Cleaner. Better. Further. - Delphi


Cleaner.Better.Further.Sustainability Report2019

1ContentsWHO WE ARE2Overview of our business and introduction from our CEO Company overview Building a sustainable future CEO message and ‘Sustainability Roadmap’OUR APPROACHAbout Delphi TechnologiesWe’re a global provider of propulsion technologies that make vehicles drive cleaner,better and further. As a leading automotive supplier, we deliver pioneering originalequipment and aftermarket solutions for combustion, hybrid and electric vehicles.From the latest powertrain technologies to advanced service parts, tools andtraining, we partner with our customers to ensure we make a difference.We operate technical centers, manufacturing sites and customer support servicecenters in more than 20 countries and employ some 21,000 people around theworld.Update: On June 25, 2020, Delphi Technologies’ shareholders approved the previously announcedtransaction with BorgWarner Inc., which is expected to close in second half of 2020.6Find out about how we approach sustainability and what matters to us Aligning with best practice to shape our future Materiality assessment Our approach to reportingOUR PERFORMANCE9How we performed in the year and the impact we made Environment Governance Products StakeholdersREPORTING AND PARTNERSHIPSHow we report against global frameworksTo learn more visit www.delphi.comSustainability Report 2019 17Global Reporting Initiative (GRI) and other global standards

Go to contentsWHO WE ARECompany overviewPioneers in propulsion technologies, solutions and services for global OEMs and the AftermarketKey facts and figuresLeading provider ofpropulsion technologiesand solutions that makevehicles drive cleaner,better and furtherDeep expertise inelectrification withdifferentiated powerelectronics and softwarecapabilitiesBusiness overviewComprehensive portfolio ofadvanced technologies forinternal combustion engineand electrified vehicles tomeet current and futuremarket needsStrong position in highpressure fuel injectionsystems for light andcommercial vehiclesSales mix in 2019PowertrainOur Powertrain people are committed to engineering fuel handling and enginecomponents that monitor, control and optimize powertrain efficiency. It’s thanksto the dedication of this 5,000 strong team that we deliver vehicle technologythat offers a cleaner, better drive – no matter the power source.ElectronicsAftermarketElectrification & ElectronicsOur Electrification & Electronics division has been at the forefront of electrified(1)18%19%powertrain solutions for the past 25 years. And our people are continuallypioneering to secure its next 25 by producing solutions that support OEMs atevery stage of their electrification journey.Fuel Injection SystemsWith 9,000 employees globally, our Fuel Injection Systems division is powered bypeople who are passionate about delivering the future of driving. Our teams areconstantly developing innovative solutions that drive down fuel consumption and 4.4 billionrevenue in 201924manufacturing sites 21,000employees5,000 engineers, scientistsand techniciansemissions, while enhancing responsiveness and reliability, enabling our customers25%26%to enjoy the best of both worlds.AftermarketOperating across 150 countries with a global network of service centers, ourAftermarket team employs people who want to be part of a truly internationalenterprise, helping to create end-to-end solutions for technicians, garages andPowertrainProducts12%Commercial Vehicle Dieseldistributors who are committed to making vehicles safer, cleaner and gofurther.(1) ElectronicsSustainability Report 2019Light VehicleFuelInjectionincludes power electronics, ECUs and other gas electronics2

Go to contentsWHO WE AREBuilding a sustainable futureCleanerActing sustainably is at the core of who we areand how we operate both now and in the future.Our success is based on a shared culture oftransparency, inclusion, excellence and respect.We are a truly global organization, with peoplefrom all backgrounds who bring new energy andideas to our work, and who are united by arelentless drive to make a difference.As our industry shifts toward autonomous,connected and electrified vehicles, our deepdomain expertise means we are defining the nextgeneration of connected and intelligentpropulsion systems that will transform the waywe drive.Our visionWho we are and who we want to be in the futureTo be the pioneers in propulsion technologies, solutions and services.Our missionWhat we do every day to get thereTo make vehicles drive cleaner, better and further while being thepartner of choice for all stakeholders.BetterConsumers are expectingconnectivity and automation.We are designing systems tomake propulsion predictive,active and knowing.Cleaner. Better. Further.Our solutions are helping to reduce vehicleemissions, improve performance and extendvehicle range throughout its lifecycle.Our valuesHow we behave and make pectOur vision, mission and values guide our strategic directionSustainability Report 2019Consumers are demanding moresustainable transportation. We arecrafting vehicle systems thatmaximize clean propulsion.Consumers are open to new formsof vehicle power with a caveat –no compromises. We are exploringand developing new avenues inenergy management and thedriving experience.3

