Rolls-RoyceMotor Cars Limited

Sustainable Value Report 2007/2008

Taking responsibility.Shaping the future.Using today’s successto create tomorrow’svalues.

>>Ways to drive responsibility.

01

01

02

03

04

05

06

Contents

Preface by the Chairman of the Board of Management 02Quotations from members of the Board of Management 04Profile of the Group 06BMW Group worldwide 08

Sustainability management 101 Strategy and organisation 122 Areas of activity 143 Stakeholder dialogue 16

Economics 181 Value increase and risk management 202 Economic factor BMW Group 22

Product responsibility 241 CO2 reduction – a challenge 262 Innovative technologies for reduced consumption 283 Integrated climate protection in the traffic sector 324 Product safety 345 Customer satisfaction 366 Product recycling 38

Environmental protection across the Group 401 Environmental protection management 422 Energy consumption and emissions 443 Protecting resources and nature conservation 464 Efficient transportation logistics 485 Sustainability in the supply chain 50

Employees 521 Attractive employer internally and externally 542 Performance, compensation and flexibility 563 Co-determination and involvement 584 Equal opportunities and rights 595 Lifelong learning 606 Health and safety at work 627 Demographic change 64

Society 661 Traffic concepts for the future 682 Traffic safety projects 703 Education and intercultural understanding 724 Commitment to fighting HIV/AIDS 745 Worldwide cultural commitment 766 Foundations 77

Indicators for sustainabilityFurther information, indicators and facts regarding the designated topics can be found in the chapter “Indicators for sustainability”. >> 79

GRI Index >> 107

Global Compact – Communication on Progress (COP) >> 109

Glossary 110Index 112Contacts 114

i>

Basic reporting principles

Basic reporting principles.The BMW Group is publishing this report to inform its stakeholdersin a transparent way about its strategies and the steps it has taken with respect to economy,product responsibility, environmental protection across the entire Group, its employees andsociety. In the chapter Indicators for sustainability the strategies and actions are supported byrelevant figures and the objectives for the individual areas of responsibility are shown.

The choice of topics and their prioritisation are based on the results of the international stake-holder survey that was carried out in winter 2006/2007. In this survey, almost 200 of the BMWGroup’s stakeholders were asked about the subjects that were most relevant to them. In addition,in-house workshops were held to identify areas of greater relevance from the company’s per-spective. With the aid of a materiality analysis, the results and topics from the stakeholder surveyand the in-house workshops were then prioritised for this report (see facing page).

The Sustainable Value Report 2007/2008 was prepared in accordance with current guidelines ofthe Global Reporting Initiative (GRI G3).The report is also designed to meet the informationrequirements of rating agencies that evaluate how effectively companies perform in terms ofsustainability. The report covers the financial years 2005 and 2006. In order to bring the reportfurther up to date, activities up to and including August 2007 were also taken into account.

The facts and figures published relate to the BMW Group as a whole, including all three of itsbrands, BMW, MINI and Rolls-Royce. The statistics relating to site-specific subjects and locally-controlled sustainability measures represent an exception. In these cases, the relevant scope ofvalidity, e.g. BMW AG, is quoted in addition to the numerical data.This Sustainable Value Reportis already the sixth report on corporate sustainability to be issued by the BMW Group.The reportis available in German, English, French, Italian, Japanese and Chinese.

Evaluation of the extent to which GRI guidelines (GRI G3) are being applied. The consul-tancy Schlange & Co. has checked this report and confirmed that it conforms to GRI applicationlevel B+. Adherence to GRI indicators is illustrated and explained by a GRI index in the chapterIndicators for sustainability.

WWW.globalreporting.org

UN Global Compact – Communication on Progress.The BMW Group committed itself tothe principles of the Global Compact back in 2001, and in this report is once again reporting on itsprogress towards satisfying these principles. An overview of the 10 principles and references toexamples of ways of implementing them are contained in the chapter Indicators for sustainability.

WWW.unglobalcompact.org

Further internet links to the topics discussed in the report are indicated by the symbol WWWat the end of a text. Activities of the BMW Group in the field of corporate responsibility can befound at www.bmwgroup.com/responsibility. The current annual report can be obtained fromwww.bmwgroup.com/ ir.

Materiality analysis <<

Materiality analysis. In accordance with GRI G3, this Sustainable Value Report 2007/2008fulfils the BMW Group’s obligation to report on the company’s main sustainability topics and itsassociated strategies, targets and measures.

To identify the most important subjects for this report, the BMW Group adopted a structuredapproach:

1. Between November 2006 and March 2007, stakeholders of the BMW Group around the worldwere asked which sustainability actions of the BMW Group they were aware of, what thefuture trends are, and the subjects on which they expect even more information in the future.

2. From the responses received from the almost 200 telephone interviews, categories such asenvironmental protection, employees and product responsibility, together with their corre-sponding subcategories, were identified.The subjects raised were then weighted accordingto the number of times they came up.

3. The specialist divisions of the BMW Group then assessed which of the specified topics aremost significant in terms of corporate activities.The criteria applied were which processeshave a relevant effect on business profitability, the environment, the employees or the societyand to what extent can the BMW Group control these topics itself.

4. Finally a competitors’ benchmark was conducted to ensure that the industry-related topicshave been fully recorded and evaluated.

5. All the corporate responsibility topics established in this way were presented in materialitymatrices (example below) according to their evaluation. Both the structure of this report and itskey aspects are derived from these matrices.

Relevance for theBMW Group>high

Relevance for stakeholders

>

high

low

Nature conservation at sitesLand consumption

Renewable materials

Soil protection/residual pollution

Sample illustration of the materiality analysis for the chapter on Group-wide environmental protection

Topics with a high degree of relevance for stakeholders and the BMW Group.These form the primary focus in this Sustainable Value Report 2007/2008.

Topics with a lower degree of relevance for stakeholders and the BMW Group.These are accordingly discussed in less detail.

Topics that are addressed by the BMW Group but are either not mentioned or mentioned only in passing in the report.

Environmental management systems

Energy consumption (e.g. use of alternativesources of energy)

Emissions (e.g. CO2, wastewater, noise, VOC)

Consumption of resources (e.g. water)

Transport logistics

Hazardous substances

Preface by the Chairman of the Board of Management02

Ladies and Gentlemen,

With its Sustainable Value Report the BMW Group has for years been endeavouring to keepinterested stakeholders informed about the company’s commitment. We report in a trans-parent and verifiable manner on the successes and the challenges facing the company in itsefforts to operate in a sustainable way. By actively seeking out a dialogue with various interestgroups, we engage with important topics and developments in our field at an early stage.Developments that determine the conditions for our commercial approach – and are thuscrucial for our future success. For the BMW Group this dialogue is an important instrumentin securing the company’s future.

The BMW Group, like all companies, strives for business success. That is also quite cru-cial and correct, since only successful companies can provide their employees with securejobs and generate attractive dividends for their shareholders. Economic success is at thesame time the prerequisite for a company’s long-term and effective involvement in society.Only in the role of a strong partner can we work effectively to solve the key challenges facingall of us today and tomorrow. These include protection of the environment and the climate,the fight against HIV/AIDS, and dealing with demographic changes in important markets, toname just a few.

In view of the scale of the challenges it would be presumptuous to claim that we havealready found solutions for all of them. What I can honestly say, however, is that we are on theright paths towards various solutions – and these paths are described in this report.

All these paths have one thing in common: we are not interested in short-term actionsor sensationalism. The problems that face us around the world are too serious for that.Theissue is rather one of creating a long-term, lasting effect. Sometimes this also means thatwe have to tread an uncomfortable path, and we take this fact on board at a conscious level.This is because we are looking for solutions that generate the greatest possible added value –both for society and for our company.

03

Sustainability throughout the value added chain, comprehensive product responsibilityand a clear commitment to saving resources are all an integral part of the BMW Group’s suc-cess. However numerous, diverse and complex the tasks are, the company has just as manystarting points towards solutions. Within the BMW Group, sustainability is therefore not theresponsibility of an individual department or a particular division. Instead, it starts off in theminds of all its employees and culminates, day after day, in the results that those employeesachieve for the company.

One thing is perfectly clear: we are not yet perfect when it comes to running our businessin a sustainable way – and eventually one can never be. Nevertheless, it is my personal goal,as well as that of my colleagues on the Board, that our company should make positiveprogress in the area of sustainable operations. This is because we want to develop theBMW Group’s leading position in the automotive industry further by ensuring that all ouremployees act responsibly.

For us, an awareness of our social responsibilities is inseparable from our corporate self-image. We thus actively shape the conditions for our own future. This represents not only achallenge, but also a unique opportunity for any company. Let me assure you that we intendto make the most of this opportunity. Day after day. Our company’s strong ties with societyalso play a key role in achieving this. That is why we choose to take responsibility. Because ofour convictions, but also our self-interest, now and in the future.

Yours,

Norbert ReithoferChairman of the Board of Management

Norbert Reithofer, Chairman of the Board of Management

Quotations from members of the Board of Management04

Our customers obtain in-depth information from all over the world.They knowwhat they want: innovative products with emotional appeal from a companythat acts in a responsible manner. Vehicles that set standards – both in fuelconsumption and performance. We don’t want a niche vehicle as a kind ofecological fig leaf. Our fuel and CO2-saving technologies are already playingtheir part throughout our range of vehicles. We are moving steadily forwardsalong this road to sustainable mobility. For our own success. For the benefit ofour environment. But above all for the benefit of our customers.Dr. Michael Ganal Member of the Board of Management of BMW AG, Sales and Marketing

The BMW Group is taking responsibility to protect the climate; it was doing solong before the current debate on CO2 emissions started. Our approach:EfficientDynamics forms the basis of an effective strategy for improving drivingperformance while at the same time significantly reducing fuel consumption. In this way we are able to reduce CO2 emissions across our entire product range.By autumn 2007, around 40% of all new vehicles from the BMW Group in Europewill achieve or fall below CO2 emissions of 140 grams per kilometre. In the medium-term future we will offer vehicles with a hybrid drive that will set new standardsfor efficiency and dynamics in their segment. In view of the finite nature of fossilfuel reserves, it is already clear to us that only regenerative hydrogen can guaranteea future for individual mobility.Dr.-Ing. Klaus Draeger Member of the Board of Management of BMW AG, Development and Purchasing

05

Values such as trust and mutual esteem permeate our corporate culture.To be appreciated not only enriches the everyday experience of thepeople who work together in the company, it also pays off: employeeswho feel appreciated achieve more and identify more strongly with thecompany. This kind of climate is also more likely to stimulate innovation.In a nutshell: Appreciation results in value added.Ernst Baumann Member of the Board of Management of BMW AG, Human Resources

A sense of ecological responsibility characterises not only our products,but also the structures and processes involved in their development.Flexibility and efficiency are of the utmost importance in our internationalproduction network. Needless to say, this also means using resourcesas efficiently as possible. We have clearly specified our high environ-mental standards and resource-saving measures under the concept of“Clean Production”. For us, running this business in a sustainable way ismore than a task, it is more an attitude towards life. This fundamentalprinciple guides our decisions, and is manifested by all our employees.Frank-Peter Arndt Member of the Board of Management of BMW AG, Production

Sustainability has finally arrived in the capital markets – notonly in little niche funds but also in classical company valuationsystems. The issue here is not one of moral principles, butquite simply one of future success. The investors of todayknow that companies who do business in a sustainable wayhave greater control over risks and are better prepared forthe challenges of the future. With our long-term sustainableprogramme we are continuously increasing the value of theBMW Group, thus making it a very attractive investment.Stefan Krause Member of the Board of Management of BMW AG, Finance

Profile of the Group06

The BMW Group. With its brands BMW, MINI and Rolls-Royce, the BMW Group concen-trates exclusively on the premium segments of the international automobile and motorcyclemarkets, with an outcome that others in the industry are striving for.

Leading player in the premium segment. From development, through production to themarketing of its products, the BMW Group displays an uncompromising commitment to thepremium claim.

Founded in 1916 as “Bayerische Flugzeugwerke AG” and later changed to “BayerischeMotoren Werke AG”, the company is now the world’s leading premium manufacturer in theautomotive industry. In addition to the development, production and marketing of automo-biles and motorcycles, the BMW Group offers its private and business customers a compre-hensive range of financial services.

Under the BMW brand – one of the most prestigious automobile brands in the world – thecompany currently offers eight model series, all of which embody the proverbial “ultimatedriving machine”. With MINI, the BMW Group has also been extremely successful in posi-tioning its product at the premium end of the small car segment. Rolls-Royce automobiles, onthe other hand, have been synonymous with timeless, everlasting perfection for more than100 years. In the motorcycle industry as well, the BMW Group has for years played a leadingrole in all the segments in which it has an interest. In respect of technology, safety and environ-mental protection, BMW motorcycles are among the best on the market.

The Financial Services business makes an important contribution to the success of the com-pany. As well as finance and leasing offers for dealers and retail customers alike, the productrange also includes insurance, capital investment offers and finance for multiple brands andfleets.

Producing continuous, lasting value. In all areas of its business, the BMW Group is suc-cessful and profitable.The financial year 2006 was the third consecutive year in which theGroup posted record results.This success is based on the extensive product and marketinitiative that the BMW Group launched in 2001 to develop new market segments andmarkets.The company now boasts the most extensive product range in its entire history.

07

It has a presence with its own sales subsidiaries in 41 countries around the world, and main-tains an extensive network of independent dealers. Approximately 100 other markets arelooked after by importers.

The efficiency of the international BMW Group production network forms the basis for thecontinued growth of the company. With 23 production sites, the BMW Group is active in12 countries – including Chennai in India, where the company opened its latest plant in 2007.

To detect trends at an early stage and put forward appropriate solutions, the BMW Groupalso runs a worldwide research and development network, currently incorporating ten sites.Within this network, over 9,400 employees in five countries are working day after day onthe future of individual mobility, and on enabling customers to experience the benefits of thecompany’s premium claim.

All the activities of the BMW Group are designed to increase the value of the company con-tinuously and over the long term. In the view of the Group, long-term growth is generatedby thinking long-term and acting in a sustainable manner. The central factors for success areconcentrating on the premium segment, the skill and dedication of our employees, the maxi-mum focus on what the customer wants, plus an ability to innovate, which is firmly rooted inthe corporate culture.

Taking responsibility. Another factor can be added in – a factor that does not feature inconventional business philosophies: facing up to tomorrow’s challenges in good time and ina responsible manner. The BMW Group regards itself as part of society and is actively in-volved in its development. These efforts make the company sustainable, thus creating one ofthe most important prerequisites for further increasing the company’s value over and aboveits balance sheet and profit-and-loss account.WWW.bmwgroup.combmwgroup.com/responsibility

The Research and Innovation Centre is wherethe automobiles of the future take shape.

BMW Group headquarters.

The BMW Group manufactures automo-biles, engines and vehicle components at23 production sites around the world.

59,000 tons of CO2are saved annually thanks to the Landfill GasProject at BMW plant Spartanburg.

1,000 participantsattended the BMW Group’s Road Education Programme in Brazil and Argentina in2006. In Argentina, 29 of every 100,000 people die annually as the result of roadtraffic accidents. In Brazil the figure is 17, in Germany 8.To lower the dramaticaccident figures in the former two countries, particularly among young people,the BMW Group invites pupils, teachers and parents to participate in the RoadEducation Programme.

1,000,000 visitors go to the Festival de Méxicoevery year. Since 1996 theBMW Group has beenactively involved with thiscultural event, one of themost important in CentralAmerica.

