hse+ IT tool, and• workshops on new HSE process instructions.
To achieve this, we ensure information is shared biannually between employees
from the regions, the HSE Steering Team and the regional HSE experts.
Communication – Sharing Best Practices
Through targeted communication measures we motivate plant managers andemployees at our Group companies to help identify savings potentials and measures. A central element of this is our quarterly Ecological Business Management
newsletter that targets a broad audience, especially plant managers, and encourages them to adopt and implement measures that have already been introduced
successfully at other locations. Since 2016 a further two newsletters (HSE Best
Practices and HSE Flash News on current HSE risk areas) have supplemented ourcommunications mix with information on incident focus areas in occupational healthand safety. Each edition has a clear focus, showing specific examples of how todeal with situations successfully and which are worthy of emulating.

FACTS & FIGURES
Association Membership

In Constant Dialog with Stakeholders
As a global company group Voith is in constant dialog with a large number of stakeholders. We address their wide-ranging requirements, interests and expectations,and take account of these in our business decisions. Our key dialog partners
include the shareholders, supervisory committees, employees, the Works Council,
our customers, suppliers and investors, as well as neighboring communities, tradeassociations, academia, government agencies and politicians, NGOs (such as theWorld Wide Fund for Nature), and the interested general public.
External Experts Provide Further Stimuli
To expand the internal view of sustainability topics and to generate new stimuli
for our sustainability management activities we established an Advisory Board
Sustainability in the 2015/16 fiscal year. The committee comprises Prof. Dr. Stefan
Schaltegger from Leuphana University, Lüneburg, Germany, and Andreas Zamostny,

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains

15

Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

CEO of management consultancy firm Schlange & Co. GmbH, Hamburg, Germany,
which specializes in sustainability.
The committee met twice in the reporting year where it reviewed the continuation
and updating of environmental goals. As the existing goals expire at the end of
the reporting year, future influencing factors and appropriate targets for Voith’senvironmental activities were discussed.

Environment Chapter

Regular Stakeholder Survey
In early 2016 we conducted our global stakeholder survey for a second time. 993
participants from Europe, North and South America, Asia, and Africa completed
the questionnaires that we distributed as an anonymized online survey in fivelanguages on the Voith homepage.
Whereas our first survey in 2013 focused mainly on the expectations and requirements of the stakeholders in terms of corporate responsibility at Voith, this time theparticipants were also asked for their assessment of our performance in terms ofsustainability. Based on the feedback gained from the previous survey, we revised
the questions on individual fields of action and integrated new topics relating tosuch matters as the supply chain and product responsibility.
The results provided us with the basis to perform a detailed materiality analysis,
allowing us to realign our sustainability management and reporting activities, andfocus on the key aspects. The challenge confronting us now is to prioritize ouractivities, as most of our fields of action received an equal weighting.
We will continue to gather our stakeholders’ opinions regularly by utilizing surveys
and forums, the format of which we are currently planning to revise.
Effective and Transparent Reporting
From as long ago as 2009 we have informed our stakeholders of our performancethrough our annual Sustainability Report and via additional online information. To
ensure our reporting remains as effective as possible, in the reporting year we developed a new reporting model that focuses even more strongly on our target groups.
Our traditional sustainability report will now concentrate more on the fields of actionthat are most material for our company and our stakeholders. It is supplemented by
an extensive online facts & figures resource which includes additional information
intended mainly for sustainability experts and specialists. In addition, we aim to
explain the bases of our actions with our new brochure, giving especially applicants
and interested parties quicker access to our activities in a compact format.
Sustainability has been an integral part of our Annual Report for many years. We
also keep our employees regularly updated on sustainability issues through posts
on our Group-wide intranet and articles in our employee magazine.

Voith Sustainabilit y Repor t 2016

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1_What Underpins our Actions

Materiality Analysis
Very important

10
29
6

Importance to external stakeholders

30
28

20
21

17
18
16
19

7
15

26

13 11

25 2 27

12

24
23

14 4
5

3
1

8

22
9

ImportantManagement
1 Anti-corruption
2 DataProtection
3 Economic
Stability
4 GoodGovernance
5 HumanRights

Importance to internal stakeholders
Supply Chain
6 SupplyChainAnti-corruption
7 Supplier
Relations
8 Environmental
Standards

9 Social
Standards


Employees
10 Occupational
Safety
11 Education

12 HealthBenefits
13 Training
14 Work-Life
Balance
15 Remuneration

16 DiversityEnvironment
17 Material
Efficiency
18 Emissions
Reduction

19 Energy
Efficiency

20 Water
Efficiency

21 Renewable
EnergiesSociety
22 SocialEngagement

Very important
Products
23 Customer
Collaboration
24 Innovation
Management
25 Reliability
26 Value for Money
27 Energy-efficient
Products

28 Product
Safety
29 Resource-efficient
Products

30 Water-efficient
ProductsThe Outlook for Stakeholder Dialog Activities
We intend to systematically continue our stakeholder dialog activities over the coming years and hold our newly established stakeholder survey biennially. Our survey
in the 2015/16 fiscal year also serves as the basis for overhauling our Sustainability
Strategy, which we are developing further alongside our Corporate Strategy, andwhich will also see international and national action plans being incorporated into
the goal-setting process.
In terms of environmental aspects, with the support of our Sustainability Advisory
Board we are currently working on developing our management approach andcorresponding goals further. As a result, our target system will in future also include
a specific climate goal, whereas previously our CO 2 emissions were only addressed
through our energy target.

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains17

Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

1.3 Values & Compliance
How We See Ourselves
At Voith, we integrate the tradition of a family-owned business with the culture of a
global player. For many years, Voith has been undergoing a comprehensive processof transformation that impacts our organization and culture. In the reporting year we
consolidated the way we have come to see ourselves in a new corporate mission
statement. Our vision: Voith is the technology partner for industrial generations.
Our values underpin all of our actions: We are respectful and reliable, open andambitious. Our values, and the guidelines derived from them, ensure that Voith
acts according to the same business principles and adopts the same philosophy
worldwide. We have summarized this mission statement in our new claim, which we
presented in October 2016 and which we will introduce worldwide in the 2016/17
fiscal year: Inspiring Technology for Generations.
Code of Conduct for All Employees
Voith committed itself to upholding the following business principles in 1927: “In
the business world one must be ethical, decent and honest. If a contracting party
or competitor behaves unfairly, this does not give us the right to deviate from thisprinciple.” These principles still govern our actions today. Our Code of Conduct
defines the way we act towards customers and business partners, as well as how
employees behave towards each other within the company. It can be viewed online
and contains information on contact partners and the Voith Compliance Committee,
among other things.
We ask every single one of our employees to comply with prevailing legislationand our company’s internal regulations. This applies across our Group and all
hierarchical levels, and any violations will entail sanctions. We constantly update
our rules and procedures, and adapt them to meet current requirements.

Key Aspects Addressed by the Voith Code of Conduct
Observance of the rules of fair competition.
• No anti-competitive agreements.
• No corruption or bribery: No offering, granting, demanding and/or acceptingof unfair benefits.
• Transparency on donations and sponsorship.
• Safeguarding our own trade secrets and patents, and respecting those of third
parties.
• No illegal preferential treatment of suppliers and service providers.
• Respect for human rights, fair working conditions, and rejection of child andforced labor.
•

Voith Sustainabilit y Repor t 2016

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1_What Underpins our Actions

Voith Compliance Organization
Our Compliance Committee is responsible for establishing, developing, and coordinating our Compliance Program, revising compliance regulations, and coordinating
training. This committee meets monthly and comprises the Head of the GroupLaw Department (Chairman), as well as the respective Heads of the Group Human
Resources Management and the Group Audit Departments. Its Chairman reports
directly to the Corporate Board of Management of Voith GmbH. The CFOs of theGroup Divisions and the individual Group companies serve as the Compliance
Officers in their units. Within their area of responsibility, our Compliance Officers are
responsible for implementing our Code of Conduct and also serve as Group-wide
contact partners. This also corresponds to our other Risk Management organization.
Compliance Training for Employees
All of our employees are required to keep their knowledge of compliance issues and
our Code of Conduct up to date on a regular basis via e-learning programs. With
their successful participation, employees also document that they are fully awareof our Code of Conduct and have understood the appropriate regulations. Around
97 % of our employees with a computer workstation completed our programson anti-corruption and antitrust law, as well as on leadership and employees. A
higher degree cannot be achieved owing to customary headcount fluctuation in acompany, so we assume the programs cover all employees. Employees who do
not have a computer workstation are trained by their line manager to ensure theirknowledge is up to date.

FACTS & FIGURES
Compliance Training
FACTS & FIGURES
External Security Personnel

Face-to-face training courses were also held again in the reporting year, with
241 employees – mainly comprising managers and employees from Sales andPurchasing – taking part in twelve events. Separate, particularly detailed training
courses were offered to Compliance Officers from our Group Divisions.
Group-wide Information and Complaints Reporting System
Any employee can report abuse, complaints or violations of our Code of Conduct tous. This principle applies just as much to our employees as it does to our suppliers,
local residents or other stakeholders of our company.
There are several ways in which Voith employees can do this: either personallythrough his/her line manager or the Compliance Officer, electronically via the Helpdesk, or by e-mail. We also follow up on complaints that have been submitted
anonymously via our Group-wide whistleblower system. The number and type ofviolations are documented centrally, and this whistleblower system can also beaccessed by external parties at any time via our company website, so it is open to
all business partners and suppliers too. Any type of complaint on any subject canbe reported. And to ensure the strictest confidentiality is maintained, the number
and nature of the complaints at Voith are not disclosed externally.

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2_Environment

3_Employees

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Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

Reports relating to the environment can also be submitted to the local Environmental Officer. The exact complaints process and escalation paths are set out inour HSE Group Directive and its annex Environmental Incidents. Complaints arecommunicated based on their severity along disciplinary and functional reportinglines. This is an opportunity that is also utilized: In the reporting period two incidents
were reported regarding noise; the incidents were dealt with and the complaints
resolved.

FACTS & FIGURES
Violations of Compliance Regulations
FACTS & FIGURES
Escalation Paths

Regular Reviews Guarantee EffectivenessIn the 2012/13 fiscal year an external auditing firm reviewed our compliancemanagement system in accordance with the IDW PS 980 standard in respect ofits design, implementation, and effectiveness. This review focused on preventing
violations of antitrust and corruption laws.
Our Internal Audit Department also examines observance of all complianceregulations in a routine risk assessment that involves around 30 operating units
annually. We are pleased to announce that this Department once again confirmedthat our compliance management system had been implemented appropriately inthe reporting period.
We ensure that our business partners comply with our regulations by means ofa Supplier Self-Assessment (SSA). Compliance also forms part of our General
Purchasing Terms. For the reporting period we are pleased to announce that we
received no complaints concerning supplier violations of environmental or social
standards, nor were we notified of any suspected cases of corruption.
As in virtually all companies, in the reporting year we also had isolated cases wherecompliance regulations were violated at Voith. Appropriate action was taken in all
instances.
Tackling Corruption
It is vital that we take rigorous action against corruption. All Compliance Officers
create a Risk Control Matrix that also includes potential corruption risks for their
specific Group Division. This structured process covers all Voith locations worldwide.
The results of all Group Divisions are aggregated and, among other things, form
the basis of internal compliance audits.
Our risk assessment is based on many factors including the Corruption Perception
Index (CPI) published annually by Transparency International. The index ranks virtually all countries by their perceived levels of corruption on a scale of 1 to 100. As
we maintain business relationships the world over, special precautionary measuresapply to high-risk countries. The risk manager responsible decides on the measures.
176 countries are listed in the Corruption Perception Index.

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1_What Underpins our Actions

Confidential Treatment of Information
Information security and protection of confidential data are core aspects of privacy
and information security at Voith. Every employee is expected to show appropriate
awareness and a sense of responsibility. Our information technology and security
management system is certified according to the international standard ISO/IEC
27001. Our Group Directive on Information Security and Data Protection sets out
how information, and particularly customer data, must be handled.

http://www.voith.com/en/konzern/
compliance-187.html

The Outlook for Integrity
This fiscal year we are focusing on revising our Voith values in particular. In addition,
we work continuously to optimize our compliance organization and adapt it to
new standards and requirements. For example, in January we implemented the
UK Modern Slavery Act declaration in our organization. We are currently working
on reviewing and, if necessary, making relevant modifications to our compliancemanagement system in the context of the German government’s action plan on
human rights.

1.4 Responsibility for Society
Active social engagement is an integral part of our understanding of sustainability.
A particular focus area of our activities lies traditionally on our headquarters in
Heidenheim, Germany. Through various initiatives, such as our training program, we
cooperate there with the special vocational college Sonderberufsfachschule Hanns
Voith. And as a good neighbor, we also get involved in numerous other activities inthe town. The scope of our activities focuses on the areas of sport, education, social
affairs and culture, which we support either by providing direct financial assistanceor through in-kind contributions.
Group Directive Defines Frameworks
The nature and scope of our engagement have been documented since 2008 in
our Donations and Sponsorship Group Directive. This also outlines the financial
frameworks of our spending commitments. The budget is based on the previous
year’s earnings before tax (EBT), limited to a maximum of 1 % of EBT or at least
two-thirds of the volume of funding in the year before last. By simplifying ourapproach we aim to ensure our engagement is continuous – even at times when
our company’s development is volatile.
We record our donation and sponsorship activities in our internal controlling system
and update it every six months, covering all our global activities and across all
business units. The Head of the Legal Department informs the Corporate Boardof Management once a year on how funds have been allocated across the entire
Voith Group.

