Sustainability
Designing Sustainable Supply Chains
Beyond costs, time, and quality, sustainability and resilience are becoming crucial factors in supply chain management. Disruptive changes like climate change and electrification in the automotive sector are creating a more volatile business environment. We address this with a clear strategy for an integrated, resilient, and sustainable value chain.
Our current and future suppliers must demonstrate their commitment to sustainability standards, which are assessed and made mandatory, ensuring our climate journey begins at the very start.
Corporate Sustainability Bid Conditions
ZF has implemented bid conditions in the sourcing process. The revised Corporate Sustainability Bid Conditions establish sustainability requirements for the supply chain. The updated content includes criteria related to climate, nature, and social responsibility.
Sustainability Score
To evaluate a supplier's sustainability performance, we have introduced a Sustainability Score. This score is calculated using three key input KPIs: Green Electricity share for 2025 (GE 2025), NQC self-assessment questionnaire results (NQC), and Business Partner Code of Conduct acceptance (BPCoC). The SUS Score is utilized in both the sourcing and New Supplier Approval processes.
NQC Self-Assessment Questionnaire (SAQ)
Given the heightened focus and growing demands for sustainability from customers, legislation, and stakeholders, we believe that a collaborative approach within the sector will better mitigate and prevent sustainability risks. This approach offers benefits such as improved comparability, higher acceptance, increased transparency, and reduced effort for our suppliers.
Social Standards and Responsible Sourcing
To uphold Human Rights within Materials Management, we implement a multi-stage due diligence process that solidifies our commitment to the supplier network. This process is integrated into the ZF Code of Conduct and sourcing procedures, fulfilling legal requirements.
Business Partner Code of Conduct
All new and existing suppliers are required to adhere to the ZF LIFETEC Business Partner Code of Conduct. They represent the key values that are indispensable for us. More precisely, these principles contain guidelines specifying fundamental requirements for collaboration with our business partners.
The Code of Conduct addresses topics such as human rights, labor standards, occupational health and safety, environmental protection, business ethics, compliance, and Sustainability in the Supply Chain.
Human Rights Due Diligence
Numerous countries, such as the United States, Canada, Mexico, and Germany, have enacted laws to enhance human rights and environmental protection within global supply chains.
These laws require companies to uphold human rights by adhering to specific due diligence obligations. These obligations extend to the company's own operations, the activities of their direct partners, and those of indirect suppliers. Consequently, a company's responsibility now spans beyond its own premises, covering the entire supply chain.
Responsible Supply Chain Initiative
A crucial aspect of meeting corporate due diligence and legal requirements involves tools that enable the assessment of working conditions. To support this, ZF has joined the Responsible Supply Chain Initiative (RSCI), which promotes sustainable supply chains in the automotive industry.
Critical Raw Metals
We strive to maintain a responsible and resilient supply chain for Critical Raw Materials (CRM), as outlined in the Material Change Report by Drive Sustainability. CRM are raw materials of significant economic importance that carry high supply risks, including environmental and social concerns. We prioritize transparency, traceability, and circularity of raw materials to prevent and mitigate ESG risks associated with their extraction and processing. This commitment is reflected in our raw material sourcing standards, which are included in contractual agreements with suppliers. Our expectations for suppliers include mandatory reporting of tin, tungsten, tantalum, and gold (3TG) smelters and refiners through the Conflict Minerals Reporting Template (CMRT), mandatory reporting of cobalt and mica smelters through the Extended Minerals Reporting Template (EMRT), and meeting circularity targets related to the proportion of recycled raw material content.
Environmental Responsibility
Our Sustainability strategy reflects climate change legislation and global initiatives striving for a carbon-neutral future. We have established a climate neutrality target for 2040 across all three carbon scopes.
To achieve this ambitious goal, we are working towards interim targets for 2030, including an 80% reduction in carbon emissions for Scope 1 and 2, and a 40% reduction per sales in the value chain. Our decarbonization targets are aligned with our commitments to Social Responsibility and Responsible Sourcing.
Green Electricity
The ZF Sustainability Strategy sets ambitious decarbonization targets, aiming for climate neutrality across all three scopes by 2040.
Among the various decarbonization initiatives, Green Electricity is a key lever and has become a mandatory requirement in the sourcing process. It is included in bid conditions and assessed in the SUS Score as a critical criterion.
The ZF Supplier Guide on Green Electricity is available here
Product Carbon Footprint
Product Carbon Footprint (PCF) is a mandatory requirement for procurement cases involving high volumes of production material.
To improve PCF consistency and transparency at the part and component level across all tiers, the 'ZF PCF Calculation Method Supply Chain' will be replaced by the Catena X PCF Rulebook (V.3). This will enable ZF suppliers to use a standardized method for PCF calculation that is scalable across the entire supply chain.
The Catena X Rulebook, similar to the ZF Calculation Method:
- covers 'cradle to gate' emissions,
- prioritizes primary data over secondary data,
- is based on ISO 14067.