Research and Development BMW Group Research and Innovation Centre (FIZ), MunichBMW Group Forschung und Technik, MunichBMW Group Car IT, MunichBMW Innovations- und Technolo-giezentrum für Leichtbau, LandshutBMW Entwicklungszentrum für Dieselmotoren, Steyr, AustriaBMW Group Designworks, NewburyPark, USABMW Group Technology Office, Palo Alto, USABMW Group Engineering and Emission Test Center, Oxnard, USABMW Group Technology Office, Tokyo, JapanBMW Group Development Office, Beijing, China

Production Berlin plantDingolfing plantEisenach plantGoodwood plant, GB (headquarters ofRolls-Royce Motor Cars Limited)Hams Hall plant, GBLandshut plantLeipzig plantMunich plantOxford plant, GBRegensburg plantRosslyn plant, South AfricaBMW Brilliance Automotive Ltd., Shenyang, China ( joint venture withBrilliance China Automotive Holdings)Spartanburg plant, USASteyr plant, AustriaSwindon plant, GBWackersdorf plant

Contract production

Magna Steyr Fahrzeugtechnik, Austria

Assembly plants

CKD production Cairo, EgyptCKD production Chennai, IndiaCKD production Jakarta, IndonesiaCKD production Kaliningrad, RussiaCKD production Kuala Lumpur, MalaysiaCKD production Rayong,Thailand

Sales subsidiary marketsArgentinia, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Great Britain, Greece, Hungary, India, Indonesia, Ireland, Italy, Japan, Malaysia, Malta, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, USA

Headquarters

BMW Group worldwide08

500 highly-gifted studentsfrom economically disadvantaged backgrounds received support from the BMW Group in China through its “BMW Excellent UniversityStudents Award Fund”. In cooperation with the China Soong ChingLing Foundation, the company is investing RMB 2.5 million (aroundeuro 240,000) in this education project over a five-year period.

1,400 people in India are benefiting from anew roof over their heads.Thedonation of euro 150,000 toDeutsche Welthungerhilfe(German Agro Action) hashelped to rebuild 275 housesthat were destroyed by thetsunami.

200,000,000 British poundswere invested by the BMW Group in the MINI Production Triangle, comprising the three Britisch plants Hams Hall,Oxford and Swindon, thereby creating 450 new jobs.

96 % of BMW employees in South Africa have had a voluntary HIV test. At six per cent, the HIV infection rate within the BMW Group in SouthAfrica is well below the national average.

3 mobile classroomsare enabling children to go to school in areasof the Aceh Province that were devastated bythe tsunami. These “bintang” mobile unitsform part of the “BMW Build” programme, asocial initiative for supporting Indonesia’syoungest generation.

30,000,000 litres of waterare saved annually by the BMW Group through its completelynew system for industrial and wastewater at its Steyrengine plant.This is equivalent to the average consumptionof a village with a population of 750.

24,000 tons of CO2

are saved every year by the BMW Group throughits well thought-out employees’ transport programme.

09

10

01Sustainability management

Entrepreneurial success does not come about spontaneously. It is created by and for peopleand is unimaginable without customers and employees, who alone make long-term growthpossible. In order to develop, success requires an environment worth living in and a societythat is intact. Because ultimately, it is these factors that create the conditions in which thecompany functions. For this reason, the BMW Group takes on an active role not only in shapingsuccess factors within the company but also as a corporate citizen in the locations and themarkets in which it operates. And this for many years now.

In the BMW Group, sustainabilityis not an assignment for adesignated staff member. Asspecialists in their fields, allemployees are expected to thinkand act responsibly in their ownsphere of activity.That is thecase for these five representa-tives of the more than 106,000employees of the BMW Group.

1101 Sustainability management >> 101 Strategy and organisation >> 122 Areas of activity >> 143 Stakeholder dialogue >> 16

02 Economics >> 1803 Product responsibility >> 2404 Environmental protection across the Group >> 4005 Employees >> 5206 Society >> 66

Based on this knowledge, the BMW Group regardscorporate responsibility as self-evident. The compa-ny takes on responsibility worldwide, wherever itsvalue added chain is affected. Here the BMW Groupmakes a special contribution by lending its innova-tive powers and competence, in its own interestand the interest of those communities where it seesitself as a member. The activities of the BMW Groupare oriented towards the long term – precisely be-cause it is not only a matter of good deeds but alsoof investments in its own future.

More and more, this connection is also valued incapital markets were sustainability criteria are in-creasingly incorporated in company analyses. Inthis area, the BMW Group is evaluated as excellent.However, it is also clear that even for a worldwideoperating group, the opportunities for influence arelimited. Acting alone, the BMW Group can stopneither the AIDS pandemic nor climate change. Butin all these areas it can make its contribution – andit does this looking to the future, consistently, andwith considerable effort. i > Page 81et seq.

WWW.bmwgroup.com/responsibility

In the early 70s, environmental protection wasalready included in the company’s organisation.Social commitment also developed over the yearsfrom the original, purely local activities to a globalinvolvement. Today sustainable operation is an inte-gral guiding principle in the company’s strategy andculture. In line with this, the BMW Group conformsto the ten principles of the Global Compact and theCleaner Production Declaration of the United Na-tions Environment Programme (UNEP). In addition,the company’s orientation is guided by the agree-ments of the International Labour Organisation(ILO), the OECD guidelines for multinational com-panies, and the Business Charter for SustainableDevelopment of the International Chamber ofCommerce (ICC).

For the BMW Group, the exercise of social respon-sibility has little to do with philanthropy or patronagebut a great deal to do with increasing the value ofthe company. For in the long term, the competitiveadvantage will be gained by those companies thathave been quick to develop solutions for future chal-lenges. Ultimately, fulfilled responsibilities createthe ability to meet future challenges, which is a gainfor society and for the company.

“It is very important that thetopic of sustainability isintegral to the companystrategy, particularly whenthe products, that are theheart of the company, are inconflict with the environ-ment.”Dr. Gabriella Ries, ResearchAnalyst, Bank Sarasin

“The BMW Group is very wellthought of in the region,since the company is able toincrease value added and iswell thought of as an em-ployer in all areas. This goodimage also exists thanks tothe fact that the BMW Groupcarries on a lively dialoguewith stakeholders and abidesby a good neighbour policy.”Dr. Stephan Schwarzer, AustrianChamber of Commerce

“In our Mobility Forum I wit-nessed BMW Group’s recog-nition of product responsi-bility in the context of climatechange beyond sustainabilityof production.This certainlyguides its decisions regard-ing fuel efficiency, alterna-tive drive trains and mobilityservices.”Martina Otto, Head, Energy and Transport Policy Unit, United Nations EnvironmentProgramme

12 01.1 Strategy and organisation As varied as the aspects of sustainable manage-ment for the BMW Group may be, the goalsare clear as regards the direction that companyaction should take.

Resources, risks and reputation. The BMWGroup sees sustainability as a management task andin its decision process it takes into account not onlybusiness but also ecological and social criteria. Allsustainability activities of the BMW Group are focusedon the most efficient and conservation-oriented de-ployment of resources, early recognition and min-imisation of risks as well as the consequent increaseof the company’s reputation.

Conserving resources. This approach is also re-flected in the company’s personnel work. With flexi-ble work time models for employees and the com-pany, further training initiatives, advanced measuresfor workplace safety as well as numerous othermeasures, the BMW Group provides for the health,qualification and motivation of its employees. At first,all these measures generate costs. In the mediumand long term, however, they lead to a pricelesscompetitive advantage for the company.

The same long-term thinking characterises the han-dling of capital, the products of the BMW Group andsuch resources as water, energy and raw materials.For the BMW Group, “efficiency” means not onlyeconomising but rather the most effective deploy-ment of resources. An example of this is the com-pany’s EfficientDynamics strategy that achieves in-creased performance and vehicle dynamics whiledecreasing fuel consumption. And what is true forthe products is also true for the BMW Group as awhole. Only a company that operates efficiently hasenough mobility for a flexible response to today’schallenges.

Lowering risks. An important requirement forhandling risks and avoiding them if possible is torecognise them in time. That is why the BMW Groupis in constant dialogue with stakeholders from theworlds of business, politics and society. As construc-tive observers and critics of social developments,they help the BMW Group to be ready for futurechallenges. Active risk management and strategic

sustainability commitment can transform many chal-lenges into opportunities for the company.

Building reputation. As a responsible corporatecitizen that communicates its social commitmentclearly, as for example with this sustainability report,the BMW Group advances both understanding andappreciation for its actions in the public forum. Inthis way, the BMW Group strengthens both the rep-utation of the company and trust in its brands.

Comprehensive integration of sustainability.The BMW Group has integrated sustainable de-velopment as the premise of its operation andplanning in all processes and areas of the company.With clear goals and responsibilities, the Board has

Productresponsibility

Long-termvalue added

Social

Success andresponsibility

Resourceefficiency

Economics

Reputationmanagement

Riskmanagement

BMW Group’s understanding of sustainability and areas ofactivity

Responsibilityto employees

Environmentalprotection acrossthe Group

Socialcommitment

Environment

Achievements.– The BMW Group de-

ploys its resources fivetimes more efficientlythan the German na-tional economy andachieved a sustainablevalue of more than euro8.2 billion for the year2004.

Challenges.– To coordinate sustain-

ability activities in theBMW Group moreclosely.

– To integrate sustainabilityactivities more exten-sively into processesand to work system-atically on weak points.

committed itself to sustainability. In doing so, thecompany takes a consistent bottom-up approach:ultimately, more than 106,000 employees worldwide,each in his/her own sphere of activity, are workingday after day for greater sustainability – an approachthat adds up to the greatest possible effect.

Instead of banking on fixed structures and rigid pro-cedures, the BMW Group is relying on the knowledgeand sense of responsibility of its workforce. As spe-cialists in their fields, all employees are expected tothink and act responsibly at their work places. Forinstance, the environmental managers in the plants,as well as the central environmental protection de-partment, concern themselves with environmentalprotection at the various locations, identify opportu-

are formulated in the various departments. In thisway, the responsibility for sustainable operation isnot delegated but actually acted upon in all process-es and areas of the BMW Group.

Becoming better. It is the declared goal of thecompany to expand its activities in the area of sus-tainability over the entire company and coordinatethem more vigorously. These activities are alreadycreating significant added value. The precise magni-tude of this added value has been studied by scien-tists at the Queen’s University in Belfast (NorthernIreland) and the Institute for Future Studies andTechnology Evaluation in Berlin (IZT) in an extensivestudy in spring 2007. The goal of the researcherswas to quantify the sustainability achievements ofGerman companies with the help of the sustainablevalue approach. In other words, how efficiently com-panies use their economic, ecological and socialresources. Result: In the year 2004, the period understudy, the BMW Group deployed its resources fivetimes more efficiently than the German nationaleconomy and thus created an absolute sustainablevalue of more than euro 8.2 billion. No other com-pany of those studied deployed its economic, eco-logical and social resources more efficiently than theBMW Group.

WWW.new-projekt.desustainablevalue.org

13

nities for improvement and provide for their imple-mentation. On the other hand, climate protection is atask that involves a large number of employees andspecialists from developmental engineers to worksplanners. The central idea is that individually, in theirown positions and with their own resources, theymust seek out the best solutions. With this style ofwork, suggestions for improvement are developedby precisely those specialists who are the most fa-miliar with a topic, and then passed on to the deci-sion makers. For complex problems, each employeehas the possibility of involving other departmentsand experts in decision making. Sustainability goals

All employees in the BMW Group are expected to work responsibly in their areas ofactivity.

Sustainable value achievedby the BMW Group in theyear 2004 amounted to:

euro8.2 billion

14 01.2 Areas of activity What is the significance of sustainable develop-ment for the business operation of the BMWGroup? How is the commitment to responsibilityexpressed in practice?

The BMW Group sees its over 106,000 employeesas decisive components of its success and makesevery effort to provide them with attractive jobs.Thecompany responds to demographic changes withopportunities for further training and employee healthcare measures, thus making an important contribu-tion to its own ability to meet future challenges.

Recognised social commitment. However, theBMW Group believes that corporate responsibilityextends beyond the plant gates. On the contrary, theBMW Group accepts broad social responsibility atall its locations. The key aspects of its commitmentarise from the company’s core competence. It isclear that social commitment is all the more effectivethe more closely it is related to the key aspects ofone’s own operation and the challenges presentedby society.

The BMW Group supports and encourages an on-going dialogue with its stakeholders through itsbiennial Sustainable Value Report, an online presenceand public events on the topic of sustainability. Bycommunicating its role as an active corporate citizen,the company wins the appreciation of customers andinvestors, an appreciation that has a direct effect onthe value of the company via sustainability rankings.Within the company, the concept of sustainability isconstantly being communicated and integrated throughthe BMW Group employees’ newsletter, the intranet,management conferences and training for employees.

Top grades. For its achievements in the area ofsustainable operation, the BMW Group receives highrecognition from financial analysts. Just one example:In the Dow Jones Sustainability Index World it washonoured as a “Super Sector Leader” in 2005 and2006 and thus, from the point of view of sustainabil-ity, it is the leading automotive company. The BMWGroup is the only automotive company since theestablishment of the Dow Jones Sustainability Indexin 1999 to be continuously listed in one of the topthree places within the index.

Responsibility in the value added chain. Firstof all, corporate responsibility is expressed by thefact that the BMW Group is expanding its businesssuccess through competitive products and openingup new markets. The company can only fulfil its re-sponsibility to employees, whose jobs it must se-cure, and to shareholders, who expect a continuousincrease in the value of the company, through long-term, profitable growth. Moreover, the BMW Groupalso takes on overall responsibility for its products,for resource-economising production, for safe jobsnow and in the future, and responsibilities towardthe society of which it sees itself as a member. Com-prehensive internal and external communicationforms the basis for active management of corporateresponsibility.

With regard to its products, the responsibility of theBMW Group already begins in the early developmentphase. From the start, vehicles are constructed insuch a way that their production economises re-sources and their recycling is environmentally sound.With a sustainable mobility strategy extending fromgrowing efficiency to increasing electrification ofthe power train to long-term use of hydrogen as aninexhaustible source of energy, the BMW Group iscontributing to the reduction of CO2 emissions.By means of mobility projects, it is engaged in theoptimisation of traffic overall and contributes toa decrease in the CO2 emissions of traffic as awhole.

Environmental protection across the BMW Group isequally comprehensive. The company strives forthe smallest possible effect on the environment andthe greatest possible conservation of resources bymeans of efficient environmental managementsystems. Regular audits monitor company compli-ance with environmental standards. However, highenvironmental and social standards apply not onlywithin the company but also to suppliers and serviceproviders along the entire value added chain of theBMW Group.

The year the BMW Groupwas first listed in the DowJones Sustainability Index:

1999

Awards.– For its company strategy

oriented to sustain-ability, the BMW Groupwas honoured by theEuropean Foundationfor Quality Management(EFQM) with the 2006Excellence Award.

15

In addition, the BMW Group was singled out by theEuropean Foundation for Quality Management(EFQM) with the 2006 Excellence Award. This awardhonours European companies or organisations thathave achieved their leading positions not only bytechnical or economic performance but most impor-tantly, by a company strategy demonstrably orientedto sustainability for at least three successive years.The chassis and drive components division partici-pated in the competition as representative of theentire BMW Group. The jury put particular emphasison the strategic customer orientation and the BMWGroup’s company culture, oriented to partnershipand sustainability.

BMW Group in financial and sustainability ratings as well as in index listings from January 2005 to July 2007

Financial Rating Agencies Results of short-term and long-term ratings in 2006

Moody’s P-1/A1

Standard & Poor’s (S& P) A-1/A+

Sustainability Rating Agencies Evaluation and Result

imug/Ethical Investment Research Services (EIRiS) Evaluated (Result see FTSE4Good)

Oekom Research Second place Automotive industry, Status Prime in Corporate Responsibility Rating

ÖKO-TREND ÖKO-TREND certificate: Outstanding corporate responsibility

Sustainable Asset Management (SAM) Evaluated (Result see Dow Jones Sustainability Indexes)

Scoris Third place for the BMW Group in 2005

Vigeo Evaluated (Result see Advanced Sustainable Performance Indices)

Sustainability Indices Listing and Result

Advanced Sustainable Performance Indices (ASPI) Listed

Climate Leadership Index (CLI) Best in class in the Carbon Disclosure Project in 2005 and 2006

Dow Jones Sustainability Index (DJSI) World Business leader in 2005 and 2006

Dow Jones Sustainability Index (DJSI) STOXX Business leader in 2005 and 2006

Dow Jones Sustainability Index (DJSI) EURO STOXX Business leader in 2005 and 2006

E. Capital Partners International (ECPI) – Index Family Listed

Ethibel Sustainability Index (ESI) Excellence Global Listed

Ethibel Sustainability Index (ESI) Pioneer Global Listed

FTSE4Good Environmental Leaders Listed

FTSE4Good Europe Index Listed

FTSE4Good Global Index Listed

Achievements.– Named Supersector

Leader “Automotivesand Parts” in the DowJones SustainabilityIndexes in 2005 and2006.

