We learn from our stakeholders

The exchange with stakeholders is indispensable for Mercedes-Benz. The objective of our dialogue is to jointly find solutions to complex challenges as well as learning from experts.

  • The relationship of trust between us and our stakeholders has grown

    Quicklink Wolfram Heger (Photo) Quicklink Nicole Susann Roschker (Photo)
  • What we need now is a courageous and emboldening policy

    Quicklink Silvie Kreibiehl (Photo)

The relationship of trust between us and our stakeholders has grown

WITH Dr Wolfram Heger & Nicole Susann Roschker

They are the trend indicator when it comes to current developments in sustainability, whether they be regulatory, social or technological. They combine the external requirements that the Group has to meet with its internal goals and business strategy. In addition, they advise and support the specialist units in considering sustainability aspects within their work. Nicole Susann Roschker directs sustainability management at the Sustainability Competence Office in cooperation with the Corporate Environmental Protection department, while Dr Wolfram Heger is responsible for Stakeholder Management at the Mercedes-Benz Group. In the following interview, they talk about the modus vivendi with non-governmental organisations (NGOs), the value of materiality analysis and the limits of corporate influence.

Wolfram Heger (Photo)

Wolfram Heger

Head of Stakeholder Management at Mercedes-Benz Group AG

Nicole Susann Roschker - © Norbert Gräf Photography (Photo)

Nicole Susann Roschker

Head of Sustainability Management & Sustainability Competence Office at Mercedes-Benz Group AG

Ms Roschker, Dr Heger, what are the most important sustainability topics for the future of the automotive industry that you and the stakeholders have to keep an eye on?

Dr Wolfram Heger: The priorities are manifold — starting from environmental protection, human rights and responsible supply chains to issues of social cohesion. In the future, we will address these issues even more strongly on the societal level than before. This means that we will look into what causes, social interdependencies and possible solutions exist in these areas.

Nicole Susann Roschker: In addition to human rights and climate protection, one of the top issues for the Mercedes-Benz Group is resource conservation. We can’t address climate change and resource use separately from the question of social justice. This is demonstrated, for example, by current regulatory developments such as Germany’s Supply Chain Act. Making a supply chain sustainable requires far more than just respecting human rights. Social and environmental aspects have to be addressed holistically and risks have to be avoided or limited along the entire value chain — from the raw material sources all the way to recycling. This will also be reflected in the statutory requirements that we expect the EU to introduce in 2022. In addition, we have to meet the expectations of investors, who are increasingly focussing on ESG factors as well.

We focus on SDGs 8, 9, 11, 12 and 13, as these are the areas where we can add the most value. In this way, we are further expanding the contribution of our business activities to the achievement of the UN Sustainable Development Goals.

You ask internal and external stakeholders to contribute to the materiality analysis that is used for weighting sustainability topics. What role do the United Nations’ Sustainable Development Goals (SDGs) play in this context?

Nicole Susann Roschker: A very decisive one. As corporate citizens, companies are part of society and their activities have a positive or negative impact on its sustainability goals. We have therefore evaluated the effects that our business activities have on the SDGs (SDG impact analysis). Our cooperation with partners from the business community, society and government creates impulses far beyond our product that have an impact on society. Among our partners are companies, think tanks, universities and municipalities; each of these collaborations makes a contribution. At the same time, we examine how we can improve, for example in the supply chain or at our plants. We continue to work with the insights gained.

Are there any aspects that evolved to an especially great extent in 2021?

Nicole Susann Roschker: Yes, the much more ambitious electrification targets of our Ambition 2039 in the car sector, according to which we want to make the whole value chain of our new car fleet CO2 neutral by 2039. Last year, we further reinforced this goal by taking the strategic step from “electric-first” to “electric-only”. In addition to a number of other factors, the results of the materiality analysis contributed to the company’s decision to switch to battery-electric drive systems by the end of this decade, wherever the market conditions allow. External and internal stakeholders classified climate protection as the most relevant area of action.