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Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

We follow clear project-selection criteria. To qualify for assistance, above all we must
be convinced that the recipient’s project is a worthy one, and of their integrity. We
also take the regional relevance and the appropriateness to our business segments,
values and corporate culture into consideration. Furthermore we consider the frequency and volume of previous contributions. Irrespective of this, in humanitarian
emergencies that demand urgent action we provide help quickly and directly. There
was no significant expenditure in the reporting year.
By contrast, our sponsorship activities always focus on the appropriateness ofthe contribution and the benefit we receive in return. This is because we follow
additional, mainly communicative goals besides providing sponsorship.
Organization of our Engagement
Our social engagement activities are managed predominantly by two organizations:• Voith GmbH, Heidenheim, and• Fundação Voith, Brazil – since 2004, Voith has helped social projects in Brazil
through this foundation.
In terms of organization, within our company we have also taken into account ouractivities’ various goals. Our Legal Department coordinates our social engagement
activities, while Corporate Communications controls our sponsorship activities.
Individual Group Divisions and local Group companies can also launch and run
their own assistance and sponsorship projects as long as they comply with ourGroup Directive.
We also support numerous initiatives and projects in coordination with the Hanns
Voith Foundation. Through its activities, this independent foundation regularly
engages in a large number of local and supraregional initiatives, and also provides
financial support as annual donations to various projects.
Our Engagement Activities in the Reporting Period
In the 2015/16 fiscal year we invested around €1.99 million in social engagement
activities (previous year: €2.8 million). Of this, Fundação Voith contributed €62,000.
The drop in total funding is due primarily to the non-recurrence of one-time effects
in the area of sponsorship.
We provided €0.80 million in the form of donations, while €1.19 million was used forsponsorship measures. We spent the greatest share on sports (57 %), followed byeducation (29 %), social projects (8 %), and cultural projects (7 %). In the reporting
year, political parties and organizations received financial contributions of €80,000.

FACTS & FIGURES
Donations and Sponsorship
FACTS & FIGURES
Contributions to Political Actors

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1_What Underpins our Actions

Sports Engagement
Voith sponsors professional and amateur sports, and supports sports clubs andevents around the world with the main focus on Heidenheim. In the reporting year
we spent €1.13 million in this area. At our company’s headquarters we sponsor
the sports club 1. FC Heidenheim 1864 e.V. This includes sponsoring the namingrights to the Voith Arena and supporting the club as the principal sponsor of theshirts and perimeter boards. By doing so we aim to increase Voith’s brand recognition in particular. In addition, we sponsor the fencing center of the Heidenheimer
Sportbund 1846 e.V. (HSB – Heidenheim Sports Association) as well as the local
HSB baseball team and the HSB athletics department, whose training site bears
the name Voith-Sportzentrum (Voith Sports Center). We believe support for local
initiatives is an investment in the attractiveness of the region – and one that benefits
both the regional citizens and our employees. In the previous fiscal year we also
provided financial assistance to Sunpor St. Pölten cycling club, the Crailsheim
Merlins basketball team, and the Tennessee Valley golf association.
Committed to Education
A good education and training form the basis for the best development opportunities in life. This is why we support kindergartens, schools, and universities
around the world, and in doing so are continuing the tradition of Dr. Hanns Voith.
Already in 1946, Voith dedicated itself in the German state of Baden-Württemberg
to taking disadvantaged young people and preparing them for training schemes
and the world of work. What initially started as a vocational preparation and training
course has now become an institution, and has been recognized since 2004 as
the Sonderberufsfachschule Hanns Voith (Special Vocational College Hanns Voith).

FACTS & FIGURES
Education Initiative “business@school”

13 years have passed since we began supporting the Germany-wide business@school, an education initiative of The Boston Consulting Group. It gives senior highschool students the opportunity to get a closer look at business, including hands-on
experience, over the course of one school year.

FACTS & FIGURES
University Engagement andFoundation Professorships

At university level we support young talent at the universities of Aalen, Dresden,
Stuttgart, and Ulm as part of the German Deutschlandstipendien scholarship
scheme. Furthermore, we provide endowments for professorships at the German
universities of Stuttgart, Ulm, and Aalen. By doing so, we aim to contribute – without
influencing the research content or teaching practices – to the training of newacademic talent and promote research in scientific areas relevant to Voith.

FACTS & FIGURESInternational Education Projects

Our long-standing cooperation with schools and universities has also proven its
worth in Europe, the US, India, China, and Brazil. Our assistance in this area
includes support for the Educational Freedom projects of Recreatur Resgatur,
Escola Estadual Conjunto Habitacional Voith, and Friedrich von Voith School inSão Paulo, Brazil as well as the Formare project of Fundação Iochpe. Each year
Formare offers 20 children from low-income families the chance to take a training
course and go on to gain a state-recognized qualification. Employees’ children are
excluded from taking part.

FACTS & FIGURES
Special Vocational College Hanns Voith

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Our Profile
Strategy & Organization
Values & Compliance
Responsibility for Society

We forge a link to our cultural engagement through our contribution to the Heidenheim Opera Festival, of which we are the main sponsor. In the reporting year
this support included inviting all fourth grade primary school pupils in Heidenheim
to the Junge Oper opera for youngsters, thereby contributing to the pupils’ earlymusical education.
Cultural Engagement
We want to give as many people as possible access to culture. As an example, in thereporting period we provided financial support to various institutions in Heidenheim,
including the Opera Festival with a €9,000 donation. In Brazil, we also provided€50,000 in funding to the Fundação Bachiana Filarmonica.
Social Affairs Engagement
Our wish is to improve people’s living conditions around the world and promoteintercultural exchange. Voith is one of the initiators of the integration initiative “Wir
Zusammen" (We Together) of German industry, which helps refugees integrate inGermany. We are involved in providing an introductory vocational training course
for young refugees to facilitate their entry into professional life or vocational training.
Of the eight places offered at Voith, on October 1, 2016 four were taken by young
refugees, who are supported and trained by experienced Voith trainers.
In India we supported a number of social projects in the reporting period. These
included Bharat Sevashram Sangha, the Prime Minister’s National Relief Fund, andPranab Kanya Sangha (€13,500 each), Prayas Social Welfare Society and Shirdi
Sai Baba Temple Society (€6,750 each).

FACTS & FIGURESInternational Social Projects

Many of our employees also volunteer their spare time to assist people in need.
Among our activities in this area, we support them by granting temporary paid
release from work and providing them with materials or equipment that is no longer
required.
One example of this in action is a children’s village in Nepal, which came about on
the initiative of a Voith employee and his wife. The village is run by the Children’s
Future Organization (CFO) and looks after orphans and half-orphans.

FACTS & FIGURESEngagement in Nepal

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2_Environment
Voith is a global technology group,
so we see it as our corporate
responsibility to handle resourcesand energy efficiently as well as to
avoid environmental risks at all of our
locations. By linking our economic
principles with environmental actions
we not only contribute to protecting
the climate but also create measurable
added value for our company.

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2_Environment

2_Environment
2.1 Environmental Management Approach
As a global technology group Voith is required to comply with a large number ofnational, regional, and industry-specific laws, regulations, and guidelines. It goes
without saying that we comply fully with these. At the same time, we have aduty towards our employees and neighbors to avoid environmental risks and use
resources responsibly. As a manufacturer our main focus therefore lies on energy
and resource management, through which we intend to continually reduce ourenergy consumption and the resulting greenhouse gas emissions, make efficientand safe use of materials and raw materials, and prevent waste as far as possible.
We also work continuously to reduce our water withdrawal and wastewater volumes.
To meet these challenges we defined two focus areas for our environmental activities:• Operational environmental protection – Eco Standards provide strategicand operational support to our divisions and locations in complying with andimplementing environmental regulations as well as internal environmental
protection policies.
• Resource protection – Ecological Business Management (EBM) improvesenergy and resource efficiency at our locations.
2.1.1 Operational Environmental Protection
Eco Standards Set the Framework
The aim of operational environmental protection is to minimize all environmentally
harmful effects of Voith’s operating activities. Our actions in this area focus on
strategic and operational control, with the aim of ensuring that environmental regulations are implemented and upheld (Eco Standards). In particular, this includes
the assessment and internal communication of potential environmental risks, categorized into risk classes according to their probability and potential damage level.

Section 1
What Underpins our Actions

The HSE Steering Team is responsible for coordinating and standardizing ourapproach to operational environmental protection. In the reporting period, theteam dealt with a variety of activities including standardizing and organizing existing
environmental protection processes and procedures. It also addressed central
issues relating to hazardous materials management, with the aim of replacing
especially critical materials with harmless substitutes while reducing the amountof materials used.
Our HSE Group Directive commits each of our locations to appoint an Environmental Representative. Their tasks cover a wide range of topics including emissions
control and water protection, waste management, hazardous materials and goods,

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Environmental Management Approach
Performance in the Reporting Period

and preventing environmental incidents. They also advise operations managers
on new plant constructions, modifications and approval processes, and conduct
regular site inspections and audits.
Full-time environmental experts at our regional HSE service organizations ensure
our Group companies are provided with high-quality, organized support. To assist
them, the experts have access to a central HSE legislation database that contains all
the relevant HSE regulations and standards that apply to us in each region. Besides
current legislative texts, the database also includes summaries and comments in
the respective national languages.
The legal requirements are assigned via our global hse+ system to the relevant
representative, who then becomes responsible for ensuring the requirements arecomplied with. The same applies to Voith standards, approvals, and requirements.
hse+ is also used to perform location-related environmental risk assessments. The
measures derived are then assigned implementation responsibilities and implementation review dates, and documented and monitored in hse+.
Environmental Incident Reporting System
Using our Group-wide reporting system we record all environmental incidents
every month based on standardized criteria. We analyze them, and then report theanalysis results every quarter to our Corporate Board of Management.

Section 1.1
Strategy & Organization

In the reporting year we revised our definition of environmental incidents. They are
now fully aligned with our occupational safety categories, enabling us to evaluate
and rate cross-topic incidents according to the same standards. We incorporated
the corresponding changes in our HSE Group Directive.
Our internal communications have increased our employees’ awareness of environmental protection and environmental incidents, thereby broadening the regional
distribution of information relating to unsafe actions. Whereas our focus was previously on Europe and South America, in the 2015/16 fiscal year we gathered more
information from North America and Asia.
We are pleased to announce that no incidents requiring public reporting wereregistered in the reporting period.

FACTS & FIGURES
Noise Complaints

Hazardous Materials Management
The hazardous materials we use at Voith include coating materials such as paints,
lacquers, thinners and solvents, adhesives, resins and hardeners, lubricants,
cleaning agents, and industrial chemicals. Wherever possible we try to eliminate
particularly harmful materials, and encourage the use of low-risk substitutes as wellas the harmonization of safety standards across the Group.

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2_Environment

To achieve this, our global approval process is underpinned by our hazardous materials database. It comprises a uniform global assessment of the environmental, health,and safety risks of work materials and hazardous materials.
The first step involves us examining globally whether legal restrictions are in place orwhether materials are listed on customers’ banned lists. We ensure these materials
are handled as safely and securely as possible by means of a Group-wide hazardous
materials approval process. We also impose a strict “polluter pays” principle toencourage prioritization of the use of approved materials from the hazardous materials database. In doing so, we work to meet environmental protection, occupationalsafety, and compliance requirements, and achieve the greatest possible degree ofstandardization. We also aim to have a positive influence on hazard potentials andcosts by reducing the wide range of redundant materials we use.

FACTS & FIGURES
Nanotechnology

Since we introduced the process there has already been a considerable increasein both the quality and completeness of data as well as in the transparency of
the requested materials. In doing so, this process will allow us to issue productdeclarations at the press of a button and reduce pollutants in products.
However, the sheer number of materials currently in the database means the consolidation process is taking longer than we expected when launching the projectback in 2011. We currently estimate it will take a further two years to integrate allprevious local databases into our centralized hazardous materials database.
In the reporting period we submitted 947 requests for new hazardous materials, ofwhich 867 were approved. 8 % of applications were rejected; in over half of theseit was because they contained banned or harmful materials – proof that the newprocess is working and effective. The other rejected applications were returned
with the request to select a suitable substitute from the list of approved materials.
In coming years we aim to progressively increase the consolidation of hazardous
materials used, but we can only achieve this in collaboration with the people who
use these materials within our company. They need to trust the substitutes, particularly in relation to the integrity of our processes and the quality of the products.
In the reporting period we developed a Materials Navigator tool to provide information quickly and reliably whenever required on which hazardous materials we use in
our products. As an indicator of any hazardous materials that product groups may
contain, the tool offers a range of functions including a quick check on whether andto what degree a (sub)product contains certain hazardous materials. It also allows
banned or restricted materials to be checked against current standards, so that
Purchasing does not buy problematic materials in the first place, or a stop can be
put to their use as soon as possible.

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Environmental Management Approach
Performance in the Reporting Period

2.1.2 Efficient Use of Resources
Ecological Business Management (EBM) aims to identify ecological and economic
potentials for improvement in our production processes. To leverage these potentials, we perform analyses at process, system, and component level.
We focus on the areas of energy, waste, and freshwater, and within this we follow
three specific aims set out by the Corporate Board of Management taking the
2011/12 fiscal year as the benchmark: We will reduce our energy consumption by
20 % based on revenue, our waste by 25 %, and our freshwater consumption by
10 % by the 2017/18 fiscal year. Since the absolute savings to be achieved vary

Production-related Energy Consumption*
specific value in MWh/€ million in revenues

126.0

126.2

126.2
113.8

Target value
for 2015/16
Target value
for 2017/18

106.4

108.6
100.8

2011/122012/132013/142014/15

2015/16

Waste
specific value in t/€ million in revenues

10.7

Target value
for 2015/16
Target value
for 2017/18

10.9
10.2

9.9
8.7

2011/122012/132013/142014/15

0.32

0.32

8.8
8.0

2015/16

Freshwater Consumption*
specific value in m 3/€ thousand in revenues

0.36

Target value
for 2015/16
Target value
for 2017/18

0.33
0.32

0.27
0.25
2011/122012/132013/142014/15

2015/16*D ata excludes the discontinued Group Division Voith Industrial Services.