Challenges.– Further optimisation and

integration of the com-pany’s sustainabilitycommitment, in order tocontinue earning verygood sustainability rank-ings in the future.

16 01.3 Stakeholder dialogue Commitment requires dialogue. As an interna-tionally-operating company, the BMW Groupcommunicates constantly with a number ofinternational and regional stakeholder groups.Customers, business partners, employees,media, policy and scientific decision makers,non-governmental organisations (NGOs) andinvestors – they all make demands on the com-pany at a local and global level.

surroundings.The goal is to derive motivation forimprovement from the analyses. Similar analyseswere carried out at the Berlin, Dingolfing, HamsHall, Landshut, Leipzig, Oxford, Regensburg andSteyr locations and appropriate measures weredeveloped from them.

Dialogue on these topics with European and inter-national non-governmental organisations (NGOs),which have recently chiefly involved the topic ofclimate change, is largely carried out at the com-pany’s headquarters in Munich.

The target groups are broadly selected – as broadlyas the society in which the company sees itself asan active partner. The exchange with stakeholders is

Listening, explaining, understanding.The BMWGroup reacts not only to inquiries coming from theoutside but actively and systematically seeks outdialogue with its stakeholders. After all, open, un-prejudiced dialogue offers great opportunities. Ithelps the company with early identification of risksand potentials, finding new ways and correcting oreven avoiding errors. And last but not least, thereputation of the BMW Group is enhanced whenthe motives and goals of its operations becometransparent.

The dialogue is carried out on different levels and bydifferent departments within the company. At eachlocation, the communications offices of the BMWGroup are in close contact with the region’s stake-

holders. For instance, since 1999 the BMW plantDingolfing has carried out four image analyses inwhich the local stakeholders were asked for theiropinion of the plant and its effects on the immediate

institutionalised by participation of the BMW Groupin various committees and organisations. In this way,the company has been involved since 2001 in imple-mentation of the United Nations’ Global Compactprinciples. Other sustainability committees in whichrepresentatives of the BMW Group participate in-clude the econsense Sustainable DevelopmentForum in Germany, which the company helpedfound, the Global Business Coalition on HIV/AIDS,the Transport Energy Strategy (TES) and the CleanEnergy Partnership Berlin project that grew out ofit, and the Strategy Council for Hydrogen and Fuel

Perception and rating of the BMW Group commitment tosustainability*

in % according to rating scale

Very good 35

Good 36

Moderate 18

Adequate 5

Poor 5

Very poor 1

The ratings refer to the commitment specified by the stakeholders of the BMWGroup in the subject areas economics, supply chain management, environmentalprotection, product responsibility, employees and society.* International stakeholder survey winter 2006/2007. 189 stakeholders from 21 coun-tries were interviewed by telephone; multiple answers were possible.

Achievements.– Implementation of the

first international stake-holder survey with189 participants from21countries.

– Inclusion of local stake-holders by means oflocal surveys or imageanalyses at the Berlin,Dingolfing, Hams Hall,Landshut, Leipzig,Oxford, Regensburg andSteyr locations.

Challenges.– Improving stakeholder

dialogue by means ofregular surveys of stake-holders worldwide.

Stakeholder universe of the BMW Group

Neighbours

Stakeholderuniverse

Employees

Capital market

NGOs

Interest groups

Multinationalinstitutions

Media

Education, Research

and Science

Policy and Legislation

Suppliers

Customers Socialorganisations

17

Cells. In addition there are the European Hydrogenand Fuel Cell Technology Platform as well as theGerman Chinese Sustainable Fuel Partnership. Onall these levels, the BMW Group solicits the opinionof others, makes its position clear and creates trustin the company.

Positive evaluation of the stakeholders. Forfurther optimisation of its activities, the BMW Groupcarried out a stakeholder survey in winter 2006/2007. In this project, an external consulting firm sur-veyed almost 200 stakeholders in the BMW Groupfrom 21 countries. The goal of the study was to focusthe sustainability reporting even more sharply onthe needs of the readers, to identify relevant topicsand trends for the future, to discern the commitment

competitive. At the same time they felt that theBMW Group, as a technology leader, is betterplaced than many competitors to master thesechallenges successfully.

In the future too, the BMW Group wants to continueimproving and systematising its stakeholder dialogue.This effort will be supported by regular surveys andexchanges with stakeholders worldwide, but alsoby increased utilisation of electronic media. This isalso the easiest and fastest way to learn more aboutthe involvement of the BMW Group in sustainabilityactivities. An e-mail to sustainability@bmwgroup.comis enough. i > Page 81et seq.

WWW.bmwgroup.com/responsibility

of the BMW Group and to make the dialogue withstakeholders more permanent.

Evaluation of the talks showed that the dialogueof the BMW Group with its stakeholders is generallyconsidered positive and its commitment is largelyevaluated as good to very good. Environmentalprotection, climate protection and alternative drivetechnologies were ranked as the most importantchallenges by the individuals interviewed. In theopinion of respondents to the survey, vehicles withalternative drive technologies and focusing modelpolicy on fuel consumption and CO2 emissions arethe most important factors for making the BMW Group

* International stakeholder survey in winter 2006/2007: 189 stakeholders from 21 countries were interviewed by telephone; multiple answers were possible.

Relevant trends and subjects for the BMW Group in the area of corporate sustainability*

Areas Number of answers Examples of trends and topics

Product responsibility 149 Climate protection, alternative drive technologies, traffic safety, product recycling

Economics 104 Anti-corruption, risk management, investments

Employees 95 Demographic change, safety at work/health protection, equal opportunities

Environmental protection 68 Energy management, resource consumption, sustainable transportation logistics

Society 64 Sustainable mobility, HIV projects in countries with BMW Group activities, education

Supply chain management 24 Transparency in the value added chain with regard to maintaining environmental and socialstandards, cooperation with (system)suppliers

Percentage of stake-holders who evaluatedthe BMW Group’s com-mitment to sustainabilityin the survey of winter2006/2007 as “good” or“very good”:

71%

18

02Economics

For the BMW Group, success and responsibility go together. Only successful companiesthat generate profits have the power and independence to take on responsibility for the long-term. And from the point of view of the BMW Group, this is an indispensable form of activeassurance for the future and thus a necessary and prudent investment in continued successten, twenty or thirty years from now.

Gianluca Giavi and his col-leagues in corporate controlling/risk management contributesignificantly to the BMW Group’sability to recognise opportuni-ties and risks on time and reactto them appropriately.

1901 Sustainability management >> 1002 Economics >> 18

1 Value increase and risk management >> 202 Economic factor BMW Group >> 22

03 Product responsibility >> 2404 Environmental protection across the Group >> 4005 Employees >> 5206 Society >> 66

Investment for future performance. Comprehen-sive investments in the expansion of the productionnetwork, in research and development as well as inthe worldwide sales network assure the company’sperformance ability for the future. In 2006, for exam-ple, the company invested about GBP 200 million inGreat Britain in the so-called MINI ProductionTrianglethat includes the plants at Hams Hall, Oxford andSwindon. As a result, the production capacity for theMINI rose from about 200,000 to 240,000 units peryear and the number of employees at the three loca-tions will rise, when full production capacity has beenreached, from 6,350 today to 6,800.

At the beginning of the year 2007, the BMW Groupopened a new subsidiary in India with headquartersin Delhi and, soon after that, the BMW plant Chennai.The Chennai plant is designed for production inthe mid-term of up to1,700 vehicles of the BMW 3 Se-ries and 5 Series. With a presence on the subconti-nent, the BMW Group plans to make better use ofthe potential of the growing market in India.

In addition, in October 2007, the BMW Group willopen the BMW Welt at the Munich location. At thenew delivery centre near the headquarters, the BMWmuseum and the Munich plant, it will be possible toexperience the BMW brand in a previously unknown,fascinating way.

The primary goal of the BMW Group is to assurecontinued profitable growth. Its BMW, MINI andRolls-Royce brands will be further expanded. Forthis purpose, the company has invested about euro21 billion in the last five years, from 2002 to 2006to expand the production network, extend the salesnetwork, and for research and development. With alargely constant number of employees, sales volumein 2007 is expected to rise to the historic high ofmore than 1.4 million vehicles. For the year 2010,the BMW Group is already counting on 1.6 millionunits sold. i > Page 83 et seqq.

Financial year 2006 successfully completed.The BMW Group achieved record levels for salesvolume, revenues and earnings in 2006. The pastyear has therefore been the most successful in theGroup’s corporate history. For the third successivetime, it was possible to exceed the figures of the pre-vious year. The company delivered 1,373,970 vehi-cles of the BMW, MINI and Rolls-Royce brands tocustomers, 3.5% more than in the previous year. Inthe motorcycle business, another historic high wasachieved with more than100,000 BMW motorcyclessold. The company also achieved robust growth inthe financial services business. The number of leas-ing and financing contracts rose by 8.8% comparedto 2005. The number of new BMW Group vehiclesleased or financed by the financial services divisionfor the year 2006 was at 42.4%.

On the basis of the positive retail performance andthe growth in financial services business, the rev-enues of the Group for 2006 rose by 5.0% to euro48,999 million. Profit before tax surpassed the euro4 billion level for the first time, the operating cashflow of industrial operations was euro 5,373 million.These are only two examples of the company’s finan-cial strength.The BMW Group’s financial reliabilityis confirmed by excellent ratings from independentrating agencies. Moody’s ranks the BMW Groupthe first-class short-term grade of P-1, Standard &Poor’s the grade of A-1. The long-term rating for theBMW Group was A1 (Moody’s) and A+ (Standard &Poor’s), both with a stable outlook. In the ratings thatare specialised in sustainable operations, the BMWGroup also achieved very good results.Thus thecompany has been a “Supersector Leader” for theautomotive industry in the Dow Jones SustainabilityIndexes since 2005.

“As investors we need to un-derstand how BMW Group’scorporate responsibilityefforts translate into shortand long-term financial per-formance effects. As such,relevant corporate responsi-bility indicators should becommunicated alongsidefinancial performance indi-cators.”Hege Sjo, European governanceand engagement, HermesPensions Management Ltd.

20 02.1 Value increase and riskmanagement

As a global company with strong interests in theautomotive and motorcycle business as well asin financial services, the BMW Group resemblesan extremely complex organism. In order toachieve the goal of long-term and continuousincrease in the company’s value, the enterprisehas at its disposal a corporate managementsystem.

nised early and dealt with appropriately, be trans-formed into opportunities. Opportunities that theBMW Group uses to good purpose, as the pro-gramme “Today for tomorrow” shows, with whichthe company responds to the demographic change(see also pages 64 et seq.).

Trust and clear responsibility.The company cul-ture of the BMW Group is characterised by clearresponsibility, mutual respect and trust. And yet indi-vidual misconduct can never be totally excluded. It isthe goal of the BMW Group to minimise these risksthroughout the corporation, to the greatest extentpossible and to uncover cases of corruption, briberyor blackmail systematically. In accordance with theanti-corruption principle of the Global Compact,the BMW Group has for years been implementingan internal control system whose effectiveness ischecked regularly and on the basis of risks. More-over, employees in the relevant divisions are increas-ingly sensitised to corruption.

The way in which employees should confront theserisks is laid down in the respective company guide-lines, the mission statement for employees andmanagement of the BMW Group, and in the guide-lines of the long-term personnel policies.The risk ofcorruption is reduced by organisational rules, for in-stance that everything should be seen by more thanone person and the basic separation between request-ing departments and Purchasing. Regular, obligatoryjob rotation in the Purchasing Department, which isintended to prevent relationships of dependency, issupported by the Human Resources Department. Inaddition, all units of the company are regularly moni-tored by the Corporate Audit Department accordingto the standards of the “Deutsches Institut für interne

Management system within the BMW Group.For value based management in the Automobile andMotorcycle Segments, specific product, processand structure-related projects are considered.TheFinancial Services Segment is concerned with thecash flows resulting from its credit and lease portfolio.For decisions about a project the net present valueand the internal project rate of return are determinedand compared with the minimum rate of return de-rived from capital market data. Using this methodthe project´s value added as well as the total value ofthe segment can be ascertained at any moment.

Managing risks, taking opportunities. Just asthe company keeps a constant watch on its costsand value contributions, it constantly monitors op-portunities and risks that confront it. In general: TheBMW Group only consciously takes on risk whenthis step can increase the value of the company.The BMW Group arrives at company decisions onthe basis of comprehensive evaluation of the associ-ated opportunities and risks.The type, magnitude, andrelevance of a specific risk are usually determined bycorporate controlling and the respective specialistdivisions. Further risks are taken under considerationby the risk management network and monitored bymeans of IT supported risk reporting.This includesrisks that impede business performance of the BMWGroup considerably but cannot be influenced by thecompany. Political and social conditions (such aspandemics or terrorist attacks that can influence theworld economy), specific industry risks such as anincrease in the price of raw materials or exchangerates, laws and ordinances, but also personnel riskssuch as demographic change that alters the struc-ture of workforce, customers and the labour market.However, most of these risks can, if they are recog-

21

Revision” (German Institute for Internal Review), withclose attention to possible risks.The reviews aremore frequent for processes and areas of the corpo-ration that exhibit higher risk – for instance in coun-tries that are more strongly affected by corruption.The corporate audit provides the departmental func-tions with tools for risk control and risk self-evaluation.

An example of the efficiency of the internal controlmechanisms was the discovery of a case of corrup-tion in the purchasing process of BMW AG in theyear 2005. The legal processing of the cases led tothe conviction of employees of the BMW Group in2006/2007. In order to further reduce the risk ofirregularities, the guidelines for employees in thePurchasing Department as well as for 600 suppliersregarding gifts and non-business events werespecifically communicated once more in 2006.

Corporate Governance. Cooperation between theBoard of Management and the Supervisory Board,in an atmosphere of commonly shared trust andresponsibility, has long been the basis for managingthe affairs of the BMW Group. It did not merely beginwhen the concept of corporate governance becamea topic for public discussion. This basic approach isreflected in transparent and regular reporting of in-formation regarding the business position as well asall relevant developments in the company. A signifi-cant component of corporate governance in theBMW Group is the company-specific Code of Cor-porate Governance that the Board of Managementand the Supervisory Board already adopted in De-cember 2002 and which since has been adaptedseveral times to correspond to changes in the Ger-man Code of Corporate Governance.

WWW.bmwgroup.com/ir

Achievements.– Establishment of a

Compliance Committee.

Challenges.– To make employees,

suppliers and businesspartners more con-scious of working incompliance with guide-lines and statutes.

22 02.2 Economic factor BMW Group Every year in which the BMW Group growsprofitably, it simultaneously contributes to thegrowth of the economy. Some direct effects –for instance through investment, taxes, socialsecurity contributions and jobs with the BMWGroup – can be specifically measured. Others,such as the tax payments of its employees orthe creation of jobs with suppliers and their sup-pliers – can only be roughly estimated.

tained by the company to finance future businessactivity.

The contribution made by the BMW Group’s taxpayments is also significant. In the year 2006, euro993 million in current tax expense were paid out totax authorities worldwide. In the same year, deferredtax expense amounted to euro 257 million. In addi-tion there are the income taxes and other duties paidby employees of the BMW Group in the past year.

WWW.bmwgroup.com/ir

Stimulus for regions. All these figures documentthe great significance of the BMW Group as a growthfactor at its locations. A research group of the

Integral value added. During the reporting period,the BMW Group has made a significant contri-bution to economic growth and social stability atits locations. The company provided work for106,575 employees worldwide including 4,359apprentices. While the number of employees inGermany, where about three quarters of the per-sonnel are employed, remained almost constant,the number of personnel worldwide increasedslightly by 0.7%. Overall, the BMW Group hascreated about 12,900 new jobs since the year2001. The increased international presence of theBMW Group, the growth of capacity abroad andthe worldwide demand for BMW Group automo-biles helps to assure the security of jobs domes-tically and abroad.