Dr Wolfram Heger: I want to emphasize that we’ve been working on these goals for quite some time. I think our continuous and longstanding stakeholder dialogue with civil society and the Advisory Board for Sustainability and Integrity has contributed to the fact that today we have a Human Rights Respect System, effective data protection, Ambition 2039 and our electric-only approach.

Why is the external viewpoint so important for the analysis?

Dr Wolfram Heger: External experts, such as those from non-governmental organisations and our Advisory Board, provide us with very frank ‘food for thought’ and contribute their specific expertise to the further development of our strategy and operational processes. With the aim of making progress on these issues, we organize the Sustainability Dialogue, in which the external experts voice their positions, express criticisms and expectations of Mercedes-Benz very clearly. And that’s how it should be, because they continuously help us to determine what we can improve. This makes our stakeholders indispensable sparring partners and I expect them to become even more important in the future.

Nicole Susann Roschker: This trend is also evident in the fact that our Advisory Board is regularly consulted in between board meetings on a wide range of specialist issues. We greatly appreciate this dialogue because the discussions with external experts, who bring a different perspective, help us to make considerable progress.

Materiality analysis (Photo)
The materiality analysis helps determine which sustainability issues are particularly relevant for the Group and its stakeholders. The analysis consists of several components: a comprehensive competition and media analysis, regulatory requirements and information relevant to capital markets, and among others an online stakeholder survey.

What role did NGOs play in the materiality analysis?

Nicole Susann Roschker: NGOs are a key stakeholder group that contribute to all four components of the analysis: the desk analysis, the SDG impact analysis, the stakeholder surveys and the interviews with experts. The NGOs are driving many developments, including legislation.

When NGOs make demands or suggestions, how do you incorporate them into your strategy and processes?

Nicole Susann Roschker: The materiality analysis underpins our strategy process. For every topic that our stakeholders mention in the analysis, we conduct an in-depth analysis that addresses the risks, opportunities and key trends. We ask ourselves how to address a given topic at the company in the best manner. We not only present our analysis in the Group Sustainability Board, but also prepare the findings for all of the departments and interdisciplinary working groups in our strategic areas of action. In this way, the results of the materiality analysis contribute to the further development of our strategy. We then derive operational measures and use performance indicators to assess the results.

Dr Wolfram Heger: A practical example of this is our Human Rights Respect System, which we have repeatedly mirrored in cooperation with external stakeholders over many years. In doing so, we take up suggestions and discuss dilemma situations, but also sharpen processes and KPIs and adjust them. We haven’t adopted every idea, but very many — because they’re helpful and we have a common objective in mind. So this dialogue is extremely important to us.

That sounds like a trustworthy working relationship

Dr Wolfram Heger: Absolutely. That wasn’t always the case. However, the regular discussions, including those conducted during 14 years of Sustainability Dialogues, have gradually led to the growth of a trusting relationship. As a result, today we have a good relationship with almost all stakeholder representatives, given that they are interested in a constructive dialogue. There is a certain modus vivendi, which is based on reliability, trust and mutual respect. This enables us to address critical topics and jointly deliberate them. Incidentally, honest dialogue also includes pointing out the limits of our corporate influence.

Daimler Sustainability Dialogue (Photo)
More than 200 representatives from politics, business and society came together at the 14th Daimler Sustainability Dialogue on 17 and 18 November 2021.

At the same time, you, as a company, use national and international mandates in order to present your positions to governments.

Dr Wolfram Heger: That isn’t a contradiction — on the contrary. The regulatory framework is established by the political institutions that are legitimately entitled to do so. Together with other stakeholders, we can present our positions via mandates such as those of the UN Global Compact, the World Business Council for Sustainable Development and econsense. In this way, it is perfectly legitimate to demonstrate towards politics what we can realistically achieve.

Let’s get back to the materiality analysis: where has a stimulus led to a concrete strategy?

