Sustainability Report 2013/2014 MTU Aero Engines AG
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Sustainability Report 2013/2014
MTU Aero Engines AG
GER 07/15/MUC/00000/DE/XX/E
MTU Aero Engines AG
Dachauer Straße 665
80995 Munich • Germany
Tel. +49 89 1489-0
Fax +49 89 1489-5500
corporateresponsibility@mtu.de
www.mtu.de
Table of contents
Contact information
Publisher
MTU Aero Engines AG
Eckhard Zanger
Senior Vice President Corporate
Communications and Public Affairs
Project management and contact point
for questions regarding content
Ute Schwing
Senior Manager
Corporate Online Services,
Internal Communications and CR
corporateresponsibility@mtu.de
www.mtu.de
Photo credits
Cover page Airbus
Pages 4-5 MTU Aero Engines
Pages 6-7 MTU Aero Engines
Pages 8-9 Bombardier, Boeing,
Foreword 4 1 Strategy 10 2 Economics 20 3 Product 28 4 Environmental manage- 5 Responsibility 56 6 Commitment 70 Airbus, MTU Aero Engines
Pages 10-11 Bombardier,
responsibility ment in production toward employees to society MTU Aero Engines
About this report 6 Pages 12-17 MTU Aero Engines
Pages 18-19 Fotolia, MTU Aero Engines
MTU Aero Engines AG 8 1.1 Management approach 11 2.1 Management approach 21 3.1 Management approach 29 4.1 Management approach 45 5.1 Management approach 57 6.1 Management approach 71 Pages 20-21 Airbus
Page 22 Convent Kongresse GmbH
1.2 Stakeholder dialog 16 2.2 Risk management 23 3.2 Mobility today: efficient 4.2 Energy management 48 5.2 Occupational health 6.2 Research & training 73 Pages 23-29 MTU Aero Engines
engine technologies 32 and safety 60 Pages 30-31 Airbus
2.3 Compliance and 4.3 Emissions 50 6.3 Corporate citizenship 74 Pages 32-33 Airbus, MTU Aero Engines
corporate governance 24 3.3 Mobility in the future: 5.3 Employee qualification, Pages 34-35 MTU Aero Engines,
4.4 Water use 52 Lufthansa,
MTU’s climate strategy 33 education and training 64
2.4 Supplier management 26 Bauhaus Luftfahrt
4.5 Material efficiency 54 Pages 36-37 MTU Aero Engines, Airbus
3.4 Aircraft noise 37 5.4 Diversity 66
Pages 38-44 MTU Aero Engines
3.5 Product quality and Goals and goal 76 Page 45 Designstudio Monoflosse
Pages 46-75 MTU Aero Engines
safety 39
attainment for
2013/2014 Geared Turbofan™ is a trademark
application of Pratt & Whitney.
GRI-Index/ 80
GC-Principles
2 3
Foreword by the Chief Executive Officer
Foreword by the Chief Executive Officer
Dear readers,
Developing aircraft engines that consume less fuel and produce less pollution such as CO2 and noise—this
tops our list of priorities. The Geared Turbofan™ exemplifies our product responsibility. We are playing a deci-
sive role in the development of this clean, quiet and fuel-efficient engine technology, which will be used in
five new aircraft families. The Geared Turbofan is the linchpin of our Clean Air Engine technology agenda, on
which we have made further progress over the past two years.
Sustainability requires targets. Our aim with the Clean Air Engine agenda is to use our engine products to
substantially improve the environmental sustainability of aviation by 2050. Climate change, mobility and
scarcity of resources are global megatrends of our time, and we want to actively respond to these challenges
with Clean Air Engine. Our roadmap for the future targets a 65 % reduction in noise emissions and a 40 %
reduction in CO2 emissions. The CO2 emissions of our products will therefore continue to be a main theme
of our sustainability work. We want to make our position on climate change even clearer for stakeholders, and
last year we devised and published a separate climate strategy based on Clean Air Engine.
Sustainability requires values. We place a high value on the sustainability of our business practices. We
have committed ourselves to upholding the ten principles of the UN Global Compact on human rights, fair
Reiner Winkler
working conditions, environmental protection and anti-corruption, and we want to further improve their imple-
mentation within our sphere of responsibility. Our solid performance in international rankings—our Prime
Status from oekom research AG is a good example—confirms that we are on the right track. Receiving the
German Investors’ Award for Responsible Business Practices in 2014 was an especially gratifying validation
of the progress we have made.
Sustainability requires partners. At MTU, employees are very much a part of corporate responsibility.
Together we work hard to make progress in sustainable development inside and outside the company.
Sustainability-related issues such as co-determination, equality of opportunity, diversity, safety, health, and
employee training and qualification are cornerstones of our HR policy and important reasons why our approx-
imately 9,000 employees work together so successfully. Currently we are giving managers greater responsi-
bility, supported by various further training measures such as a new Leadership Feedback tool and the
International Leadership Program.
As defined by responsible sourcing, we are placing a stronger emphasis on upstream value creation. Since
2014, we have been laying down binding labor, social and environmental standards in a Code of Conduct that
governs our cooperation with our worldwide suppliers. These standards are based on the principles of the UN
Global Compact.
Sustainability requires dialog. We have compiled this third Sustainability Report, which for the first time
contains our UN Global Compact Communication on Progress, in order to provide transparent information
about our achievements and goals. Through our initiatives to facilitate communication on sustainability, we
have learned more about stakeholders’ opinions and expectations. We incorporate this valuable input into our
sustainability management.
Yours sincerely,
Reiner Winkler
Chief Executive Officer
MTU Aero Engines AG
4 5
Reporting principles
Key performance indicators (KPIs)
All data and information was collected by the
About this report responsible departments for the reporting
period using representative methods. Environ-
mental KPIs were collected via the environmen-
tal management systems at the individual loca-
tions and then consolidated in the CR database
according to agreed criteria. Using an elec-
tronic HR management system, the HR KPIs
were collected and evaluated centrally at the
headquarters in Munich for Germany and at
MTU Aero Engines AG UN Global Compact— the Rzeszów location for Poland. Once the data
Communication on Progress was evaluated, it was sent to the CR database.
