Daimler : Summary Daimler Sustainability Report 2019

BRIEF OVERVIEW

SPUR

Sustainability report 2019

WECHSEL

OUR STRATEGY

OUR STRATEGY FOR THE FUTURESPURWECHSEL - WE ARE CHANGING LANES

We firmly believe that individual mobility will likely be a basic human need in the coming decade as well. Demand for goods transport services re-mains a key pillar of the economy and our pros-perity, and this demand can be expected to in-crease even further around the globe for years to come. The markets for financial services and the demand for fleet management services and digital mobility solutions are also likely to develop posi-tively in the future. We are committed to the prin-ciples of sustainability and in particular of climate protection, and are therefore setting our course for CO2-neutral mobility.

The basis of our strategy is our purpose - the spirit and purpose that guide all of our decisions and actions. What is our DNA, what makes us who we are, why are we as a company active in the market? We have answered these questions for all of our divisions. Mercedes-Benz Cars' motto is "First Move the World." Daimler Trucks & Buses is there "For All Who Keep the World Moving," and Daimler Mobility makes it clear that "We Move You." Daimler itself is the connecting element that holds these businesses together, as symbolized by the word "move." For us this means striving to achieve more than just the obvious - and to go beyond our immediate concerns, with regard to sustainability as well.

Our customers want to use our vehicles without generating any negative consequences for the climate, environment or society. Our employees want future-proof jobs in a company that is recognized as acting with overall responsibility. Our investors and shareholders demand more commitment in sustainability matters with respect to their investment decisions. Legislation is in-creasingly formulating specifications for the econ-omy. And politics and society rightly expect from us concrete contributions, for instance towards climate protection and respecting human rights. Only through a sustainable transformation of our company will we meet these requirements. We call this sustainable transformation "SpurWechsel" (German for "lane change"). The aim of our "SpurWechsel": To create a new Daimler for a new era. Sustainably exciting, sustainably climate-neutral and sustainably profitable.

Our strategy is helping us lay the groundwork for climate-neutral and sustainable mobility. The key to achieving this goal is innovation within the framework of a holistic approach along the entire value chain.

Ola Källenius

Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG

SUSTAINABLE BUSINESS STRATEGY

Sustainability at Daimler

For us, sustainability means permanently creating value for all stakeholder groups: for custom-ers, employees, and investors as well as for our business partners and society as a whole. Eco-nomic, environmental, and social responsibility go hand in hand - along the entire value chain.

In order to achieve long-term success, we need to live up to this responsibility. What does this mean in a world that is changing faster today than ever before? Climate change, demographic trends, digitalization - in order to safeguard and expand our leading position under these condi-tions, we must also change ourselves. Of course we also take this into account in our business strategy. It's important to note that we don't have a "sustainability strategy" as such. Instead, we have "sustainable business strategies" - for each one of our business divisions. Thus we empha-size the fact that sustainability issues don't simply supplement our business strategies - they are integral components of these business strategies. Doing sustainable business or being out of business - those are the alternatives. Consequently, sustainable business strategies are a must for our company.

6 plus 3 - our sustainability themes

To be specific, we have defined nine sustainability topics: six areas of action and three so-called enablers. You could also call these basic principles or factors for success.

Our six areas of action:

The Sustainable Development Goals of the United Nations and the ten principles contained in the UN Global Compact serve as guidelines for our six areas of action. We have a particularly close connection to the UN Global Compact, as one of its founding members.

Our three enablers:

Three basic principles, which together form the basis for our success, are critical to the achieve-ment of our goals in the areas of action:

We want to make an effective contribution to sustainable development with our six areas of action and three enablers. In order to ensure that our sustainability activities have a substantive effect, we must examine them on a regular basis and adapt them to current developments. We have therefore developed a clear ambition, a set of goals and a series of milestones for each of these areas of action and enablers.

CLIMATE PROTECTION & AIR QUALITY

On the road to CO2-neutral mobility

An emission-free mobility - this vision shows our commitment to climate protection and keeping the air clean. Our ambition: Our fleet of new vehicles should be CO2 neutral by 2039 and have no relevant effects on air quality in inner cities. We have a holistic view of climate protection here: Our goal encompasses all value added stages of the automobile - from development and extraction of raw materials and production, to the use phase and recy-cling of the vehicles. For us the Paris Climate Agreement is more than an obligation - it is a conviction.

CO2-neutrality at Mercedes-Benz Cars

AMBITION 2039

We aim to have a carbon-neutral2030new passenger car fleet by

By 2030 we want to achieve2025more than 50 percent of our

2039

By 2025, depending on the framework conditions, we are2022striving for a sales share of upBy 2022 we want to offer several electrified variants in all segments of Mercedes-Benz Cars.

to 25 percent for all-electric vehicles.

passenger car sales with plug-in hybrids or all-electric vehicles.

