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The engine company. DEUTZ®

Corporate responsibility at DEUTZ

Personnel development

Employees are the backbone of any business. A company’s success and capacity for innovation will depend to a large extent on employees’ engagement and enablement and not just on their ability to do their job. We measure the engagement and enablement of our staff using a Group-wide employee survey that we plan to carry out every two years. The first employee survey of this kind took place in 2019. The insights gained are being used to define specific initiatives with which we intend to motivate and empower our employees to get the best out of themselves. We are also holding workshops in order to develop potential action plans in collaboration with our employees.

We are committed to utilizing diversity to drive the success of the business. In the spirit both of the United Nations’ sustainable development goals and the Women’s Empowerment Principles, we intend to drive forward the representation of women in the workforce as a whole and in management positions and to establish a meritocratic leadership culture based on equal opportunities. This will enable us to gain a better understanding of changing markets, give us access to a larger pool of talent, and benefit us in the form of additional creativity and innovation. One of the tools that we are using to increase the proportion of women in leadership roles is the cross-mentoring program for female management trainees. Under the scheme, the mentee works in tandem with a mentor from a different company in order to gain insight into the structures and processes that are in place at another organization.

A growing shortage of skilled workers is a feature of today’s labor market.  In order to retain skilled employees over the long term, we offer them a wide range of training opportunities as well as monetary and other benefits that are based on local circumstances. At the same time, we firmly believe that new employees bring with them new perspectives that can help a company to develop and improve its ability to innovate. For this reason, we strive for a balanced rate of staff turnover within our workforce.

We attach great importance to apprenticeships – particularly as a means of meeting our own need for skilled workers, with whom we can help to safeguard and strengthen the competitiveness of our Company. This is why we are aiming to maintain the proportion of trainees in our workforce at the same high level as before. Offering apprentices who pass their exams permanent contracts is one of the ways in which we strive to maintain our appeal as a training provider.

1) Levels of engagement and enablement in the workforce are measured by an employee survey that was first carried out in 2019 and will be conducted every two years going forward. 2) Excl. temporary workers, incl. staff on fixed-term contracts. 3) Second level below the Board of Management. 4) Includes both resignations and dismissals; excl. temporary workers and staff on fixed-term contracts.
5) Number of trainees at the sites in Cologne, Ulm and Herschbach (Germany) in relation to the number of employees in Germany (excl. temporary workers and Torqeedo; incl. staff on fixed-term contracts).

Occupational health and safety

Every individual has the fundamental right to physical safety, and we recognize that providing a safe working environment that is conducive to health is part of our responsibility as an employer. We must also ensure that financial considerations are never allowed to compromise the health and safety of our staff.

However, occupational health and safety does also have a particular importance from a commercial perspective, as absences due to accident or injury can severely disrupt operations and result in high costs. There is also the danger that health and safety failings can be reflected in shortcomings in production that will ultimately impact on the quality of the product.

We aim to implement measures that go beyond what is required by law to ensure that our employees are not exposed to danger while carrying out their work and that minimize the risk of accidents occurring.

Planned measures include establishing a regime in which workstations are subjected to a risk assessment immediately prior to the commencement of work by the individuals who are about to carry out their work there (LMRAs – last minute risk assessments). The idea is to get the people who actually do the work to become more aware of the risks and how to minimize them. Another new measure will be to issue every production employee with a written checklist of key safety issues, known as ‘safety no-goes’.

Furthermore, we intend to have our main production sites certified in accordance with the global ISO 45001 standard, which sets out the requirements of an effective system for managing occupational health and safety. The process leading up to certification has already been initiated.

1) Number of reportable incidents per year per million hours worked.

Corporate governance and compliance

Corporate governance and compliance play a key role in our corporate culture and therefore also our day-to-day work. As a company with international operations, DEUTZ is subject to a broad range of laws and regulations that it needs to comply with in order to continue its business activities and to achieve sustained commercial success. Corruption, bribery and other forms of criminal conduct, or the mere perception of breaking the law, can do lasting damage to the reputation of a company and not only result in serious financial losses but also jeopardize its very existence as a going concern. For this reason, we are explicitly committed to legal compliance and take a zero-tolerance approach to unlawful behavior, particularly corruption and bribery. At the same time, we demand that all DEUTZ employees respect and follow not only external laws and regulations but also the rules and policies that we issue internally.