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2_Environment

Ability to Influence Value-adding Stages
in terms of material efficiency

Potential to influence

R&D

FACTS & FIGURES
Environmental Goals

Construction

Purchasing

Production–

depending on revenue targets, we adjust and check these through our Green
Controlling process. Our progress towards achieving targets in our EBM system
is influenced by a range of factors, including changes to design and construction
processes, production relocations, production fluctuations as a result of changes
in utilization, changes in purchasing behavior, and site closures.
In the reporting year we continued the successful course charted in the previous
year and achieved further improvements across all target fields based on revenue.
We successfully refilled our pipeline of measures and also further improved the levelof implementation of measures already identified and launched.
At present we are already working on further developing existing goals so that we
can continue optimizing our processes seamlessly beyond the end of the current
target period in the 2017/18 fiscal year. Our EBM team was tasked with reviewing
this, and its findings will be discussed during the current fiscal year in the Corporate
Sustainability Council (CSC).

FACTS & FIGURES
Green Controlling
FACTS & FIGURESEBM Experts

Green Controlling Establishes Objective Decision-making Principles
We aim to create both economic and ecological added value through our resource
management activities. To achieve this we follow a four-stage Green Controlling
process: This provides us with transparency concerning our pipeline of measures,the degree of implementation of the measures represented within it, and theirimpact on the development of indicators, allowing us to actively control the target-achievement process.
Hot-spot Analyses Leverage Further Potential
For many years now we have been using hot-spot analyses to successfully address
location-specific and cross-location focus topics, such as the energy consumed
during a process step. To achieve maximum effect we focus on the greatest consumption drivers at our individual regions and locations. To allow us to leverage

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Performance in the Reporting Period

additional optimization potentials, in the reporting period we conducted 17 hot-spot
analyses – 10 in Europe, 2 in America, and 5 in Asia – that also enabled us toaddress the regional distribution of resource consumption. Once again, energy
and waste were the focus areas of the analyses. The results are explained later inthe respective report sections.
The analyses once again confirm the trend that we are increasingly moving awayfrom facility infrastructure topics (lighting, compressed air, ventilation, and air
conditioning) towards process-specific topics (such as the use of steel grit forsandblasting, and the heat-setting process for felt production). In doing so we are
gradually leveraging the greatest value potentials, although the expense and risks
involved in implementing the relevant measures are increasing.

FACTS & FIGURES
Hot-spot Analysis Methodology

2.2 Performance in the Reporting Period
2.2.1 Energy Efficiency and Greenhouse Gas Emissions
Energy Consumption Falls Again
In the 2015/16 fiscal year Voith consumed 452,294 MWh of energy (previous year:
489,473 MWh). 106 MWh of energy was needed per € million in revenue, which
was 6.5 % less than the previous year (114 MWh per € million in revenues). Taking
the figures of the 2011/12 fiscal year as our benchmark we have already achieved
a 15.6 % improvement, with the goal of 20 % in the 2017/18 fiscal year still firmly
in our sights.
In the period under review the identified potential for action in the pipeline rose from
90.1 GWh to 107.0 GWh (an increase of 18.8 % versus the previous year). Measureswith a volume of 23.6 GWh (previous year: 25.4 GWh, –7.1 %) were implemented
in the reporting period; as a result, the total amount of measures implemented is73.6 GWh.

FACTS & FIGURES
Energy Consumption
FACTS & FIGURES
Energy Saving Measures
and Further Potentials
FACTS & FIGURES
Certifications

Production-related Energy Consumption*in MWh525,862

2013/14489,473

2014/15452,294

2015/16*Data excludes the discontinued Group Division Voith Industrial Services.

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2_Environment

To further reduce our energy consumption in the reporting period we conducted hotspot analyses focusing on ventilation, air conditioning, heating, and lighting. Almost
all analyses were followed by upgrade projects to existing facility infrastructures,
which to some degree had already been implemented in the reporting period.
However, the trend reveals that the potentials that still need to be achieved ineconomic terms through infrastructure measures are limited owing to the successful
implementation of measures in past years.
Regular resource-efficiency workshops also encourage knowledge exchange within
our organization. Within these we try to compare similar processes, set benchmarks,
and realize identified potentials by sharing best practice examples.

FACTS & FIGURES
Renewables

Energy Mix Largely Unchanged
14.8 % of the energy we consumed came from renewables, and 85.2 % from
non-renewable resources. This calculation included all energy sources associatedwith our energy consumption in production.

FACTS & FIGURES
Production-related
Energy Consumption

Besides heating and cooling, which account for around 33 % of our energy consumption, the production of paper-machine clothing remains the key driver of our
production-related energy use, accounting for 25 % of our global consumption.
Apart from weaving processes, heat-setting is especially energy-intensive – particularly in felt production. The operation of machine tools consumes 5 % of the energy
used at Voith, with 5 % of production-related energy consumption accounted forby the foundry in São Paulo, Brazil.

FACTS & FIGURES
Direct and Indirect Energy Ratio

In the reporting period there was no change to the proportion of direct (33 %) andindirect (67 %) energy consumption. With a share of 80 %, natural gas remains the
key energy source for our direct production-related energy consumption, followed
by LPG (liquefied petroleum gas), diesel, and heating oil with percentage shares insingle digits. We use these energy sources as heating fuel and for heat-intensive
thermal processes. Diesel is used primarily to operate emergency generators andMain Sources of Energy Consumptionin %7%
Heating and cooling energy
25 %

33 %

Paper-machine clothing
Machine tools

5%Foundry5%

25 %Production and test stands
Other

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Environmental Management Approach
Performance in the Reporting Period

generate steam at our locations in Karawang, Indonesia, and for thermal processesin São Paulo, Brazil.
Electricity Consumption Continues to FallIn the reporting period we consumed 249,206 MWh of electricity (previous year:
268,855 MWh). In terms of our electricity mix, the share of energy sources suppliedby external providers remained virtually unchanged at 73.3 % (previous year: 71.9 %)from non-renewable and 26.7 % (previous year: 28.1 %) from renewable resources.

FACTS & FIGURESElectricity Mix
FACTS & FIGURES
Environmental Impact of Buildings

Greenhouse Gas Emissions Reduced
We are well aware of the impact our actions have on climate change, so we try
to minimize them as far as possible. We identified how much energy we consume, as the main driver of our greenhouse gas (GHG) emissions, and are taking
rigorous steps to counter these emissions as part of our environmental goals.
The primary focus of our activities in the current fiscal year is on improving ourenergy efficiency.
Both energy consumption and the associated GHG emissions are included in ourcurrent realignment of environmental goals. In addition, through our measures within
the framework of our EBM and Eco Technologies activities we also factor-in theconsequences of climate change when developing products. After all, our products’
lifecycle analyses demonstrate clearly that their environmental footprint is far greater
when they are in use than in the production stage. As a fundamental principle we
aim to be the technology leader in all of our markets – where Voith products feature
regularly in the highest efficiency class.

Section 4
Product Responsibility

In the 2015/16 fiscal year our facilities’ GHG emissions fell by 4.1 % to 147,341 t
CO2e (previous year: 153,697 t CO2e). The share of direct GHG emissions fellcompared to the previous year by 6.6 % from 32,728 t CO2e to 30,554 t CO2e.
Indirect GHG emissions also fell to 116,787 t CO2e (previous year: 120,968 t CO2e),equivalent to a reduction of 3.5 %.

Electricity Mix by Renewable and Non-renewable Resourcesin %From renewablesources

27 %From nonrenewablesources73 %2013/142014/15

2015/16

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2_Environment

Production-related Greenhouse Gas (GHG) Emissions
energy consumption/total GHG emissions in t CO2e163,755

2013/14

FACTS & FIGURESGHG Emissions by Scope,
Region, and Methodology
FACTS & FIGURES
Transport Emissions
FACTS & FIGURESGHG Emission Reduction
Measures
FACTS & FIGURES
Emissions Trading
FACTS & FIGURESAir Pollutants

153,697

147,341

2014/15

2015/16Since the 2008/09 fiscal year we have reduced our absolute energy consumption
by 19.8 %, whereas absolute GHG emissions in the same period fell by 13.1 %.
This difference is attributable to the national electricity mixes, meaning energy
savings at individual locations or due to production relocations vary in their impact
on GHG emissions.
2.2.2 Material Efficiency and Waste
The use of materials and raw materials is controlled Group-wide at Voith. We work
tirelessly to make our processes resource-friendly; we are nevertheless confronted
with specific challenges due to the broad scope of our product portfolio and thecorresponding diversity of our process landscape. We also face challenges in the
project businesses at Voith Hydro and Voith Paper, as well as in mass production
at Voith Turbo.
Known methods to increase material efficiency have so far focused heavily on mass
production and efficiencies of scale; however, in practical terms there is currently
a genuine lack of useful methodical approaches to increase material efficiency inthe project business. This is why we have invested a great deal of time in recent
years in developing a practical standard methodology for project business andmass production.

FACTS & FIGURES
Materials Used

Voith Sustainabilit y Repor t 2016

Material Efficiency Increased
In the reporting period we purchased around 186,000 t of materials from suppliers,
an increase of around 15 % versus the previous year (161,739 t). The distribution
in terms of the materials we purchased is as follows: 59 % semifinished products(previous year: 55 %), 30 % raw materials (previous year: 34 %), 9 % packaging(previous year: 8 %), and 3 % auxiliaries (previous year: 3 %). The proportion ofrenewable materials was 9 % (previous year: 10 %) owing to the large share ofwooden packaging.

1_What Underpins our Actions

2_Environment

3_Employees

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35

Environmental Management Approach
Performance in the Reporting Period

Material Consumption by Usein %of which semifinished products
2%

59 %

of which raw materialsof which packaging

9%of which auxiliaries
30 %In the reporting period 41 % (previous year: 50 %) of the materials we used were recycled. The proportion was 55 % (previous year: 53 %) for auxiliaries, 45 % (previous
year: 47 %) for raw materials, 33 % (previous year: 49 %) for semifinished products,
and 80 % (previous year: 84 %) for packaging.

4.2 Responsibility in the Supply Chain

We work continuously to further optimize material efficiency by utilizing provenapproaches, such as hot-spot and Ishikawa analyses. As part of this we closely
follow one of the focus areas of our Voith Excellent Initiative – Voith 150+ Next
Level – whose aims include looking for potentials for improvement in productdevelopment and engineering.
Waste Volume Reduced
In the reporting period Voith generated 36,989 t of waste (previous year: 42,632 t),which is 5,643 t, or 13.2 %, less than the year before. As a result, the ratio of thevolume of waste by revenue improved by 12.2 % to 8.7 t per € million in revenues(previous year: 9.9 t). With an overall reduction of 18.7 % since the base year, ourgoal of 25.0 % for the coming fiscal year is within reach.

FACTS & FIGURES
Waste Volume

Gains from measures implemented rose by 1,399 tonnes to 3,782 tonnes (increaseof 170.4 %) in the reporting year. Due to our restructuring measures as part of theVoith 150+ success program, we reevaluated our measures in the topic area ofwaste. This reevaluation – owing to site closures and the cutback in production
at our smelting furnace in São Paulo – reduced the potential gains identified frommeasures in the pipeline by 31 % to 5,975 tonnes in the period under review.

FACTS & FIGURES
Waste Saving Measures
and Further Potentials

To further reduce the amount of waste we generate, and thereby increase material
efficiency, at the start of the period under review we held expert workshops on
the topic of waste in which we reviewed an analysis of key waste drivers. This
analysis was carried out based on our global sustainability database, and reported
the largest waste fractions on the basis of mass by region and location. In a
joint discussion we reviewed the causes of the individual fractions and looked

Voith Sustainabilit y Repor t 2016

36

2_Environment

Waste
in t
45,412

42,632
36,9892013/142014/15

2015/16

for opportunities to reduce them. We identified emulsion waste (such as from
coolant emulsions), packaging waste (e.g. wood), as well as casting-sand wastefrom the foundry in São Paulo as key waste fractions. To validate the workshop
findings and identify detailed measures, we conducted hot-spot analyses
at the locations.
Wood, paper, and cardboard waste account for a large share of the waste we
generate in all regions. This is due largely to packaging, and making make-to-ordercomponents safe and secure for transportation.
Owing to the high proportion of one-off and custom-made products at Voith, it isoften not economically viable to produce individual material-optimized packaging; nevertheless, in some cases we managed to increase the share of recycled
packaging.

FACTS & FIGURES
Hazardous Waste

Reduction in Hazardous and Non-hazardous Waste
Our waste classifications remain virtually unchanged versus the previous year, witharound 81 % of our waste deemed non-hazardous and the remaining 19 % classified
as hazardous. In absolute terms we generated 3,889 t less non-hazardous waste
and 1,754 t less hazardous waste compared to the previous year.
The hazardous waste reduction is mainly caused by the cutback in production at
our foundry in São Paulo, which generates over a third of our hazardous waste.
The restructuring measures we implemented the previous year also influenced thevolume of non-hazardous waste. At our locations of St. Pölten, Ravensburg, andKrefeld we produced 1,136 t less waste compared to the same period the previous
year. At the same time, the non-hazardous waste volumes at our locations ofVoith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains

37

Environmental Management Approach
Performance in the Reporting Period

Heidenheim, Kunshan, and Appleton – to which we relocated production – roseslightly by 338 t.
The collection of hazardous waste at Voith is governed by internal regulations.
External waste disposal and recycling companies take care of our company’s waste;
Voith does not transport any waste itself. We are pleased to announce that in thereporting period no violations of the law were reported to us related to the disposalof waste by our external service providers.

FACTS & FIGURES
Waste Disposal

In addition, many of our locations developed special solutions in the reporting
period to tackle local waste challenges, increase material efficiency, and reduce
waste volumes.
2.2.3 Water
Significant Drop in Freshwater Consumption
In the reporting period our freshwater consumption totaled 1,046,912 m³, representing a fall of 346,727 m³ or 24.9 % versus the previous year. We use arounda third (35.2 %; previous year: 41.9 %) of our freshwater consumption for cooling
purposes only, which does not contaminate it.

