23 % Asia 24 % Asia 8 % Americas 8 % Americas 69 % Europe 68 % Europe 72 % local 73 % local 28 % non-local 27 % non-local 20 % Asia 8 % Americas 72 % Europe 72 % local 28 % non-local Regional distribution of the direct and indirect purchasing volume of the Festo Group. 2022 €1.792 bn 2022 €1.792 bn 2023 €1.558 bn 2023 €1.558 bn 2024 €1.527 bn 2024 €1.527 bn Festo is constantly expanding its global supplier network, which consists of local and non-local suppliers. By “local” we mean procurement within the region of the respective national subsidiary. Compared to the previous year, the number of local suppliers rose slightly in 2024. The “local-for-local” strategy was also continued in 2024 in order to facilitate positive changes like shorter delivery times throughout the entire supply chain and shorter transport routes. Efforts continue to be made to procure more goods from those countries and regions in which production takes place. The diagrams below show the regional distribution of the direct and indirect purchasing volume of the Festo Group, and the proportion of local and non-local suppliers. We also participate in the sustainability ratings of EcoVadis, NQC Supplier Assurance, and Integrity Next with the aim of having our sustainability performance independently assessed. Their rating platforms allow you to ask a question about the assessment of Festo SE & Co. KG. Regional distribution of purchasing volume Festo’s direct and indirect purchasing volume (production materials and non-production materials) continued to fall back slightly from 1.558 billion euros (2023) to 1.527 billion euros (2024). This is partly due to the economic situation. The non-production materials relate to all production sites (Festo Global Production Center, GPCs for short) as well as the distribution companies. The production materials cover all production sites. Reducing risks by means of preventive measures Alongside updating the declaration of principles and operation of the complaint procedure, we concentrated on preventive measures derived from the risk analysis in the reporting year. Raising the awareness of our employees was continued in order to increase the profile of our complaint mechanism across the company. We integrated the legal regulations of the LkSG that are relevant to environmental concerns in our ISO 14001 environmental management system and launched a training and communication campaign on LkSG. We informed skilled workers and managers in all purchasing units of the Festo Group about the applicable due-diligence guidelines and the new regulations in the pipeline. At the same time, we continued the basic LkSG training sessions from previous years. Focus on the construction industry Our risk analysis identified specific human-rights and environmental risks in relation to construction projects commissioned by us across the world. Over the course of the reporting year, we therefore amended our contracts with the specialist trades working for us on international construction sites in order to address specific shortcomings, such as occupational health and safety, and environmental protection. We also amended our own Code of Conduct in 2024 to take account of the risk assessment. The aim was to increase the awareness for human rights in our supply chain among our employees and alert them to dealing transparently with violations. Ensuring independent effectiveness monitoring In 2024, we carried out an audit with the group auditing department. The aim was to review implementation of the due diligence obligations pursuant to the LkSG in order to assess the effectiveness of operational risk management. The mission of the group auditing department is to carry out independent and objective audits. The objective is to continuously improve the effectiveness of operational risk management, internal controls, and the management and monitoring processes. The findings of the audit revealed that the Festo Group complies with its due diligence obligations pursuant to LkSG. Upholding Human Rights In 2024, we purchased around 55,000 different products from some 2,200 direct suppliers. We require our suppliers to comply with social and environmental standards. Festo is committed to the values of the United Nations Charter of Human Rights. The same dedication is expected from our business partners. Commitment by business partners All suppliers must provide written confirmation that they comply with our Code of Conduct for business partners. Signing this document also commits them to require compliance from the suppliers they source products and services from. The Code of Conduct for business partners is continuously updated with additional requirements that apply to all existing suppliers. Furthermore, all new suppliers are evaluated and reviewed with respect to environmental and social standards in the context of the supplier qualification process. Suppliers identified as posing a risk of violations will not be approved in the qualification process. We also analyze whether our existing suppliers may deviate from our standards, classify them according to this risk and regularly review the extent to which they comply with the requirements. Supplier evaluation based on environmental certifications All our suppliers are subject to structured evaluation processes aligned with a range of objectives for environmental and climate protection. We distinguish here between suppliers with higher environmental impacts and those with average impacts. If suppliers’ manufacturing processes are associated with a higher level of environmental impacts, for example industry-specific use of chemicals, we require certification in conformity with ISO 14001 or validation in accordance with the “EcoManagement and Audit Scheme” (EMAS). We draw on appropriate certification from the actual manufacturer for evaluation of distributors. Certification in conformity with ISO 14001 or EMAS is optional for suppliers with average environmental impacts. Festo SE & Co. KG Sustainability Report 2024 Festo SE & Co. KG Sustainability Report 2024 2. Social 50 51
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