Sustainability Report 2013/2014 All other data was requested from the CR cen-
The new MTU Aero Engines sustainability For the first time, Communication on Progress ter coordinators in the relevant departments
report provides information about corporate according to the principles of the UN Global and compiled centrally in the CR database.
responsibility (CR) within MTU. The report Compact has been integrated into this sus- Financial KPIs were collected and published in
details the company’s CR strategy and objec- tainability report. We have done this to give accordance with the International Financial
tives and describes the main thrust of its sus- stakeholders a better overview of CR-relevant Reporting Standards (IFRS).
tainability performance in 2013 and 2014. It information. In the GRI Index at the end of the
continues where the last sustainability report report, you will find cross-references to the
in 2012 left off and is available for download UN Global Compact’s ten principles. The inte- External validation of report
on our website as a PDF in both German and grated sustainability report is due to be pub-
English. lished annually in the future. The CR reporting for this sustainability report
is not subject to external auditing or validation.
Click here for the sustainability The majority of corporate processes that
report (German version) Scope of validity underlie data collection for CR reporting are
certified.
Click here for the sustainability The reporting period spans the 2013 and 2014
report (English version) calendar years (January 1 to December 31 in View all Certifications
each case), which also correspond to the
2013 and 2014 financial years for MTU Aero
Reporting in accordance with GRI Engines AG. In order to better organize how
information is presented and to provide explan- Further information
The 2013/2014 Sustainability Report was atory context for readers, activities from out-
drawn up in compliance with the Global Re- side the reporting period are also cited in some You can find supplementary information, more
porting Initiative guidelines, GRI G3.1. In our cases. The report covers MTU’s European loca- detailed analyses and older sustainability pub-
estimation, the report satisfies the require- tions that are treated as fully consolidated in lications online:
ments for Application Level B. We report on the company’s fiscal reporting. This includes MTU Aero Engines headquarters in Munich.
selected indicators from all categories of the MTU Aero Engines, the company’s headquar- Corporate Responsibility at MTU
guidelines (to facilitate comparison, tables and ters in Munich, MTU Maintenance in Hannover,
diagrams are cross-referenced to the corre- MTU Maintenance Berlin-Brandenburg in Lud- Our Corporate Responsibility Reports
sponding indicator) and explain our manage- wigsfelde near Berlin, and MTU Aero Engines Forward-looking statements
ment approach for the six principle spheres Polska in Rzeszów, covering the majority of Compliance at MTU
of activity as defined by GRI. The GRI Index at the MTU Group. As regards the workforce, the This report contains forward-looking state-
the end of the report provides an overview report applies to almost 90 percent of employ- MTU’s Quality Standards ments. These statements reflect the current
of the indicators and the extent of reporting. ees. understanding, expectations and assumptions
MTU Maintenance Hannover A materiality matrix presents the topics rele- MTU’s portfolio of technologies of MTU Aero Engines and are based on the
MTU Maintenance Berlin-Brandenburg vant to sustainability for MTU and how they are for the future information available to management at the
The joint venture MTU Maintenance Lease
MTU Aero Engines Polska
weighted from an internal and external per- Services B.V. in Amsterdam, the Netherlands, present time. Forward-looking statements pro-
spective. It serves as the basis for selecting is not included in the report, because it has no Work at MTU vide no guarantee that certain results and
the performance indicators and topics for this measurable effect on MTU’s sustainability per- developments will actually occur in the future,
report. MTU has commenced preparations for formance. The JV is responsible for leasing air- In addition, we regularly report on important and they are associated with risk and uncer-
the new reporting standard G4, which will be craft engines, with MTU Maintenance Hannover sustainability topics in central MTU publica- tainty. Consequently, the actual future results
binding from 2016. handling operational implementation of the tions and communication channels. of MTU Aero Engines may deviate substantially
leasing agreements. The key performance from the expectations and assumptions ex-
indicators in the report refer to the scope of pressed here for a variety of reasons. MTU
validity specified above; any deviations from Aero Engines assumes no obligation to update
this are indicated. the statements contained in this communica-
tion.
We are gradually broadening the scope of our
reporting and are striving to encompass all MTU’s next integrated sustainability report
the MTU Group’s fully consolidated locations is expected to be published in the summer of
step by step over the next few years. 2016.
6 7
Company Profile
To gird for the future, MTU has taken stakes Global player for commercial The Munich headquarters
in a number of significant engine programs engine maintenance
and is well positioned in the marketplace. Munich is home to MTU Aero Engines’ corpo-
MTU Aero Engines AG Among these future programs are the GEnx
engine to power the Boeing 787 Dreamliner
and Boeing 747-8 long-range wide-body airliner
MTU Maintenance, a division of MTU Aero
Engines, is one of the top five providers of
maintenance services for aircraft engines and
rate headquarters. This is from where the
group’s subsidiaries and most of its research
and development activities are controlled and
and the GE9X for Boeing’s 777X. industrial gas turbines. With more than 30 en- where engine components are produced in
gine types, it boasts one of the largest port- various shops. Munich also is home to MTU’s
The advanced geared turbofan™ technology folios worldwide, including the bestsellers military programs. A new leading-edge blisk
is applied in Pratt & Whitney's PurePower® V2500 and CFM56, and the world’s largest manufacturing system, combined with one of
engine family. To date, five major aircraft manu- engine, the GE90-110/-115B. New engine the world’s most advanced machine pools, is
facturers have selected the PW1000G models programs are continuously added to offer accommodated at the company’s headquarter.