We also expect our business partners – whether they are customers, suppliers, or service providers – to act in compliance with the law. We are currently in the process of implementing a new IT-based business partner compliance tool that will enable us to respond appropriately and at an early stage to suspected money laundering, anti-competitive practices, corruption, bribery or other forms of misconduct on the part of our business partners. We will use this to provide our business partners with a web-based self-declaration form and we will then check both the company itself and the members of its governance and supervisory bodies against up-to-date sanctions lists. On the basis of the information obtained, our business partners will be classified using an internal DEUTZ risk model and, if required, action will be taken to minimize risks.

The tool will initially be rolled out at German sites, where it will be used to conduct compliance checks on new business partners. From 2020, it will be progressively applied to existing business partners and made accessible to DEUTZ companies based outside of Germany. We should then be able to review our compliance status even more efficiently than before.

Compliance for us does not just mean acting in accordance with the law, it also means doing what is right from an ethical and moral standpoint. There is a particular onus on our employees to assume responsibility for ensuring that we are able to meet our objective of striving for commercial success while fulfilling our duty to society and the environment and as a corporate citizen. This is reflected not only in our corporate values but also in our code of conduct, which we comprehensively updated in 2019.

In the course of this update, we brought our code of conduct into line with our new sustainability strategy and added  standards covering respect for human rights, the treatment of employees and social responsibility, health and safety, and environmental protection.  The aim is to make all employees take greater account of sustainability aspects in their day-to-day work. The rules for behavior enshrined in the code of conduct are considered mandatory for every DEUTZ employee. To help them to act responsibly in all situations, our employees are asked to participate in annual compliance training courses. Disciplinary action may be taken as a last resort if they fail to attend these. Internal workshops are also held in order to inform employees of current developments and make them aware of the relevant issues.

Several years ago, we added a whistleblowing tool to our website that any employee or third party, such as a customer or business partner, could use to report breaches of laws or regulations. It is there to help rapidly identify breaches of compliance and swiftly deal with proven incidences of misconduct.

Supplier management

We not only expect our employees to act responsibly, but are also committed to ensuring that responsible practices are adhered to throughout the value chain, particularly with regard to environmental matters, treatment of employees, and social responsibility.

We maintain business relationships with around 700 suppliers in around 50 countries. With around €1 billion in direct materials purchased annually worldwide, our supply chain makes a significant contribution to our value creation process.

We firmly believe that global challenges can only be overcome by working together. With this in mind, we expect our suppliers to adhere to particular standards regarding the environment, working conditions, and social responsibility and, in turn, to ensure that their suppliers make the same commitment.

In 2019, in order to reinforce what we expect from our suppliers, we introduced a code of conduct that commits them to respect human rights, take steps to ensure the health and safety of their workers, and comply with environmental protection standards. This was the first step, and the code of conduct will now form part of all new supplier contracts as well as our general purchasing conditions.

In a second step, we will be conducting periodic audits of existing and new suppliers to ensure that they are adhering to the code of conduct. At the same time, we are planning to create an online assessment platform for global purchasing chains that we will use to review the sustainability practices of our suppliers.

We also intend to use a new business partner compliance tool (see ‘Corporate governance and compliance’) to make sure, over time, that our suppliers are not engaged in money laundering, anti-competitive practices, corruption, bribery or other forms of misconduct.

In addition, we take our corporate responsibility in the procurement of minerals seriously and consider environmental and social impact. Based on our Supplier Code of Conduct, we have established a Guideline for handling conflict minerals in our supply chain to avoid minerals from conflict and high-risk areas. We are committed to the OECD Due Diligence Guidance for Responsible Mineral Supply Chains and pursue a Group-wide approach for reporting.

1) 90 percent of suppliers that have been brought on board within the last year. 2) Relates to existing suppliers whose purchasing volume for the prior year exceeded €0.5 million. 3) 50 percent of the top 150 suppliers as measured by their purchasing volume in the prior year.