Nicole Susann Roschker: Our focus on resource conservation, for example, can be traced back to the analysis. We held intensive discussions with the Procurement unit in order to determine to what extent we should set corresponding goals for our suppliers. How we could cooperate with them to greatly improve resource conservation and climate protection along the entire value chain was also part of the discussions. This also includes checking whether the Supplier Sustainability Standards are still sufficiently ambitious and continuously developing them further.

Do you also see your in-house role as explaining stakeholder interests to others?

Dr Wolfram Heger: We see our role as translating society’s current expectations for our company. However, we also see ourselves as a source of information and impulses for future sustainability developments. For example, we provide specialist units with advice on how they can plan and shape their measures. Like sustainability as a whole, this task isn’t a sprint, but rather a marathon.

Nicole Susann Roschker: We bring internal and external viewpoints together when we pass on what we hear in discussions with our stakeholders to the various specialists at our company.

In 2021 you held the 14th Daimler Sustainability Dialogue with stakeholders. This was the last such dialogue to date. Will this format be continued in 2022?

Dr Wolfram Heger: Definitely. We are constantly developing the content of the dialogue and are also planning an anchor event in 2022. We are currently developing the details — and we’re also considering additional smaller dialogue formats and discussions on special topics. Above all, it is important to be in continuous exchange. We will continue to do everything in our power to contribute to the sustainable orientation of the company in dialogue with our stakeholders.

Dr Wolfram Heger

is responsible for external stakeholder management, including the Sustainability Dialogue and supporting mandates, for example in matters involving the UN Global Compact at Mercedes-Benz Group AG. His team channels external momentum onwards internally and addresses future sustainability topics. He has been with the company since 1998. Before then, he studied economics and politics and received his doctorate for his work on value-oriented internal communication.

Nicole Susann Roschker

mainly looks after the development of strategy and governance for sustainability as well as the area of sustainable finance at Mercedes-Benz Group AG. She is currently carrying out a new materiality analysis. Together with her colleagues from Corporate Environmental Protection, Roschker is responsible with her team for the Sustainability Competence Office, the working body of the Group Sustainability Board. She successfully completed her MBA in Sustainability Management at the Leuphana Professional School in Lüneburg in 2012 and has been active in the field for many years.

Divider NGO (Photo)

What we need now is a courageous and emboldening policy

The NGO Germanwatch is one of the stakeholders with whom the Mercedes-Benz Group AG is in a continuous exchange. This portrait is about the Chairwoman of the Board of Germanwatch, Silvie Kreibiehl, and her view on the results of COP26, the mobility revolution, climate justice, legislation and sustainable luxury saloons.

Silvie Kreibiehl - © Christine Gabler (Photo)

Silvie Kreibiehl

Chairwoman of the NGO Germanwatch

At the 26th United Nations Climate Change Conference (COP26) in Glasgow in November 2021, the Mercedes-Benz Group AG committed itself to discontinuing combustion engines by 2040. This was an important signal for other companies, says Silvie Kreibiehl, Chairwoman of the Board of Germanwatch1. “When companies communicate such goals, it helps raise people’s awareness,” says Kreibiehl, 45, who noticed at COP26 that businesses are now extremely active in this regard. However, apart from an agreement between several industrialised countries and South Africa, the conference in Glasgow made almost no progress with regard to the good international cooperation with, or the support of, partner countries that take political approaches to incorporating social justice into the energy transition programmes for combating climate change. “In order to counteract the climate crisis, governments, businesses and society need a shared mission and have to invest at the same time. This requires a strong commitment and considerable trust between all of the market players.” Considering the automotive industry’s complex supply chain, the Ambition 2039 strategy of Mercedes-Benz as an OEM is as ambitious as it is helpful. Since then, the targets have been tightened even further. “When the economic risk becomes more tangible, the suppliers react too. That’s something we see quite often.”