In the aviation industry, three simple letters Commercial engine business With its products, MTU has content on engines to power their latest aircraft. Airbus is offering customers the most popular variants and to The new blisk competence center will allow
stand for top-notch engine technology: MTU. in all thrust and power categories, from power- the PW1100G-JM for the A320neo. Bombardier secure the company’s position in the after- MTU to expand its production capacities from
Germany’s leading engine manufacturer has As part of its commercial activities, MTU Aero plants for small business jets to the world’s has chosen the propulsion system as the sole market for next generation engines. currently 800 to as many as 4,000 blisks a
been providing propulsion systems to power Engines designs, develops and manufactures most powerful jetliners. The company is a engine choice for its CSeries, as has Mitsubishi year by 2016.
aircraft for more than 80 years now, having engine modules and components. Its techno- risk-and-revenue-sharing partner in the major for its MRJ regional jet. Irkut will equip its MTU Maintenance in figures
become an established global player. The logical expertise in the field of low-pressure commercial engine programs. Under the part- MS-21 with the engine. Last, but not least, The Munich site in figures
About
company engages in the development, manu- turbines, high-pressure compressors and tur- nership arrangements, MTU assumes full Embraer has opted for the PW1000G family as
facture, marketing and support of commercial
and military aircraft engines and industrial gas
bine center frames as well as manufacturing
processes and repair techniques have made
development and production responsibility for
the components and modules forming part of
the exclusive powerplant for its second-gener-
ation E-Jets.
4.000 employees 500.000 square meters
turbines. Operating affiliates all over the world,
MTU has a local presence in major regions
MTU a leading manufacturer of subsystems
and components in the global engine business.
its work share. Its cooperation partners are
the world’s big-league players in the engine In the military arena, the company is the
Over
15.000 shop visits
4.700 employees
and markets. industry—Pratt & Whitney, GE Aviation, and German Armed Forces’ major industrial partner
MTU Aero Engines in figures
The engine programs of MTU that currently
yield the highest sales
Rolls-Royce. for practically all engine types flown by them.
MTU provides a full range of services, from 35 years of company history
MTU program work shares depending on maturing enabling technologies through devel-
9,000 employees and V2500 for the A320 familiy of
aircraft the valuation of the module oping and manufacturing engines and engine
components, to providing maintenance and
Apart from its outstanding technical and
engineering know-how, customer proximity is
3.9 billion euros in sales
in fiscal 2014 GP7000 for the A380 4 -25 % comprehensive customer support services. one of MTU’s greatest strengths. A network of
locations in Europe, Asia and North America
GEnx for the B787 and B747-8
as well as representative offices, IGT service
centers and joint ventures around the globe
PW2000 and
ensure that its customers’ expectations are
fulfilled timely and with the same high stan-
dard of quality. These include dedicated
CF6-80 for medium- and
long-haul airlines
centers of excellence, e.g. for parts and ac-
cessory repairs. In addition, on-site teams
are able to carry out repair jobs at every
corner of the world at short notice.
8 9
Strategy
1 Strategy
1.1 Management approach Materiality analysis
We identify important sustainability topics
We can look back on more than 80 years of using a materiality analysis. This involves corre-
company history, a period over which MTU lating significant economic, environmental
Aero Engines has established itself as a major and social challenges for our business with
player in the industry. As well as being the their relevance for stakeholders. At the same
number-one engine manufacturer in Germany, time, the materiality matrix forms the basis
we also play a decisive role internationally for our sustainability strategy. Priority activity
as one of the world’s leading subsystems pro- areas are those that are very important both
vider. We have grown to become a global high- from an internal company perspective and
tech company and technology leader, which from the point of view of the main stakeholders.
calls for particular corporate responsibility In 2014, we reviewed the materiality matrix
(CR) on our part. Here we take an integrative and updated the list of topics from an internal
approach that incorporates environmental and perspective as part of a workshop (involving
social considerations into the company’s eco- the CR steering committee, CR coordination
nomic performance. Responsible corporate and CR specialist coordinators) and from an
management strengthens the bond of trust external perspective based on the results of a
with stake-holders and guides the MTU brand stakeholder survey.
successfully into the future.
> The stakeholder survey is described in the
We have integrated sustainability into the Stakeholder Dialog section on page 18.
company and established it as an overriding
principle. The main tools for implementing this
approach are group-wide MTU Principles, a
“MTU is a sustainable company. binding Code of Conduct for all employees,
Commercial success isn’t the managers and Executive Board members, and
only thing that matters to us— CR management that is rooted in organiza-
social and environmental tional practices.
concerns are important too.”
Sustainability strategy
Reiner Winkler, We can make our biggest contribution to sus-
Chief Executive Officer tainable development through eco-efficient
MTU Aero Engines AG engine technologies. Aircraft engines have a
service life of several decades; compared
against their entire life cycle, it is during this
usage phase that the effects of our products on
the environment and climate are the greatest.
Climate change, mobility and scarcity of re-
sources are three global megatrends that
affect our business. Consequently, we have
placed product responsibility at the heart of
our sustainability strategy. We pursue product-
Our main topics: oriented environmental and climate goals in
our Clean Air Engine (Claire) agenda. In a cli-
eco-efficient engines, mate strategy embedded within Claire, we
pursue concrete, staggered climate protection
innovation, objectives. We have already made very good
progress toward our first target to be achieved
product safety by 2020. Other areas that MTU is focusing on
include product safety and long-term value
creation.
• Code of Conduct for approx.
9,000 employees worldwide > For more on MTU’s climate strategy, see
• Code of Conduct for approx. chapter 3 Product Responsibility, page 28.
> For more on long-term value creation, see
4,000 suppliers worldwide chapter 2 Economics, page 20.