The growth of the company can also be seen fromthe investments that have been made. In the year2006 alone, the BMW Group invested euro 4,313 mil-lion, principally in continued expanding and moderni-sation of the worldwide production network, the ex-pansion of its sales network, as well as in researchand development. This corresponds to an increaseof 8.0% over the previous year.

The net value added of the company increased by8.8% to euro 13,585 million, in particular thanksto rising revenues in 2006. Of this, 54.9% wasallotted to employees, 12.0% to creditors, another12.0% to the public sector (including deferred taxexpense) and 3.4% to shareholders.The remainingportion of the net value added of 17.7% was re-

Oxford Economic Forecasting Institute has made adetailed study of the exact economic contributionthe company makes to a single market. In thestudy published in February 2006, “The EconomicContribution of BMW Group to the UK,” the eco-nomic researchers calculate the direct contri-bution alone in the year 2004 to the gross domes-tic product of Great Britain to be GBP 1 billion.Through the purchase of deliverable components,raw materials, equipment and services in GreatBritain, the BMW Group contributes indirectly toanother GBP 1 billion of the British gross domes-tic product. In 2004, with the production in theHams Hall, Oxford and Swindon plants and atRolls-Royce Motor Cars Limited, the BMW Groupwas the fourth largest automobile manufacturer in

BMW Group value added 2006in %

Net value added 27.1

Cost of materials 53.1

Depreciation and amortisation 9.8

Other expenses 10.0

54.9 % Employees

12.0 % Providers of finance

12.0 % Government/public sector3.4 % Shareholders

17.7% Group

23

What makes this possible is the significant investmentthat the BMW Group makes in Great Britain. In theyears from 2000 to 2004, the company invested al-most GBP 900 million in British production facilities.Expansion of production capacity and preparation ofproduction for the new MINI from 2005 to 2007 inthe MINI production triangle (Hams Hall, Oxford andSwindon) triggered further investment amounting toabout GBP 200 million. With achievement of the fullproduction capacity of a maximum of 240,000 unitsper year, the number of workers at Hams Hall, Ox-ford and Swindon increases by about 450 to a totalof 6,800. In 2006, with the investment of about GBP40 million in the production of the new MINI, thenumber of jobs in supplier companies rose by 750.

sumer goods industry, the BMW Group today offersabout 4,400 attractive jobs. And furthermore: Sinceevery job at BMW Group creates about four addi-tional jobs in other areas of the economy, the com-pany generates almost 17,000 jobs and wages andsalaries of US dollars 691 million in the region. i > Page 85 et seq.

Similar model calculations were used to documentthe total economic significance of the Leipzig plantand the Spartanburg plant in the USA. According tothe results of a study by the universities of Leipzigand Halle-Wittenberg and inomic GmbH, it is calcu-lated that during the three-year construction periodof the new BMW plant Leipzig, almost 4,800 fulltime jobs were created within a radius of 50 km.Thegross value added in the region through the con-struction of the plant from 2002 to 2004 amountedto about euro 700 million and the aggregate incomeamounted to more than euro 420 million.

In the Spartanburg area, in the american state ofSouth Carolina, while suffering from restructuring anddecline in the number of jobs in the traditional con-

the country that, through the production and distri-bution of automobiles, paid a total of taxes andsocial security contributions of more than GBP 1 bil-lion in Great Britain.

In the year 2004, more than 8,000 employees workeddirectly for the BMW Group. Approximately 11,000worked in the 159 dealerships, about 25,000 inthe supplier industries of the BMW Group and an-other 11,000 in retail businesses, the consumergoods industry and the service sector who benefitfrom the purchasing power of the BMW Group. Atotal of about 55,000 jobs in Great Britain are con-nected directly or indirectly with the activities ofthe BMW Group.

BMW Group Capital expenditurein euro million

5,000

4,500

4,000

3,500

3,000

2,500

02

4,042

03

4,245

04

4,347

05

3,993

06

4,313With manufacture for Rolls-Royce Automobiles in Goodwood (above) and the MINIProduction Triangle, the BMW Group is the fourth largest automobile manufacturer inGreat Britain.

24

03Product responsibility

Taking on challenges and seeking innovative solutions – for the BMW Group this is not onlya question of attitude but also a way to assure the future.The Group can only act successfullyas an automobile manufacturer in the future if there are worldwide conditions that permit in-dividual mobility similar to that which exists today.Therefore the company has a vital interest inprotecting the environment and natural resources.

The BMW Group does this by designing its products, over the entire life cycle, to be as en-vironmentally friendly and conserving of resources as possible and through a comprehensiveunderstanding of its responsibilities: Product responsibility begins with the development ofvehicles that are efficient in consumption and exceptionally safe for drivers and other traffic.It includes production methods with low environmental impact, comprehensive customerservice and recycling concepts that let the vehicles of the BMW Group, even after their use,create the smallest possible environmental load.

Dr. Stefan Wolff is working onmaking the vehicles of theBMW Group more efficient. Forexample, with the developmentof the Auto Start Stop Function.

2501 Sustainability management >> 1002 Economics >> 1803 Product responsibility >> 24

1 CO2 reduction – a challenge >> 262 Innovative technologies for reduced consumption >> 283 Integrated climate protection in the traffic sector >> 324 Product safety >> 345 Customer satisfaction >> 366 Product recycling >> 38

04 Environmental protection across the Group >> 4005 Employees >> 5206 Society >> 66

In addition to the company’s high requirements forsafety and environmental friendliness of its vehicles,the BMW Group fulfils the demands and expecta-tions of its customers through a number of measuresand programmes in customer service.

Finally, product responsibility is still an issue whenthe vehicles have already been off the road for a longtime. Through a widespread network of recoverycentres for end-of-life vehicles, customers in manycountries can give back their vehicles for recyclingfree of charge.

But optimal product recycling begins in the designand concept phase of a vehicle. Engineers of theBMW Group evaluate the ecological effects of newcomponent concepts over the whole life cycle of theproduct by means of the Life Cycle Assessment in-strument. These results help the vehicle developersto choose those development alternatives early onthat offer the greatest ecological improvement overthe whole life cycle of the product.

For the BMW Group, product responsibility embracesentire concepts instead of niche solutions whosegreatest influence sometimes lies in their effect onthe public. Therefore, the BMW Group optimises theecological effects of its vehicles over the entire lifecycle. It places its efforts into a number of small andlarge, but particularly coordinated steps that in theirtotality provide the greatest benefits for environmentand society. i > Page 87 et seqq.

A main area of activity within product responsibility isclimate protection. The BMW Group searches inten-sively and systematically for ways to further reducethe CO2 emissions of its vehicles. With highly efficientengines, improved aerodynamics, lightweight con-struction and energy management in the vehicle, theBMW Group is constantly reducing the consumptionof its fleet of vehicles. This array of technical innova-tions that relates to various areas of the vehicle, isbeing introduced incrementally over the whole rangeof models and thus reduces the consumption ofthe entire BMW Group vehicle fleet. In the mid term,the company is achieving additional consumptionadvantages by electrification of the power train andthrough comprehensive hybrid solutions. In thelong term, the BMW Group is focussing on the fu-ture-oriented use of regenerated hydrogen in com-bustion engine.

Because the BMW Group can only optimise its newvehicles with these developments, it is pushing forcomprehensive initiatives in the entire traffic sector,which can improve the energy yield and environ-mental balance of all vehicles, including those al-ready in service. In this area too, the BMW Group ismaking measurable contributions. It is advocatingimproved traffic management, for instance throughoptimised setting of traffic lights, more effectivemanagement of parking spaces or new methods ofmobility management (see also page 56) and offersspecial training in which participants learn fuel-saving driving.

Another field of activity within product responsibilitydeals with the comprehensive responsibility of theBMW Group to its clients and their safety. The BMWGroup is increasing the level of safety for drivers andvehicles as well as other traffic participants beyondthe already very high level, by means of variousmeasures for active and passive safety.

“The BMW Group must rec-ognize that,if left unchecked,climate change is poised todramatically disrupt soci-eties and the global econo-my – and with the economy,the future viability of theBMW Group.To maintain itsrole as a responsible andrelevant company,the BMWGroup must become a leaderin offering sustainable mo-bility options.”Erik Assadourian, ResearchAssociate, Worldwatch Institute

“The BMW Group seamlesslyintegrates alternative drivetechnologies into the stan-dard model range and makesthem attractive to a widerange of customers. We con-sider this to be a soundstrategy.”Thomas Wiesand, ManagingDirector, ÖKO-TREND InstitutWuppertal

26 03.1 CO2 reduction – a challenge The UN climate report 2007 makes a clearstatement: A large proportion of climate changeis caused by mankind. One factor in this processis CO2 emissions that are caused, among otherthings, by conventional automobiles. In theEU, their share of the total CO2 output is about12%; worldwide, it is 7%.

CO2: Indicator for each vehicle project. In-creased efficiency in the use of fuel is an importantcriterion for the development of every new vehicleconcept by the BMW Group. The reduction in CO2

emissions is a measured value in the product devel-opment process. In every status report of a vehicleproject with which the development departmentinforms the Board of Management, the topics ofconsumption and CO2 emissions are transparentlycommunicated and progress toward the goal ofCO2 reduction is presented. In this way, the Board ofManagement determines in regular cycles whethermandates and goals are being achieved. Since 2003,a separate division in Development has been work-ing in an integrated manner on the topics of energymanagement, aerodynamics, lightweight construc-

The BMW Group recognises clearly that it has aresponsibility for climate protection. It supportsthe Kyoto Protocol and has already achieved con-siderable reductions in consumption in the pastyears through continuous efficiency measures. In2000, the EfficientDynamics strategy of the BMWGroup was created as an answer to global warmingand the finite character of fossil fuel reserves.

The path of the BMW Group to sustainable mo-bility. In accordance with the agreement of the Eu-ropean Automobile Manufacturers Association withthe EU Commission, an average value of 140 g/kmCO2 emissions for passenger car fleets of all manu-facturers is to be achieved by 2008.This correspondsto a reduction of 25% compared to the base year

of 1995.This average value is to be achieved by allEuropean automobile manufacturers. By the au-tumn of 2007, about 40% of the new BMW GroupEuropean vehicles will have achieved the value of140 g/km or less CO2 emissions (corresponds toconsumption of 5.8 litres of petrol or 5.1 litres ofdiesel per 100 km). The BMW Group will allow itselfto be judged on its commitment to cut the CO2

emissions of its fleet by 25% by 2008 and will con-tinue beyond 2008 in realising further efficiency po-tential for cutting the CO2 emission of new vehicles.In addition, the company is working at full speed onsolutions for sustainable mobility.

Achievements.– Decrease in consump-

tion of the BMW Groupfleet in Germany inaccordance with theagreement of the Ger-man Automobile Asso-ciation (VDA) between1990 and 2005 by al-most 30%.

– Introduction of theBMW Hydrogen 7 as thefirst series-producedpremium sedan with ahydrogen combustionengine. Presentation of100 vehicles in the year2007 to personalities inbusiness, politics andsociety.

Challenges.– To press ahead with

vehicle development insuch a way that both thecustomers’ expecta-tions of comfort anddynamism and furtherdecreases in consump-tion are achieved.

– To cut the fleet con-sumption of new BMWGroup European vehi-cles to 25% of 1995values by 2008. tion, performance and CO2. In this way, the BMW

Group has set up suitable internal procedures andinitiated organisational changes in order to meet thechallenges of climate change and non-renewablefossil fuels effectively.

Conflicting goals in cutting CO2 emissions.There is not doubt that the path to lower CO2 emis-sions is obstructed by conflicting goals.Traditionally,the products of the BMW Group stand for a dynamicdriving experience with high-performance engines.Measures for greater comfort and greater safetyincrease the weight of the vehicle and thus also the

>

Roadmap of the BMW Group for sustainable mobility

Adoption of theEfficientDynamicsstrategy.

BMW Group cutsfuel consumptionin Germanypursuant to VDAagreement of1990 by 2005 byalmost 30%.

2006 BMW Hydro-gen 7 is presentedto the public.

2007 Introductionof EfficientDynam-ics measures innumerous BMWand MINI models

About 40% ofthe BMW Group’snew vehicles willbe emitting a max-imum of 140 gCO2/km.

First BMW Groupvehicles withhybrid drive.

Use of regenera-tive hydrogen asfuel in motor traffic.

> > > > > >

2000 2005 2006 2007 2008 2009 long-term

Group argues emphatically for variable CO2 limitsadapted to the various classes of vehicles and thusto customer demands and expectations. A uniformlimit on all manufacturers and vehicle classes deniespure physics and is both ecologically and economi-cally counterproductive. An environmentally effec-tive improvement requires measures relating to allvehicle classes.

BMW Group – a leader in climate protection inthe premium segment. In a direct comparison ofperformance with consumption, the vehicles of theBMW Group are already leaders in the premium seg-ment today. Measures for lower consumption arecurrently available in numerous BMW Group modelsand are already effective here and now. The BMWGroup’s status as the leader in technology is theprerequisite for being able to continue setting stan-dards for consumption and efficiency. Brake EnergyRegeneration or the new engine generations repre-sent the BMW Group's achievements in innovationthat are also good for the environment. In general,most innovations originate in the premium automo-bile segment. Experience has shown that, in time,the mass market adopts many of these innovations,for example, for reduced consumption or increasedsafety. Thus these improvements have an effectbeyond the influence of the BMW Group.

New BMW Group vehiclesin Europe which willachieve a maximum of140 g/km CO2 by autumn2007: About

40%

27

consumption. In addition, in the discussion of cli-mate change and individual traffic, many interdepen-dencies must be taken into account in order to arriveat a holistic environmental improvement. This is afact that is often neglected in public debate, whichoften proceeds along lines of either black or white.

Nevertheless, because of its technological compe-tence, innovative strength and integrative approachto solutions, the BMW Group is confident that thecompany is in a good position on the road to sustain-able mobility. But achieving this goal requires newand universally reliable conditions. A uniform upperlimit of CO2 emissions for all automobiles holds signif-icant risks for business development and the earn-ings performance of many companies.The BMW

Central management of CO2-cutting measures in BMW Groupvehicle projects

Responsibility

Board of Management of theBMW AG

Determination of climate policy,product strategy and objectives

CO2 steering committee Operative management ofmeasures and monitoring ofobjectives

Tasks

>

>

>

reports

>

reports

>

Energy management, Aerody-namics, Lightweight construc-tion, Performance and CO2

Vehicle project

Development department

Operative development andconversion into pre and seriesdevelopment

>

>

28 03.2 Innovative technologies forreduced consumption

Long-term thinking, intensive research, in orderto identify the potentials for efficient energyuse – and to operate effectively and quicklytoday. This is how to describe the energy anddrive strategy of the BMW Group, which is pin-ning its hopes to a combination of efficiencyand performance. It is based on three phases,each of which makes an effective contributionto decreasing the fleet consumption and thusalso to assurance of individual mobility.

with direct petrol injection in a range that no otherautomobile manufacturer offers. By the autumn of2007, this innovation will also be widely offered inthe high-volume BMW 3 Series. In markets such asthe USA, where the sulphur-free fuels required bythis engine technology are not yet available, theefficient VALVETRONIC engines, with fully-variablevalve train, reduce fuel consumption. In the newBMW diesel engines, it is possible to achieveconsumption cuts and performance increase usingthird-generation common rail injection with piezoinjectors. From 2008, the BMW Group will introducediesel vehicles with SCR technology (SelectiveCatalytic Reduction) throughout the USA.

The energy requirement can be reduced for thevehicle body through lightweight construction ele-ments and aerodynamic optimisation. Thus thevehicles of the BMW 1, 3 and 5 Series as well as theX3 models are equipped with a new, active air flapcontrol that automatically closes the radiator flapswhen the cooling requirement of the engine is low,improving the aerodynamic resistance of the vehicleand reducing the consumption. The new MINImodels have an aerodynamically optimised under-shield. Innovative lightweight construction parts inchassis, engine and body help to reduce the weightof the vehicle and thus the consumption.