FACTS & FIGURES
Water Consumption

In relation to revenue, our year-on-year freshwater consumption fell by 21.9 % to0.25 m3 per € thousand in revenue. With a total reduction of over 30 % since thebase year we have already clearly exceeded our goal for 2017/18 even before theend of the five-year timeframe we set ourselves for this.
Notwithstanding this already very high level of achievement we were able to further
increase the number of identified measures in the pipeline, with the volume increasing by 6.9 % to 743,000 m3 of freshwater in comparison to the previous year. In thesame period, the gains from measures already implemented from the pipeline roseby 12 % to 706,000 m3 of freshwater.
In the current fiscal year we intend to stabilize the high level we have achieved, andfurther improve it by the end of the target period in the 2017/18 fiscal year.
Among other measures, in the reporting period the renewal of a cooling plant at ourYork location reduced our consumption, leading to savings of around 4,500 m3. In
addition, the full impact of repairs to our groundwater cooling system at our new
training center in Heidenheim became evident in the reporting period – further proofof the effectiveness of our Green Controlling process. By monitoring the KPIs, we
identified the defect promptly and pinpointed its location. Our Green Controlling
process also helped in the technical analysis of the fault, the implementation ofcorresponding measures, and the checking of their effectiveness.

FACTS & FIGURESFreshwater Savings Measures
and Further Potentials

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38

2_Environment

Freshwater Consumption
in m3

1,349,592

1,393,639
1,046,912

2013/142014/15

2015/16

We routinely review our 2011 water scarcity and biodiversity studies to ensure they
are current. We incorporate the findings in our planning of measures, and at thesame time we monitor the development of our water consumption as part of ourGreen Controlling process – particularly for those locations where there is a threatof water scarcity.
Our water conservation measures are especially important to us, particularly at
our facility in São Paulo, as Brazil has been increasingly afflicted by droughts andwater shortages in recent years. This is why we replaced the freshwater used tocool the foundry with processed water from our own wastewater treatment plant
way back in the 2013/14 fiscal year. This enables us to achieve annual freshwatersavings of up to 25,000 m³.

FACTS & FIGURES
Wastewater: Quality

Less Wastewater
In the reporting period our volume of wastewater stood at 985,880 m³ (previous
year: 1,212,974 m³). Around 39 % (previous year: 27 %) was discharged into rivers,
lakes or the soil, while 49 % (previous year: 44 %) was discharged into the sewage
system. We operate our own wastewater treatment plants at our locations in São
Paulo, Garching, and West Monroe. Where possible, we reuse the treated waterinternally.

2.3.3 Freshwater

The significant 20 % year-on-year drop is thanks mainly to the strong reduction
in cooling water use at our new training center in Heidenheim, the full impact ofwhich became evident for the first time in the reporting period. This reduction also
reduced our freshwater use considerably.

FACTS & FIGURES
Wastewater: By Method of Discharge

We record the KPIs to provide more detailed information about the effects of theprocess water we discharge. However, the overall burden of BOD, COD, TSS,
heavy metals, nitrogen, and phosphorus cannot be derived for the balance-sheet

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains

39

Environmental Management Approach
Performance in the Reporting Period

Wastewater by Discharge Type
in %

1%

47 %

Reuse inanother company
Groundwater

13 %Surface water
39 %Public sewage systemscope owing to the low sampling requirements. This is because our manufacturing
processes only have a minor impact on water compared to other industrial companies. Therefore, we are rarely required to measure water quality. For instance, at
our Chinese locations only one sample per year is analyzed, whereas at our otherlocations continuous or repeated monitoring measurements are required.
We are pleased to announce that there were no reports of limits being violated in
the reporting period.

FACTS & FIGURES
Water and Neighboring
Habitat Protection
FACTS & FIGURES
Sealing of Soil Surfaces
FACTS & FIGURES
Environmental Incidents

2.3 Outlook
We have already achieved our freshwater consumption goal a full year before ourenvironmental goals expire. And we will stick to our goal right to the end of the target
period, even if our revenue development turns negative. Besides this, our energy
consumption and waste generation goals are within reach for this coming fiscal year.
In the area of energy we will need to achieve savings of around 25 GWh, with adelta of 3,500 t in terms of waste generation, until we achieve our goal. Based on
the measures we introduced in the current fiscal year we expect to achieve all of
our goals as planned. We will then have saved just short of 112 GWh of energy andaround 21,502 t of waste since the base year.

FACTS & FIGURES
Saving Measures

We intend to continue creating both ecological and economic added value throughour activities. This is why we are working towards setting new goals, whereby weintend to also explicitly include our greenhouse gas emissions. Furthermore, we will
incorporate established national and international sustainable-development goals
when setting our new target values.

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3_Employees
Being a family company makes us
all the more aware of the special
responsibility we have towards our
employees. We aim to be a fair andreliable employer, and one that takes
our employees’ personal circumstances into account. We have highexpectations of our employees, so inreturn we offer them flexible solutions
for their needs, wide-ranging training
and further education opportunities
and varied career paths in all areasof our global Group.

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3_Employees

3_Employees
3.1 Our Aspiration – Our Responsibility
We are fully aware that our success as a company depends on the success of
our employees. Qualified, motivated, and committed employees are the engine
that powers Voith. We offer employees who meet our high performance standards
challenging tasks, personal development opportunities, and an attractive working
environment. As a reliable employer, we work hard to secure the long-term loyalty
of our employees, and in doing so also lay the basis for the successful long-term
development of our company – for generations to come.

FACTS & FIGURES
Workforce Structure

Voith as an Employer
The Voith Group’s workforce stood at 19,494 employees as at the end of the
2015/16 fiscal year. This is equivalent to 19,098 full-time equivalent (FTE) jobs
excluding apprentices. Around 54 % of our employees work in Europe, 26 % in theAmericas, 17 % in Asia, with the remaining 3 % working in other regions of the world.
Workforce Changes
The comprehensive transformation of our Group under the Voith 150+ program
also resulted in workforce changes in the 2015/16 fiscal year, which mainly affected
Voith Paper. The transformation was completed there, resulting in a reduction in
830 FTEs over the past two fiscal years.
Furthermore, as part of our centralization of indirect tasks such as accounting
and payroll, around 450 positions were reassigned from our Group Divisions to
our Shared Service Centers; these are in turn assigned to the Group holding inorganizational terms, and to some degree newly structured there. This has allowed
us to save a net figure of around 720 positions Group-wide, with the majority of
reductions taking place the previous year.

Number of Employees
in individual people
21,967

2013/14Voith Sustainabilit y Repor t 2016

20,981

2014/15

19,494

2015/16

1_What Underpins our Actions

2_Environment

		
		
		
		

3_Employees

4_Products & Supply Chains

43

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

We have now completed our transformation and workforce reductions as part ofVoith 150+, so there will therefore only be minimal further workforce reductions in
the current fiscal year.
True to the tradition of a family company, we have worked hard to make the consequences of our workforce restructuring measures as socially acceptable as possible.
In close collaboration with employee representatives at each location, we agreed
on solutions appropriate for local circumstances. Wherever possible, employees
affected by site closures received an offer to take on a new role within another areaof our business or at another location.

AR 2015/16, pp. 86–93

FACTS & FIGURES
Workforce by Employment Type

Challenges and Focus Topics
Voith has been in a process of transformation, which is setting the course for ourcompany’s continued success in the future. This has also resulted in new challenges
for our HR area. Increasing digitization in business and society poses new challenges
to our employees and their skills profile, so it is essential to counter the constantly
shifting labor-market conditions around the world.
To achieve this, in accordance with the development of our Corporate Strategy, wethoroughly overhauled our HR Strategy in the 2015/16 fiscal year and defined four
focus fields for our actions:• Talent Management• Workforce Planning• Performance Management• Change Management.
We bundled all four focus fields with specific packages of measures. Through these
we also address the focus topics we derived as part of our materiality analysis:• Ensuring safe working conditions• Employee development, training and further education• Health benefits for employees• Training and promoting new talent• Ensuring a healthy work-life balance• Performance-related, gender-neutral remuneration and social benefits• Diversity and equal opportunity• Co-determination through employee representation.
Company Values
Clear values have always shaped our company’s identity. They are an integral
part of our corporate culture, and are also the benchmark by which we assess

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3_Employees

our employees each year. In addition, our values play a central role in our training
programs, such as our standard training program for prospective executives.
Our value framework is described as follows: “We are respectful and reliable, open
and ambitious.” These values have been an integral part of the Voith vision andmission for over 100 years, and are imparted through our training programs at theVoith Academy.
Efficient Processes and Systems for HR Management
In the reporting period we introduced a new Group-wide organizational structure
for our HR activities. Under the Shared Service system, four Global HR Business
Service Centers around the world with seven service lines now handle tasks suchas payroll, time management, and HR administration for each region, using aservice approach that is uniform across the Group. This lays the basis for Voithwide standardization, automation, and at the same time the modernization of HR
processes – including self-service options for employees and executives.
Centralizing and bundling our activities have already achieved the targeted savings
and improved process quality in many areas. We are currently working on further
implementation details, optimizing processes and systems, and adjusting or shifting
capacities according to tasks. The next step of our transformation process involves
harmonizing and standardizing those processes and policies wherever appropriate
which have been adopted but so far not adjusted (“shift-and-lift approach”).

3.2 Attractive Employer

FACTS & FIGURES
Rankings and Ratings

The name Voith also enjoys an excellent reputation as an employer brand, as we
combine the stability of a 150-year-old family company with the opportunities ofa truly global player. This has been repeatedly reconfirmed by external institutes,
ratings portals, and employer rankings. As an employer that offers outstanding
career opportunities, in the fall of 2016 we once again performed convincingly inthe “DEUTSCHLAND TEST” and “trendence” studies.
Targeted marketing activities help to further cement this reputation. Our recently
established Voith Digital Solutions Group Division also gives us an excellent basis
to attract and retain the right employees to additionally tackle the challenges posedby digitization.

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4_Products & Supply Chains45

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

Performance-based Remuneration
The compensation we pay our employees is in line with the global market, irrespective of gender, and based on their level of qualification and performance.
Remuneration models and other benefits are in line with the prevalent market
situation in each region. At our German locations, the level of wages and salaries
is generally regulated under collective bargaining law. In all regions, we follow
applicable statutory requirements to the letter.

FACTS & FIGURES
Expenditures for Employees
FACTS & FIGURES
Upholding Employee Rights

Diversity and Equal Opportunity
Voith’s workforce is highly diverse, with employees from over 90 nations. They are
all in different stages of life, with each individual contributing their own experience
for the benefit of our company. This diversity strengthens us further, as it enriches
our corporate culture and contributes to our company’s success. And it permeates
every level of Voith, with eleven nations represented in the Voith Senior Management
Circle alone.
We foster a corporate culture that promotes respect for all colleagues and business
partners, and regards diversity in gender, culture, age, belief and other personal
characteristics as an asset. These principles are enshrined in our Code of Conduct,
and the implementation of and compliance with it is monitored at every Group levelby our Compliance Committee. In the reporting period we are pleased to announce
that we received no reports of discrimination.
To further strengthen diversity and equal opportunity within our Group we havesupported activities in this area since the 2012/13 fiscal year through our Groupwide Diversity&Inclusion (D&I) program.
As part of this, we understand “diversity” as the differences among our workforce interms of the five aspects of gender, age, nationality/ethnic origin, qualifications/professional experience, and personal differences such as beliefs or physical abilities.
At Voith, “inclusion” is understood as meaning a culture of respectful coexistencethat is open to different perspectives and approaches, thus allowing the wide rangeof experiences to be incorporated in solving complex customer requirements.
Our D&I program ranges from the gradual raising of employees’ awareness, throughinitiating suitable measures, to establishing an inclusive working environment at
each location. Our central HR area coordinates the program, but responsibility foreach focus area and implementation of the measures lies locally with the regions.
This approach enables us to take into account the wide variety of global challenges
we face.
In recent years we held awareness workshops at almost all locations outside ofEurope to increase the understanding of these matters in our upper four management levels. In the 2015/16 fiscal year we also prepared related events in theEuropean region, which we plan to implement in the current fiscal year.

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3_Employees

AR 2015/16, pp. 90/91,
Diversity and Equal Opportunity

FACTS & FIGURES
Employment Ratio of People
with Disabilities

In South Africa, the program has been expanded up to Information Level 7 since
the reporting year; thanks to this, all employees there are now aware of the topic.
At our Voith locations in China we focused on the aspect of inclusion.
Even if we have our sights set on the five aspects, various recently introduced laws
are placing the gender aspect center-stage in the social debate in Germany. Womenare still traditionally underrepresented in technical apprenticeships and courses.
This is why technology companies, especially in the B2B area, typically employ
considerably more men than women. At Voith, as at September 30, 2016 womenaccount for 17.4 % (previous year: 17.5 %) of our workforce. In the Voith Senior
Management Circle, the proportion of women currently stands at 6.6 % (previous
year: 7.3 %). We are well aware of the need to take further action in this respect.
To increase these proportions, particularly of female executives in the company,
we have launched a variety of measures in addition to corresponding activities in
our D&I program. Among these, we make a point of ensuring that both genders
always feature on the shortlist for vacancies. Furthermore, in the reporting year weestablished a women’s network in Germany, and conducted our first Female Talent
Meeting in South Africa. Our aim here is to identify potential female candidates
and provide targeted support. In China we already increased the share of womenamong recently hired graduates to 30 % in the past year alone.
Bringing Balance to Work and Family Life
Voith is a family-friendly company – a philosophy that has characterized our company for 150 years. In the reporting year we set out this understanding of how
we see ourselves in clear terms, setting them in stone in the form of guidelines
to create a flexible, family-friendly work culture at Voith. These guidelines wereadopted by the Corporate Board of Management, and we are now in the process

FACTS & FIGURES
Diversity in the Management Teamand in the Workforce

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

Voith Sustainabilit y Repor t 20162015/16
2014/15

6.1
6.8
8.9
8.1
10.1
10.4
17.4
17.5
18.1

20.5

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2_Environment

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4_Products & Supply Chains

47

Our Aspiration – Our Responsibility
Attractive Employer
Attracting and Promoting Talent
Occupational Health and Safetyof implementing the appropriate communication measures in the current fiscal year.
These are intended to increase understanding, particularly among our executives,
towards the topic.
We aim to offer our employees an attractive working environment that adapts flexibly
to their personal circumstances. The aspect of caring for family members is also
becoming increasingly important in this regard. Wherever possible, our employees
can arrange personal working-time models with their supervisor ranging from theuse of a home office, part-time working, or job sharing. This allows our employees
the greatest possible freedom to structure their personal working time, taking into
account professional and personal needs.