• Member of UN Global Compact
10 11
Strategy Strategy
For the most part, topics remained in the same Meanwhile, the CR specialist coordinators in
order of priority following the reassessment, the various business areas play a key role: Materiality matrix: important sustainability topics for MTU Aero Engines
although there were shifts in the evaluations namely, to implement CR activities in their de-
made by stakeholders. The current survey partment or location and to play a major part
revealed that stakeholders attributed greater in designing and developing the company’s
importance to health management, human CR strategy. They are also responsible for
rights, site development, occupational safety measuring the success of the defined goals
and research collaborations than before. These within their areas. The network was expanded Long-term value creation
very high
topics were already rated as having high to during the reporting period, and the site in
very high relevance for MTU in our 2012 pub- Rzeszów, Poland was integrated in 2014. Our Eco-efficient engines
Innovation Product
lication. The focal points of the CR strategy in long-term goal is to incorporate all MTU sites. safety
the categories of product responsibility (safety,
innovation and eco-efficiency) and long-term Relevant data and information regarding MTU’s
value creation were confirmed as the most commitment to sustainability and the progress Site
important topics. However, the topics of demo- it has achieved are collected by the CR spe- Human rights development Research collaborations
graphic change and diversity were weighted cialist coordinators and then pooled together
differently this time around. Demographic by the CR coordination team into an integrated Environmental Compliance
Relevance for stakeholders
change is becoming increasingly important for database for combining, verifying and evaluat- management
MTU in light of the aging workforce in Germany. ing key CR data and information. The CR cor-
Attractiveness as employer
Accordingly, we consider the integration of all porate bodies meet regularly to exchange
age groups to be an ongoing challenge that will information, agree on measures and approve
high
gain even more importance over the coming goals. Employee training and development
years. At the same time, it is a decisive part of Responsible sourcing
our efforts to create a diverse workforce and At the end of 2014, MTU’s CR coordinators
Health management
is currently the focus of the company’s work took part in a Europe-wide workshop to famil- Occupational safety
on this topic. We have therefore strengthened iarize themselves with the requirements of
the relationship between the topics of diversity the new reporting standards of the G4 Global Corporate citizenship
and demographic change in the matrix. MTU Reporting Initiative, which will replace the
will continue to promote equality of opportu- existing GRI 3.1 standard starting in 2016. In
Demographic change
nity in the future, which includes other impor- 2015, MTU will start the preparations needed
Work-life balance
“We are guided by the following tant aspects such as different genders and to ensure that the company continues to com-
questions: What topics are cultures. ply with the internationally established stan- Donating/Sponsoring
medium
important for us and our stake- dard and guarantee transparency in reporting
holders? Where can we achieve Current developments show that supplier in the future. Regional dialog
Diversity
the most? Product responsibility management is being accorded ever greater
is therefore at the heart of our importance regarding responsible business To raise employees’ awareness of sustainability
sustainability strategy.” practices. For this reason, MTU has decided to issues and inform stakeholders about our CR
include it in the company’s CR strategy and to strategy and management in a more structured
Eckhard Zanger, elevate responsible sourcing to its own cate- way, we are planning CR training courses for
CR Steering Committee and gory. In earlier reports, this topic was sub- selected employee categories. Training courses
Senior Vice President Corporate sumed under other categories, such as human for HR managers and purchasers are in prepa- medium high very high
Communications & Public Affairs rights, compliance and environmental protec- ration and are due to start by the end of 2015.
Relevance for MTU Group
MTU Aero Engines AG tion.
CR management MTU’s CR management system
Clear structures are the means by which sus- Principles and guidelines It is based on five pillars:
tainability is established within the MTU Board of Management All MTU employees and business units are • Products, technology and growth
Group’s organizational practices. A CR man- expected to uphold binding ethical principles. • Cooperation and conduct
agement system that encompasses the com- Of fundamental importance to us is the need • Staff and management
pany’s sustainability strategy, achievements CR Steering Committee to safeguard human rights; to observe labor • Partners, customers and shareholders
and goals has been in place since 2009. A CR CR Coordination laws; to maintain fair working conditions, busi- • Environment and society
steering committee responsible for sustain- ness relationships and high health and safety
ability strategy is made up of the directors of CR Divisional Coordinators standards at work; to refrain from corruption; Subordinate principles flesh out the MTU
the Corporate Communications/Public Affairs and to ensure employees have suitable qualifi- Principles and formulate values such as res-
and Corporate Quality departments and reports cations. Managers have a particular responsi- ponsibility, diversity and mutual respect and
directly to the Executive Board at regular inter- bility and act as role models when it comes to appreciation. They apply for all employees
vals; the board then makes decisions about observing laws, regulations and internal guide- worldwide.
the sustainability strategy. A centralized CR lines.
coordination team, under the auspices of
the Corporate Communications department, MTU Principles
directs the sustainability strategy’s implemen- An overarching set of principles is a major
tation in CR activity areas and is responsible component of MTU’s corporate culture and
for reporting. helps the company to act in a consistent, reli-
able manner. It was created in its current form
in 2009 and articulates the aspiration that
guides our business activities: “We help shape
the future of aviation.”
12 13
Strategy Strategy
Codes of Conduct International standards
A Code of Conduct ensures sustainable and We have been a member of the UN Global
responsible behavior throughout the MTU Compact since 2011; as such, we have under-
Group, both within the company and in its taken to uphold the ten principles of this im-
dealings with the outside world. The principles portant worldwide sustainability initiative to
laid down there cover topics such as integrity, protect human rights and the environment,
conflicts of interest, insider trading, responsi- promote fair working conditions, and combat
bility in industrial relations, environmental pro- corruption. As an active member, we report
tection and fair business practices and apply annually on our observance of these interna-
to all employees, managers and board mem- tionally recognized principles and on the pro-
bers. Behavior that violates laws or regulations gress we have made in the company. The
is not tolerated by MTU, and we investigate present Sustainability Report integrates this
any indications that such breaches might have Communication on Progress. A cross-referenc-
occurred. To facilitate the flagging of improper ing of the report’s contents to the principles
behavior, employees and external stakeholders of the Global Compact can be found in the
can contact an ombudsman confidentially. GRI Index on page 80.
MTU is committed to punishing violations with
appropriate penalties. We are guided by the following internationally
recognized principles:
These internal norms are supplemented by • The ten principles of the UN Global Compact
the Code of Conduct for Suppliers, which was • The UN’s Universal Declaration of Human
designed to establish these standards in the Rights
supply chain as well. • The principles set out in the International
Labour Organization’s (ILO’s) core labor
The Codes of Conduct for employees standards
and for suppliers • German Corporate Governance Code
Our success is founded on the commitment and know-how of our employees. An MTU expert checks the fan of a CF34 engine.