Significant savings can be achieved in the vehiclethrough improved energy management. For in-stance, with the Auto Start Stop Function, fuel issaved by automatic shut-off of the engine whenthe automobile is not moving. Brake Energy Regen-eration uses the braking and overrun phases tocharge the vehicle battery and reduces the burdenon the engine. Savings potential of both develop-ments: in each case 3%. By means of electronicsteering assistance and demand-related operationof fuel, coolant and oil pumps, vehicle functions areonly activated when they are really required. A gearshift indicator supports the driver by indicating theenergetically optimal shift point. These innovationsare gradually being introduced into BMW Groupvehicles. i > Page 87 et seq., 90 et seq.

In the first phase, the BMW Group developed a pack-age consisting of highly efficient engines, innovativelightweight construction measures, improved aero-dynamics and sophisticated energy management inthe vehicle, thus significantly cutting the consump-tion of current vehicles. All these innovations in-cluded in the concept of BMW EfficientDynamicshave in common that they depend on constantoptimisation of all model series rather than on indi-vidual niche models.This means that: the measuresdevised by the development engineers of theBMW Group are rolled out over the entire modelrange. In this way, even relatively small improve-ments in efficiency add up to considerable savingsin consumption and CO2 emissions. In addition, al-though EfficientDynamics innovations are already

integrated into current models, their medium andlong-term effects will continue to unfold.

WWW.bmwgroup.com/energymanagementbmw.de/efficientdynamics

Consumption reduction in focus. A central com-ponent for reduction in consumption is the drivetrain. Through the introduction of BMW High Preci-sion injection with a lean mixture in four and six cylin-der engines, petrol engines achieve consumptionvalues that, until now, were only possible for dieselengines. Since March 2007, the BMW Group hasbeen equipping models of the BMW 1 and 5 Series

>Medium-term >Long-term

Road to sustainable mobility – an overview

>Short-term

Engine optimisation, intelligent energymanagement, lightweight con-struction, design, aerodynamics

Intelligent energymanagement, hybrid

>

>

BMW CleanEnergy>

>

29

consumption can be cut by up to 20% comparedto an identical automobile with a combustionengine.This fully hybrid drive is a completely in-tegrated combination of electric and combustionengine.The special characteristic: a branching ofperformance between a conventional automatictransmission drive and an electric continuously-vari-able transmission. With the help of electronic con-trol, it is possible to switch between these two drivesdepending on the driving situation. In this way, theusual losses in efficiency of a conventional hybriddrive can be significantly decreased. At the inter-national automobile show (IAA) in Frankfurt in Sep-tember 2007, the BMW Group will introduce thiscompletely hybrid drive in the BMW Concept X6ActiveHybrid.

Hybrid drives are exploiting further consump-tion advantages. In the medium term, the much-discussed hybrid technology will make further in-creases in efficiency possible. But from the pointof view of the BMW Group, a hybrid system is onlyone of many integrated fuel-saving measures.Thisbecomes clear in the competition of the hybridmodels available on the market with comparablediesel engines of the BMW Group. Regarding con-sumption and CO2 emissions, the company’sefficient diesel vehicles can compete with com-plete hybrid vehicles. Moreover, many of the cur-rent hybrid drives only exhibit their potential forsavings in a specific driving situation: urban stopand go traffic. Therefore, one goal of the BMWGroup is to develop hybrid drives that achieve con-

sumption advantages not only in city but also in longdistance driving that compensate for the additionalweight.

The hybrid cooperation being carried out by the BMWGroup together with DaimlerChrysler and GeneralMotors is leading to an even more intensive interplayof important hybrid components. The goal of thiscooperation is to bundle the wide expertise of thecompanies, to utilise synergies and to realise effi-ciency potentials. The BMW Group has been work-ing with its partners since September 2005 in ajoint development centre near Detroit, USA on theso-called two-Mode hybrid drive, with which fuel

In 2007, the BMW Group and the Mercedes CarGroup intensified their cooperation. The goal is thedevelopment of a hybrid drive for rear-wheel drivepassenger vehicles in the premium segment.

By 2009, the first BMW Group vehicles with hybriddrive will be available.

Consumption reduction inthe new BMW 318i com-pared to its predecessor:

19%Diesel engines with third generationcommon rail and lightweight construction

Air flap control

Gear shiftindicator

Roll resistance-reduced tires (all around)

Brake EnergyRegeneration

Additional devices (demand-con-trolled fuel, coolant and oil pumps)

Petrol engines with High PrecisionInjection and lean operation

Auto Start Stop Function

The BMW EfficientDynamics measures – an overview

Electric steeringassistance

30

vehicle in 2001 and the presentation of the BMWHydrogen 7 at the end of 2006.The BMW Hydro-gen 7 is the world’s first hydrogen driven sedan foreveryday use. The vehicle went through a com-pletely normal series development process andpassed all the quality and safety tests that apply toconventional vehicles in on-road traffic. A smallseries of one hundred BMW Hydrogen 7 vehicles,whose bivalent combustion engine can be run bothon petrol or hydrogen, is on the road in Europe,Asia and America

WWW.bmw.com/cleanenergy

Joint commitment to a hydrogen infrastructure.Before hydrogen vehicles can demonstrate a trulyzero-sum CO2 balance, considerable innovations andinvestments in hydrogen production and infrastruc-ture as well as appropriate automotive technologiesneed to be made. At present, hydrogen is still ob-tained from natural gas by expenditure of conven-tional energy, which inevitably produces CO2. In thelong term, the BMW Group is therefore counting onhydrogen, generated by using CO2-neutral regenera-tive energies. In order to make these drive variantsavailable for customers, a wide network of hydrogenfilling stations is needed. But before producers, fuelsuppliers and electricity generators invest in thistype of infrastructure, they require a worldwide con-sensus about the construction of a future energyinfrastructure, i.e. a reliable political environment. Itis precisely this goal that the BMW Group is strivingtowards, as a co-founder of the “TES” (TransportEnergy Strategy) initiative. Members of this groupare leading companies in the petroleum industry,the energy production industry and the automotiveindustry.Together they are working on the structuralrequirements for a functioning hydrogen economy.At this time, the German federal government hascreated the National Innovation Programme (NIP) asa public-private partnership and supports a signifi-cant component “Clean Energy Partnership Berlin,”in which, among others, TES partners demonstratethe everyday feasibility of hydrogen and the way to

Using the combined power and heat systemseffectively in vehicles. In addition to specific opti-misation of automotive technology, the BMW Groupis working on research projects with far-reachingpotential for the future. One of these is the Turbo-steamer.This technology uses the largest source ofenergy in the automobile, which has been completelyunused until now: heat. In combining power and heat,the heat from exhaust gases of the combustion en-gine, as well as the heat from the coolant, are trans-formed into drive energy. On the test stand, a proto-type was able to cut consumption by up to 15%.TheBMW Group is currently researching the question ofwhich other energy flows in vehicles might also beused in the future in a joint interdisciplinary projectwith the Technical University of Munich (CAR@TUM).

Helping to start the H2 age. No matter how largefuture possibilities may be: The use of exhaustiblecarbon-containing fossil fuels like petrol, diesel ornatural gas will inevitably always be accompaniedby CO2 emissions and in addition, it will not be suffi-cient for the growing need for mobility. In the long-term, the BMW Group is counting on regenera-tively-produced hydrogen in the third phase of itsEfficientDynamics strategy. Since the 80s, it hasalready been doing research on hydrogen-poweredcombustion engines that combine the energy carrierof the future with the best-proven drive technologyin automobile construction. Important milestoneswere the start of series development of a hydrogen

A milestone on the way to sustainable mobility – the BMW Hydrogen 7 is the world’sfirst premium sedan with a hydrogen combustion engine.

31

the hydrogen future. In 2006, the petroleum com-pany TOTAL and the BMW Group signed an agree-ment on the opening of three hydrogen filling sta-tions in Europe by the end of 2007.The locations ofthe filling stations are Berlin, Munich and Brussels.

Also in 2007, the project “HyICE”, supported by theEU Commission, was successfully implemented. Inthe three-year project, the BMW Group worked to-gether with suppliers and two universities on theoptimisation of the combustion process in hydrogen-driven engines. In the course of this project, im-proved simulation tools for the development of ahydrogen engine were developed.The exchange ofleading European hydrogen experts with specialistsfrom the US Department of Energy (DOE) was alsoencouraged and the enormous potential for thefuture of the hydrogen combustion engine wasdemonstrated.

WWW.cep-berlin.de

Their suppliers and network partners from the hy-drogen project BMW CleanEnergy were informed bythe BMW Group at the Clean Energy Partner forumat the end of November 2006 about the develop-ment status and the perspectives for clean fuel. Inaddition to workshops on the topics of strategy, ve-hicle and marketing, the possibility was also offeredto participants to drive a BMW Hydrogen 7 them-selves.

These efforts are all small but decisive steps into aclean energy future. What form this may take hasbeen discussed by scientists and industry leaders,politicians and environmental advocates in theClub of Pioneers.This internet platform for dialoguefounded at the end of 2006 by the BMW Groupserves as a worldwide exchange by those pioneerswho want to join in shaping this future.

WWW.clubofpioneers.com

Achievements.– Reduction in fuel con-

sumption in the BMW118d and BMW 120d byabout 18% compared tothe preceding models(emissions of 119 g/kmCO2 and 128 g/km CO2respectively).

– Reduction in consump-tion in the new BMW 3Series of between 16%and 19% compared tothe preceding models.

– Introduction of the newMINI model generationin autumn 2006: Reduc-tion of consumption byup to 21% compared tothe preceding models.By introduction of addi-tional measures such asAuto Start Stop Func-tion and Brake EnergyRegeneration by autumn2007, the consumptionof numerous MINI mod-els will be reduced by afurther 9%. Result: MINI Cooper D 104 g/kmCO2; MINI Cooper S149 g/km CO2.

– By autumn 2007, about40% of BMW GroupEuropean vehicles willhave maximum emis-sions of 140 g/km CO2.

Challenges.– To discover additional

efficiency potential forfuture generations ofvehicles.

– To create a sustainablehydrogen industry andto encourage the de-velopment of hydrogenstorage technology.

CO2 emissions of the newMINI Cooper D:

104 g/km

Potential for reducing fuelconsumption by intelligentdriver information systemsand driver training:

20%

32 03.3 Integrated climate protection inthe traffic sector

Whoever wishes to protect and sustain resources,and work effectively against climate change, can-not be satisfied with isolated solutions but mustidentify and use all relevant potentials for CO2savings.The BMW Group does this by means ofcomprehensive innovations to its vehicles. How-ever, in order to reduce the CO2 emissions ofindividual traffic over the entire vehicle fleet, theefforts of all partners engaged in the traffic sec-tor, automotive industry, suppliers, petroleumindustry, politics and customers, are required.

Joint efforts for greater efficiency. The CARS 21(Competitive Automotive Regulatory System for the21st century) initiative of the EU Commission hasdescribed what a comprehensive joint approach totraffic may look like. In contrast to measures basedexclusively on automotive technology, this holisticapproach is working towards effectively reducingCO2 levels of all motor traffic, at lower costs.

The integrated approach requires a significant con-tribution of the automotive industry to CO2 reductionby means of innovation and technical improvementsin vehicles. It also expects contributions from thepetroleum industry through more environmentallyfriendly fuels and the expansion of the infrastructurefor alternative fuels. And for their part, politicians are

ticipants and thus also all existing vehicles. Onlythrough these activities, coordinated and agreed uponacross sectors, can the goal of effective CO2 reduc-tion be achieved with low costs to the national econ-omy. Calculations show that in this way, a muchhigher potential of CO2 savings can be achieved.Also with regard to costs, an integrated approach ismuch more efficient than measures that focus exclu-sively on automotive technology. If it were decidedto achieve the EU goal of 120 g/km CO2 emissionsexclusively through automotive technology meas-ures, the expense would be significantly higher thaneuro 400 per ton of CO2. With an integrated approach,CO2 reduction can be achieved at significantly loweravoidance costs.

BMW Group measures support the integratedapproach. With EfficientDynamics, the BMW Groupmakes an active contribution to decreasing the CO2

emissions of its vehicles. Moreover, the BMW Groupalso commits itself to additional areas of the inte-grated approach. With its traffic management projectsand its own institute for mobility research (see Chap-ter 6), the BMW Group is contributing to a reductionin traffic and environmental pollution and thus to areduction of CO2 emissions in urban areas.

Through an optimised driving style, fuel consump-tion can be reduced by up to 20%. Therefore, theBMW Group is supporting its customers, for in-stance by pointing out to them the ideal shift pointor current efficiency levels. In addition, in specialdriver training courses provided by the BMW Group,customers can learn a particularly economical driv-ing style. By 2008, the basic elements of the so-called Economy Training will be included as a com-ponent of all driver training by the BMW Group.

WWW.bmw.com/drivertrainingmini.de/drivertraining

The BMW Group and TOTAL have agreed that the petroleum company will build andoperate three hydrogen filling stations in Europe by the end of 2007.

challenged on the one hand to create the frameworkfor long-term, effective and efficient CO2 reductionby means of consistent legislation and, on the otherhand, to provide for improvement of the traffic infra-structure and traffic management. Ultimately, fuelconsumption also depends on traffic flow (e.g. trafficjams) and on the individual driving behaviour.

The BMW Group supports this holistic approach be-cause it does not stop at technical improvements ofnew vehicles but because it involves all traffic par-

33

Moreover, the BMW Group supports the further de-velopment and the application of technologies foralternative fuels. For this purpose, the automotive in-dustry and the petroleum and biofuel producersmust work hand in hand. Highly efficient engines re-quire a defined fuel quality – this also applies to bio-fuels. The BMW Group supports the use of biofuelswhich are system-acceptable and equally usablefor old and new vehicles, as additives in petrol ordiesel.These additives save fossil energy reservesand can contribute to assuring the supply of energy.Therefore, together with the German Associationof the Automotive Industry (VDA), the BMW Groupsupports the goal of increasing the proportion ofthese renewable fuels in the fuel supply.

Holistic use of alternative fuels. However, beforealternative fuels can become truly sustainable energysources, it is the opinion of the BMW Group thatqualitative, social and environmental criteria must bedefined. At EU level, fuel options must be prioritisedand reliable quality standards for new fuels must bedefined. The same is true for the production con-ditions under which plants are cultivated worldwidefor biofuels. Plant fuels grown, for instance, oncleared rain forest land or with high concentrationsof fertiliser and pesticides, do not represent an eco-logical improvement. In this area, worldwide uniformecological standards for the cultivation of plants forfuel must be agreed upon.

It is important to find solutions that meet economic,social and ecological requirements and do not opti-mise the balance in one sector at the cost of theothers. The option that the BMW Group finds mostpromising for the long-term is a conversion to hydro-gen, an almost inexhaustible energy source that canbe obtained from numerous clean sources. i > Page 88

Achievements.– Collaboration of the

BMW Group in CARS 21and further establish-ment of the integratedapproach.

– Petrol-saving driving asa consistent feature ofall BMW driver trainingcourses.

– Introduction of driver in-formation systems suchas the gear shift indica-tor in order to supportthe driver in fuel efficientdriving.

Challenges.– To continue increasing

the proportion of biofuelthat the system cantolerate.

Achievements.– 5 stars (Highest rating)

for the MINI Cooper inthe Euro NCAP – one ofthe world’s most de-manding crash safetytests. BMW 1 and BMW3 Series also win 5 starsin the Euro NCAP.

– Standard equipment ofall BMW models withDynamic Stability Con-trol (DSC) – preventsdangerous skids fromdeveloping.

– Standard equipment of all BMW and MINImodels with flat tire indi-cators.

Challenges.– Introduce driver assis-

tance systems such aslane departure warningsystems and activecruise control with Stop & Go function inadditional models ofthe BMW Group.