FACTS & FIGURES
Flexible Working Time Models

Furthermore, we help our employees achieve a better work-life balance throughour offer of assorted company daycare centers and childcare places at various
locations. In addition, our facilities in Sonthofen, Heidenheim, and Crailsheim eachhave their own parent-child workroom, enabling parents to bring their children
to work with them should they have difficulty finding someone to look after theirchildren at short notice. We also offer our employees in Germany a comprehensive
range of information covering topics such as children & career, and care giving &career. These are available via the intranet or through an information hotline run by
an external service provider.

FACTS & FIGURESParental Leave

To measure our employees’ satisfaction we regularly analyze illness and employee-­turnover data. The 2016/17 fiscal year also marks the first time we will conduct a
global employee survey to gain even more detailed insights and approaches on
potential improvements.

FACTS & FIGURES
Employment Length
Employment Turnover

Parental Leave Take-up, Employees Returning after Parental Leave Who Are
Still Working at Voith 12 Months after their Returnin individual people

Parental leave

151

580

Returnees

91

474

Returnees who arestill working at Voith
one year later

77

319

731

565

396

Female employees
Male employees

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3_Employees

3.3 Attracting and Promoting Talent
Voith has a presence at many locations around the world, where the competition for
qualified employees is intense. To win in the global war for talents, we present ourselves through our HR marketing measures as a modern, forward-looking employer.

FACTS & FIGURESNew Hirings

FACTS & FIGURES
Trainees
Section 1
Committed to Education, p. 22

We are further improving the professionalization of our recruitment processes bymodifying and standardizing them. This process is largely completed in Germany,
North America, Brazil, and China. Alongside greater process efficiency, our new
pep. (People Excellence Platform) recruitment module offers numerous self-service
options for applicants, providing them with additional offers through its integrationin our Talent Management Platform.
Appealing to New Talent at an Early StageWe address students directly, and offer them an insight into our company as apotential employer through collaborations and international HR marketing campaigns at universities. We also award scholarships and sponsor competitions in
the regions where we are active.
Consistently High Level of Training and Education
We have been actively involved in offering first-rate vocational training for over 100
years. We are currently training young people in over 40 commercial, technical, andtrade occupations, whereby we place great emphasis on interdisciplinary learningand the integrated provision of social and specialist expertise. Voith apprentices
repeatedly achieve excellent results in a German federal-state and nationwide
comparison. In general, apprentices are taken on by our company on completionof their vocational training.

Number of Apprentices (Including Dual-study Students)
in individual people
1,015

1,012
889

2013/14Voith Sustainabilit y Repor t 20162014/15

2015/16

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

As at the end of the 2015/16 fiscal year, Voith employed 1,012 apprentices andstudents (previous year: 889). 606 of our apprentices work in Germany, 358 ofthem in Heidenheim.

FACTS & FIGURES
Apprenticeships and Opportunities

Our two Voith Training Centers in Heidenheim, Germany, and Kunshan, China,
bear witness to the high regard Voith has for training and education. They serve
as further training and education centers for employees and executives, and as
multi-function buildings they bring cutting-edge training programs together witharchitecture, construction, building technology, and design within an innovative
overall approach.
Internationally too, we employ the German dual-track system to offer training
enriched by country-specific values and cultural aspects. In São Paulo, Brazil, we
worked with training initiatives at a local level to develop a training model for a typicalfour-year training scheme aimed at young people over the age of 15 and which
regularly produces qualified new talent. The dual-track system has also provenitself in Kunshan. In the reporting year, the second year of specialists successfullycompleted their one-year training program there. Of the 20 trainees, 18 passed
their exams and have been employed by Voith.
Lifelong Learning – Both a Right and a Commitment
Lifelong learning is a principle of our company. We expect our employees tocontinuously expand their know-how and skills, so we help them by providing acomprehensive range of training and education measures. Our aim when recruiting
is to always match the right employees with the right qualifications and, correspondingly, expertise with the right position. Our leadership model, which comprises a
range of leadership tools, provides the operational framework for this. It revolves
around two formal annual meetings between the employee and the supervisor.
While the target-setting meetings focus on the individual’s personal contribution to
the achievement of corporate goals, the performance review meetings concentrate
on work tasks and the working environment, the relationship between the employee

Hours of Further Education

244,604
171,991
97,056

2013/142014/15

2015/16

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

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3_Employees

and supervisor, and the employee’s own personal development perspectives. The
outcome of these meetings is entered in our pep. HR IT system, together withfindings of the management review process, allowing development measures tobe defined and implemented in line with company needs and specific position
requirements.

FACTS & FIGURES
Training and Education& Career Development

To encourage the expansion of personal or methodological skills we offer our
employees a broad spectrum of further training and education opportunities. The
range of topics covered by Voith training includes occupational health and safety,
environmental protection, technology, IT, quality, management and personality
development.
At the Voith Management School we provide special training to employees from
specific departments such as Purchasing and for project managers. Our executives
also take part in standard development programs to create a common understanding of leadership in all Group Divisions and regions. These programs are compulsory
for all executives with supervisory roles. Our new Business Forum Leadershipformat, which we established in the reporting year, is a further component of ourprograms: This two-day event focuses on topics arising from daily management
practice as well as key aspects of the personal work-life balance for executives,and has been held annually since 2015. Executives at the top management level arealso committed to lifelong learning, and take part in our Voith Academy to prepare
themselves for future tasks.
In the 2015/16 fiscal year 15,829 employees (previous year: 14,505) across all Voith
locations took up our further training and education offerings, with 244,604 training
hours (previous year: 171,991) completed.
To measure the success of each training course, and to constantly improve ourtraining offering, we ask participants to give us feedback on their experiences. The
results are then passed on to the trainers and HR. In addition, the participant’s
supervisor is asked to rate the success of the training measure.
In Germany we continually receive awards and quality seals that recognize us as an
attractive and fair employer that offers its employees excellent training and development opportunities, and promotes a sound work-life balance. In the reporting
year, we are pleased to announce that our commitment was honored for the firsttime in China too. As part of the China Learning & Development Value Awards, Voith
received a Most Valuable Case Award from the Human Resource Excellence Center
for its lifelong learning model, which is also implemented in China.

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

Leadership at Voith – Focus on Development and Feedback
Executives at Voith are expected to lead their staff in a way that enables them tofulfill their responsibilities in meeting joint objectives, and at the same time allows
their own talents to unfold and develop further. We review the performance of our
executives as part of our annual Management Review, in which we also assess
individual potential and derive development measures.
As an international company, we rely on a Group-wide, uniform understanding of
our corporate and management culture. In principle we strive to staff executive
positions with local employees. At the same time we place considerable value on
temporarily reassigning our executives abroad as a development step, so that they
can gain international experience. In this regard we follow our 3x2 principle: Overthe course of their career at Voith, our executives are expected to gain experiencein two Divisions, two functions, and two regions.
In coming years, the requirements on our executives will change and expand, as
we want to seize the opportunities that digitization offers our company. At the sametime, working at Voith will be increasingly shaped by greater team self-management.
As such, we intend to encourage autonomy and strengthen engagement. Throughthe restructuring and focusing of our values, in the reporting year we created a key
foundation on which to build towards these goals.

3.4 Occupational Health and Safety
Health and safety in the workplace take maximum priority at Voith. Established lastyear across the Group, our HSE (health, safety, environment) organization underpins our occupational health and safety activities. Through optimizing workplaces
and processes we intend to prevent accidents and work-related illnesses to thegreatest extent possible. To underscore this, reducing the frequency and severityof accidents has been anchored in our corporate goals since 2009.
In the field of health protection we take a regional approach, as differing legal
frameworks and cultural differences call for specific approaches in the regions. We
identified this in the reporting year in an analysis of health protection in Germany,
China, Brazil, and the USA. We have already devised basic strategies for healthprotection in the four regions. In Germany, we will also anchor internal occupational
medical care progressively in the company.
In the current fiscal year, we are working mainly towards gradually integrating ourrecently established Digital Solutions Group Division into our occupational healthand safety model and structure. Furthermore, we intend to further consolidate andcontinue developing our HSE organization. This will ensure that we continue tomaintain our high level of achievement in occupational health and safety.

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Section 1.2
Strategy & Organization

Efficient HSE Organization
As part of our Voith 150+ program, in the previous fiscal year we took a systematic
approach to additionally structure HSE (health, safety, environment) as a sharedservice organization.
The frameworks and responsibilities for occupational health and safety are documented in our Group Directive. It sets out the mandatory minimum requirements
and standards for our Group, and also includes standard operating procedures(SOPs) on HSE at Voith. We are currently consolidating and streamlining our existing
policies, so that by the end of the coming fiscal year all 23 SOPs will be available inan amended form. Among them, there will be three completely new SOPs on the
topics of emergency management, travel and transport, as well as machine-safety
testing.
All occupational health and safety policies, just like our environmental protection
regulations, are available via our Group-wide hse+ IT system. In the reporting
period we expanded this system to include a further module on environmental risk
assessments. To produce it we gathered a wide range of information, including
hazards posed by earthquakes and regional floods, for instance.
Matrix Certification Process Established
We also use hse+ to control the matrix certification of our locations according to
ISO 14001 and OHSAS 18001 – a process we established in 2016. At the end of
the reporting year, the matrix covered 78 Group companies (Group Holding andCorporate Central Functions). In the current fiscal year we intend to add two further
Group companies with locations in Germany and South Africa.
Through our participation in the DIN Standards Committee we play an active rolein migrating OHSAS 18001 to DIN EN 45001. At the same time, we are preparing
our company for this changeover.

FACTS & FIGURES
Employee Representatives
in Committees

Voith Sustainabilit y Repor t 2016

Joining Forces with Employee Representatives
In terms of occupational health and safety, common, goal-oriented action on thepart of the employer and employees is the key factor for success. This is why wetake a collaborative approach with these topics too, whereby we involve employee
representatives in key decisions. Company agreements on occupational health andsafety, as well as on preventing addiction, complement the regulations embedded in
our HSE Group Directive. A Safety Committee, comprising employee and employer
representatives, meets every month at each production location and works todevelop the annual occupational safety program and implement it in monthly actions.

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

3.4.1 Occupational Safety
Our occupational safety program includes every employee. Information and targets
are cascaded right from the Board of Management through the respective executives down to employee level. Executives with supervisory roles have a particularresponsibility in this regard. They have a clear duty to train their staff and actively
communicate current developments. Employees must be given documented
instruction at least once a year, with centrally prescribed training documents supporting this process.
In the reporting period, all executives received occupational safety training. We also
involve our service providers in our activities through our “Coordination of Visitors
and Contractors” Occupational Safety Directive. Production employees’ awarenessof the topic of occupational safety is raised on a daily or weekly basis through short,high-impact presentations. Beyond the annual instruction we provide, through these
five to ten-minute presentations on current topics we aim to keep the subject ofoccupational safety at the forefront of their minds as they carry out their daily work.
In the reporting year we focused on the topic of hand injuries – the most common
type of injury at Voith Hydro. Besides short, high-impact presentations and related
literature, the campaign also comprised a newsletter focusing on hand and finger
injuries. In the 2016/17 fiscal year we will focus our activities on crane operation,
as we noticed that the greatest number of near-miss accidents happened in thisarea in the previous fiscal year.

FACTS & FIGURES
Occupational Safety Training

We document training sessions required by law. Besides verbal or written instruction, pilot projects have allowed us to gain positive experiences over recent years
in the area of online instruction, which we are now gradually rolling out using ourglobal hse+ IT tool. In this, our initial focus areas are decentralized organizations
such as site construction, service and sales employees, and administration. For
this purpose, we ran a successful pilot project in the reporting year.

FACTS & FIGURESHSE Standard Online Instruction

We place particular emphasis on training our experts in the regional HSE organization. They have already been fully trained on the use of hse+, which we havebeen using since the 2015/16 fiscal year to display information globally and in astandardized and transparent way on audit planning and audit results, as well as
key information on hazardous materials, compliance, and risk assessments.

Section 2
Environment Hazardous
Substances

Special Responsibility with Field Service
When on construction sites or service calls, Voith field service employees takeresponsibility for occupational health and safety as well as environmental protection
in a variety of ways – whether as a supervisor without authority over other service
providers, right through to taking full construction-site responsibility that includes
authority over subcontractors.

