Sustainability

Letter to stakeholders

As you drive along China’s vast, state-of-the-art roads and motorways, you’ll notice something: the number plates on the vehicles will be either green or blue; green for electric cars and blue for those with internal combustion engines. Well, it’s quite clear that those “eco-friendly” ones are now in the clear majority. China, therefore, is pushing hard in that direction.

What is happening in other parts of the world, though?

In some regions, the transition to zero-emission cars began with the introduction of very strict (perhaps overly strict) regulations, and there is currently a heated debate over whether these rules should be relaxed and their implementation timeline extended in order to stem the historic crisis in the automotive industry (but are we sure this approach makes sense?).

In other areas, however, the ecological transition (and not only that) is “driven” more by ideological considerations, as well as very short-term economic interests, rather than by a debate grounded in science and technology.

Elsewhere, on the other hand, it is necessary to tackle broader environmental and structural issues that go far beyond the question of whether or not to adopt electric cars, and so the issue is not a priority.

It is clear, in all likelihood, that as a result, China will assume absolute leadership in new propulsion technologies. This will have a major global impact, given that within a few decades most cars will be electric and Chinese companies will therefore inevitably be the key players in the market. 

Incidentally, for the benefit of those who argue that electric cars are not the most environmentally friendly solution, this technology currently has a carbon footprint that is at least 50% lower than that of internal combustion engines (the initial environmental impact of manufacturing these vehicles is, in fact, offset in less than 35,000 km of zero-emission driving).  ¹

That noted above leads me to highlight a simple concept: when it comes to environmental issues, we need to be pragmatic and take a long-term view. There is an obvious problem: climate change. Let’s try to solve it and build a business opportunity around it, just as China is doing.

This is also the approach we are taking within our Group. For several years now, we have been offering our customers driveline systems for electric vehicles (such as the THE transmission for light construction equipment) and we are currently involved in various research and development projects focusing on off-highway electric drive systems in both India and Europe, as well as special gears for electric trucks.

In the short term, this will not bring us any immediate significant economic or financial benefits, but once these new generations of vehicles begin to account for a significant share of the market, we will be at the forefront with our technologies; and then, on the one hand, we will be able to help reduce the environmental impact in our core sectors, and on the other, we will have the opportunity to generate new business opportunities.

Looking at the bigger picture, the Carraro Group is investing heavily in various measures to reduce emissions from production processes (solar panels, energy from renewable sources, more efficient machinery, circularity projects), but I am certain that the most significant contribution in this regard will come specifically from the development of new, increasingly sustainable products, ultimately leading to the ideal zero impact driveline.

A key element on this journey is the Product Carbon Footprint project we have launched: understanding who we are so that we know where we are heading.

Getting back to the green and blue number plates -- why did they make that choice in China? Because, as always, it is people who make the difference; it is not enough simply to provide technology – we must also raise public awareness so that people adopt solutions that are compatible with sustainable development. And as more and more green number plates appear on the roads, more and more people will be encouraged to consider buying electric cars. Indeed, as a well-known Chinese proverb says, “It takes a decade to grow trees, but a century to cultivate human beings”.

I have decided to devote much of this letter to the ‘E’ (Environment) in the ESG acronym, as both the debate and the decisions currently being made on this issue at the global level strike me as confusing, to say the least. We, however, must look beyond this and not allow ourselves to be distracted, keeping our focus and strategies firmly on environmental sustainability.

But that’s not all. Because, as the Chief Executive Officer’s letter clearly explains, all three dimensions of sustainability (and therefore also Social Impact – S and Governance – G) remain fundamental, on an equal footing, to the Carraro Group’s current and future strategies.

Tomaso Carraro
Deputy Chairman & Chief CSR Officer

1. “Bibliographic review of LCA studies on private passenger transport using light vehicles: electric, hybrid and internal combustion mobility”, Prof. Bruno Notarnicola, Scientific Advisor to the Ministry of Ecological Transition on Life Cycle Assessment issues in the energy and transport sectors, September 2022. Page 42. ↩︎

Dear Stakeholders, 

For Carraro, 2025 marked a turning point: a decisive step towards an industrial model in which sustainability, innovation and competitiveness go hand in hand. This is the year in which our sustainability journey entered a new strategic phase, thanks to the development of our 2025–2027 Plan, which is the result of joint efforts by the ESG Committee and all company departments. 

We have launched initiatives that provide clear and measurable guidance for our commitment to the climate and the environment, to sustainable innovation, responsible supply chains, to people and inclusion. A framework that enables us to operate in a structured and credible manner, fully in line with international standards. 

And so this year, we have made significant progress across all aspects of sustainability. We have finalised and validated a new ESG governance framework, drawn up a roadmap for its implementation and aligned all our initiatives with the findings of the external assessment. 

On the environmental front, 2025 saw significant progress: the expansion of solar power installations, energy efficiency measures, the digitalisation of monitoring systems, and the first technological trials to pave the way for the use of hydrogen in heating systems associated with gear production. 

In addition, we are strengthening our commitment to reducing the environmental footprint of our products, thanks to the launch of the Product Carbon Footprint project and a growing focus on eco-design. 

External recognition confirms that we are on the right track: among others, we note Ecovadis, which awarded us an ESG Advanced – Silver Medal rating, with our score improving for the fourth year running. 

2025 was also a year in which people took centre stage once again. Initiatives such as the Sustainability Academy, cross-functional training programmes, leadership development and the strengthening of the Young Advisory Board (consisting of Carraro employees under the age of 32) have helped to broaden skills, engagement and intergenerational understanding. Our commitment to an inclusive workplace has been further strengthened, making participation and well-being key features of our culture. 

Alongside internal development, 2025 saw a host of initiatives that further strengthened the Group’s identity, such as the international roadshow ‘The Carraro Spirit’ (designed to share Carraro’s new values charter), and ‘Carraro Cultura’ (the Group’s project created to promote the company’s artistic and cultural identity), participation in Open Factory (an event that saw us open the doors of our Maniago plants to over 1,600 visitors) and joining MUNER, the Motor Valley University of Emilia-Romagna. 

The digitalisation of business processes has taken a significant step forward thanks to projects such as OutIT, which involved migrating our servers to TIER 4 infrastructure, ensuring maximum security and business continuity. At the same time, alongside the many digital transformation projects we have launched, we have strengthened our responsible AI model through initiatives aimed at the ethical use of these emerging technologies, supported by a targeted training programme. 

The milestones achieved in 2025 paint a picture of a company that is more resilient, more competitive and more aware of its role in the world. The journey is challenging, and will continue to be so, but the direction is clear: embedding sustainability into every process, every decision and every relationship with our stakeholders. 

I would like to thank each and every one of you – colleagues, customers, partners and the wider community – for your daily contribution to this transformation. It is thanks to your trust and commitment that Carraro can look to the future with determination and confidence.

Andrea Conchetto
Chief Executive Officer

See our Sustainability Report for more information.