34 03.4 Product safety For the BMW Group, product responsibilitymeans first of all maximising the safety of itsvehicles – for its customers and all other trafficparticipants. For this reason, the company’sengineers are working on innovations that ac-tively help to avoid accidents and on passivesafety measures that provide maximum protec-tion to those involved, in case of an accident.These measures offer the greatest degree ofsafety when they work together perfectly.

environment through information, communicationand assistance systems. BMW ConnectedDrive,which is currently available in nine markets, is like avirtual front seat passenger who continually sup-ports the driver in decision-making in both normaland critical road traffic situations. One of these, forexample, is an emergency call to the nearest emer-gency services centre that is activated as soon as anairbag is deployed.

WWW.bmw.com/connecteddrive

As leading partner, the BMW Group is carrying outintensive research in the European PReVENT projecton driver assistance systems that are intended toimprove, among other features, pedestrian protec-

The BMW Group is optimising the active and pas-sive safety technology of its vehicles with a holisticapproach.

Driver assistance systems support the driver.The development departments of the BMW Groupare conducting intensive research in all areas ofvehicle safety. The focus is particularly on the pre-vention of accidents. For this purpose, the engi-neers of the BMW Group have developed a widerange of driver assistance systems that help thedriver in handling critical traffic situations and thusavoid accidents.

Among these safety tools are assistance systemssuch as active cruise control with Stop & Go function

(Active Cruise Control) that brakes a vehicle to astandstill in slow-moving traffic. The lane departurewarning alerts the driver to unintended lane changingby vibration of the steering wheel. Both assistancesystems are already standard and support the driverin manoeuvring. In critical traffic situations, suspen-sion control functions stabilise the vehicle, thusavoiding accidents. Dynamic Drive reduces therolling motion of the vehicle to a minimum whentaking a fast corner.

But active safety systems are not restricted to the in-dividual vehicle. The BMW ConnectedDrive systemnetworks vehicle and driver with the whole traffic

tion and safety in intersection traffic.The results ofPReVENT will be presented in autumn 2007.

WWW.prevent-ip.org

A substantial increase in traffic safety is also beingstudied by Project AKTIV (Adaptive and CooperativeTechnologies for Intelligent Traffic). In addition to theBMW Group, 28 partners from the automotive, elec-tronics and telecommunications industries and thesciences are participating in this German researchinitiative. Together, they are working toward the goalof making future traffic safer and smoother flowing.Starting in 2006, the partners together have been

>Active safety>Passive safety

BMW Group phase model Safety

Before the trip Trip incl. notices Warning Correction Pre-crash Crash Post-crash> > > > > >

Start of trip Condition leading toreal danger

Mechanical worknecessary

Contactunavoidable

Contact End of externalimpact

Passive systems include side impact protection,crumple zones, bumpers and impact absorbers aswell as adaptive restraint systems that, for instance,release airbags and seatbelt tensioners in an intelli-gent fashion, depending on the degree of danger.This gives rise to innovations that increase safetyand can save lives. An example is the Head Protec-tion System that the BMW Group developed tenyears ago on the basis of its own accident researchdata for special head protection and was the firstautomobile manufacturer to install it.

The BMW Group has been carrying out research inthe USA since 2007 in partnership with the WilliamLehman Injury Research Center of the Universityof Miami which additional kinds of safety innova-tions are necessary and possible.Together withtrauma experts of the renowned accident researchcentre, engineers of the BMW Group are studyingaccident vehicles and the course of events in acci-dents.The causes of accident injuries can be betterlocalised on the basis of biomechanical accidentanalyses and in the future, vehicles can be con-structed in such a way as to minimise injuries to thegreatest possible extent.

The innovative light and vision systems and theactive safety and driver assistance systems of theBMW Group help to prevent collisions and thus alsocontribute to pedestrian safety. The vehicles of theBMW Group satisfy the statutory requirements forpedestrian protection worldwide. For instance, thefront of the vehicle is designed in such a way that incase of a collision it absorbs the impact.

With its numerous active and passive safety meas-ures, the BMW Group does everything in its powerto eliminate safety hazards in its vehicles, as far aspossible. But it is also committed to seeing thatdrivers act prudently and responsibly in all trafficsituations and it offers driver training courses.Thetraining programmes are now offered in 28 countriesworldwide. China was recently added to this list.

WWW.bmw.com/drivertrainingmini.de/drivertraining

Number of countries inwhich the BMW Groupoffers driver safety training:

28

35

developing innovative driver assistance systems andsolutions for efficient traffic management in a four-year research project.

WWW.aktiv-online.org

A clear view in the dark. Additional driver assistancefunctions that contribute to active safety are theinnovative light and visibility systems in the vehiclesof the BMW Group. Night Vision uses an infraredcamera to make the driver aware of dangers such aspeople and animals at the side of the road in thedark. The high beam assistant supports the driverby switching the headlights to low automatically assoon as opposing traffic comes into view or thevehicle ahead is too close. When the road is clear

again, the high beams will automatically turn onagain.

Safety systems reduce the consequences ofaccidents. Not every accident can be avoided. Forthis reason, the BMW Group carries out ongoing re-search by means of virtual and real crash tests, aswell as with analysis of real accidents, into how vehi-cles and their safety systems actually behave in ac-cidents. These results are used to design active andalso passive safety systems that keep the risk of in-jury for accident victims as low as possible.

More safety in the dark: With BMW Night Vision, obstacles outside the light cone ofthe headlights can be detected early.

36 03.5 Customer satisfaction

Knowing expectations, implementing meas-ures consistently. From all these study results,the BMW Group derives goals that it integratesinto the various levels of the organisation down tothe individual dealer.The results of market researchalso have consequences for company productsand activities. They influence the process of prod-uct conception, the organisation of the customersupport programmes and the qualification meas-ures of the after-sales employees. One such meas-ure with positive results for both customers andthe environment is the service strategy of theBMW Group. Its aim is not to exchange parts un-necessarily and of only changing, for example,brake linings or oil when it is technologically neces-sary. The result: The vehicles of the BMW Group

have the longest oil change intervals in the auto-motive industry.

In order to increase customer satisfaction with serviceeven more, the authorised repair shops will beequipped over the next two years with leading, inno-vative workshop technology. In addition, the com-petence of all after-sales employees will be system-atically improved by means of new skill sets, forexample in the selection and training of employees.

Continuing to increase customer satisfaction.Employing comprehensive Customer RelationshipManagement (CRM) activities, the BMW Groupstrives to recognise and to better understand cus-tomer needs and this is true for potential as wellas existing customers. These processes are coordi-nated and bundled through the Customer Relation-ship Programme, introduced in 2003 by the BMWGroup, which was developed in collaboration withthe company divisions relating to service, such asmarketing, after sales, and Financial Services.

Product and service quality: Key factors forcustomer satisfaction. The quality of service andsupport is decisive for customer satisfaction andloyalty, particularly in the premium market. It is there-fore of decisive importance for the BMW Group toknow customer expectations for support and service.In order to do this, the company is challenged tounderstand and to fulfil the wishes and needs of itscustomers in different countries from Finland toSouth Africa, from the USA to China. The key tosuccess: The BMW Group listens to its customers.On the basis of both external and in-house studies,product-related customer satisfaction and satis-faction with sales and service is constantly beingmeasured. Thus the wishes, expectations andneeds of customers have been gathered by meansof international market research for some time now.In 2007, for instance, there was a new survey ofcustomer satisfaction with support services. Centralresult: It has been possible to increase customersatisfaction in sales and services since 2005. Inaddition, a representative number of service or newvehicle customers is surveyed for satisfaction with thedealer’s performance after every visit to the dealer-ship. The picture is rounded out by regular surveysof customer satisfaction with the BMW Group’s Fi-nancial Services.

Customers worldwide whowere surveyed in 2006 as to their needs and ex-perience with Service:

2.8million

With the BMW, MINI, and Rolls-Royce brandsthe customers associate complex service prom-ises. In order to keep these promises, theBMW Group is working to fulfil the premiumdemands of the customer at every contact withthe company.The goal: to achieve the greatestcustomer satisfaction in the premium segment.

Awards.– The Customer Service

Centre of the BMWBank DeutschlandGmbH was honouredfor customer satisfac-tion in 2006 with theCCF Quality Award asthe best German callcentre, and also receivedthe ECCO AWARD asthe best European callcentre.

Competent customer support is a central element of the BMW Group’s work toimplement premium demands in service.

37

High standards of customer support. As a basicprinciple, the BMW Group stays in contact with itscustomers throughout the life cycle of a vehicle.For this purpose, uniform customer data systems,grouped according to country classes and adaptedto local needs are already being used in 19 sub-sidiaries and 17 import markets. The BMW Groupoffers every customer a premium support programmethat has been extended to include local aspects ofeach country in question. Potential clients also havea special status here. Monitoring of the high de-mands the BMW Group has set for itself in this re-gard takes place annually by means of standardisedinternal audits.

Communicating consistently and in a mannerappropriate to the brand. An additional centralcomponent of the Customer Relationship Manage-ment Programme is the fine-tuned and brand-appro-priate appearance of the BMW Group’s individualbrands. This is assured by close collaboration andcontinual exchange of information between the rele-vant divisions of the company and the sales organi-sation. For BMW and MINI employees who havedirect contact with customers, the BMW Group hasstarted a Brand Behaviour Initiative. This providesspecific training for employees in brand-appropriateservice and dealings with customers.

For the BMW Group, data protection is a matterof course. All information obtained by the BMWGroup from customer surveys or concerning cus-tomer behaviour is treated strictly in accordancewith the customer’s wishes and according to the ap-plicable provisions for data protection in the respec-tive market. No customer data is stored centrally bythe company. Data relating to interested personsand customers is only used specifically for certaincommunications purposes. In this way, irrelevant ad-ditional contacts are avoided and the customer isonly contacted for specific purposes, in accordancewith the premium claims of the company.

The result: Employees have more experience, aremore motivated, and therefore can help customersfaster, more efficiently and more competently.

Customer complaints are recorded and processed bythe BMW Group according to a multiple-step classi-fication system. For this purpose, all subsidiarieshave established well-defined complaint manage-ment processes. In addition to functioning as localcontact persons for customer questions and com-plaints, the so-called Customer Interaction Centres(CICs) play an important role in complaint manage-ment. Here, potential and existing customers canpose their questions and address their complaints.In ten markets of the BMW Group, sales and financialservice departments are using the CICs togetherand collaborating in improving the processes forcustomers. These CICs, which employ primarilyBMW Group employees have a significantly lowerfluctuation ratio than external call centre agencies.

Achievements.– Introduction of a pre-

mium support pro-gramme that is uniformworldwide for everycustomer and supple-mented with local as-pects.

– 19 subsidiaries and17 importers have acustomer data manage-ment adapted to localconditions that extendsdown to the dealershiplevel that already inte-grates the majority ofcustomer contacts com-prehensively betweensales and financialservices.

Challenges.– Further integration of

after-sales customercontact points.

The five central principles of the BMW Group’s customersupport strategy

PremiumCRM

We anticipate the needs ofour customers and exceedthem.

We respect individualdemands and the privatesphere of our customers.

We communicate consistently,keeping in mind the brandcharacteristics.

We know all our customers.

All existing andpotential customersare valuable to us.

Achievements.– Testing of new auto-

mated sorting techniquefor plastics, metals andshredder light fraction in2006.

– Successful developmentof suitable recyclingconcepts for new com-ponents and materials in2006, e.g. for hydrogenvehicles and their tanks.

Challenges.– To evaluate post-shred-

der technologies holis-tically and ecologically.To build up know-howthrough experiments incollaboration with part-ners, in order to developcompetence in evaluat-ing the waste disposaleconomy and to be ableto arrive at appropriatemeasures.

– To press ahead withnetworking on topics ofenvironmental protec-tion in the sales organi-sation worldwide and toupgrade the network ofenvironmental workersin the individual salesmarkets.

– To introduce a uniformworkshop waste man-agement system recom-mended by the BMWGroup in the sales andservice departmentsand to integrate corre-sponding requirementsworldwide in importers’agreements.

38 03.6 Product recycling A deep sense of responsibility for productsalso includes environmentally friendly disposalof vehicles at the end of their life cycle. For thisreason, the BMW Group commits itself to effi-cient recycling methods. The goal is to recyclematerials and substances contained in the vehi-cles quickly and completely, to close materialcircuits and thus to work with resources as eco-nomically as possible.

basic research establishment, provides importantapproaches to disassembly and draining techniquesand for future recycling concepts.This is the locationwhere among other things, the BMW Group’s devel-opment vehicles are processed, recycling methodsare tested that will only become relevant for recyclingoperations in about 15 years.

Forward-looking design. In the construction anddevelopment of its vehicles, the BMW Group antici-pates many measures that in the end will contributeto efficient and ecological recycling of the product.This approach is summarised by the BMW Group asthe Design for Recycling concept. For example, allfluid-carrying components in the vehicles are de-signed in such a way that before disassembly, oper-ating fluids such as oil, fuel, brake fluid and coolantcan be quickly and easily removed. Pyrotechniccomponents (airbags, seatbelt tensioners, safetybattery clamps, etc.) are designed so that they canbe specifically triggered by a central plug-in connec-tion.This simplifies and shortens the disassemblyand recycling process significantly. The corre-sponding engineers’ guidelines are stipulated in aBMW Group internal standard.

WWW.bmwgroup.com/recycling

Completing material circuits. With the goal ofcompleting material circuits, the BMW Group installscomponents in its vehicles that are produced fromrecyclables – materials obtained from old parts – and,in this way, reduces environmental impact. At the startof production for all vehicles, recyclables are alreadyused in plastic components. By successive exploita-tion of additional potential, this proportion usuallyincreases in the current series to more than 15% ofthe total weight of plastic components. In light ofecological and economic concerns, the use of plasticrecyclables in the vehicle is intended to increase toup to 20%. New components, such as the under-

Redemption network established for vehicles.In the early 90s, long before statutory regulations,the BMW Group had already started to establish awidespread network of recovery centres in the EUfor the acceptance and recycling of vehicles. As aresult, customers have been able to return BMWGroup vehicles free of charge since 1January 2007.Every end-of-life vehicle that BMW Group cus-tomers return to this network is recycled by a recog-nised disassembly business. Outside Europe, theapplicable statutory provisions are still very differentfrom country to country. But it is foreseeable that inmany markets, statutes regarding old vehicles willbe introduced. For example in China, South Koreaand the United States, such legislative initiatives arealready in process or being enacted.

WWW.bmw.com/recyclingmini.com/recycling

Developing recycling concepts.The commitmentof the BMW Group to continuously optimising itsrecycling programme has been concentrated since1994 at the Munich Recycling and Dismantling Centre(RDZ). Today it is the world’s leading facility of thiskind and a certified specialised waste managementoperation as well as a competence centre for edu-cation and further training. Moreover, the RDZ, as a

Oil removal from shock absorbers: The recycling experts of the BMW Group havedeveloped in partnership a device for the rapid and safe evacuation of the old oil.

Proportion of plasticrecyclables that arecurrently used in BMWGroup vehicles:

15%

39

shield of the BMW 1 Series are constantly beingconverted to recyclables. A hat shelf, for example al-ready consists today of about 85% recyclables. Allthese recycling successes that were first achievedin individual model series, are transferred seamlesslyto the successor vehicles and where possible, toother model series. The wheel housings made ofrecycled bumper coating were first installed in thepredecessor of the BMW 5 Series. Today thesecomponents are used in the current model of theBMW 5 Series but also in the BMW 3 Series andBMW X5 and in future, they will also be used in otherseries. i > page 88

Recycling concepts in sales. Old parts from servicedepartments are also a part of the BMW Group re-sponsibility for the entire life cycle of its products.Repair and wear parts, used operating materialsand packaging are collected and recycled in thevarious markets by country-specific programmes ofthe national sales organisations. In Germany in theearly 90s, the BMW Group was the first manufac-turer to develop regulated workshop waste manage-ment. Today a system partner has taken over thewaste management for the approximately 800 BMWand MINI dealerships and service businesses. In2005, BMW UK Ltd. established a new waste manage-ment and recycling programme that includes allBMW and MINI dealers in Great Britain and has re-duced the share of deposited workshop waste toless than five per cent. The BMW Group is the onlyautomobile manufacturer that has established stan-dards for the recycling of old BMW and MINI partsin its European dealer and service agreements. Pri-ority goes mainly to the far-reaching recycling ofold parts and packaging that in this way become re-usable materials.Thus, material circuits are com-pleted, valuable resources are economised and thefrequently quoted concept of waste management isgiven meaning.