Human rights Created in 2014 and incorporated into MTU’s
MTU respects the human rights internationally contracts, the Code of Conduct for Suppliers
recognized in the United Nations Universal requires partners to refrain from using child
Declaration and ensures that they are safe- labor. Should it emerge that a supplier has
guarded within the company. MTU is commit- used child labor in the manufacturing process
ted to respecting the individuality and dignity for goods they deliver, MTU is entitled to termi-
of all, maintaining equality of opportunity in nate all existing legal transactions with the
recruitment and preventing discrimination. The supplier without notice. During the reporting
company promotes employment diversity and period, MTU introduced various measures and
the integration of employees with disabilities. a monitoring system to prevent conflict min-
As the employer of some 9,000 people world- erals from getting into the supply chain. Some
wide, we create fair working conditions based conflict minerals come from Central African
on legally binding employment contracts. Pro- mines and can be used to finance armed con-
tecting human rights is a cornerstone of our flicts that involve human rights violations.
social responsibility. As such, it is built into
our Codes of Conduct for employees and for > For more information, see Chapter 2
suppliers. Economics, Supplier Management, pp. 26-27.
> For more information on diversity and work- No business activity containing a risk of
ing conditions in the company, see Chapter 5 compulsory or forced labor could be detected
Employees. during the reporting period.
MTU considers the risk of human rights viola-
tions occurring in the company’s business
operations at its European locations (Munich,
Hannover, Berlin and Rzeszów) to be low, be-
cause they are governed by the provisions
of German and Polish law, which vouchsafe
human rights. In the reporting period, there
were no complaints relating to human rights
infringements.
We create fair working conditions throughout the company. An MTU employee inspects the largest aircraft engine
in the world, the GE90 Growth.
14 15
Strategy Strategy
1.2 Stakeholder dialog Business partners and customers Sustainability topics in dialog with key Capital market
We involve stakeholders in our commitment Topics Communication channels
stakeholders Topics Communication channels
to sustainability. Our continuous interaction • Product quality and safety Voice of the customer • Product innovations/ AGM
with them allows us to identify the expectations • Sustainable technologies Trade fairs eco-efficiency Investor and analyst
and requirements they have of the company (noise, CO2, emissions) Customer magazine • Responsible corporate conferences
and develop suitable responses. Systematic • Product efficiency in terms of Sustainability Report governance Investor discussions,
stakeholder dialog, which we structure based fuel economy Internet • Product responsibility road shows
on openness and mutual trust, helps us iden- • Human rights • Human rights Trade fairs
tify and set trends. • Compliance • Compliance (e.g. Executive Press releases
Board compensation) Sustainability Report and
Our key stakeholders include employees, cus- • Environmental management Annual Report
tomers, business partners, suppliers and share- (e.g. resources) Ratings
holders. We are also in regular contact with • Risk management Internet
representatives from science and research,
Suppliers • Supplier management
analysts, journalists, politicians, industry as- Topics Communication channels
sociations, employee representatives, our • Product quality and safety Supplier portal
neighbors and local government authorities. • Environmental protection Audits
We use various communication channels and • Responsible sourcing Supplier surveys
• Compliance with MTU Sustainability Report
Media
standards (above all the Code Topics Communication channels
of Conduct) • Innovation and technologies Press releases
• Aviation sector/eco-efficiency Press conferences and
• MTU as employer briefings
• Financial Plant tours
• Site development Sustainability Report
Employees • Compliance Internet/Social Media
Topics Communication channels Trade fairs
• Health and safety Employee newspaper, intranet
• Career and further education Sustainability Report
opportunities Surveys
• Compensation and benefits HR services
• Work-life balance MTU Principles events
Politics, public agencies
MTU exhibits its innovations at international air shows. • Equality of opportunity Company suggestion scheme Topics Communication channels
• Co-determination Health management • Developing and promoting Parliamentary evening
• Diversity technology Plant visits by politicians
• Environmental regulations, International trade fairs,
climate protection, eco-effi- air shows
ciency Sustainability Report
• Policies on aviation taxes Political discussions
Region and duties MTU SkyLounge
Topics Communication channels • Mobility concepts (background talks)
• Social commitment Corporate communications • Site development Bonn Evening
• Environmental protection media • Demographics, ensuring the Visits by political delegations
• MTU as employer Sustainability Report continued supply of skilled Internet
• Site development Museum open house days labor
• Compliance Collaborations • Economic, labor market
Internet/ Social Media and educational policies
In dialog with shareholders: Annual General Meeting of Globalization
MTU Aero Engines AG. • Compliance
forms of dialog to interact with different target
groups in ways that are suitable specifically
Science and research
for them. To engage with our stakeholders, we Topics Communication channels
use online and print media, surveys, expert • Developing new technologies Joint research projects
Associations and organizations
discussions, workshops, conferences and trade • Promoting research and Work in MTU centers of Topics Communication channels
fairs, for example. One important tool is our teaching excellence • Eco-efficiency in aviation Meetings and committees
regular employee survey; the next one will • Networking between industry Trade fairs • Innovations and technologies Sustainability Report
take place in 2015. In addition, we participate and research Sustainability Report • Promoting technology Internet
in associations, committees and sustainability • Study of engineering and Work experience, student
initiatives such as the German UN Global Com- scientific disciplines research projects
pact Network. Through numerous member- • Recruiting Work-study programs
ships, we contribute our expertise to a range • Economic and labor policies
of specific issues. We are a founding member
both of the Bauhaus Luftfahrt think tank and
of the Aviation Initiative for Renewable Energy
in Germany (aireg e.V.).
16 17
Strategy Strategy
Political dialog Memberships
The German aviation industry is greatly affected • Algae Biomass Organization (ABO)
by political decisions at the national, European • Association of German Engineers (VDI)
and international levels—more so than many • Aviation Initiative for Renewable Energy in
other sectors. It is therefore important for Germany e.V. (aireg)
companies to keep informed about develop- • Bauhaus Luftfahrt e.V.
ments in the political-administrative sphere • BavAIRia e.V.
that are relevant to their businesses. Contact • Employers’ Associations for the Bavarian
persons are legislators and decision-makers Metalworking and Electrical Industries
in ministries at the EU, federal and state levels (bayme and vbm)
as well as in subordinate government agencies • Chamber of Commerce and Industry for
and the German armed forces. Maintaining Munich and Upper Bavaria
dialog with politicians and administrative bod- • Deutsches Verkehrsforum e.V. (industry
ies about the company’s interests is one of association for all modes of transport)
the responsibilities of MTU’s office in Berlin. • Enterprise for Health
Relevant topics include innovation, technology • European Aerospace Quality Group
development and promotion, sustainability, • Federation of German Security & Defence
eco-friendly technologies, noise reduction, the Industries (BDSV)
social relevance of air transport, site devel- • Forum Luft- und Raumfahrt e.V.