Go to contentsWHO WE ARE‘Pioneering with purpose’As a leader in the global automotive industry, we believe it is our roleto help create a safer, greener and more socially responsible world.Our ‘Sustainability Roadmap’Partnerof choiceDuring the year we made good progress indeveloping our roadmap, which sets our directionThis is a duty we take very seriously. From our manufacturing plantsand ambition in the short- to medium-term andand supply chain, to our people and the places we call home, we areallows us to assess our progress against ourdriven to make a difference.ambition to be a ‘partner of choice’.Sustainability reportSustainability “north star”goals and three-year planWe apply the highest standards of health and safety across ourMateriality assessment /stakeholder engagementorganization and operate a sustainable business delivering realreductions in resource use. We are actively engaged in ourcommunities, both as a company and a team of individuals wantingto make positive change.We are committed to a longer-term vision for the automotiveKey:Engagement with external parties - rating agencies,customers and investors - EcoVadis, SAQ3.0, CDPEvaluated and adopted appropriate sustainability standards– e.g., GRI, SASB, UN-SDGsemissions and better performance that drive further on any sourceExternal channel engagement including first Corporate SocialResponsibility Report and online web presence via Delphi.comof power.Welcome to our 2019 Sustainability Report,likely to be our final report as a standalonecompany due to the transaction withBorgWarner, which we expect to completelater this year.Improved internal data collection –e.g., sustainability monitoring tool (SoFi)Overall ambitionActions in 2020Actions implementedindustry, working with our partners to deliver vehicles with cleanerRichard F. DauchChief Executive OfficerMonitoring &improvementAs we prepare to integrate into BorgWarner, we can be proud of ourbest-in-class safety performance and strong customer recognition –these are without question ongoing strengths.External recognition highlightsI’ve always believed that being a ‘Pioneer’ means having the courageto lead and explore new frontiers, and I have no doubt our people willremain ‘Pioneers’. They will continue to help solve the industry’sfuture propulsion challenges, as well as tackling important issues inthe communities in which we operate.At Delphi Technologies we have always believed thatactions count, and that what we do and how we do itmakes a difference.Sustainability is at the core of who we are andguides how we operate. By following this path weare helping to bring about a positive change for ourcustomers, our communities and our planet.Sustainability Report 2019You can read about our performance and accomplishments in thefollowing pages. I am proud of the work we have done, and recognizesuccess only matters if it supports all our stakeholders – our people, ourinvestors and our communities.Be the Best!European Agency for Health and Safety at WorkTop Employers Institute China, Certified Top EmployerWe are proud to continue as a long-standing “SteeringGroup” member for EU-OSHA, working actively to supportand engage in healthy workplace campaigns.In China, we have once again been recognized as oneof China’s top employers for our best practices andexcellence in developing our people and local communities.4

Go to contentsOUR APPROACHAligning with best practice to shape our futureIn this report we provide an update on our sustainability activities during2019, along with all relevant non-financial performance disclosures.The UN Sustainable Development Goals are the blueprint to a better and more sustainableWhen it comes to sustainability, we understand we cannot achieve our wider goals on“Responsible Consumption and Production”; and “Climate Action” goals.our own. To ensure we remain relevant, we align our reporting efforts to the standardsfuture by 2030. Delphi Technologies is embracing the “Decent Work and Economic Growth”;and assurances set by several global organizations that make it their mission to createa better world.Why are SDGs relevant to Delphi Technologies? What are our responsibilities and opportunities?We have always been proud of our strong management systems - all our sites havebeen ISO14001 accredited since 2003, and OHSHA18001 since 2005 (transitioning toISO45001 in 2020) – and this provides a robust and comprehensive set of reportingmechanisms.With the implementation of SoFi, our new sustainability management reportingsystem, in 2019, we extended our reporting to conform with the Global ReportingWe directly employ nearly 21,000 people and manymore are dependent upon our presence. Many can befound in emerging markets. Our responsibilities are toensure that we and our supply chains are providingdecent working conditions and to promote economicgrowth for our employees and their communities.Our opportunity is to progressivelyextend decent working conditions alongour upstream supply chain, ensuring allour direct employees are employed ingood conditions and are properlyremunerated is a principal priority.Automotive production is currently linear for bothnatural and synthetic materials. This means that wasteis generated during production and products becomewaste at the end of their life. Our responsibilities are toensure that we minimize the materials we need toproduce our products and to design products that aremade from the most sustainable material sources.Our opportunity is to participate in thedevelopment of circular productlifecycles that enable the continuousrecycling of materials.Initiative (GRI), Sustainability Accounting Standards Board (SASB), the Science BasedTargets Initiative and the United Nations Global Compact Principles. We are alsoreporting via the Carbon Disclosure Project (CDP) - under both its carbon and waterschemes.The emissions from our activities are a contributor toclimate change. Our responsibilities are to ensure thatwe significantly reduce our energy requirements andthat we use as much renewable and low carbon energyas possible.Sustainability Report 2019Our priorities are to reduce our energyuse, to shift to lower emission fuels andto convert more of our electricity supplyto renewable sources.5