Emboldening visions and a mobility allowance instead of a commuter allowance

As a coordinating lead author of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), Kreibiehl knows exactly how high the investment needs are and what is driving the individual sectors. She points out that in order to buffer a rebound effect during the switch to electric mobility, governments should introduce not only purchasing incentives but also bonus/malus systems in addition to a general mobility allowance instead of a commuter allowance. “However, the mobility transition requires more than just electric mobility. It calls for changed behaviour and a better infrastructure,” says Kreibiehl, who now uses a cargo bike to travel around in her place of residence near Frankfurt. In addition to technologies, a good charging infrastructure, more bicycle paths and an expansion of local public transport are just as important as changing everyone’s behaviour, according to Kreibiehl. “We have to make this desirable. What we now need is a courageous policy that also gives encouragement. I miss more visionary leaders in business and governments who say: ‘Look here. This is how we can live and what we can do; we’ll be better off!’” Kreibiehl is deeply convinced of this: “Our world will become better if we do so. However, in this regard we need catchy images that encourage people and tell a vision.“

COP26 (Photo)
In November, Mercedes-Benz, together with 33 countries, 40 regions, cities and regional governments as well as 38 companies from around the globe signed the COP26 “declaration on accelerating the transition to 100% zero emission cars and vans”.

Goal-oriented politics and a desire for transformation

According to Germanwatch, a lot is happening on the corporate side. “Many companies have committed managers who redirect large companies”, says Kreibiehl. Germany and its companies are ideally positioned for a rapid transformation, she says, speaking as an expert in climate finance. This change will strengthen Germany’s economy if business continues to make innovative investments in this field.

The best steering instrument for governments is to create transparency and set explicit long-term goals and short- and medium-term milestones to clearly define what needs to happen for the transition of mobility and attainment of climate neutrality, says Kreibiehl. “The next five years will be crucial for us in order to still achieve the global 1.5-degree target. We now need a significant reduction in greenhouse gas emissions very quickly, so that we don’t exceed the remaining CO2 budget. This means that we have to avoid all lock-in effects because they are too expensive and delay everything.”

In order to explain this to the people, it was very helpful that, in April 2021, Germany’s Constitutional Court ruled in favour of key parts of a constitutional complaint regarding the Climate Protection Law that had been submitted by a group of young people. The individual stakeholders have to greatly trust one another if we are to achieve the necessary reductions. However, the most important thing is to get people to want the transformation. “This will create a competitive situation within society where people will try out new things and lose their fear of change. When that happens, transformation can occur faster than expected. Although it might be inconvenient at first, if I can no longer enter the city centre with my combustion engine car. However, after a while I find it normal to take a tram into town, especially when I’m familiar with the connections and start to enjoy the benefits of car-free city centres.”

Resolving the supposed contradictions between capital and climate protection

Not doing or buying something can be “incredibly liberating” says Kreibiehl, who has an integrated master’s degree in business administration. She herself has already decided to make a big change in her life: at the age of 30, she was a successful investment banker for corporate finance and sustainability at Deutsche Bank, where she earned a six-figure salary. Although she benefitted from a steep learning curve and exciting projects, she nevertheless decided to contribute her skills elsewhere in society. In 2007, she therefore applied at Deutscher Entwicklungsdienst (German development service) to supervise a microloan project in Uganda. However, her supervisors at the bank wanted to keep her. She then decided to spend a six-month sabbatical at a Ugandan village near the border to Congo. Here, she lived under very basic conditions. Although it might seem to have been a complete turnabout, it was rather a “getting back to the roots”, Kreibiehl says in retrospect. That’s because she originally wanted to study tropical agricultural economics and then work in cooperative development aid.

As an investment banker, she gave solar power companies access to the stock exchange. “Back then, you still had to explain to investors what a feed-in tariff is.” As Chairwoman of the Board of Germanwatch, she now knows that capital and climate protection have to go hand in hand. “You won’t be able to achieve a transformation if you don’t finance companies,” she says. “Moreover, the transformation will not succeed without a capital market. I think we have to stop emphasising supposed contradictions.”

