104 BMW Group Report 2024 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor’s Report Remuneration Report Other Information Sustainability Statement As part of the environmental analysis, material sustainability-re- lated impacts, risks and opportunities are also evaluated in terms of their effect on the strategy and business model, underlying as- sumptions are reviewed, and strategic goals are aligned accord- ingly » Environmental Analysis. The BMW Group’s strategy forms the baseline for its consistent focus on sustainability » Cornerstones of the Strategy. With its products, the BMW Group is contributing to sustainable development and, with its business activities, aims to create a connection between business, the environment and society. The strategy’s key areas of focus take into account ma- terial impacts, risks and opportunities across the entire value chain. This involves, in particular, all drivetrain technologies with a strong focus on electromobility, digitalisation to strengthen customer interaction and products, and increasing sustainability along the entire value chain, including circularity. The heteroge- neous nature and increasing complexity of the regulatory re- quirements and the material impacts, risks and opportunities that arise as a result are incorporated into the BMW Group’s po- sition and strategy development process. An overview of how the BMW Group takes the current and expected future effects of key material impacts, risks and opportunities into account in its busi- ness model, value chain and corporate strategy can be found in » Position - What does the BMW Group stand for?, » Direction –What drives the BMW Group?, » Strategic approach –Where is the BMW Group heading? and » Collaboration –How does the BMW Group achieve this?. Only in certain cases do material impacts arise out of the BMW Group’s strategy and its business model. They arise pri- marily from the business activities and relationships of the BMW Group. This applies particularly to material impacts in the up- stream and downstream value chain. The chapters » Position - What does the BMW Group stand for?, » Direction –What drives the BMW Group?, » Strategic approach –Where is the BMW Group heading? and » Collaboration –How does the BMW Group achieve this? discuss the key strategic priorities and areas of focus relating to material im- pacts, risks and opportunities. The BMW Group directly and indi- rectly generates greenhouse gas emissions worldwide through upstream processes, the procurement and processing of raw materials, products and services for development and produc- tion, and the supply and use of its own products and services. By offering electrified vehicles (BEV, PHEV, FCEV) and expanding the use of cost-effective CO2e-free energy, including through PPAs, the BMW Group is contributing to progressive decarboni- sation ↗ Position – What does the BMW Group stand for?. Strategic measures to reduce direct and indirect greenhouse gas emis- sions worldwide may necessitate adjustments within the supply chain and exert pressure on suppliers to adapt. The circular economy is a key component of the BMW Group’s strategy. Incorporating the principles of the circular economy into business models and products may be an important step to- wards reducing the use of natural and limited resources. Reduc- ing the use of primary materials contributes to the reduction of CO2 emissions and the preservation of biodiversity, and mitigates the impacts on the environment and society that are associated with the extraction and processing of primary materials. For these reasons, the BMW Group is taking further steps to increase the proportion of recycled materials in its products » Strategic approach – Where is the BMW Group heading?. With regard to its own workforce, diversity is an important ele- ment of the BMW Group’s competitiveness. The proportion of women in management positions is a strategic target variable. The BMW Group consistently supports its employees to acquire new professional qualifications and to achieve their personal de- velopment goals. The BMW Group supports the training and fur- ther education of its employees and helps them to remain pro- ductive by providing initial and further training at all locations » Collaboration – How does the BMW Group achieve this?, ↗ Own workforce. All other material impacts identified do not arise from the strat- egy or business model of the BMW Group and also do not have a material effect on their future development. » The BMW Group Strategy Strengthening the resilience of its strategy and business model in terms of managing material impacts and risks and making use of material opportunities is a key concern of the BMW Group. Therefore, it is important to recognise changes in the environ- ment early on, consider alternative development scenarios, ef- fectively manage risks and take advantage of opportunities that may arise from such changes » Risks and Opportunities. For this rea- son, the resilience analysis is conducted across the organisation and includes all topics of relevance to the BMW Group. This also includes sustainability topics and related risks and opportunities. A regularly updated analysis of the environment based on se- lected and relevant topics also forms the basis for this » Environmental Analysis. This also includes an assessment of politi- cal and regulatory framework conditions » Economy, » Politics. The BMW Group aims to reduce the influence of exogenous fac- tors, particularly those related to sustainability, by expanding the resilience of its global supply chains. » Expanding resilient supply chains, » Purchasing battery cells. Forward-looking risk management helps to strengthen the resilience of the supplier network. » Risk management in purchasing. Digitalisation across the entire supply chain provides the basis for sustainable and resilient supply chain management. » Digitalisation in the supply chain. The resilience analysis relating to biodiversity and ecosystems is discussed in ↗ Resilience analysis. Current financial effects of material risks and opportunities Competition in the electrified vehicle market intensified in the re- porting year. The financial effects of this development are dis- cussed in » Earnings Performance of the BMW Group. Regulatory restrictions mean that certain energy sources, such as biogas, can no longer be used for emission reduction measures. Hedging activities ensured that financial effects for the BMW Group were completely avoided.