Materiality assessmentOur ‘Materiality Matrix’Recognizing and understanding our stakeholders and their opinions plays an important part in ourbusiness strategies and approach to sustainability.4.90Engagement included internal representation from Delphiacross our different channels, at both the global and localTechnologies employees, and external representation fromlevels. In the past 12 months, we undertook a four-stagea broad range of stakeholders including suppliers,approach to our materiality assessment in order to align ourregulators, academia, customers, rating agencies andreporting to best practices, identify the topics that are mostinvestors. The geographical distribution of respondentsmaterial to our stakeholders and understand how best towas evenly split across the regions of Asia Pacific, Europe,prioritize and take actions toward them.Middle East and Africa (EMEA), and North America.ResearchAnalysisWe undertook a benchmarking exercise, focusing on the rangeWith the results we were able to map the issuesof international reporting standards, as well as how our peersstakeholders view as most significant. We then undertookin the automotive sector and in other best practicean evaluation exercise involving our senior business leaderscompanies are reporting. We worked closely within order to determine the potential impact the issues could'thinkstep/Sphera', a global sustainability consultancy service,have on our business and strategic develop our methodology. This allowed us to calibrate ourThis process also helped us consider how and where we cansustainability topics and categories against the externalcontribute to global efforts such as the UN’s SustainableStakeholder consultationOur in-depth stakeholder review took the form of an externalonline survey where we sought quantitative and qualitativeDevelopment Goals and understand more clearly the areaswhere we can focus our resources to achieve the greatestClimate Changeand Air EmissionsWorkers Health,Safety and WellBeingEthics andIntegrityComplianceWasteManagement4.50Company CultureStability4.30Product Safetyand QualityHumanRights4.10Training andEducationRaw ement3.70PhilanthropyDiversity, EqualOpportunity nvironmentaland SocialStandards in theSupply .204.404.604.80Strategic Importance to Delphi Technologiesimpact. For more see “Materiality Topics assessedagainst Global Standards” on page 17.responses. We received an encouraging level of stakeholderResultsengagement with more than 600 responses.By integrating the results from our internal and externalexercises, we identified the most material topics for theorganization and grouped them into one of three categories.The results can be seen in our ’Materiality Matrix’ (see right).Sustainability Report 2019SustainableProducts andInnovation4.70Importance to StakeholdersThis is why we commit to connecting with our stakeholdersenvironment and ensure relevance.6Go to contentsOUR APPROACHMaterial Topics - 10 in total, representing the issues which are most important to meeting ourstrategic objectives and shaping the “North Star” goals for each topicMonitoring and Improvement Topics - 5 in total, representing issues of high importance andneeding to be monitored and improved as necessary to support our strategic objectivesMonitoring Topics - 5 in total, representing issues which are equally important, but most likelyto require ongoing monitoring and assessment5.00