>

>> Life Cycle Assessment. TheBMW Group has been pursuing the aspiration tofactor in relevant ecological implications of vehiclecomponents since the early 90s with the instru-ment of Life Cycle Assessment (LCA). Alternativematerials and component designs are alreadyevaluated in the development phase as regardstheir effects on the environment over the entirelife cycle – from acquisition of raw materials touse, through to recycling. In spring 2007, the spe-cialists of the BMW Group conducted a life cycleanalysis of two different designs for a rear seatbackrest. With the help of the LCA method acomplete comparison was made of environmen-tal effects of the conventional rear seat backrestmade of a steel-plastic combination with an alter-native backrest made of various polypropylenematerials. The cumulative energy requirement,the greenhouse potential, the acidification poten-tial and the potential for formation of near-groundozone were evaluated. The ecological balancesheet yielded the conclusion that the backrestmade of polypropylene offers advantages, in theecological categories considered, over the con-ventional backrest.

R&D Production

Use and service

Recycling

Years18103

Consideration of the entire life cycle

40

04Environmental protection acrossthe Group

The BMW Group strives to increase production on a continuous basis while consuming everfewer resources in the production process. To achieve this, the BMW Group has been usingcertified environmental management systems since 1996 to coordinate and optimise environ-mental protection issues, which also positively impacts resource consumption. By anticipatingand integrating environmental protection ideas into all business processes, the BMW Grouphas realised added value both ecologically and economically.

This commitment is based on the International Declaration on Cleaner Production from theUnited Nations’ Environmental Programme of 2001.The BMW Group signed this declarationand has hereby obligated itself to make preventative environmental protection the model forits own production processes. The 1993 environmental guidelines adopted by the groupare based on the Charter for Sustainable Development of the International Chamber ofCommerce.WWW.bmwgroup.com/responsibilitybmwgroup.com/productionunep.fr/pc/cp/declaration/trnslatn.htmiccwbo.org

Briggs Hamilton as theenvironmental manager at theBMW plant Spartanburg, SouthCarolina in the U.S. promotesenvironmentally friendly manu-facturing. Here is just one ex-ample: Since 2006, the “LandfillProject” has been helping theplant cover a major share of itsenergy requirements withmethane gas from a nearbylandfill.

41

recycles waste, reduces wastewater and uses energyefficiently. This way, the company was able to makegreat strides in the past years.

To improve upon current environmental protectionmeasures, the BMW Group is blazing new trails farbeyond company environmental management.One extremely successful approach entails learningfrom and sharing experiences made at the produc-tion sites. The BMW Group institutionalised BestPractice Sharing across the group with expertise cen-tres on topics such as water, waste, energy and imis-sions, and including environmental experts from the

“The BMW Group, throughtheir continuing commitmentto sustainable environmen-tal practices, has proven tobe a corporate environmen-tal leader in South Carolina.”Bob King, Deputy Commis-sioner for Environmental QualityControl, South Carolina Depart-ment of Health and Environ-mental Control

01 Sustainability management >> 1002 Economics >> 1803 Product responsibility >> 2404 Environmental protection across the Group >> 40

1 Environmental protection management >> 422 Energy consumption and emissions >> 443 Protecting resources and nature conservation >> 464 Efficient transportation logistics >> 485 Sustainability in the supply chain >> 50

05 Employees >> 5206 Society >> 66

individual plants as well as specialists from the cen-tral environmental protection department.The ex-pertise centres develop reference systems for theirrespective subject areas, analyse successes andchallenges at individual sites, and examine what canbe gleaned from these experiences and applied toother sites within the company’s global productionnetwork.

In addition, the BMW Group has increased its effortsto set the course in the early stage of a project forgreater resource efficiency and improved environ-mental protection.The sooner these steps are takenhere, the greater the leverage in favour of resourcesand the environment, in many cases. For this reason,the environmental protection experts at the BMWGroup today are already involved in the preparationstage for decisions concerning investment andprojects. In this manner, the BMW Group achievesan effect similar to compounded interest.The moreeffectively resources are protected and the earlierany negative environmental impact is avoided, thegreater the advantage is at the end of the day for theenvironment and the company.

At the same time, the group also ensures that theenvironmental performance evaluation is optimisedat its suppliers and transportation service providers.Thus, the transportation logistics are also includedin the environmental protection measures. Beyondthe confines of its own plants, the BMW Group obli-gates its suppliers and service providers to complywith social standards as well as verifiable, systematicenvironmental protection. i > Page 92 et seqq.

Company environmental protection at the BMWGroup began many years ago. In 1973, the first envi-ronmental manager went to work; at the time this wasa unique position in the industry. With certification ofall its own production plants according to ISO 14001by 1999, the company has systematised its environ-mental protection efforts globally. In the course ofthe product and market initiative, new productionsites, such as those in Thailand and China were alsointegrated into the environmental management.Across the globe, the clean production philosophy isin place, whereby the production processes at theBMW Group are to be designed such that they haveas little impact on the environment as possible.TheBMW Group’s efficient resource management re-duces its emissions e.g., CO2 or solvents, avoids or

Investment in environmental protectionin euro million

40

35

30

25

20

15

Information excludes major investments for production sites of BMW AG in Germany.* The rise in 2004 resulted from the overall and environmental protection investmentsin the construction of the BMW plant Leipzig, Germany.

02

20.7

03

25.3

04

34.2

05

20.8

06

20.7

*

42 04.1 Environmental protectionmanagement

Using certified environmental managementsystems, the BMW Group today controls in itsglobal production network all factors that im-pact the environment and resource consump-tion significantly. Thus environmental effectsare uniformly monitored, managed and system-atically reduced across the globe. In this manner,the company is attaining continual, systematicand above all noticeable improvement in environ-mental protection.

Guidelines and indicators for integrated envi-ronmental protection. Beyond the relevant legalrequirements, additional internal requirements de-rived from the company’s environmental guidelinesalso apply to the environmental management systemat the BMW Group. Employees, whose work im-pacts the environmental efforts of the BMW Group,are educated on a regular basis about the environ-mental management system and environmental top-ics.These training courses were further developedin 2006 specifically for target groups including execu-tives, operators and planers.

To attain the objective of constantly improving theaccomplishments in environmental protection, eachyear the experts responsible in each plant of the

Environmental management systems setstandards. From 1996 to 1999, the BMW Grouphas certified its plants in accordance with the inter-national environmental management standard ISO14001. This was followed by certifications of thecentral area of the production department in 2002,for the assembly plant in Thailand in 2004, and in2006 for the Joint Venture started only two yearsbefore in China.The new BMW assembly plant inIndia, which was opened in March 2007, is slatedfor certification according to the ISO 14001 standardby 2008. All plants are audited externally in accor-dance with this standard every three years in thecourse of the matrix certification. In addition, the sitesin Germany and Austria voluntarily submit to an an-nual inspection in accordance with the “Eco Manage-ment and Audit Scheme” (EMAS II), which is a Euro-pean standard that exceeds the ISO standard. Since2006, the operation of the Research and Innova-tion Centre (FIZ) in Munich is also validated accord-ing to EMAS II.

Aside from these external audits, numerous internalinspections are carried out on a regular basis. Oncea year, the internal system audit checks the func-tional capability of the entire environmental manage-ment system. The potential for improvement de-tected by the internal and external audits is recordedand taken care of systematically with an intranettool. Focus areas for individual plants in the BMWGroup are hereby identified and the measures re-quired for this are developed accordingly.

Company environmental protection in the BMWGroup functions in cooperation with the central envi-ronmental protection department under the direc-tion of the group agent for environmental protectionand those responsible for environmental protectionat sites worldwide. Employees at the central officeattend to partial strategies for environmental protec-tion and comprehensive tasks. Furthermore, eachplant has for environmental protection issues its ownofficer or team who is also responsible for the appli-cation and further development of the environmentalmanagement system on site.

Number of deviationswithin the environmentalmanagement systemdetected during externalaudits:

0

Environmental management organisation at the production sites

Delegation ofresponsibility,organisation andcontrol

Report Objectives

Environmentalmanager

respective manager forwaste, water protection,

immission control

>

>

OperatorsCore production & technologies

Plant management

>

>

Information

Department

Team

Tasks, control Report

Tasks, control Report

Report

>

Tasks, control

>

>>

>

>

Line Manager

>

>

>

43

BMW Group develop their respective environmentalprotection programme.The environmental indicatoris used to check if the accomplishments in environ-mental protection are being improved at the sites.As a result, the water and energy consumption, thequantity of wastewater produced, emissions fromvolatile organic compounds (VOC), CO2 emissionsas well as the quantity of waste for each unit pro-duced are determined in each plant each month.The monthly values are aggregated to one annualvalue and compared to the average of the prior year.In this manner, it is possible to determine whether ornot the effects of production on the environmenthave changed in the six individual categories. For acomprehensive survey across the group, an averagevalue is calculated from the individual values and com-pared with the value of the prior year. i > Page 92 et seq.

Deciding with foresight. Learning from the best.Systematising environmental protection by usingcertified management systems is just one step –albeit a fundamental one – on the way to continuallyimproving achievements in environmental protec-tion across the entire production network. However,this is not enough for the BMW Group. It goes onestep further when managing resources and protect-ing the environment.

In this way, ecological aspects are taken into accounteven in the early stages of investment decisions.Moreover, the idea of Best Practice Sharing is devel-oped further and above all institutionalised. Onething is certain – not all sites in the BMW Group canalways have the same level of success when it comesto factors regarding environmental protection. Newenvironmental technologies and processes are oftenimplemented in the course of a pending plant re-modelling in a manner that conserves resources. Inthis way, the production network of the BMW Groupcontinually generates best practices, from whichthe other sites can profit and learn. In the expertisecentres for water, energy or waste within the environ-mental protection organisation, the respective ex-perts systematise and analyse the best examplesfrom the individual plants and attempt to apply themas much as possible to the entire production network.

WWW.bmwgroup.com/production

Achievements.– Certification of the Joint

Venture BMW BrillianceAutomotive Ltd. in 2006according to ISO 14001.

– Investment of euro 20.7 million in companyenvironmental protec-tion in 2006.

– Certification of the highlevel of quality andenvironmental protec-tion at the BMW Groupby auditors from theTÜV Group (GermanTechnical Inspectorate)at various audits in 2006.Some processes werehighlighted as exemplary.

Challenges.– Actively integrate sup-

pliers and sub-suppliersinto the environmentalprotection network.

– Further involve thedealerships of the BMWGroup globally with theenvironmental protectionmeasures of the group.

– Certify assembly plantsin Kaliningrad (Russia)and Chennai (India) ac-cording to ISO 14001(planned by 2008).

44 04.2 Energy consumption andemissions

Every kilowatt hour that the BMW Group savesthrough intelligent process planning and moreeffective technologies means fewer emissionsand better protection of resources and climate.Since purchasing energy and capturing emis-sions are also tied to considerable costs, it isalso possible to attain a measurable economicgain for the BMW Group by saving energy.

Awards.– The U.S. Environmental

Protection Agency(EPA) distinguished theBMW plant Spartanburgas “Energy Partner ofthe Year 2007” for ob-taining its energy supplyof methane gas fromthe local landfill.

– Bavarian energy prize2006 for the publicworks in Munich, Ger-many and the BMWGroup for the groundwater cooling systemproject in the BMWGroup Research andInnovation Centre.

(FIZ). At the FIZ, the ground water cooling system isalso used for an environmentally friendly climate con-trol. A ground water cooling system involves usinggroundwater near the surface to cool parts of build-ings, thereby saving 8,000 MWh of electricity and5,000 tons of CO2 each year.The BMW plant Spartan-burg covers 63% of its energy requirements usingthe methane gas from a local landfill.The previouslyunused methane gas from the landfill is now used asan energy supply, thereby reducing the need fornatural gas. Overall, about 59,000 tons of CO2 canbe avoided each year in the Spartanburg area as of2007. Thereby 53,593 tons of CO2 were saved in2006. Using rotating air-to-air heat exchangers in theventilating systems, the BMW Group is able to re-claim heat in the European plants from the exhaust

Emissions reduction using improved energy effi-ciency is a high priority for the BMW Group. In thisarea, the company has already achieved much suc-cess. The energy consumed per unit produced nowis 2.90 MWh, which is 26% lower than ten yearsago.This can be traced to numerous energy-savingmeasures in the entire production network. Nearlyevery plant in the BMW Group has an energy re-search group developing energy-saving options fortheir respective site.

Innovative measures for low energy consump-tion. The latest approach of significantly reducingthe energy consumed below the level alreadyachieved is the project “Energy management andstrategy” started in 2006. The objectives are to

reduce the amount of energy consumed, to createmore exact energy requirements forecasts, to usealternative energy reasonably and to reduce the pol-lutants output. By the end of the project in 2013,these objectives are to be attained by holding em-ployee action days at various sites, through con-cepts for energy-saving buildings and increased useof combined heat and power generation.

Energy and heat are generated using combinedheat and power generation facilities, which have asignificantly higher level of efficiency (80%) thanconventional power generation (approx. 35%).This method is in place at the plants at Dingolfing,Landshut, Regensburg, Steyr, Oxford, Spartanburg,and in the Munich Research and Innovation Centre

air, which is another free source of energy, thus savingup to70% of the energy requirements for heating. InDecember 2006, in the recently built BMW Welt inMunich, Germany, the second solar energy facility ofthe BMW Group (after a smaller facility at the Leipzigplant) was started up. It covers an area of 6,100 m2

and produces up to 824 kW.

Also when using its IT technologies, the BMW Grouphas an eye on energy efficiency, thus lowering CO2

emissions. For example, the company uses the latestIntel processors, is reducing the number of serversand is asking employees to switch off computerswhen not in use. The results translate into savingsabout 50,000 MWh power annually and the trend ismoving upwards.

Energy consumed per unit producedin MWh/unit

3.75

3.50

3.25

3.00

2.75

2.50

02

3.21

03

2.94

04

2.94

05

2.94

06

2.90

CO2 emissions per unit producedin t/unit

1.15

1.10

1.05

1.00

0.95

0.90

* The increase is due to a change in the energy mix.

02

0.98

03

1.00

04

0.94

05

0.99

06

0.94

*

45

Solvent emissions and chemical consumptionradically reduced. The BMW Group’s focus at allsites is on water-based paints with low-solventcontent. Furthermore, the powder-based paint tech-nology is used for the last coat of paint in the BMWplants Regensburg, Dingolfing and Leipzig.Thisdoes not require any water or solvents, and it utilisesalmost all of the material used with close to noresidue. The conventional clear-paint technologiesalso saw significant improvements. The BMW plantMunich, for example, is 25% below the legally pre-scribed limits for solvents (VOC). Also the integratedpainting process – this process omits one of thefour coats of paint – introduced in May 2006 at theMINI plant Oxford, reduces the use of solvents. Over-all, the BMW Group reduced its solvent emissions

paint. This will reduce the solvents in the exhaust airby 85%. The objectives are similarly ambitious inthe foundry at Landshut. Since autumn 2006, thesynthetic resin binders for producing the grit re-quired for the founding process have been replacedone after another by near odourless and low-emis-sions mineral binders.This will pave the way for afirst-ever odourless foundry. The BMW Group iscurrently the only automobile manufacturer in theworld using this technology, which reduces the per-centage of organic components in the exhaust airby 98%, for highly complex engine componentssuch as crankcases and cylinder heads. Thanks tothis technology, it is very likely that the elaborateexhaust air cleaning equipment can be switched offcompletely in the long term. i > Page 94 et seq.

in the last ten years by more than half of 2.04 kg perunit produced in 2006.

