Vitesco Technologies Group AG
Vitesco Technologies is a leading international developer and manufacturer of state-of-the-art powertrain technologies for sustainable mobility.
ID: 513067943447-94
Lobbying Activity
Response to European Sustainability Reporting Standards
26 Jun 2023
Vitesco Technologies GmbH welcomes the draft European Sustainability Reporting Standards (ESRS) and acknowledges their improvement compared to the previous version. However, there are areas that require attention to enhance coherence and comparability in sustainability reporting. Harmonization and simplification are necessary, including clearer guidance on core elements like policies, actions, metrics, and targets. The relationship between ESRS and other EU Legislations needs clarification, particularly regarding environmental topics and their connection to the EU Taxonomy requirements (e.g., in the climate-risk assessment of the taxonomy does only require the analysis of physical risks while the ESRS also cover transitional risks). To ensure consistent reporting, a predefined table for external reporting for all undertakings should be established, aligning with the requirements for financial market participants according to SFRD. A practical manual for sustainability disclosure is essential to promote coherence and comparability, providing guidance on structuring the sustainability report. Structural observations highlight the need for an elaboration on the Draft ESRS core elements such as policies, actions, metrics, and targets to ensure all undertakings ability to accurately relate these to their internal document structure. Specific issues include the question regarding the level of integration of the double materiality assessment working paper published by the EFRAG in January 2022 and the structure of environmental standards, such as the relationship between water-related topics and the biodiversity and ecosystems standard. For example, issues related to water might be simultaneously addressed in the E2 Standard on pollution (of water) and E3 Standard on water and marine resources. Furthermore, the scope of E4 Standard on biodiversity and ecosystems has high overlap with identified impacts in the E3 Standard on water and marine resources. Clear guidelines are necessary to define the scope and inclusion of certain topics across different standards. The Draft ESRS lack clarity in terminology, leading to potential ambiguity. Definitions for terms like "vulnerable groups," "indigenous people," "decent pay," "stakeholder engagement, and "payment terms" should be provided to enable comparable reporting. Further guidance on the materiality assessment of substances of concern and thresholds for classification as material is recommended. Integrating existing legislation and aligning requirements with regulatory requirements is crucial (e.g. EU taxonomy pollution criteria which exceed REACH requirements). Restrictions for data gathering, especially related to local legislations, pose challenges (e.g. Social KPIs such as work-related illness). Clear guidance is needed on how to address these restrictions in collecting and disclosing information on employees and non-employee workers. Additionally, there is a need for clarification on disclosing impacts throughout the entire value chain, specifically regarding where and at what stages of the value chain impacts need to be disclosed on (upstream/Tier N). The materiality assessment should be consistently aligned between the topical standards, with expanded guidelines for the practical approach and expectations for the assessment process. Clarification on the link between impact materiality and financial materiality, more guidance on severity, scope, likelihood scales, and the interlinking of risks and opportunities with corporate risk management is recommended. In addition, the expected level of assessment (topic, sub-topic, sub-sub-topic) should be clarified. Sector-specific guidance should be expanded, outlining industry-specific disclosure requirements, and providing guidelines for materiality assessment and sustainability reporting in specific industries.
Read full responseMeeting with Katherine Power (Cabinet of Commissioner Mairead Mcguinness)
22 Jun 2023 · Sustainable finance
Response to Initiative on EU taxonomy - environmental objective
2 May 2023
Vitesco Technologies welcomes the Commissions draft Delegated Act on the EU taxonomy for the four remaining objectives and the amendment for the Climate Delegated Act. Vitesco Technologies highly appreciates the European Commission's efforts to amend the Climate Delegated Act with activity 3.18 in order to recognize automotive components in the EU taxonomy. It is a crucial step to enable suppliers to continue their contribution to zero-emission mobility. The newly proposed category 3.18 "Manufacture of automotive and mobility components" now explicitly addresses the manufacture of components and is a milestone in this respect. To further underline the goal associated with implementing the new category 3.18 which we highly welcome we would like to give you our feedback on the practicability of the requirements. From our perspective the focus on key components for zero emission vehicles is the right approach to focus on the technologies which enable the transformation of the automotive sector. In order to provide solid feedback supported by facts, we performed an internal dry run of the 3.18 draft based on our Q1 2023 revenues. OPEX and CAPEX were not yet considered. The dry run required support of our technical experts from our Business Units Powertrain & Electrification, Sales Controlling, Sales Intelligence, Sustainability and Strategy. We updated the mapping of our product portfolio and our Q1 (EU taxonomy) Sales according to the new criteria described in category 3.18. Based on the current draft of category 3.18 approximately about a third of our components which are essential for delivering and improving the environmental performance of the vehicle could be considered in the EU taxonomy. The reason that we could not consider all relevant components is that the information on the final platform where our Electrification components are used is not available for us. There is no legal requirement for OEMs to provide this information so that we certainly have no audit-proof documentation on this. Additionally, our analysis showed that the requirement that our components must be "type approved" and "designed" and "constructed" and also "used only in vehicles [...]" is very difficult to proof. Even if all the evidence would be available in an audit-proof version, the bureaucratic effort would be enormous and cause massive reporting costs. Therefore, we would propose to adapt activity 3.18 in a way that enables automotive suppliers to assess the requirements independently from OEMs feedback. To achieve this, activity 3.18 could be aligned with the current requirements for activity 3.4 of the Climate Delegated Act where the battery itself and respective components are recognized. Similar to this approach, activity 3.18 could focus on key components necessary for the operations of the electrified powertrains and drivetrains. In case the proposed adaptation is not an option, it should be evaluated how an obligation for OEMs to report the platform or vehicle type to the automotive supplier must be implemented. The major conclusion of our dry run is that the application of the 3.18 based on the current draft will lead to a significant improvement of transparency in our EU taxonomy reporting. However, the obligation to provide very specific data from the OEMs use of our components will still lead to an incomplete reporting of Taxonomy-eligible sales or cause very high administrational burden and costs. As Vitesco Technologies considers sustainability being at the core of our mission, we strive for a complete and transparent reporting of our sustainable revenues. All in all, we fully support the implementation of the proposed category 3.18 and hope that with some minor adaptations of the draft, a transparent and comprehensive EU taxonomy reporting can be achieved. Vitesco Technologies is a leading international developer and manufacturer of cutting-edge drive systems for sustainable mobility.
Read full responseMeeting with Katherine Power (Cabinet of Commissioner Mairead Mcguinness)
22 Mar 2023 · Sustainable finance
Meeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis)
22 Mar 2023 · Sustainable finance