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eVAP – Accident Prevention by App

To analyze the challenges and standardize existing policies in the long term, ourVoith Hydro and Voith Paper Group Divisions established the cross-divisional
working group HSE in Field Service in the 2015/16 fiscal year.
Documenting, Analyzing, and Preventing Accidents
At Voith, all accidents are immediately recorded, reported to the respective supervisor, and published on the intranet. In the event of serious incidents, the Corporate
Board of Management is informed directly within 24 hours. Every accident is thenstudied and documented by an investigation team comprising those affected,
supervisors, and safety experts. Especially serious accidents are examined separately once again at our Center of Competence HSE. The accident definitions aredescribed in detail in the Group Manual, and presented in a way that makes themcomparable internationally with other companies.
Since the 2015/16 fiscal year we have taken steps to involve our employees evenmore closely in accident prevention. We developed our eVAP (electronic Voith
Awareness Program) app to enable employees to log unsafe situations quickly andeasily right on the spot, and then send this information to a central database. Clear
icons facilitate the entire process of using the app. The data is analyzed automatically and then published in target group-specific media together with corresponding
instructions. This allows us to raise our employees’ awareness of unsafe actions

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

and situations before accidents occur. In 2016 we received the DEKRA Award 2016
in the “Safety at work” category for our innovative accident-prevention approach.
We monitor the development of occupational safety on a monthly basis throughaccident analyses, audits, and other measures. This allows us to take immediate
steps if serious incidents occur, or if specific types of accident increase in number.
The first step we take in every instance is to issue a global HSE Flash News notice(information on the accident/incident focus areas in occupational health and safety)
to promptly inform all affected employees. In the reporting period we continued
to focus on reporting near-miss accidents. Through doing so we intend to takemore preventative action – especially in view of the continual decrease in accident
numbers.

FACTS & FIGURES
Near-miss Accidents

Our regional HSE organization implements Voith standards globally. The experts
meet twice a year to share experiences locally, and by doing so ensure that knowhow is transferred more quickly between locations. They are also responsible fortranslating the guidelines and standards into their respective languages.
In 2016 the business partners at the Center of Competence HSE analyzed the
distribution of accidents at each Group Division in more depth to identify accident
hot-spots and division-specific hazards. One specific result of this is our hand-injury
prevention program at Voith Hydro.
Occupational Safety Benchmark
We have continuously improved our performance since we implemented our global
occupational safety program in 2009 at all production locations. Both the number
and the severity of accidents at our company have fallen continuously, making Voitha worldwide industry leader in occupational safety.

FACTS & FIGURES
Occupational Accidents

Two benchmarks above all confirm this position: the accident frequency rate andthe accident severity rate. The frequency rate (the number of accidents per 1 million
working hours), which we calculate according to the international standard, fellsignificantly from 13.9 in the 2008/9 fiscal year to 1.6 in the reporting year. This
corresponds to 57 notifiable accidents (previous year: 57). In the reporting period
we are pleased to announce that there were no fatalities as a result of occupational
accidents. To put things in perspective, the average frequency rate of companies
in the Professional Association of Plant and Mechanical Engineering is 22.
We also achieved a considerable improvement in recent years in terms of theaccident severity rate, which stabilized at a very satisfactory level in the reporting
year at 282 working hours lost (previous year: 273). Alongside the absolute figure,this shows that the severity of accidents has decreased significantly.

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3_Employees

Frequency Rate*

Severity Rate*

specific figure in accidents
per 1 million working hours

specific figure in lost hours
per 1 million working hours

2.0

1.6

1.5

276

282

10,544

10,3302014/15

2015/16absolute figures

absolute figures82

2013/14402

16,20657

57

2014/15

2015/16

2013/14*Data excluding the discontinued Group Division Voith Industrial Services.

We intend to maintain this high level in occupational safety in coming years too.
Using our hse+ IT platform we will further optimize the transparency of our actions
and derive measures in an even more targeted way. Above all, however, we intend
to involve employees even more closely in our activities. Our eVAP occupationalsafety app is a further key step in this direction.
3.4.2 Occupational Health
We focus particularly on prevention when it comes to the health of our employees.
We pursue a regional approach to take into account the highly varied conditions at
our locations all around the world. Regardless of where our employees work, wewant them to stay fit for work and retire healthily at the end of their professional
lives. To achieve this aim, we focus on four fields of action in which we achieved
the following progress in the reporting period.
Ergonomic and Safe Working Environment
Within our ergonomics campaign we targeted office workers in particular this fiscal
year. As part of workplace walkarounds we informed them about ergonomics andadvised them on optimally arranging their own workspace layout.

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

Health Promotion and Illness Prevention
In this field of action, the locations initiate campaigns as part of their respective
annual programs. The measures are each developed as pilots at our Center ofCompetence HSE in Heidenheim, and then rolled out to all locations in Germany. In
the reporting year we offered the following presentations, which were predominantly
given by external medical experts:• Medicine: Movement – a miracle cure with positive side-effects• Matter of the heart: Preventing and detecting heart and circulatory diseases• Care planning: Living will and healthcare proxy• All about Life Balance.
An average of 120 employees took part in each event. The Life Balance presentation
was repeated in Heidenheim due to the strong demand, and was also offered in
Crailsheim. Besides the series of seminars, in the 2016/17 fiscal year we plan torun a colon-cancer screening campaign at our German locations.
Illness and Stress Support
In the reporting period we achieved significant improvements in occupational medical care at our German locations. Two locations are now supported directly by our
occupational medical service, with the others now more closely coordinated. We
also leverage synergies, amongst others by standardizing occupational healthcare
software, which creates additional scope for the optimal provision of healthcare.
Thanks to our cooperation with an external service provider, our employees inGermany can obtain information and support relating to caring for family members
and childcare. We are currently continuing to work on implementing robust illness
and stress-support processes at our locations. Once this is done – as far as permissible under data-protection legislation – we will establish a central reporting
system on this topic. In addition, we will complete the process of implementing
our standardized occupational-reintegration management system in the current
fiscal year.
Corporate Culture and Leadership
Occupational health and safety are key aspects of our corporate culture. Our Groupwide reporting system provides Voith executives with robust KPIs on a quarterly
basis on the development of our employees’ health, such as their illness rate. If oneof our locations reports an above-average illness rate, we offer seminars on preventative healthcare. Through seminars on the topic of Leadership & Health we also
intend to enhance our executives’ awareness for the topic of health management.
We already held 10 seminars attended by around 111 participants in the reporting
year, and plan to hold further events at different locations in Germany.

FACTS & FIGURES
Employee Support Measures

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4_Products &Supply Chains
We create economic and environmental added value for our customers
through our products and industrial
services. Besides our products’­quality and reliability, we place greatvalue on their energy and resource
efficiency – both in the production
and usage phase. Within our overall
sphere of influence we also ensure­international environmental and social
standards are upheld. In a nutshell,
we set high standards for ourselves
and our suppliers in order to provide
the same to our customers.
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4_Products & Supply Chain

4_Products & Supply Chain
4.1 Product Responsibility
Voith products and industrial services serve five major markets around the world:
Energy, Oil & Gas, Paper, Raw Materials, and Transport & Automotive. And oursolutions are just as varied as these markets’ requirements.
Voith Hydro is a manufacturer of generators, turbines, pumps, as well as electricaland mechanical equipment for hydropower plants. With this broad offering Voith
supplies all key components for hydropower plants in the power generation andpower storage sectors. At the same time, Voith Hydro ensures a plant remains
productive throughout its lifecycle.
Voith Paper supplies technologies, products, and services covering the entire
paper production process. Its offering includes large industrial production lines forpaper and board production, system rebuild and modernization services, as wellas corresponding service offerings. This is complemented by consumables andreplacement parts.
Voith Turbo technologies transmit and control energy under extreme conditions –safely and in a resource-efficient way. Voith Turbo’s drive solutions, advanced technical components and systems are used in a wide variety of industries, wherever
power needs to be transformed into controlled movement.
Our Responsibility – Our Fields of Action
Owing to the diversity of our product portfolio and the very different market requirements we face, our Group Divisions are confronted with a range of challenges
regarding product responsibility. To gather data on these requirements systematically and evaluate them in terms of their materiality, we draw on the results of our
stakeholder survey of early 2016. As part of a Master’s thesis we also evaluatedexternal benchmarks, including IÖW (Institute for Ecological Economy Research)and oekom research. This enabled us to define the main fields of action for ourcompany in terms of our product responsibility.
Challenges and Trends
To identify trends early on and take effective action to counter upcoming challenges,
our Group Divisions employ their own market- and technology-specific methods
and tools.
In the reporting period Voith Paper comprehensively expanded its trend-gathering
methodology. This is based on five pillars: Trend Analysis, Technology Outlook,
Customer Perspective, Consumer Perspective, and Radical Technologies. Voith
Hydro and Voith Turbo both plan to introduce a similar process in the 2016/17 fiscal

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Product Responsibility
Responsibility in the Supply Chain

year. The one thing in common among the trends identified in this way is that they
directly or indirectly address the sustainability of our or our customers’ manufacturing processes. Furthermore, through trend surveys we identified additional trends
such as bionics and water scarcity. In the reporting period we already started toprocess the topics and expect to be able to produce results and derive specificmeasures during the 2016/17 fiscal year.
One current challenge facing Voith is posed by new policies and legislation which
erode intellectual property protection. Among them, EU Directive 2016/943 on theprotection of undisclosed know-how and business information (trade secrets) will
give customers the right to disassemble purchased machines into their constituent
components, to reverse engineer them, and then commission a third party to
manufacture spare parts. In doing so, the original manufacturer loses copyrightprotection in relation to its product, meaning safe operation of the system may nolonger be guaranteed.
Requirements such as the German Renewable Energy Sources Act (EEG) and EU
Directive 2014/24 on public procurement constantly place new requirements on
Voith Hydro’s development and sales activities. Last but not least, the opportunities
presented by Industry 4.0 must be seized and translated into specific customer
benefits through process modifications.
Hydropower competes globally with other renewables. While the wind and solar
power industry is at present enjoying high double-digit growth rates, hydropower iscurrently expanding by an annual 2.3 %. Consequently, Voith Hydro faces the challenge of improving the public perception of hydropower as a source of renewableenergy. Among other things this calls for the advantages of pumped storage power
plants over battery storage facilities and other solutions to be evaluated technicallyand objectively, and for their case to be argued accordingly. In particular, promising
trends for Voith Hydro include hybrid power plants that combine solar, wind, andhydropower, as well as pumped storage power plants that use the ocean as areservoir. Material tests for the application of hydraulic components in seawater
have already been performed successfully. The supply of pumps for agricultural
irrigation plants or drinking water storage also offers new opportunities.

AR 2015/16, pp. 94–107,
Opportunities and Risk Report

Customer Dialog
Maintaining close customer relationships and a deep understanding of their needs
has always been one of Voith’s strengths. All divisions are in constant touch with
their customers, for instance through targeted surveys on customer satisfaction or
their future requirements on our products’ capabilities.

FACTS & FIGURES
Responsible Marketing

Customer dialog is an essential part of Voith Hydro’s sales strategy. Customer
requirements are often reflected in great detail in individual tenders. Furthermore,in the subsequent negotiations the technical as well as new or further optimized

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solutions are discussed at length. Last but not least, the Product Management teamholds discussions with customers and associations to examine further improvements.
Close contact with customers is also typical of Voith Paper’s approach. Specialists provide technical advice to customers, while the Key Account Management
team primarily supports larger customer groups. Customers are also involved
closely in quality assurance processes, and even to some degree in technicaldevelopment activities and in identifying trends. When optimizing paper machines
Voith Paper works closely with customers to improve the use of raw materials
through recycling and to reduce electricity consumption as part of energy audits.
The aim is to develop energy- and water-efficient products, and further reduceoverall operating costs.

Resource Preservation

In the past fiscal year Voith Turbo underwent a fundamental transformation, andnow focuses even more clearly on the three corporate goals of Customer Focus,
Technological Leadership, and World-class Performance. Customer proximity, ahigh level of regional market presence, and offering a world-class service wereidentified as success factors in the area of Customer Focus. The introduction of
a Product Management team at the interface between Sales and Key AccountManagement has proven itself, and has since been rolled out across the Division.
This means customers’ requirements can be better taken into account, more clearly
focused on, and implemented more quickly.

FACTS & FIGURES
Research & Development Expenditure

Percentage of Revenues Dedicated to
R&D in %5.2

2013/14

4.9

2014/15

4.9

2015/16

Voith Sustainabilit y Repor t 2016

Research & Development
Technological expertise and the ability to continually apply our know-how to innovations that bring added value to our customers are the basis of our company’s
success. This is why we continue to invest, even in economically challenging
times, in the research and development of new solutions. In the past five years
alone we have invested over €1.1 billion in this area. In the 2015/16 fiscal year
our R&D expenditure totaled €208 million (previous year: €210 million; –1 %). The
Voith Group continued to dedicate an equivalent 4.9 % of its Group revenues to
R&D (previous year: 4.9 %). All of our Group Divisions involved in mechanical andplant manufacturing have a strong patent base. The Voith Group currently holds
several thousand active patents, with many hundreds more added in the reporting
year alone.
In all of our Group Divisions we fully intend to defend and strengthen the leading
position we hold in many markets. The digital transformation in particular, often
referred to as “Industry 4.0”, offers immense opportunities for our Group Divisions.
They work consistently to leverage the potential of Industry 4.0 in their own production
processes and in specific products for their customers.
We established the function of Chief Technology Officer in each of our divisions
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Responsibility in the Supply Chain

their divisions’ technological development roadmaps within the CTO Council toleverage synergies. By doing so, we intend to achieve positive economies of scale
as well as create knowledge in a more structured way, and distribute it within ourGroup, particularly in the case of technologies and process that can be implemented
universally, such as in the area of materials use.
Voith Paper is currently developing systems that use sensors to forecast the service
life of products. This approach improves operational reliability, making sudden
system failures virtually a thing of the past. Automated monitoring systems havealready been launched with the OnCare product family, and are now being expanded.
Fuglesangs and Voith Turbo have partnered up to develop speed-controllable
drives to operate sea-floor multiphase pumps. Thanks to this there is no need fora frequency converter to control the speed, which would otherwise take up a lot of
space on the supply ship. This technology is making a considerable contribution to
the exploration of raw materials beneath the sea floor.
In its E-Volition project, Voith Turbo is currently developing a drive which can achievefuel savings of around 7 %, and which is designed to run more quietly. Among otherthings, mild hybridization and recuperation provides energy to power the electricalsystem and drivetrain.
Collaborations Deliver Key Findings on Future Viability
Voith’s Group Divisions are market and technology leaders in many of their businesssegments. This is why they are also in constant dialog with research institutes,
universities, associations, as well as other companies along the supply chain.
Among them, Voith Paper collaborates with a range of institutes and universities
within clearly defined fields of action. This includes initiatives such as the industry-wide Fiber & Paper 2030 project, and the EU-wide Provides project, whichaims to achieve a drastic reduction in the carbon footprint of cellulose and paper
production. The implementation phase of such initiatives is often relatively long,as the paper-industry investment cycle may extend up to 20 years. To achieve
the targeted 80 % carbon reduction between 2030 and 2050 as planned, Voithis already working actively on developing the technology to make it market-readywithin the next decade.

