Sustainability

Letter to stakeholders

No man is an island,
Entire of itself;
Every man is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less,
As well as if a promontory were:
As well as if a manor of thy friend's
Or of thine own were.
Any man's death diminishes me,
Because I am involved in mankind.
And therefore never send to know
for whom the bell tolls;
It tolls for thee.

John Donne (1624)

These words alone could suffice to capture the profound significance of the CSR transformation changing the way companies are managed and valued the world over. I have often expounded the extraordinary opportunity that CSR represents for the growth and development of our company. However, in the context of this historic shift, there is a real need for immediate and long-term action and responses to the challenges humanity faces individually and collectively, as social bodies, institutions, political parties, companies and other entities. These actions and responses belong to three main categories, referred to as ESG.

E = Environment. Climate change is evident and proven, and the effects are visible to us all. Earth Overshoot Day (the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year) is getting earlier and earlier. In 2023, it was on 2 August, and is expected to be even earlier this year. Air, water and land pollution is being analysed in increasing detail and scientifically correlated to negative effects on biodiversity and human health. All of this, and much more, requires decisive and immediate action. The goal is to reduce/rationalise our consumption and develop new technologies that drastically cut CO2 emissions to achieve carbon neutrality, as set out in the European Union Green Deal. Over the last year, the Carraro Group has continued to invest on all fronts in new production technologies, as well as the self-generation of energy, constantly reducing the impact of our processes. Large amounts of capital have been allocated to developing new products that enable our customers to use increasingly less-polluting vehicles. These virtuous investments have the additional benefit of reducing production costs and enabling entry into new markets.

S=Social. All around the world, the expectations that workers have of their companies have changed profoundly. Wages and a permanent contract are no longer the only parameters that people consider. Instead, aspects such as work-life balance, welfare, health and safety, inclusion, female employment, the gender pay gap and others have come to the forefront in professional decisions. Our Group has long been aware of this, and we are committed to ensuring that our workplaces respect the people that use them. Again in 2023, Carraro worked to promote new ways of working, improve health and safety at our sites, increase female employment and integrate foreign colleagues into our community. A product of this is the possibility of greater employee satisfaction, which boosts productivity, and the chance to attract the best talent to our company. Human capital sits at the heart of our business journey. On this basis, in 2023, we continued to invest significantly in training our people (including through the Carraro Academy and Carraro Business School), and we are committed to supporting local schools. The local impacts of our companies are highly important, and we have maintained a watchful eye on social challenges and situations, offering our support. We have aimed to increase community engagement with our factories, including through the wonderful Open Factory initiative in November at our Campodarsego site. Finally, during the pandemic, we understood the importance of culture for all of us. This prompted us to sponsor various initiatives of organisations and cultural associations throughout the year.

G = Governance. Transparency with all of our stakeholders has always been central for the company, including shareholders, workers, customers, suppliers, financial institutions and tax authorities, to mention just a few. For the company, this translates into well-defined, shared and communicated strategic management, prudent and transparent financial management, and prevention of market abuse and corruption, factors that will continue to have a central role. A more transparent company will also attract new investors, financial institutions, customers and talent. We will continue to focus on risk management, considering possible negative impacts in an increasingly turbulent global scenario (war, climate change, cybercrime, supply chain disruption, etc.) which could endanger the stability of our business.

Returning to the beautiful words of poet John Donne, we can reinterpret his message as this: we shouldn’t ask why the glaciers are melting; we are the ones melting them. We need to find the solution, and the Carraro Group is on the front line with its CSR programme.

Tomaso Carraro
Vice Chairman
Chief CSR Officer

Our structured sustainability approach launched in 2017 with the first report on the progress of the development of our Group CSR model. This process continued in 2023, in the knowledge that, year after year, we must carry forward our efforts as a company, focused on sustainable development. This path began much further back, when Carraro was first founded, clearly outlined in the values that guide the Group’s vision and strategy, and the principles set out in the Code of Ethics and Sustainability Policies (quality, human rights, health, safety and environment, diversity and anti-corruption). These elements are all shared openly, with a clear focus on transparency and ethics, which defines how we do business.

In 2023, the responsible commitment our Group made translated, among the many training initiatives, into classroom sessions on diversity to prevent gender violence. It involved all personnel regardless of hierarchy or gender, including executives, managers and operational figures. Measures were also introduced to improve the whistleblowing channel, essential for internal protection, which ensures our company responds swiftly to any irregularities identified. Elsewhere, steps were taken to make sure we remain rooted in the local area but clearly focused on the future, as we joined the 2023-2024 regional Sustainability Group run by Confindustria Veneto Centro, aware of the importance of sharing best practices and innovative ideas arising from engagement with other virtuous enterprises in our community.

Carraro’s commitment not only translates into a quest for the continuous improvement of internal processes and products but also the maintenance of existing achievements. This is evident in the renewal of certifications, including ISO 45001 for managing occupational health and safety, ISO 14001 for environmental management, quality certifications such as ISO 9001 and IATF 16949, specific to the automotive sector, and Authorized Economic Operator status for managing customs procedures. In addition to these, the company again received ESG ratings from Ecovadis and CDP (Carbon Disclosure Project) regarding climate change. These achievements, which we shall continue to extend to the sites without such certifications (the number of 45001 certified sites increased in 2023), saw the important addition in 2023 of two further achievements: our Chinese plant became the first in the Group to obtain ISO 50001 certification for energy management systems, and the parent company, Carraro S.p.A. received a Legality Rating for the first time, achieving the top score of 3 stars.

In line with market trends, we are committed to mitigating the impacts of designing and making Carraro products. Key aspects from this perspective are process efficiency, the selection and use of materials, the smart management of solutions, the digitalisation of processes with a view to streamlining and therefore readiness and effectiveness in decision making, and the introduction of new high-performance technologies enabling energy savings and decarbonisation. One example of this in 2023 is the launch of the plan to increase energy self-generation from renewables for manufacturing plants, increasing the amount of energy available for consumption while reducing emissions and procurement costs. All of these measures allow us to maintain a relationship of constant trust with our customers—leaders in various sectors—who regularly assess and audit Carraro’s processes and products, confirming that we are a supplier that maintains its high quality standards.

We take the same approach in our supply chain, managed on the basis of production factors, responsible business operations and proximity criteria, prioritising local suppliers to limit the impacts associated with goods transport emissions.

Again in 2023, there were plenty of opportunities to engage our community, including by organising events and dialogues with schools and local organisations, sponsoring local sports and cultural initiatives, supporting vulnerable people and those affected by discrimination, and being personally involved in events to raise awareness about health or female empowerment, including testimonials from qualified professionals and making company spaces available.

The approach we have chosen and adopted, only partially explained above, is not a point of arrival but an ongoing and necessary commitment to the responsible and sustainable progress in what our Group represents and does, in a global context that is constantly evolving and where every actor is asked to play their part.

Andrea Conchetto
Chief Executive Officer

See our Sustainability Report for more information.