opment, economic and labor market policies, (forum for the aerospace industry)
and support for exports. • Friends and Sponsors of the
Deutsches Museum
We represent industry-specific interests • German Aerospace Center (DLR)
through membership in associations, including • German Aerospace Industries Association
the German Aerospace Industries Association (BDLI)
(BDLI) and the Bavarian business association • German Association of Environmental
(Vereinigung der Bayerischen Wirtschaft). Management
We are in continuous dialog with our stakeholders and increasingly use social media for this purpose. • German Society for Aeronautics and
All activities are subject to the applicable laws Astronautics (DGLR)
and guidelines and the MTU Code of Conduct. • IATA Strategic Partnerships
As a fundamental principle, political dialog • Münchner Bildungsforum gem. n. e.V.
is conducted on a non-partisan basis, with all (Munich-based network for employee
We have expanded our dialog with stakeholders Communicating with stakeholders via social parties and factions. We do not make any training and HR development)
during the reporting period, and for the first media is gaining in importance. During the financial donations. • Stifterverband für die Deutsche Wissenschaft
time we organized an online survey to ask reporting period, MTU further reinforced and (sponsors’ association for German science)
stakeholders for their perceptions and opinions internationalized its social media presence. In • Trace International, Inc.
of corporate responsibility at MTU. As we 2014, the company added the international • UN Global Compact
wanted to reach as many stakeholder groups LinkedIn network to the platforms it uses and • Vereinigung der Bayerischen Wirtschaft e.V.
as possible, we decided to make the survey now has over 4,200 followers there. We have (Bavarian business association)
open and international. More than 100 people also attracted new fans on Facebook, who
took part. In a second step, we asked over now number just under 9,000. In 2014, MTU
200 selected representatives from all MTU’s joined Kununu (www.kununu.com), the Ger-
relevant stakeholder groups to evaluate the man-language portal for rating employers, and
company’s sustainability topics and achieve- has already received over 80 ratings. We foster
ments and CR reporting. Here we were keen an open feedback culture, treat criticism
to ensure that all stakeholder groups were with seriousness and respect, and respond
covered. In the eight-part questionnaire, we constructively to suggested improvements.
also asked stakeholders to weight the topics
in our materiality matrix on a multi-level scale in Social Media@MTU
order to identify relevant sustainability topics.
The survey achieved a response rate of approx-
imately 32 %, and its results are reflected in the We want to intensify our dialog even further
updated materiality analysis and are factored in the future through CR training courses for
into sustainability management. employees in roles that involve direct contact
with relevant stakeholder groups.
> For more on the results of the stakeholder
survey, see the Materiality Analysis section in
this chapter.
We also have more detailed information on our
website about our compliance activities, our
compliance structures, and our rules regarding
conflicts of interest and insider trading.
Compliance at MTU
MTU places high value on open and trust-based dialog. Michael Schreyögg, Chief Program Officer, talks with media
representatives.
18 19Economics
2 Economics
2.1 Management approach Key financial figures
EC1
MTU has 14 principal sites across the globe.
As an employer, purchaser and investor, we
promote economic development in the regions
where we operate. Our operations are sustain- Revenue (EUR bn)
able, responsible and geared toward long-term
value creation. Forward-looking investment and 2013 3.6
adequate financial room for maneuver form 2014 3.9
the basis for profitable growth. Our commercial
activities are backed up by a risk and oppor- Operating profit* (EUR bn)
tunity management strategy that opens up
new areas of business, minimizes risks and 2013 377
punctually addresses economic, environmental 2014 383
and social challenges. Responsible corporate
governance throughout the company is reliant Earnings after tax* (EUR bn)
on the observance of the applicable laws,
regulations and internal guidelines and is im- 2013 239
plemented through compliance structures. For 2014 253
MTU, sustainable management incorporates
the supply chain. As the first step in doing so, Earnings per share** (EUR)
the company’s supplier management enshrined
corporate responsibility (CR) standards for 2013 3.27
cooperation in supplier contracts. Only through 2014 3.84
sustainable management will MTU achieve
lasting economic success and competitiveness Dividend per share (EUR)
in the engine manufacturing market, which is
based on long-term plans and goals. 2013 1.35
2014 1.45
Economic performance
As a company that is listed on the stock ex- * Adjusted
change, we are committed to increasing the ** Undiluted, reported
value of our business over the long term and
want to be an attractive capital investment for
our shareholders. MTU achieved this goal in the value of its shares has roughly quadrupled,
the reporting period. The company was able while revenue has grown by 6.9 % on average.
to continue its strong economic performance This demonstrates the long-term success
and build on its record-breaking successes of of MTU’s business model and the company’s
2012. Revenue increased to 3.6 billion euros growth potential.
Our main topics: in 2013 and on to 3.9 billion euros in 2014—
both of which represented all-time highs. In For 2015, we have targeted an increase in
sustainable investment, 2014, adjusted earnings were also higher than revenue of around 4.4 billion euros, and we
ever before. Shareholders—institutional and estimate that operating profit will be around
compliance, supply chain private investors—are an important stakeholder 420 million euros and earnings after tax will
group for MTU, and we were delighted to be around 285 million euros. This will keep
• German Investors’ Award for Responsible reward their trust in our securities with the MTU on a solid, long-term growth course.
highest dividend in the company’s history in
Business Practices 2014 2014. In total, MTU paid out around 74 million
• Company-wide compliance structures euros to shareholders for the business year.
• 31.5 % of employees in Germany received Since the company went public ten years ago,
compliance and anti-corruption training in 2014
• Sustainable guidelines for working with
suppliers based on 10 principles of UN Global
Compact
20 21Economics Economics
Value added in 2014 (in million euros) 2.2 Risk management Our sustainable business
EC1 relationships are based
Risk is part and parcel of any entrepreneurial on compliance with laws
and regulations.