FACTS & FIGURES
Voith Paper Collaboration Projects

Voith Paper and Voith Digital Solutions and a group of customers and academics
are working together to develop solutions that will enable the paper-productionindustry to respond to the volatile supply and price situation in the energy market
by allowing production plants to be operated in a sustainable way through the useof new technological processes. These range from allowing the use of cheaperenergy periods, through to switching off individual process steps at periods whenenergy is scarce – without a significant impact on paper production.

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FACTS & FIGURES
Voith Hydro Collaboration Projects

In the reporting year Voith Hydro devoted itself to a range of activities including
developing digital solutions for hydropower plants. One focus area was HyGuard,
a new type of smart plant-monitoring solution that is currently being pilot-tested.
Noise monitoring at a power plant, for example, can help to monitor trends andinterpret anomalies. HyGuard Acoustic can also be used in conjunction with othermonitoring systems to measure oscillations or temperatures, for instance. Responsibility for developing the monitoring systems has since been transferred to our new
Group Division Voith Digital Solutions.
Voith Turbo is currently working on a research project that also involves DLR (German Aerospace Center). In this project, composite-structure sensors are being
developed for use in mobile applications such as for rail vehicles. The projectfocuses on gathering data on vehicle damage resulting from external influences
and/or material fatigue: Its aim is to increase operational safety as well as reduce
construction weight.
Reliable, Safe Products
The Voith name is renowned the world over for safety, quality, and reliability. We are
fully aware of the value of this important competitive advantage, so we have set out
the principles of our quality management process and technical risk-management
process in a Group Directive. Our Group Divisions and their companies then
expand on these principles and supplement them accordingly.
We document and certify our activities according to the international ISO 9001
quality management standard, which we supplement with many of our own QM
methods. Virtually all Voith locations are certified to this standard. With the helpof clearly defined KPIs (Key Performance Indicators), a Group-wide Operational
Excellence initiative places an even stronger focus on the quality of our products
and processes.

FACTS & FIGURES
Quality Managementin Our Business Areas

Voith products always meet the statutory and regulatory requirements of thecountries we supply to. Our Group Divisions are responsible for implementation,
while the respective Quality Assurance departments ensure process compliance.
To achieve this, they rely on our Group-wide TRQM (Total Risk and Quality Management) system as well as division-specific regulations. Our TRQM system also
defines how to fulfill the respective statutory product documentation requirements,and how products are to be labeled. Besides internal technical documentation,
operating instructions provide information on the intended use of our products aswell as on how to handle them in a technically and environmentally safe way. Our
TRQM system also outlines procedures for decisions that entail risks.
We regularly train employees on how to handle regulations, and make these available to them via our Group-wide database and internal communication channels.
In addition, we provide our customers with the relevant know-how through training
courses held either at our training center or directly at the customer’s location.

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Right from the development stage we analyze and simulate the various operatingstates, perform computer-based calculations, and run pilot projects on productperformance and safety. We evaluate the effectiveness of our quality assurance
measures in our respective Group Divisions using division-specific KPIs as well asinternal and external audits. We also involve our suppliers closely in these activities.
In the reporting year alone, over 200 participants from around 50 companies took
advantage of this opportunity.

FACTS & FIGURES
Voith HydroSchool

65

Long service life is a key quality of Voith machines and systems, which is why
Voith Turbo gear systems and Voith Hydro turbines are often in reliable operation
for decades. And the same applies to our paper machines. Due to this, our Group
Divisions are faced with the challenge of supplying spare parts even after many
decades of operation. Consequently, the reparability of our solutions is a corerequirement we factor-in right from the product development stage.
By further developing our products, we work to make them increasingly environment- and resource-friendly throughout their lifecycle. In doing so, we meet
our customers’ demands, statutory requirements, and ultimately our own statedobjective. The primary aim of all of our Group Divisions is therefore to conserve
resources and to minimize the environmental impact of our products. To achievethis, we follow a decentralized management approach.
Product Impacts by Group Division
We predominantly supply components that as part of an overall system havediffering energy and material footprints. We employ a range of tools to gain aneven more detailed evaluation of our products’ energy and raw-material efficiency.
To achieve this, for many years now we have conducted Life Cycle Assessments(LCAs) for selected products in compliance with ISO 14040 and 14044.
As our product portfolio is so broad and we are active in such a variety of markets,
we constantly face the challenge of producing a balanced account of our activities
in a uniform, standardized report that covers all Group Divisions. By way of example,
in the following we have outlined the lifecycle of a main product of each Group
Division that also shows the environmental and social impact of each product.

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Voith Paper

Paper Facility
Sustainability aspects

Upstream/Supply Chain(Procurement of Materials and Services)

Creation(Paper Facility Construction Phase)

Potential risks:· Social & environmental impacts inthe supply chain

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

Voith component lifecycle
Voith Paper Machines
Contribution to greater sustainability

Paper machines are in operation for many decades, with an average operating
period of around 40 years. Over this long period of time, even small improvements
can have a vast impact on a machine’s efficiency. However, while the environmental
impacts caused during the manufacturing of the machine are minor, the amount ofenergy required to operate a paper facility exceeds the amount required to manufacture the machine by a factor of 300. Steel, as well as materials for structural andcivil engineering, account for the largest share of material types in the supply chain.
Voith Paper aims to generate the greatest added value for customers throughoperation that is as resource-friendly as possible, and by designing machines withefficiency as high as possible. To Voith Paper, resource conservation means above
all reducing the specific consumption of water as well as electrical and thermalenergy requirements per tonne of paper. Moreover, it also means reducing fiber
loss and achieving paper-production time-savings for customers by deploying themost efficient systems possible. In the reporting period Voith Paper incorporated an
additional topic in the development process, the Clean Design of paper machines.
The aim here is to reduce dirt deposits in paper machines, thereby minimizing thecleaning effort.

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

			
			

Utilization Phase(Paper Production)

End-of-Life(Decommissioning of the Paper Facility)

Potential risks:· Fresh fibers from unsustainable forestry practices· Water consumption· Energy requirement· Emissions (air, wastewater, noise, goods
transportation)· Waste (impurities and process waste)· Process residues· Use of chemicals· Loss of fibers

Potential risks:· Process residuals, hydraulic oil

4_Products & Supply Chains

67

Product Responsibility
Responsibility in the Supply Chain

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

Potential opportunities:· Use of fibers from waste paper· Closing of cycles
Efficient paper machine technology helps
reduce:· Energy requirements· Fiber use (stock preparation)·  Water consumption(water treatment, closing water cycles)· Emissions· Use of chemicals

Extension of the utilization phase through:· Renewal of components
· Modular design· Service offering

Improving occupational health and safety at
the customer’s site through product safety
standards

Voith Paper is using increasing amounts of renewable materials, and works tirelessly to close material, water, and auxiliary cycles. In doing so, we intend to further
reduce the environmental impacts of paper production while increasing the plantcost-effectiveness. In the reporting period Voith Paper achieved further progressin energy efficiency and in reducing the environmental impacts of its products andservices. Among their many outstanding features, over two-thirds of the 34 new
products launched by Voith Paper also support lower consumption of resources.

FACTS & FIGURES
Progress Regarding Socialand Environmental Impacts

Moreover, Voith Paper is always looking for opportunities to increase the recycling
rate of its own production processes. However, it is currently only economically
viable to achieve high rates of recycling in terms of petroleum-based plastics with
PPS (polyphenylene sulfide) materials. Voith Paper is also currently reviewing
the cost-effectiveness to recycle used materials – in other words, products usedand contaminated through use. If this material is fit for reuse under technical andeconomic considerations, Voith Paper aims to recycle this material.

FACTS & FIGURES
Recycling in DetailOver the coming years Voith Paper expects new emissions laws, which enter into
force in the EU from mid-2018 onwards, to provide considerable stimuli. These
will require customers to operate facilities in an even more resource-friendly
way – requirements which Voith Paper is already perfectly equipped to meet with
its portfolio.
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4_Products & Supply Chain

Voith Hydro

Hydropower Plant
Sustainability aspects

Upstream/Supply Chain(Hydropower Plant Planning Phase)

Creation(Hydropower Plant Construction Phase)· Environmental & social acceptability checks· Stakeholder engagement· Management of social and environmental
aspects· Safe working conditions· Reduction in supply chain risks throughGPTs, CoC· ISO 9001, ISO 14001, and OSHAS 18001
matrix certification for production locations· High global safety and quality standards· Ensuring the occupational health and safetyof our employees (when at the customer’s
location)· Technical customer training courses on optimal environmental and economic operation–> HydroSchool

Voith component lifecycle
Complete Equipment from Voith
Contribution to greater sustainability

FACTS & FIGURESReducing Noise
EmissionsHydropower is renewable, and despite its unavoidable impacts on nature it is an
eco-friendly way to generate electricity. Voith technologies are crucial to minimizing
the environmental impact of hydropower plants – from improving water quality
through aerating turbines and oil-free hubs which prevent water contamination,
through to innovative runners which ease the passage of fish. Voith Hydro works
tirelessly to further minimize the remaining environmental impacts. This includes
reducing noise emissions produced by generators, turbines, and hydraulic auxiliary units in the hydropower plant.
Owing to the long service life of hydropower plants – a service life of 70 years is notuncommon – our customers focus on their own energy requirements and material
use during the utilization phase to optimize their operating costs, especially in thecase of large systems and equipment. Especially in Scandinavia, avoiding the useof oil in bearings and hubs is an important topic for customers.

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

			
			

Utilization Phase(Electricity Generation)

End-of-Life· Electricity generation· Regenerative, flexible, reliable, inexpensive,
low-carbon multi-purpose benefit of theplant (e.g. flood protection, irrigation)· Plant safety· Environmental impact· Modernization allows continual extensionof a plant’s operating life

VH products offer:· A high level of efficiency· Durability· Extension of the utilization phase through therenewal of components· High proportion of reused products

4_Products & Supply Chains

69

Product Responsibility
Responsibility in the Supply Chain

VH products/services can:· Improve operation and cost-effectiveness· Mitigate the plant’s environmental impacts· Offer flexible operation to integrate otherrenewable energy sources into the gridTo document the minimal environmental impacts of our components and entire
hydropower plants, such as their excellent energy payback ratio or their low carbon
footprint, we also perform LCAs in accordance with ISO 14040. In addition, wedevelop environmentally sound solutions for the automation of hydropower plants,
and provide services for all plant components. To ease the passage of fish wedeveloped an optimized wicket gates and runner design as part of the Advanced
Hydropower Turbine System (AHTS) program established by the US Departmentof Energy.

FACTS & FIGURES
Progress Regarding Socialand Environmental Impacts

Wherever possible, Voith Hydro attempts to repair or modernize products used bycustomers. The high proportion of steel parts and low share of hybrid materials
have a positive impact on the ability of materials to be recycled.

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70

4_Products & Supply Chain

Voith TurboBus
Sustainability aspects

Upstream/Supply Chain(Procurement of Materials and Services)

Creation(System Construction Phase)

Potential risks:· Social & environmental impacts
in the supply chain

Potential risks:· Emissions(air, wastewater, noise, goods transportation)· Occupational accidents· Reduction in supply chain risks throughGPTs, Code of Conduct, and LSA· ISO 14001 and OSHAS 18001 matrix
certification for production locations· Ensuring the occupational health and safetyof our employees when integrating thetransmission unit at the customer’s location

Voith component lifecycle
Voith Components
Contribution to greater sustainability

Voith Turbo also follows the principle of offering increasingly energy-efficient andenvironmentally friendly product generations. It focuses on the impact of using Voith
components on the total cost of ownership (TCO). By way of example, a 1 % fuelsaving with a standard bus brings the operator around €3,600 in operating-costsavings. As such, the topic of resource conservation through increased efficiency isa key aspect of related customer discussions, whether during the tendering phaseor on handover of the product. In this regard, Voith Turbo aims to adopt a continual
process of improvement in which it also involves its customers.
In the reporting period Voith Turbo achieved the following progress in terms of its
energy efficiency and in reducing the environmental impacts of its products andservices.
When redesigning the VoreconNX, three sustainability aspects were improved
significantly. A new transformer in the power splitter allows the second planetary
gear to be replaced by a single gear stage. As a result this allows the Vorecon to
be designed in a modular way. The advanced design of the remaining planetary
gear offers a very high power density, making it around 7 % more efficient acrossVoith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

			
			

Utilization Phase(City and Overland Transportation)

End-of-Life

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

Potential risks:· Operating fluids: transmission oil,engine oil, hydraulic oil, brake fluid,
air-conditioning unit, coolant additive· Interior fittings, etc.