2039.

Mercedes-Benz is absolutely convinced: We must use every means possible to reduce emissions rapidly and sustainably. We are developing new and increasingly more efficient drive technologies and are putting them on the road. Our road towards emission-free mobility encompasses a systematic model initiative with the focus on plug-in hybrids and purely battery-electric vehicles.

EQC: Stromverbrauch kombiniert: 20,8-19,7 kWh/100 km; CO2-Emissionen kombiniert: 0 g/km; siehe Anhang zu Labeling

Daimler Trucks & Buses:

Making CO2-neutral transport a reality

2nd half 2020s

Hydrogen-based series-production vehicles in the second half of the decade.

2022

Battery-electric series-production vehicles in all core regions by 2022.

As one of the biggest commercial vehicle manufacturers we have systematically set ourselves the task of working on elec-tric mobility for trucks. With our electric city buses and a full range of consultancy on all aspects of the "e-bus" we already currently make a considerable contribution towards locally emission-free local public transport and keeping the air clean in cities. Alongside the battery we are also concentrating on the fuel cell - both technologies complement one another per-fectly. With the new subsidiary Daimler Truck Fuel Cell GmbH & Co. KG and the planned joint venture with the Volvo Group we are therefore working on the series production of fuel cells.

2039

CO2-neutral driving operation (tank-to-wheel) by 2039 for new trucks and buses in the markets of Europe, Japan, and North America.

* Tank-to-Wheel

Daimler Mobility and Mercedes-Benz Bank: CO2-neutral locations and administration

2022

Global CO2-neutral

locations and administration.

2020

Sustainability: embedded in our corporate values.

Sustainability is part of the corporate values which we live every day. As a finance and mobility service provider, globally approx. 96 percent* of our CO2 emissions are caused by electrical consumption in our offices. Our ambition is to neutralize our CO2 footprint globally at our sites and in administration by the end of 2022. The biggest lever for this will be the use of green energy, as well as the systematic inclusion of our employees in developing a Green Office.

*At the present time, we have measured only the CO2 emissions produced in our offices. Other potential sources, such as business travels and canteen meals, are not included.

OUTLOOK

In our central sustainability management, adherence to the strategic climate goals will be continually monitored and tracked. In this way we want to ensure that we achieve the goals we have set ourselves within the prescribed period.

More information:

Our future is electric:

https://www.daimler.com/sustainability/ climate/electric-offensive.html

More on the topic of climate protec-tion & air quality in the sustainability report 2019:

https://sustainabilityreport.daimler.

com/2019/reporting/climate-protecti-on-air-quality.html

On the road to CO2-neutral production

20222039

CO2-neutral production in all our Mercedes-Benz Cars and Vans plants worldwide by 2022.

We aim to have CO2-neutral production in all our plants and all business units worldwide.

CO2-neutral production in our European Daimler Trucks &

Buses plants by 2022.

Production is another important step along the road to CO2-neutrality. From as early as 2022, all of our own Mercedes-Benz Cars and Vans plants worldwide will produce on a CO2-neutral basis in accordance with the goals of Ambition2039.

In order to achieve these targets, the emissions generated by Mercedes-Benz vehicle production and the plants' energy supply shall be eliminated entirely wherever possible, or consistently reduced. With respect to the reduction, Mercedes-Benz Cars & Vans has set itself the target of reducing absolute CO2emissions by 50 percent in relation to 2018 by the year 2030.

This target has been scientifically confirmed by the Science Based Targets initiative. The remainder of the emissions will be offset accordingly. CO2-neutral production is also being promoted at Daimler Truck AG. The first step will involve making the Daimler Trucks & Bus production plants CO2-neutral from 2022. From 2020 on, our battery production will also be CO2-neutral worldwide.

More information:

Our new plants: Flexible, digital, efficient and sustainable:

https://www.daimler.com/innovation/ digitalisation/industry-4-0/opening-factory-56.html

RESOURCE CONSERVATION

Preserve resources, recycle, recover

Whilst the global demand for mobility is increasing, the availability of resources is decreasing. It is therefore our aim to make a value cycle from the value chain and to consider the value of the raw materials and products used. We assume responsibility on the product and production side: In order to increasingly decouple resource consumption per vehicle from sales growth, we want to close the cycle of materials, for example, make our processes more efficient and increase the proportion of recyclates. Across all business units and regions we also want to increase transparency via the use of secondary raw materials in our products. This applies in particular to materials which we require in large quantities, such as steel, aluminum and polymers, and to essential raw materials which are used in batteries.