For Kreibiehl as the mother of a three-year-old daughter this is also about a socio-ecological transformation in terms of global justice. “It will make you want to enjoy nature. Experiencing more extreme weather phenomena won’t be enjoyable, however. Even city life will be different, but more pleasant. Once we have more global justice, I won’t have to always think whether the things I buy might cause someone to suffer,” she says. Many countries need technology transfers, capacity increases and much more besides. “However, we also have to address the causes of existing wealth gaps, for example in trade agreements.”

Climate change (Photo)
Extreme weather events such as heat waves, cold snaps or heavy rainfall are increasing due to climate change.

EU taxonomy increases the awareness of investors and financial market players

The first part of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, published in summer 2021, clearly describes the regional effects of climate change and what these mean, among other things, for the economy and its supply chains. According to Kreibiehl, one of the major achievements of Germanwatch in 2021 was Germany’s Due Diligence Act (Sorgfaltspflichtengesetz), which is also known as the Supply Chain Act (Lieferkettengesetz). Kreibiehl says: “This is a paradigm shift from voluntary to mandatory measures when it comes to respect for human rights in global supply chains. Companies are already taking this topic much more seriously than before.”

The Human Rights Respect System initiated by the Mercedes-Benz Group, which aims to ensure respect for human rights throughout the supply chain, is “exactly what we need” as a risk-based approach, she says. A company must begin to take action where it sees the biggest human rights risks in its own business activities. This is also the approach taken by the Supply Chain Act. Kreibiehl says: “The focus really has to be on the people in the affected areas. It’s important that the risks do not depend on whether they are direct supplies or those further down the supply chain.”

“A taxonomy that defines the sustainability of investments can have a huge pull effect,” she adds. “More and more investors will take sustainability risks into account.” Kreibiehl then expects asset managers to come under pressure to take ESG criteria not only as a reporting tool but also as a steering instrument. According to Kreibiehl, the taxonomy will help sharpen the focus and become more transparent and concrete. After all, by no means all investors would already realise yet how extensively and quickly companies need to realign. She further points out that the taxonomy requires vehicles to be emission-free from 2026 in order to be considered sustainable. This would be an important, even if insufficient, component for the transformation of mobility. Not only the climate taxonomy but also the social taxonomy would be important in the future.

Luxury sedans as early movers for sustainable innovations

According to Silvie Kreibiehl, the mobility sector will also have to reduce its demand for raw materials if the transformation to a sustainable, CO2 neutral economy is to be a success. “Unfortunately, many technologies — especially those in the energy sector — have a high consumption of metallic and mineral raw materials. That’s why the circular economy targets are so important for the energy sector and a reduction in raw material consumption is so fundamental”, says Kreibiehl. “If a luxury saloon is manufactured from recycled materials, it becomes an early mover for innovations that will later be launched on the mass market. However, such a car must not become a fig leaf for much more far-reaching changes in lifestyle and consumer behaviour.”

In this context, Kreibiehl also finds a different pricing policy intriguing: “It would be interesting to consider whether the environmental impact should be incorporated into the production costs of the various models as a sort of shadow price. In the end, the more sustainable vehicle would be somewhat cross-subsidised by the other vehicle, but the price signal will be more appropriate.”

1 Germanwatch: This German non-governmental organisation (NGO) works for global equity and the preservation of livelihoods. In addition, it contributes to national and international climate-protection policies. Other core topics include corporate responsibility and education for sustainable development as well as global nutrition, land use and trade. It is considered one of the leading NGOs in the automotive dialogue.

Silvie Kreibiehl

has been Chairwoman of the Board of the German NGO Germanwatch since 2019. She holds a diploma in business administration, is an expert in climate finance and is the coordinating lead author of the Financing chapter of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).

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