Potential opportunities:· Emissions reduction in
local public transport

Automatic transmission units help reduce
fuel consumption, such as through:· Limiting acceleration· Deactivation of kick-down· Acceleration and topography based
gear-changing· Smart Assist (in development; information
on fuel-savings potential when driving)

4_Products & Supply Chains

71

Product Responsibility
Responsibility in the Supply Chain

Potential opportunities:· Recyclable materials such as aluminum,
copper, steel, less plastic· Transmission Exchange Program(reconditioning of transmission units)· Correct handling and disposal

Automatic transmission units help reduce TCO(total cost of ownership), such as through:· Smart Maintenance (predictive maintenance)· Service-friendly (reduces labor time andincreases labor safety)

the complete operating range than its predecessor. This means the new VoreconNX
saves energy, is more compact and lightweight, and increases process reliability
in production thanks to its modular design.
FlexPad – an innovative connecting coupling between the universal joint shaft androller in the steel mill – revolutionizes this highly stressed component in the drivetrainof a rolling mill. Up to now, wear plates had to be replaced at sometimes very shortintervals – with the entire assembly even needing to be replaced after the third or
fourth replacement of the wear plates. Voith FlexPad technology triples the service
life of the coupling, protects the drivetrain, and reduces both the costs for wearing
parts and maintenance effort. At the same time it improves safety throughout the
manufacturing process and increases product quality.
The diesel-electric RailPack for rail vehicles increases resource utilization and passenger transportation efficiency. In addition to the power supply via the overheadlines, the RailPack is integrated into the vehicle allowing trains to be operated onrail networks which include electrified, partly electrified, and non-electrified track
sections. This means there is no need to operate a separate diesel locomotive to

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72

4_Products & Supply Chain

FACTS & FIGURES
Challenge: Long Service Life

serve non-electrified sections, dispensing with the time-consuming process of
uncoupling and recoupling wagons. Passengers also benefit as they no longer needto change trains on the switchover from the electrified to the non-electrified sections.
Product Responsibility Outlook
We expect a further tightening of environmental protection legislation as well asa continual rise in customer demands regarding the environmental and resource
efficiency of our products. This is something that affects all of our Group Divisions.
The growing complexity of the challenges confronting many of our customers intheir markets is increasingly leading them to opt to obtain solutions from a single
supplier. In the coming years, we see Industry 4.0 opening up huge opportunities
for all three Group Divisions involved in mechanical and plant manufacturing.
With the founding of our Group Division Digital Solutions we are bundling existingknow-how in our Group, developing new digital business models, and will further
expand our technological leadership in the years to come.

4.2 Responsibility in the Supply Chain
We aim to anchor resource conservation and social responsibility in our supply
chains. Our stakeholders also considered this as material to the way we manage
sustainability. In Purchasing, our Guiding Principles and the Voith Purchasing
Manual set out specific requirements in this area.
Naturally, Purchasing focuses on price, quality, on-time delivery, compliance withhealth, safety, and environmental legislation as well as upholding the ban on theuse of child and forced labor. Differing legislation and ever-growing demands for
documentation, such as under the chemicals directive REACH, and the Restrictionof Hazardous Substances Directive (ROHS), place high demands on our company.
A further challenge is current legislation on conflict minerals in the USA and EU. At
the same time, as our buyers’ and suppliers’ level of knowledge varies, appropriate
training is needed.
In light of this, controlling complex and heterogeneous supply chains remains acore challenge for Voith Purchasing.
Owing to the multitude of suppliers and supply chains, we can only provide reliable
information on tier 1 of our supply chain.
High Purchasing Volume, Heterogeneous Product Range
In the 2015/16 fiscal year our purchasing volume stood at around €2.5 billion, of
which production materials accounted for around €1.8 billion. As usual, they varied
greatly, ranging from a 1 mm nut to a 250 mm-thick steel sheet, and from special
customer-specific lacquering to electrical cable custom-made for Voith. In terms

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

			
			

4_Products & Supply Chains

73

Product Responsibility
Responsibility in the Supply Chain

Share of Suppliers by Region
in %

23

23

Germany
Rest of Europe

15

Americas
Asia

38

1

Other

of our invoicing volume, as in the previous year structural components accounted
for the majority of our procured product materials by value, followed by electricals/
electronics, subcontracting, and cast parts.

FACTS & FIGURES
Purchasing Volume

International Environment with Fairness as the Guiding Principle
As an international company we work with over 23,000 suppliers from 84 countries.
However, the majority of goods and services are provided by European suppliers –with Germany alone accounting for 35 %.
In principle we consistently strive for long-term business relationships, so wealways focus on the economic feasibility of our requirements. We also believe firmlythat treating each other fairly is the basis for a long-term partnership based on trust.
Supplier Days are special initiatives where we get to engage in discussion withour business partners. In the reporting period, we held a successful Supplier Day
for Voith Paper China, with further Supplier Days already in the planning stage.

FACTS & FIGURES
Active Suppliers
FACTS & FIGURES
Procurement Markets

Clear Conditions Set the Framework
Our Code of Conduct and General Purchase Conditions (GPCs) define our basic
understanding of partnership, and provide the guidelines for questions regarding
compliance as well as environmental and social standards.
Our Code of Conduct and the GPCs are available on the Internet. Our GPCs
form the basis for contractual agreements with our suppliers, and also ensurethat their sub-suppliers abide by these requirements. Country-specific versions
ensure that local purchasing processes always take national aspects into account,
for instance regarding payment terms, environmental standards, and customs
requirements. We are currently in the process of updating our GPCs and producing
country-specific versions for Poland, Chile, and Argentina.

GPCs:
http://www.voith.com/de/konzern/
einkauf/aeb-176.html
Code of Conduct:
https://voith.com/cn/coc-english.pdf

FACTS & FIGURESCountry-specific GPCs

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74

4_Products & Supply Chain

Supplier Management Process

Identify
suppliers

Review/approve
suppliers

Developsuppliers

Phase-out
suppliers

Selectsuppliers

Evaluate
suppliers

Risk Map Establishes Transparency
With the help of the Swiss Federal Institute of Technology (ETH) in Zurich, in thereporting year we gathered information on key economic, social, and environmental
risks in our supply chain. This was underpinned by public sources of informationsuch as the UN Global Weather Report and Transparency International’s Corruption
Index. This allowed us to create a risk map that illustrates in detail for us the complex
issue of sustainability in the supply chain. The study focuses on each of our key
material groups and regions. With these findings we aim to address sustainability
issues in a more focused way within our company, and coordinate queries andevaluations in a more targeted way.
High-Performance Organization
Our Purchasing organization is divided into centralized and decentralized as well
as strategic and operational responsibilities. Strategic Purchasing is responsible forsupplier and material-group management, and concludes framework agreements.
It only conducts individual negotiations once a specific value threshold has been
passed. Below this threshold, Operational Purchasing conducts individual negotiations based on material-group strategies, and deals with day-to-day businesssuch as placing and following up orders.
Since we established our four Global Business Service Centers in Heidenheim,
York, São Paulo, and Kunshan, we gradually began transferring responsibility forthe strategic and operational procurement of non-production materials to thesecenters. The corresponding locations were integrated into the new structure asplanned in the reporting year, and the local teams have commenced their work.
Production materials continue to be procured directly by our various Operating
Units around the world.

Voith Sustainabilit y Repor t 2016

1_What Underpins our Actions

2_Environment

3_Employees

4_Products & Supply Chains

			
			

Product Responsibility
Responsibility in the Supply Chain

In Voith Purchasing, sustainability topics are assigned mainly to our Corporate
Strategic Purchasing (CSP) Department, with a focus on setting sustainability goals
for Purchasing, gathering data on KPIs, and reporting. In addition, CSP devotes
itself to fundamental sustainability issues such as the use of conflict minerals inthe supply chain.

FACTS & FIGURESUse of Conflict Minerals

75

Relevant topics are identified internally within the Group, and the corresponding
activities are discussed across Divisions by the Global Purchasing Board (GPB) andcoordinated with representatives from the Group Divisions. In the reporting period,
topics including the centralization of the Supplier Self Assessment, the performingof supplier evaluations, and the pending revision of our GPTs were addressed.
Employees Receive Extensive Training
Our Purchasing Training Program, developed specifically for Purchasing, ensuresthat our employees around the world are always kept up-to-date on legal compliance requirements, the use of IT tools, and negotiations with suppliers. Local
trainers also address special cultural and local aspects through face-to-facetraining sessions. Besides traditional purchasing topics, the training modules also
cover sustainability and compliance aspects. In the reporting period we expanded
our program to include our North American locations. We are now focusing on
expanding the scope of seminars and e-learning courses.

FACTS & FIGURES
Scope of Training

Supplier Self Assessment and Evaluation
To mitigate risks in the purchasing process we require our suppliers to provide
regular Supplier Self Assessments. In the 2015/16 fiscal year we transacted 59.2 %(previous year: 61.7 %) of our invoicing volume with suppliers listed in our system
as having a current and approved assessment. Through centralized processing,
we intend to ensure that these assessments are gathered in a meaningful andcoordinated way. In addition to the self-assessment, once a year employees
from the specialist departments as well as Voith Buyers evaluate those supplierswith whom we place the largest order volumes. We use a standardized process
based on transparent criteria, so results can be compared across the Group. In

Share of Suppliers with a Supplier Self Assessment
in %
61.7

59.2

2014/15

2015/1636.0

2013/14Voith Sustainabilit y Repor t 2016

76

4_Products & Supply Chain

FACTS & FIGURES
Supplier Self Assessment,
Supplier Evaluation

the reporting period we produced 2,441 evaluations for 1,956 suppliers. Through amore targeted approach to individual evaluations we successfully covered a higher
invoicing volume with a considerably lower number of individual evaluations. We
transacted 68 % (previous year: 62 %) of our invoicing volume with suppliers listed
in our central supplier database as having an up-to-date and completed evaluation.
The supplier evaluation also encompasses sustainability criteria, which we use to
calculate the sustainability ratio. It shows the average subjective evaluation of our
suppliers by our employees in relation to their compliance with environmental andsocial standards. The partners we evaluated in the reporting period achieved anaverage sustainability ratio of 85.4 %.

FACTS & FIGURES
Supplier Compliance

Rigorous Action on Violations
If suppliers violate laws, the Voith Code of Conduct, or lose their creditworthiness,
Purchasing is obliged to terminate the business relationship and block the suppliercentrally. Even violations of health, safety, and environmental standards can leadto a Group-wide block under our Blocked Supplier Concept. For the 2015/16 fiscal
year, we are pleased to announce that there were no cases based on a violationof social or environmental standards.
Suppliers can also report violations of sustainability standards in the supply chain
on their own initiative. Just like our employees, our suppliers also have accessto our anonymous Voith Compliance Helpdesk, which covers all countries andregions where Voith is active. Complaints can be submitted both in the local
language and in English. For the reporting period we are pleased to announce
that we received no voluntary declarations, nor were we informed by suppliers ofany violations by competitors or sub-suppliers.

Share of Invoice Volume Placed with
Evaluated Suppliers in %

71.0
62.0

2013/14Voith Sustainabilit y Repor t 20162014/1568.0

2015/16

Sustainability Ratio
in %

84.0

85.4

2014/15

2015/1674.0

2013/14

77

Voith Sustainabilit y Repor t 2016

78

_The Report

The Report
Voith has published a Sustainability Report every year since 2009. This report
describes the progress we made in the 2015/16 fiscal year, i.e. from October 1,
2015 to September 30, 2016. This year’s report is complemented by a Highlights
Brochure as well as an online Facts and Figures resource for the first time.
In producing our report we followed the internationally recognized guidelines of the
Global Reporting Initiative (GRI) and applied version G4. Our report was not audited
externally. In our assessment, the scope of our report meets the requirements of
the Core option of GRI G4. To identify the material sustainability topics, in 2016 wedeveloped our materiality analysis further, based on the results of a comprehensive
stakeholder survey.
In the reporting period we continued to drive our future-focused Voith 150+ program
forward. The most significant change affected the Group Division Voith Industrial
Services, successfully divested in August 2016. This Group Division will therefore
be considered as a discontinued operation, in line with our 2016 Annual Report.
Unless stated otherwise, the facts, figures and information provided in this report
apply to the continued global Voith Group Divisions: Voith Hydro, Voith Paper, andVoith Turbo. Please refer to the Voith Annual Report 2016 for the Group companies
involved. The degree of consolidation comprises at least 80 % of the Voith Groupby revenue and headcount, and includes all of our Group’s major locations.
The information was requested electronically in writing, and the data was gatheredusing mainly division-specific software. In individual cases it is not currently possible
to derive a three-year trend; however, this is our objective for future reports. In a
few cases, certain facts already reported and affecting previous periods have beencorrected. We have marked this in the report at the appropriate points. Rounding
differences may occur owing to the addition of data.
All forward-looking statements in this report are based on reasonable assumptionsas at the deadline for content submission. Due to unknown risks, uncertainties, andother factors, the actual results, developments or performance of our company may
deviate from our forecasts, estimations, and statements. For further information
please see our Annual Report.
For improved readability we refrain from referring specifically to both genders inthis report. This is not a value judgment, and all forms are to be understood as
gender-neutral.
Further and more extensive information is provided at www.voith.com and in our
Annual Report. We currently expect to publish our next Sustainability Report inearly 2018.

Voith Sustainabilit y Repor t 2016

Imprint &Contacts

Environmentally
Friendly Production

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

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

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

Print

compensated
Id-No. 1762240
www.bvdm-online.de

The recycled paper used for the Voith­Sustainability Report 2016 is made from atleast 60 % secondary fibers, and was produced using a Voith paper machine.

Consulting
Schlange & Co. GmbH
Text
Carlsberg & Richter GmbH & Co. KG
Printed in Germany, © Voith GmbH, 2017-07
DesignCorporate Communication and
G2 Printmedienmanufaktur GmbHEnglish translation
World2World, Hamburg – Mark Elliott &Jim Blake
Picture credits
Dekra: p. 54
Voith: Other photo material

Voith GmbH
Corporate Communications
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89522 Heidenheim, Germany
Phone: +49 7321 37-0
Fax:
+49 7321 37-7000
E-mail: info@voith.com
www.voith.com