Our targets until 2030

Proportion of secondary

Energy consumption	Water consumption	Waste for disposal	raw materials
per vehicle*	per vehicle*	per vehicle*	per vehicle**
Passenger cars	Passenger cars	Passenger cars	Passenger cars
-43 %	-33 %	-43 %
40 %
Status as of 2019: - 10 %	Status as of 2019: - 7 %	Status as of 2019: - 25 %
Vans	Vans	Vans
-25 %	-28 %	-33 %
Status as of 2019: - 7 %	Status as of 2019: - 12 %	Status as of 2019: - 31 %***

* In production, as compared to the average for 2013/2014 ** On average for the Mercedes-Benz passenger car fleet without smart and Vans *** The reduction was 23 percent if a reclassification of waste for disposal (according to Daimler Group environmental guidelines) at one international location in 2017 is deducted. Accordingly the target for 2030 is currently being ree-valuated and adjusted, if necessary.

OUTLOOK

In the long term we want to transform our entire value chain into a closed loop to the greatest extent possible. To this end we want, for example, to feed our waste back into the material cycle again. At the end of the life cycle of a battery, too, the materials used represent a high value. The recycling and reuse of these materials are the focus of current and future strategic activities. It is important and necessary for us here to involve our suppliers in our work to an even greater extent - for example through dialogs and qualification measures. In addition we are involved in various initiatives to ensure that key commodities industries reduce their consumption of resources.

More information:

Value preservation for another life

- Remanufacturing

https://www.daimler.com/sustainability/ closeup/remanufacturing.html

Second chance for vehicle batteries

https://www.daimler.com/sustainability/ battery-life-cycle/

More on the topic of resource conservation in the sustainability report 2019:

https://sustainabilityreport.daimler.com/ 2019/reporting/resource-conservation/ resource-efficient-vehicles.html

LIVABLE CITIES

LIVABLE CITIES

For more quality of life in the city

Worldwide, people are increasingly moving into cities. This has consequences for the level of traf-fic and the quality of life in the city. A clever mobility mix, the reduction of emissions in the urban area and the further extension of electric mobility are therefore more important than ever before. At Daimler we have the vision of contributing towards livable cities with sustainable mobility and transportation solutions. We already contribute towards improving the traffic situation in cities with our products and services. We want to further extend this contribution. Therefore we are developing new mobility solutions and supporting the introduction and further development of existing products which contribute towards safe, clean and efficient transportation in urban areas.

More information:

Electric city buses and trucks

https://www.daimler-truck.com/

innovation-sustainability/efficient-

emission-free

Digital solutions for more efficient logistics

https://www.daimler-truck.com/

innovation-sustainability/reliable-

connected/

More on the topic of

livable cities in the sustainability

report 2019:

https://sustainabilityreport.daimler.

com/2019/strategy/livable-cities.html

smart EQ fortwo: Electric power consumption combined: 15.7-13.9 kWh/100 km; CO2 emissions combined: 0 g/km

TRAFFIC SAFETY

TRAFFIC SAFETY

Priority for increased safety

"Accident-free driving": This is our ambitious vision for the future of mobility. It drives us forward - for every accident is one too many. On the road to automated driving we are further developing the driving assistance systems with the aim of also being able to continue reducing the number of road traffic accidents in future. Our innovations already enable us, for example, to support the driver on numerous types of road through driving assistance systems or to relieve the burden on them when changing lane on multi-lane roads, to drive into and out of tight parking spaces via automated driving whilst being monitored by the driver and to reduce the dangers of collision in ever more situations. In so doing we always also take into account legal, social and ethical aspects. Safety is and remains a fundamental component of our DNA.

More information:

Innovation with safety

https://www.youtube.com/ watch?v=wStfH_4kK_4

Preventing accidents with ABA5

https:/www.daimler.com/sustainability/ safety/mercedes-benz-trucks-drives-forward-truck-safety.html

More on the topic of traffic safety in the sustainability report 2019:

https://sustainabilityreport.daimler. com/2019/reporting/traffic-safety/ assistance-systems.html

DATA RESPONSIBILITY

DATA RESPONSIBILITY

Weitere Informationen:

How Daimler Uses Artificial Intelligence

https://www.daimler.com/sustainability/

data/ki-guidelines.html

More on the topic of data responsibility in the sustainability report 2019:

https://sustainabilityreport.daimler.

com/2019/reporting/data-responsibility.

html

Shaping the mobility of the future with data

With progressing digitization the correct handling of data is becoming an ever more import-ant factor for success. We want to improve our customers' satisfaction continually by offe-ring them products and services which meet their requirements and expectations. In order to determine these and take them into account in the further development of our vehicles and services, we need the trust of our customers in our responsible handling of their data. It is essential to guarantee the security of their data and to protect their privacy. This trust is also key, especially for the acceptance of new technologies. The use of data is also relevant to us elsewhere: Networked production ensures more efficient processes. Digital product planning preserves resources. One thing is clear: Networking, digitization and the ability to process large quantities of data are of ever increasing importance for us.

