SUSTAINABILITY

Guideline of sustainability of ZD Automotive GmbH and its suppliers

Version 2018

Sustainability is a long-term strategic factor for success not only for ZD Automotive GmbH, but also for suppliers. With this sustainability guideline for the suppliers of ZD Automotive GmbH sustainable management is actively demanded.
The purpose of this sustainability guideline is therefore to establish a common standard of performance, education and engagement for responsible business operations.
The sustainability for ZD Automotive GmbH and its suppliers formulates standards and define the requirement for our suppliers:
- compliance with internationally recognized human and labor rights,
- avoidance of child labor and forced labor,
- compliance legal standards and environmental guidelines as well as precautionary environmental protection,
- compliance and promotion of ethical business conduct.
We also expect that our direct suppliers ensure the compliance with this guideline by their subcontractors and suppliers. They are encouraged to share the contents of this guideline with all stakeholders in their supply chain and to promote their compliance actively.

Content:
I.Work condition/ Staff
II.Environmental standards
III.Business-Ethic
IV.Information/Communication


I.Working conditions/ Staff
1. Avoidance of child labor
Child labor must not be used in any phase of production and trade.Companies are encouraged to adhere to the recommendation of ILO-conventions on the minimum age for the employment or the work of children. This minimum age should not be lower than the age at which the compulsory education ends, and in any case not less than 15 years old. However, a lower age is allowed in those countries where economy and training institution are less well developed. Here the minimum age is 14 years old. For light work the minimum age apply for 13 years old. For dangerous work the age must beyond 18 years old.
2. Wages and social benefits, working hours
Compensation and social benefits must comply with the basic principles of minimum wages, overtime and statutory social benefits. The working work must at least comply with the applicable laws, industry standards or the relevant ILO-convention, whichever is stricter.Overtime should only be provided on a voluntary basis, and employees should be given at least one day off after six consecutive working days.
3. Free choice of employment
Forced or compulsory labor is not allowed. The employees must have the freedom to terminate the employment relationship within a reasonable time. Employees may not be required to hand over their ID card, passport or work permit as the precondition for the employment.
4. Freedom of association
Employees must be able to openly communicate with the management about the working conditions without fear of reprisals, in any kind of form.
5. Health and safety
The employer ensures occupational safety and health at workplace at least within the framework of national regulations and supports continuous development to improve the working environment.
6. Prohibition of disciplinary penalty
ZD Automotive GmbH requires its suppliers not to punish employees in any physical or physiological form. This applies especially when employees report company practices that violate national, international or internal regulations.

II.Environmental standards
1. Environmental responsibility
Companies must adopt precautionary principle of environmental problems, take initiative to promote greater environmental responsibility and promote the development and distribution of environmentally friendly technologies.
2. Environmentally friendly production
Optimal environmental protection must be guaranteed during all phase of production. This includes a proactive approach to avoid or minimise the consequences of accidents which can have negative impacts on the environment. Of particular importance is the application and further development of energy- and water-saving technology characterised by the use of strategies for emission reduction, reuse and reprocessing.
3. Environmentally friendly products
All the products manufactured along the supply chain must meet the environmental standards of their respective market segment. This includes all material used in the production. Chemical and other substances that pose a threat when released into environment must be identified. For them, a hazardous substance management must be set up so that they can be handled, transported, stored, reprocessed or reused and disposed through appropriate approach.
4. Responsible raw material procurement
The suppliers of ZD Automotive GmbH support activities which ensure responsible raw material procurement. Procurement and the use of raw material obtained illegally or through ethic reprehensible or unreasonable approach must be avoided. The use of raw materials for example conflict minerals affected by embargoes or other import restrictions are excluded. Therefore, the suppliers are obliged to identify these material in manufactured products in the supply chain and to disclose origin and sources of supply of used raw materials.

III.Business-ethic
1. Anti-corruption
A highest level of integrity is expected in all business activities and relationships. Any form of corruption, bribery, extortion and embezzlement is strictly prohibited.
2. Non- discrimination
Discrimination against employees in any form is prohibited. This applies for discrimination based on gender, race, caste, skin color, disability, trade union membership, political beliefs, origin, religion, age, pregnancy and sexual orientation.
3. Safety and quality
All products and service must meet the contractually defined quality- and safety criteria upon delivery and must be able to be used safely for their intended purpose.
4. Management system
ZD Automotive GmbH expects its suppliers to maintain management system to ensure compliance with principles set out in this sustainability guideline. ZD Automotive GmbH prefers supplies who actively implement a management system according to ISO TS 16949, an environmental management system according to ISO 14001 as well as OHSAS 18001 for occupational safely or equivalent systems.
5. Fair competition
ZD Automotive GmbH expects its suppliers to comply with the international and national laws to maintain fair competition. This include the provisions on unfair competition and antitrust laws. Collusion with competitors to fix prices, sales conditions, quantity restrictions, area allocations, or offers for public tenders etc. are strictly prohibited.

IV.Information /communication
1. Information for business partner/ employees
This guideline must be translated to the local language and must be on display in the company facilities and in the facilities of its business partners or be available through other means.
2. Electronic form
In addition, the content of this guideline is available on our website:
(http://www.zd-automotive.cn/Richtlinie.html)
3. Monitoring and obligation to provide proof
Upon request, supplier must provide all necessary information for an initial assessment correctly and comprehensively in the context of a self-assessment. It should also provide other information to demonstrate the compliance with the sustainability guideline. ZD Automotive has the right to control the implementation of this codex and to check it on the basis of supplier audits. The supplier must inform ZD Automotive without being asked about events that conflict with the principles of guideline for sustainability.

ZD Automotive GmbH

Ingolstadt, 2018