1 Net value added 903.4 activity, and seizing opportunities always
2 Material costs/Other expenditure 2,839.5 involves a certain degree of risk. MTU’s inte-
3 Depreciation 158.0 grated opportunity and risk management sys-
tem, which is embedded in the company’s
Breakdown of where value added went organizational and management structures, is
designed to eliminate risks that threaten the
company’s existence, circumvent avoidable
67.5 % Employees risks and limit necessary risks. The system en-
sures that legal regulations are observed and
3
Wealth created
1.7 % Creditors is based on the leading international COSO II
ERM framework.
2
3.913,9 1 9.2 % Exchequer
For the MTU Group, the systematic considera-
8.2 % Shareholders tion of significant risk factors is a fundamental
basis for value-oriented management and
13.4 % MTU Group sustainable business success. MTU identifies
risks, analyzes their possible consequences
and develops measures to limit them. MTU mitigates the risks of the aviation sector requirements have to be strictly observed. Our
In 2014, MTU Aero Engines’ net value added increased to 903.4 million euros (792.8 million euros with a long-term business model, a balanced environmental management system, which is
in 2013). The lion’s share of 67.5 % goes to employees. We consider management philosophy, integrity product mix with stakes in various market seg- certified to EMAS and to DIN EN ISO 14001,
and ethical values as well as comprehensive ments and engine types, and a technological minimizes these risks.
employee qualification to be crucial factors for edge. Moreover, we regularly analyze the op-
Sustainable investment The company achieved above-average ratings successful risk management. Under the “Staff portunities and risks of climate change. For > For more information on our environmental
MTU is also regularly assessed by the capital in all categories (Environment: 76.9%, Social: and Management” heading in the MTU Prin- example, Bauhaus Luftfahrt, a research institu- management system, see page 44.
market and independent experts in respect of 82.2%, Governance: 92.7%). ciples, the following principle for a no-blame tion funded by MTU and other partners, is cur-
non-financial indicators. During the reporting culture within the company states: “We capi- rently preparing a study on climate change’s Compliance risks can arise in all areas of the
period, the company was listed in sustainability In addition, oekom research AG, one of the talize on opportunities, assess risks and deal technological, environmental and social im- company. We can define them as the danger
indices and received various awards that ob- world’s leading rating agencies in the sustain- constructively with mistakes.” This promotes pacts on aviation up to 2050. During the re- of managers or employees failing to observe
jectively accredit our achievements, among able investment segment, awarded MTU Prime an open attitude to weak points and enshrines porting period, we discussed and evaluated laws or regulations or violating internal com-
them the German Investors’ Award for Respon- Status with a C+ rating at the end of 2013. By a no-blame culture as the basis for successful what climate change will mean for MTU in an pany guidelines. Compliance measures insti-
sible Business Practices in December 2014. doing so, oekom certified that MTU met the risk management. The company’s constant internal CR workshop. The workshop concluded tuted by MTU include a central Compliance
Citing the company’s systematic progress in minimum standards defined by the agency. The efforts to better itself are reinforced by our that the company was on the right track with Board, a company-wide Code of Conduct and
CR performance, the jury recognized MTU’s analysts evaluated environmental and social CIP (Continuous Improvement Program) struc- its sustainability strategy focused on product special training courses that address particu-
impressive leap in the rankings. performance based on over 100 selected sus- tures. responsibility and its existing risk and oppor- larly sensitive topics and teach employees
tainability criteria as applied to the aviation tunity evaluation. The greatest risks for MTU how to avoid compliance breaches.
MTU improved its Environment Social Gover- sector. Control and monitoring reside in air transport restrictions because of
nance (ESG) ranking from 61st to 8th. The MTU’s risk assessment encompasses all busi- environmental pollution. Yet at the same time, MTU is not currently involved in any legal or
award is presented annually by the German MTU is also regularly evaluated by the consul- ness units and all the risk factors to which the stricter environmental regulations for aviation arbitration proceedings that might have a
publishing house DuMont Verlag and Deutsche tancy imug in cooperation with EIRIS, by the company is exposed. At the corporate level, present opportunities. Our products substan- significant influence on its general economic
Asset & Wealth Management to companies leading European rating agency Vigeo, and by a cross-divisional Risk Management Board tially reduce the emissions, fuel consumption situation.
that are particularly responsible in their treat- Transparency International. For 2015, MTU is performs centralized control and monitoring and noise of aircraft engines. The company
ment of the environment, employees, society planning to take part in the Dow Jones Sustain- functions. At its quarterly meetings, the board views climate protection as an important driver > For information on possible risks in the value
and other stakeholders. ability Index for the first time. discusses the interactions between individual of innovation in the market. A further outcome chain, see also the Supplier Management sec-
risks, ensures that all risks have been reported of the CR-workshop is to strengthen MTU’s tion in this chapter.
MTU was included in the STOXX ESG Leaders For more on MTU’s ratings and in full, and assesses the risk exposure of the positioning in relation to climate change by
indices for the first time in September 2014. awards group as a whole. The Executive Board re- drafting and publishing a climate strategy based
ceives a risk report once a quarter about the on existing eco-efficiency goals in product
group’s current risk situation. development.
The risk management system is monitored and > For more on MTU's climate strategy,
continuously refined through measures such as see Product Responsibility chapter on
regular checks by the internal auditing depart- pages 33-36.
ment and monitoring by the Supervisory Board
and by external auditors. On top of this, MTU is subject to a large num-
ber of environmental laws and regulations. Our
Risks and opportunities in CR spheres use of chemical substances in manufacturing
of activity and the emissions from our test benches could
MTU’s risk management incorporates sustain- see us faced with additional investment costs
ability topics, such as product responsibility, or make it necessary to replace substances
the environment and compliance, into risk we currently use if the relevant environmental
assessment. protection and industrial safety restrictions
are tightened. MTU requires special authoriza-
> For more on how MTU assesses the risk sit- tions for certain production equipment and
uation and identifies risk factors, see 2014 the associated restrictions and documentation
Annual Report, p. 115 ff.
MTU CEO Reiner Winkler (left) received the Investors’ Award for Responsible
Business Practices in Frankfurt at the end of the year 2014.