Go to contentsOUR APPROACHOur approach to reportingTo make vehicles drive cleaner, better and further while beingthe partner of choice for all stakeholdersOur materiality assessment allowed us toclearly identify the topics our stakeholdersfind important, align each of these topicsinto four sustainability categories, anddevelop our reporting accordingly.The table (see right) outlines the four keysustainability categories, and the respective topicsthat fall under each. The categories are alignedwith our mission - cleaner, better further and beingEnvironmentGovernanceProductsStakeholdersThe contribution we as an organizationmake to climate change throughgreenhouse gas emissions, wastemanagement and energy efficiencyThe rules, or principles, which set outthe responsibilities and expectationsbetween different stakeholdersacross our organizationCovering aspects associated withwhat we make and sell as anorganization and our role in ensuringthey are sustainableCovering issues such as adherenceto workplace health and safety,human rights, and labor standardsin our supply chainSee page 8 for moreSee page 10 for moreSee page 11 for moreSee page 12 for morea partner of choice.Where a topic is “Material,” we have indicated thisin blue, and it is the first aspect we report on whenpresenting key information for the year.The “Our performance” section of this document– pages 8 to 16 – presents our performance duringthe year across all “Material” topics, along with1Climate Change andAir Emissions2 2Waste Management3Water Management4Biodiversityadditional relevant updates in the other topics thatwe monitor.Sustainability Report 20191Compliance2Ethics and Integrity3Human Rights and WorkingConditions451Sustainable Products andInnovation1Workers Health, Safetyand Well-Being2Product Safety andQuality2Diversity, Equal Opportunityand InclusionCompany Culture3Customer RelationsStakeholder Involvement4Environmental and SocialStandards in the Supply Chain5Training and Education6Stability7Raw Materials Sourcing8Social Responsibility(includes Philanthropy)7

Go to contentsOUR PERFORMANCEEnvironmentRating agencies – Our current scores and continued success as a partner of choiceSAQ 3.0 (Self Assessment Questionnaire) / NQC Supplier Assurance platformDelphi Technologies is dedicated to protecting human health, naturalresources and the global environment.Our reporting1 Climate Change and Air Emissions Current Score: Average 88% Accredited by OEMs including Volkswagen Group,Volvo Car Corp., Daimler, BMW, Honda and FordEcoVadis: SilverAccredited by OEMs including Groupe PSA, Groupe RenaultClimate Change and Air Emissions The greenhouse gas emissions we currently monitor areCDP (Carbon Disclosure Project)related mainly to electricity consumption. We are using an2 Waste Managementintensity-based performance indicator (tons of CO2 per3 Water Managementfull time equivalent (FTE)), which provides a fair and4 Biodiversityobjective view on the emissions as we grow and gain market Climate Change: Score C (all participant companies global average is C) Water Security: Score B- (all participant companies global average is B-)share. In 2019, these emissions amounted to 9.23 mTonCo2e/FTE, a significant reduction of 5% from 9.75 in 2017.We continue to closely monitor energy demand in ouroperations, whereby any improvement also reduces ourcarbon footprint. We have also developed a “Climate ChangeToolbox,” our own system of initiatives and ideas aroundCO2 EMISSIONS / ENERGY9.259.709.46Emissions by FTE ( mTon Co2e / FTE)9.239.30combating the effects of global warming.9.228.898.985% reduction from 20178.48Further to this, we are currently implementing an internalOn track with reductiongoals to keep globalwarming below 2ºC6.55carbon tax pricing mechanism. Under this effort, each sitecalculates its carbon emissions in tons per year, which is4.41then multiplied by our internal carbon price. The resultingamount can then be spent by each site on measures tominimize greenhouse gas emissions.We use this information to set our fact-based,comprehensive and ambitious emissions reduction targets,which are aligned with the Science Based Target Initiative tofuture-proof our growth.Sustainability Report 201920172018Delphi Technologies3-year performance20192020Goal for WB2C emissions –reduce emissions by 32.5%2030Goal for 1.5ºC emissions –reduce emissions by 54.5%8

Go to contentsOUR PERFORMANCEEnvironmentWATERBeat targeted goal by 8.3% in 2019Water consumption by FTE (m3 / FTE)13% reduction from 201744.7We have a strong system in place for managing waste. Wehave adopted the principles of first avoiding or reducingwaste. Second, reusing as much as possible. And third,diverting as much as possible to recycling before finallysending residues to ene

About Delphi Technologies . to the dedication of this 5,000 strong team that we deliver vehicle technology that offers a cleaner, better drive –no matter the power source. . Monitoring and Improvement Topics