HUMAN RIGHTS

HUMAN RIGHTS

Respecting and protecting human rights

Public interest in the issue of human rights in the car industry is increasing. The reason for this are in particular new challenges which the extension of electric mobility brings with it. For there is the risk that the commodities required for this are potentially mined in conditions which are critical in terms of human rights. Our aim is to ensure that human rights are respected in our own units, as well as by our partners and suppliers. From the mine from which the commodities are extracted, and process-ing operations through to our own production and from there to sales and ultimately to the customer. Daimler has therefore developed a systematic approach to ensure respect for human rights - the Human Rights Respect System. Our goal is very clear: We only want products which are produced without any violations of human rights. We commit to principles such as the UN core principles for business and human rights as well as the national action plan for business and human rights of the

German Federal Government.

Our targets

> 2021

> 2025

> 2028

100 %

70 %

100 %

Our objective with regard to our service supply chain is to complete our evaluations of new and existing suppliers by 2021.

Our objective is to review 70 percent of all high-risk production raw materials and define any necessary measures for these by 2025.

Our objective for 2028 is to define measures for addressing 100 percent of our production raw materials that harbor a higher risk of human rights violations.

More information:

Systematically addressing human rights

https://www.daimler.com/sustainability/ human-rights/human-rights-worldwide. html

Promoting sustainability throughout the automotive industry

https://sustainabilityreport.daimler.com/ 2019/reporting/sustainable-corporate-governance.html#engagement

More on the topic of human rights in the sustainability report 2019

https://sustainabilityreport.daimler.com/ 2019/reporting/human-rights.html

ENABLER

ENABLER

Exploit sustainability potential. As a global car manufacturer Daimler is currently shaping the biggest change since the invention of the motor car. The objective here is clear: Daimler wants to remain a leading vehicle manufacturer while simulta-neously evolving into a leading sustainable mobility provider. Daimler has set off on this road with sustainable business strategies. Three factors form the joint basis for successful implementation here:

Live integrity in everyday corporate life.

"Integrity means doing the right thing by living our values. Integrity is of central importance to us at Daimler and shapes our self-image. Our Integrity Code lays down exactly what we understand by this and how we want to live it in everyday life. In partic-ular in times of transformation, integrity plays a cen-tral role. By ensuring that our actions correspond to our words we can reduce uncertainty and strengthen trust."

People at Daimler:

Key to sustainable success.

The success of our company is highly dependent on the commitment and ability of our employees. Our objective is to equip them for the challenges of a digital world. Openness for the digital transformation and digital competences are the basis for this, as is a diverse and inclusive corporate culture.

Strong partnerships.

The challenges of the present can only be solved together. We want to support and help shape the political and public opinion-forming process as a trustworthy partner. It is important to us that we clearly represent the interests of our company and develop joint solutions.

More information:

More on the topic of integrity in the sustainability report 2019:

https://sustainabilityreport.daimler. com/2019/reporting/integrity/integri-ty-in-practice-strengthening-trust.html

More on the topic of people in the sustainability report 2019:

https://sustainabilityreport.daimler. com/2019/reporting/people/ digital-transformation.html

More on the topic of partnerships in the sustainability report 2019

https://sustainabilityreport.daimler. com/2019/reporting/partnerships.html

Sustainably manage the Group

In accordance with our sustainable business strategy we pursue our objectives in the six fields of action and initiate a continuous improvement process. Our management and organization struc-tures support this process through clear responsibilities in each of our business units. Our central management committee for sustainability is the Group Sustainability Board (GSB), which reports to the Board of Management of Daimler AG. The GSB Chair is held by the Board of Management Members Renata Jungo Brüngger, responsible for the Integrity and Legal Division, and Markus Schäfer, responsible for Group Research & Mercedes-Benz Cars Chief Operating Officer. The operative work is carried out by the Sustainability Competence Office (SCO), which is made up of representatives from the units of both Co-Chairs.

CONTACT

CONTACT

If you have any questions, please don't hesitate to contact us:

Website investor relations

https://www.daimler.com/investors/

Investor relations contacts

https://www.daimler.com/investors/services/contact/

Website sustainability

https://www.daimler.com/sustainability/

Contact form for sustainability topics

https://www.daimler.com/sustainability/contact/

Sustainability newsletter

https://www.daimler.com/sustainability/newsletter.html