22 23Economics Economics
2.3 Compliance and corporate from anywhere in the world by e-mail Compliance instruments
(ombudsmann@mtu.de). Employees can also
governance visit the ombudsman in person or make con-
For MTU, it is self-evident that we should tact through any of the usual communication
respect the prevailing laws and regulations channels. The identity of the whistleblower Risk-
when conducting our business. It is an impor- and the information he or she imparts are training manage-
ment
tant basis for responsible dealings with our treated in strict confidentiality. And it goes
employees and business partners. The binding without saying that whistleblowers acting in
legal frameworks MTU imposes on all parties good faith are not penalized by the company inform
that operate on our behalf strengthen the in any way. In addition, employees can confide
confidence of our stakeholders, bolster our in the familiar contact points within the com-
good international reputation and safeguard pany, such as their superiors, the legal depart-
our long-term success. ment and security officers.
Employees Compliance audits
The company acts as a fair employer, business No breaches of the Code of Conduct were dis-
partner and client, and advocates transparent covered during the 2013/2014 reporting Compliance Board
competition where all parties are on an equal period, and once again there were no indica-
footing. Integrity and responsible behavior are tions of possible corruption at MTU.
key values in our corporate culture and are
binding for all employees and managers by Furthermore, MTU was not the object of any
virtue of our Code of Conduct. These obliga- significant monetary fines or criminal proceed-
“At MTU, compliance is for tions also explicitly apply to board members. ings, nor were such proceedings pending.
everyone. Board members and Whenever violations are proven, we always
managers lead by example, and MTU denounces corruption, including bribery duly punish them. Breaches of the law or of
we support employees in key and extortion, and all other forms of white- internal guidelines are not tolerated by MTU.
positions with training courses collar crime. It observes all applicable compe-
on prevention. This approach tition, antitrust and commercial legislation Compliance and anti-corruption training
inform
has been successful: we don’t as well as all laws and regulations relating to Another of the Compliance Board’s key duties
have a single breach to report.” consumer and data protection. is to prevent misconduct and raise employees’
awareness of what constitutes misconduct.
Reiner Winkler, Compliance structures First and foremost, this takes the form of com-
Chief Executive Officer As the chief operating decision maker, the CEO pliance and anti-corruption training courses
MTU Aero Engines AG is responsible for business ethics and anti- for all employees, with special courses for em- Stakeholders
corruption policies in the company. The key ployees and managers in positions of trust. Ombudsman
instrument for rooting compliance in organiza- These courses are repeated at regular inter-
tional practices is an MTU-wide Compliance vals. During the reporting period, compliance
Board, which is made up of the heads of the and anti-corruption training courses for mana-
legal department, Corporate Audit and Corpo- gers and employees in positions of trust took
rate Security. The Compliance Board reports place in Germany; in 2014, this training took
directly to the Executive Board and the Super- place at MTU’s site in Rzeszów, Poland. In ad- Business partners and compliance Compliance in dialog with stakeholders
visory Board every quarter. Working alongside dition, special compliance and anti-corruption To ensure that business relationships are sound As part of the rating process carried out by
the central Compliance Board are group of- training is compulsory for all new employees and dependable, the Compliance Board in- oekom research—which awarded MTU Prime
ficers for individual topics, such as data pro- working in areas with customer contact. In spects consultancy contracts for potential Status for its overall social and environmental
tection, environmental protection or IT security. 2014, around 31.5 % of administration employ- corruption risks before they are signed. These performance—the external analysts rated
ees in Germany and 10.5 % of employees at contracts are also assessed by TRACE, an in- MTU’s compliance measures as “good.”
While the Compliance Board regularly inspects the MTU site in Poland took part in compliance dependent organization specialized in business
all divisions for signs of possible legal breaches and anti-corruption training. The Compliance practice transparency and due diligence re- In 2014, MTU was evaluated and compared
or compliance risks, the group officers are Board also offers individual advice and training views of agents, intermediaries and consul- against other companies by Transparency
responsible for making sure that specific stat- to all employees and Executive Board members tants. Only once the Compliance Board has International, a non-governmental organization
utory regulations are observed and that uni- as required. given a positive recommendation does the that promotes transparency and the fighting
form standards are established across the CEO approve the conclusion or extension of a of corruption. The findings were published in
whole company and that these meet the rele- In 2015, a compliance and anti-corruption contract. Independently of these assessments, April 2015 in the form of the Defence Com-
vant legal requirements. In addition, MTU’s training course will take place Germany-wide TRACE also carries out an audit every three panies Anti-Corruption Index, and MTU was
internal auditors conduct regular compliance for around 2,000 employees from corporate years. able to repeat its good result from the first
“We don’t tolerate any violations, audits, in which they scrutinize business pro- units. The Executive Board will be explicitly in- rating in 2012. In particular, MTU’s careful ap-
and we don’t use unfair practices cesses and procedures in the company for cluded in these training courses. Another plan We also expect our business partners to re- proach when dealing with intermediaries and
to be successful. We gain legal conformity and adherence to internal for 2015 is to provide training to employees spect the law. Since 2014, a binding Code of sales consultants was classed as very good.
our advantage solely through guidelines. In 2013, MTU’s internal auditing from selected units at all MTU’s sites in the Conduct for Suppliers has been a fixed part of
first-class products and the out- department was itself audited by the German Americas. contracts. The code prohibits corruption in all
standing work of our employees.” Institute of Internal Auditing (DIIR) and its forms when cooperating with MTU, inclu-
achieved an overall average score of almost ding the offering and acceptance of bribes and
Ulrich Passow, 90 %. other improper benefits. Should a supplier
Member of the Compliance Board and engage in any such practices while dealing with
Senior Vice President and In our global whistleblower system, an om- or carrying out orders for us, MTU is entitled
General Counsel
MTU Aero Engines AG
budsman acts as a confidential point of con- to terminate the cooperation without notice.
tact to whom employees and external stake-
holders can report suspicions of corruption > For more on MTU’s sustainable business
or illegal activities or breaches of the Code of relationships, see the Supplier Management
Conduct. The ombudsman can be contacted section in this chapter.
24 25You can also read
