Group-wide sustainability management
Sustainability management is a top-level leadership task at Daimler, which is why central sustainability issues are the responsibility of our Board of Management. We also ensured that our sustainability governance structure is, at the highest level, closely interlinked with our corporate governance structure as determined by German law.
Board of Management, Supervisory Board, and Annual Shareholders’ Meeting: see Annual Report 2011
Sustainability Governance. Our central sustainability management body is the Sustainability Board (CSB). This body effectively combines all management processes and areas of responsibility that are relevant to sustainability, and does so at the highest level. The Board of Management established the CSB, which reports directly to the CEO, in 2008. The CSB is headed by a Board of Management member. Prof. Dr. Thomas Weber, the Daimler Board of Management member responsible for Group Research & Mercedes-Benz Cars Development, has been director of the board since 2009. Prof. Dr. Weber has set a goal for the CSB stipulating that Daimler must be among the top companies in the industry with regard to sustainability issues. As a result, all corporate decisions, including those pertaining to investments, must be carefully made after taking sustainability issues into account. Board of Management member Dr. Christine Hohmann-Dennhardt has also been a member of the CSB since 2011. The CSB is supported by the Sustainability Office (CSO), which ensures that all relevant corporate departments, established bodies, and key decision-makers from all divisions are involved in sustainability management activities. These bodies include the corporate organization for environmental protection as well as the Human Resources CSR Committee, which manages HR policy-related sustainability issues throughout the Group. This committee is directed by the Head of Human Resources and Labor Policy, who represents the human resources department at the Group level as a member of the CSB. In 2010 we also set up a core team at Daimler Trucks whose mission is to derive and globally coordinate sustainability initiatives for the division on the basis of stipulations laid out by the Sustainability Board. The individual corporate functions and other operating units have also established specialized committees for managing their sustainability targets.
| Tasks of the Sustainability Board |
|---|
| Develop and manage the Group-wide sustainability strategy and coordinate company-wide sustainability initiatives. |
| Provide the operational units with implementation support. |
| Interlink the central, Group-wide sustainability activities with the business units and brands; integrate specialized management systems and sub-strategies. |
| Analyze the Group’s sustainability performance. |
| Coordinate of the decision-making process that leads to the definition of the annual sustainability program. |
| Define key issues; derive targets and measures. |
| Host and coordinate of the Daimler Sustainability Dialogue in Stuttgart and at other locations (2011: Beijing, Washington). |
| Prepare decision memorandums on behalf of the CEO and support the Board of Management by working together with the Sustainability Office to provide second opinions. |
Good corporate governance is a key aim of sustainable management. We consider it to involve more than just fulfilling legal requirements. Instead, the Board of Management and Supervisory Board strive to govern and supervise the company on the basis of national and international principles in order to ensure our time-honored company’s sustained existence through the ongoing creation of added value. Beginning in business year 2012, the personal goal agreements of the Board of Management members will therefore be augmented by non-financial indicators based on those of the UN Global Compact.
The remuneration of the Board of Management consists of three components: a fixed base salary, an annual bonus, and a variable component encompassing medium- and long-term incentives. The last of these components is the Performance Phantom Share Plan (PPSP), which is a long-term, four-year remuneration system that has been geared toward the sustainable development of the company’s value since 2005. At the beginning of business year 2011 the annual bonus was once again revised in this respect, and consequently it is now paid out, with a delay, over a period of two years. While 50 percent of the bonus is paid out immediately after the business year ends, the other half is not paid until the end of the following business year. The second half of the bonus is affected by the development of the Daimler share price compared to the Auto STOXX automotive index. The annual bonus is dependent not only on reaching operational targets but also on individual goal agreements, which, in turn, take sustainability aspects into account and thus increase or decrease the amount of the bonus.
Beginning in business year 2012, the personal goal agreements of the Board of Management members will therefore be augmented by non-financial indicators based on those of the UN Global Compact. Since 2007, individual goals have also been agreed on with the Board of Management members in order to create and sustainably operate a compliance system. However, the implementation of this system cannot enhance the individual’s goal achievement; even if the targets are fully met, the effect is neutral. The annual bonus and the PPSP are therefore designed to provide sustained incentives.
Further information: The remuneration report in the Annual Report 2011.
Managing consequences — globally and locally. The basic aim of our sustainability management is to control the economic, environmental, and social consequences of our business activities. We therefore want to minimize any negative effects, while maintaining positive ones that not only benefit us as a company but society as a whole. As a globally operating company, we are particularly faced with the challenge of identifying the local effects of the business activities at our locations around the world and taking action whenever these effects contravene our own sustainability goals. This is the task of our management systems, which have to ensure that areas of responsibility, communication flows, and reporting processes are maintained across all corporate levels — from the smallest operating units and the divisions all the way up to top-level management. A key role in this process is played by our open and constructive dialogue with stakeholders. One of the Sustainability Board’s main tasks remains to coordinate our centralized, Group-wide sustainability approach with the local management systems that are associated with specific business units and topics.
Leverage opportunities. Our aim is not only to prevent sustainability-related risks but also to exploit the opportunities associated with sustainability. As far as the latter objective is concerned, we, as an automaker, see lots of promising potential in the area of safe, environmentally friendly, and forward-looking mobility. This is why innovation management plays an important role in our sustainability strategy.
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