The BMW plant Landshut, Germany, where plasticcomponents are produced, was faced with a specialchallenge for the painting technology. To date, therewas no standard-compliant technology of applyingenvironmentally friendly water-based clear paints toplastic components. For about five years, the spe-cialists at Landshut concentrated on finding a way touse water-based clear paint also in the plastics paintshop. In cooperation with the paint industry, thisdemanding project was successfully completed atthe end of 2006. By autumn 2007, the final surfacepaint using solvent base will be switched to a water-based clear paint after the primer and base coat

Achievements.– Construction and com-

missioning of new com-bined heat and powergeneration facilities inthe Landshut and Steyrplants in 2006.

– Successful participationof the BMW Group’sEuropean sites in theEuropean emissionstrading system. In 2006,the company also didnot exhaust all emissionsallowances.

– Savings of 53,593 tonsCO2 in the BMW plantSpartanburg by usingmethane gas from alocal landfill in 2006.

Challenges.– Continue to reduce

direct and indirect CO2emissions per vehicleproduced.

– Reduce by about 5%the energy consumedper vehicle produced in2008.

Heat recoveryHeat recovery from exhaust air reduces energy requirements by up to 70%.

Externalair

Exhaust airafter theheatexchange

Supplyair

Exhaustair

46 04.3 Protecting resources andnature conservation

It is the very stuff of life. However, it is an increas-ingly rare resource. 40% of the world’s popu-lation lives in countries where water is in shortsupply. For this reason, the water supplies ofthe earth will have to be handled more care-fully than ever in future.The BMW Group isapplying this basic principle systematically withits strategy for water management.

all production wastewater is conditioned here andfed back into the production process. This saves theplant about 30 million litres of water a year – almostas much as a town with a population of 750. Addi-tional fresh water is only used to compensate forlosses, such as due to evaporation.

In turn, as little fresh water as possible is taken fromthe drinking water network. For the water supply,checks are carried out to see whether the require-ments can be covered by groundwater or surfacewater. To keep an eye on the impact for the ground-water system, the plants in Berlin, Leipzig and Munichuse a digital groundwater model. Each year, theBMW Group reduces the amount of water used inthe production process. For each new vehicle, the

process wastewater has fallen by more than 25%since 2002.

Consistently avoiding waste.The “less is more”philosophy is applied at the BMW Group when han-dling waste from production and administration.Thehighest priority is reducing waste by preventing it. Ifthat is not possible, then the material recycling optionis checked before alternatives such as energy recov-ery are considered. If this is also not possible, wastemust be disposed of as per the legal requirements;this is the least desirable choice, ecologically speaking.

To manufacture an automobile, water is required fornumerous processes such as painting, mechanicalproduction or cooling. As a rule, the BMW Group onlyuses as much ground water as can be reproducednaturally. Conversely, wastewater from BMW Groupplants may only be output after a defined pre-treat-ment and only in amounts that do not overtax naturaldecomposition. According to the water guidelinesthat apply across the group, the natural water cyclemay only be impacted to the least extent possible.The water management strategy focuses on a sus-tainable water supply, the careful use of materialshazardous to water, as well as groundwater protection.

Sustainable handling of water. Wherever possi-ble, the BMW Group uses the nearest water source

of all, namely its own wastewater. By utilising closedwater cycles, the process water is reused duringthe production. In the plants, for example, analyticalmonitoring and exact chemical apportioning is usedto increase the time of exposure and to avoid pre-mature exchange of water. Water is recycled in thepaint shop, in the vehicle washing-bay or for the leaktest of finished vehicles.

In the BMW plant Steyr, all production wastewater isreused as of the beginning of 2007.Thanks to anovel combination of various membrane techniques,

Achievements.– Start of production with

no wastewater generatedin the plant at Steyr atthe start of 2007.

– Reduction of processwastewater from 0.76 m3

in 2005 to 0.67 m3 in2006 for each vehicleproduced.

– Increase of recyclingquota to 79.3% for thewaste generated in theGerman plants in 2006.Taking into account thesteel scrap generated inthe pressing plants, in-crease of the waste re-cycling quota of theGerman plants to almost95%.

Challenges.– Introduce the waste

information system(ABIS) also at the plantsin Goodwood, Thailandand India by 2008.

– Implement the idea ofproduction with nowastewater generatedat other sites.

For many years now, the BMW Group has already been separating the waste generatedin the plants according to the type of material and then has this recycled or disposed of.

Process wastewater* per unit producedin m3/unit

1.1

1.0

0.9

0.8

0.7

0.6

* The indicators for process wastewater refer to the wastewater generated in theproduction process.

02

0.92

03

0.98

04

0.83

05

0.76

06

0.67

47

To avoid creating waste, you first have to knowwhen, where and what kinds of waste are generatedin which amounts. The BMW Group obtains this in-formation using its electronically supported wasteinformation system (ABIS), which systematicallydocuments all waste streams in most plants as of1997.Today, ABIS is used in all but three of the23 plants worldwide – Goodwood (Great Britain),Rayong (Thailand) und Chennai (India) will follow atthe start of 2008.

For decades, the BMW Group has had waste sepa-rated everywhere according to the type of materialat the point of origin. Via the plants’ own disposalcentres, these are then transferred to external serviceproviders for recycling or disposal. Since 1997, all

disposal routes and waste management enterpriseshave been systematically audited by the environ-mental department.

At all sites of the BMW Group, reusable packagingis generally preferred over disposable packaging,provided it makes sense economically and ecologi-cally. Today, most of the material flow in the produc-tion network is dealt with using reusable plastic con-tainers. This reusable packaging is in circulation atalmost all suppliers. This way it was possible in thelast few years to reduce considerably the percentageof packaging material that is disposable. i > Page 96 et seq.

Number of indigenoustrees that have beenplanted on the groundsat the plant in Leipzig:

2,200

Waste per unit producedin kg/unit

450

400

350

300

250

200

02

291

03

357

04

318

05

346

06

344

>> Nature conservation.The BMWGroup attempts to maintain the natural state andbiodiversity around their sites as much as possible.Sometimes, it is even possible to increase biodiver-sity, for example by converting lawns into naturalmeadows, planting indigenous trees and shrubs,and planting vegetation on roofs. In order to be ableto quantify the consequences for flora and fauna,the area is evaluated with the so called “ecologicalpreservation of evidence” at the BMW Group priorto any construction or change of use. From thisappraisal, the company derives protective or com-pensatory measures, if required. Also, the preser-vation of evidence is repeated at regular intervalsto register changes in the biodiversity and to beable to react to them.

A current example of this systematic observationand evaluation of biodiversity is the BMW Group’stesting centre at Miramas in the south of France.The area covering 475 hectares is located in theCrau, a landscape of prime ecological value. Asearly as 2002, subareas of the testing groundswere mapped and evaluated by experts. Beforeconstruction and expansion work was begun in2006, the biologists returned.Their report certi-fied that the BMW Group has been a responsiblesteward of the land, which is still valuable ecolog-ically despite the industrial usage. In future, an im-proved land use management in the Crau shouldhelp protect rare and endangered native speciessuch as the Crau Grasshopper, the Little Bustardand the Ocellated Lizard. Developments and ex-tensions to the track will be relocated with priorityto sections of the testing grounds that are lessvaluable ecologically. An Enduro testing groundwas laid out such that valuable land was protectedand the major portion of the track runs through anarea that is less important from the perspectiveof protecting endangered species and nature con-servation.

48 04.4 Efficient transportation logistics As a company that operates across the worldwith a global production network, the BMWGroup naturally moves large quantities of mate-rials and products. To keep the transportation-related environmental stress to a minimum, allcommodity flows are constantly being analysedand optimised from procurement to delivery.Here, intelligent transportation logistics extractthe most from transportation services with aminimum of environmental stress.

BMW plant Spartanburg, activity-related billing wasintroduced in July 2007 for the U.S. market for thefirst time. In future, transport agents will be onlyremunerated for the volume transported, thus theyautomatically have an incentive to plan the transporta-tion services efficiently. In South Africa, transporta-tion trials with module systems, which enable bettercontainer utilisation, were carried out over severalmonths. The switch to this module system for highcube containers will be carried out in three steps bythe end of 2007 and will lead to measurable savingsin packaging, fuel consumption and transports.

Using transport that is ecologically advanta-geous. For the transports, the BMW Group prefersthat means of transportation with the lowest emis-

Here, it is evident that the BMW Group links moretransportation capacity with continually less eco-logical impact. This reduction is made possible bynumerous individual coordinated measures. Oneimportant measure is minimising the material trans-ports, which for example is implemented in theEuropean plants by a new transportation concept:Instead of the conventional plant supply accordingto regionally defined service provider responsibilities,transportation orders are now placed with serviceproviders bundled according to volume. This in-creases the utilisation of the lorries, lowers trans-portation costs, and decreases empty drives. In the

sions. Accordingly, the shipping of goods via airfreight is avoided as much as possible. Road trafficis eased by choosing ports near the plants as thepoint of origin for ocean transports. For the vehicletransportation from the plants to the ports and salesoperations, the BMW Group prefers to use railways.In 2006, 55.4% of the BMW and MINI brand cars lefttheir place of manufacture via rail. The year before,it was 54.1%. In individual plants, this number evenreaches 90%, such as in Graz. In the BMW plantDingolfing, it is 69%; in the BMW plant Rosslyn inSouth Africa, 70% of the vehicles leaving the plantvia rail.

Percentage of the BMWGroup’s vehicles that leftthe plant in 2006 via rail:

55.4%About 77% of the production material, the spare parts and the finished vehicles of theBMW Group were transported by sea in 2006.

Almost all plants of the BMW Group are linked to the rail network. More than half of thenew vehicles leave the BMW Group’s plants via train.

Minimise the environmental impact of logistics.All transportation flows of the BMW Group are plannedand controlled by the employees of the logisticsplanning and transportation logistics. They organisethe supply of the production sites with materials andcomponents, the delivery of spare parts and acces-sories to the sales operations, and the distributionof the new vehicles. That corresponds overall to atransportation capacity of about 13.7 billion ton-kilo-metres per year. The logistics strategy of the BMWGroup results in exactly defined environmental ob-jectives as well as process descriptions for theoperative implementation in planning and purchasing.All relevant indicators and compliance with the annualobjectives can be tracked exactly using the reportingon sustainability in logistics.

49

Avoiding transport packaging. Up to now, vehicleswere protected from the elements and transit-relateddamage during transport by adhesive film, protectivecovers or wax. After an environmental performanceevaluation concluded that a closed transport or anopen transport with subsequent cleaning of thevehicles is much more environmentally friendly, theBMW Group is in the process of successively phasingout its surface protection for automobiles. In 2006,53.4% of the vehicles from the BMW Group weredelivered without surface protection; in the year be-fore, it was 42.5%. Since the start of the project in2004, this has dramatically reduced the use of sol-vents and chemicals. Furthermore, about 5,000 tonsof CO2 emissions were prevented. These resultduring the manufacture, application, de-waxing and

recovery of the surface protection. A vehicle deliverywithout surface protection with subsequent cleaningresults in 80% fewer CO2 emissions.

A similar study, led to new, environmentally safe pack-aging for shipping motorcycles at the site in Berlin;this consists of corrugated cardboard (instead of ply-wood) or sturdy steel. The latter solution is reusableand lasts for up to eight years while conserving thecompany’s resources and the environment at thesame time. i > Page 98

Achievements.– Since the beginning of

2007, deliveries to themarkets in the UK andSpain made by theBMW plant Leipzig aremainly via rail.

– Start of the new trans-portation concept forthe material supply inEurope in 2006. Thisincreases efficiency inthe utilisation of trucks.Furthermore, contrac-tual obligations forservice providers to useonly lorries according tothe latest Europeanemission standard.

– Decrease of 3.5% in2005 to 2.6% in 2006of the especially CO2intensive air freight per-centage for materialshipments from Europeto the overseas plants.

Challenges.– Further increase the

currently high percent-age of 55.4% for ship-ments made by railwhen shipping vehiclesfrom the plants.

– Influence the respectiveproduct and processdesign early on in orderto optimise packagingand transport volume.

Percentage of transport usedin %

90

75

60

45

30

15

Inbound material (Germany, UK), spare parts shipping (Europe) and car distribution(global), measured in ton-kilometres.

Sea

Road

Rail

Air

03

77.8

15.7

6.2

0.3

04

79.0

14.7

6.1

0.2

05

77.6

15.0

7.2

0.2

06

76.9

15.7

7.2

0.2

50 04.5 Sustainability in thesupply chain

Company environmental protection can onlybe “holistic” if it really covers all the links in aproduction chain. For this reason, the BMWGroup aims to establish high environmentalstandards also with its approx. 3,000 suppliersand service providers.

High standards for suppliers and partners. Asof spring 2003, the domestic and international pur-chasing conditions of the BMW Group contain exactguidelines on environmental responsibility.They ob-ligate suppliers to design the related componentsas per the state-of-the-art technology so that emis-sions are reduced during the production, usage andrecycling stages. When manufacturing each compo-nent, energy and raw materials are to be used effi-ciently. For this reason, each partner is urged to drawup a certified environmental management systemaccording to the established standards ISO 14001 orEMAS II. Alternatively, smaller suppliers may furnishproof of individual management systems and thatthey have systematised environmental protection intheir production.

Aside from environmental responsibility, the BMWGroup also requires from its suppliers and serviceproviders that they assume social responsibility. Forthis reason, the purchasing conditions also includethe prohibition of child labour and forced labour, dis-crimination and bribery as well as the implementa-tion of a suitable management system for occupa-tional health and safety. Here, the BMW Group isguided by the globally recognised standards of theInternational Labour Organisation (ILO) and the prin-ciples of the Global Compact.

The purchasing conditions are binding for all existingand new suppliers to the BMW Group. The selec-tion of the suppliers is tasked to a multi-disciplinary

team, which is located in the Munich central office.Experts from the purchasing, logistic, developmentand quality management areas evaluate the conceptssuggested by the suppliers, in addition to costs andquality aspects, also in view of social and environ-mental risks. The selection of suppliers also includesan evaluation of the concepts suggested againstthe backdrop of the protection of resources. Criteriafor this include the weight of the components or theresulting mechanical frictional losses with drivecomponents.

Suppliers are selected according to sustain-ability criteria. New suppliers are tested using a“Questionnaire for supplier selection”, which alsoasks about the social and ecological performance

of the supplier. Attendant to the product designprocess, environmental questions on the plannedproduction process of the new parts are takeninto account with risk management for purchasedparts in conjunction with existing suppliers. Asidefrom checking environmental management cer-tificates, the BMW Group requires its suppliers toprovide extensive data on resource consumption,the contents used and their risk potential. Usingthis data, it is possible to create environmentalperformance evaluations for specific parts andprocesses, identify any room for improvement, andobligate suppliers to implement an environmen-tally optimised design and production for new com-ponents. i > Page 98

About 3,000 suppliers and service providers work with and for the BMW Group inaccordance with high social and ecological standards.

To optimise the environmental friendliness of components, the BMW Group is inconstant dialogue with its suppliers.

51

Provided infringements against the criteria agreedupon are detected, then the experts for environ-mental protection, recycling and purchasing from theBMW Group will first attempt to find together withthe suppliers the reasons for these irregularities.Should the supplier fail to implement satisfactorymeasures, an escalation process is triggered whichmay lead to the change of suppliers.

In this manner, the BMW Group commits its directsuppliers (first-tier suppliers) to conform to reliableand uniform environmental protection and socialstandards. At the same time, the BMW Group ex-pects from its suppliers a corresponding examina-tion of those suppliers with whom the BMW Grouphas no direct business relationship (sub-contrac-tors). When submitting an offer, each new suppliermust therefore confirm that sub-contractors arechecked regularly for compliance with quality, envi-ronmental and social standards and thus can reliablycontrol the risks of its own supply chain.

Especially in the emerging markets, where environ-mental protection efforts trickle down only slowlyto medium and small suppliers, the BMW Groupsupports its suppliers in establishing environmen-tally friendly production methods. Since 2000,BMW South Africa has informed its suppliers usinga coaching programme on the environmental pro-tection standards in force and the economic advan-tages which arise from environmentally responsibleproduction. The result: The percentage of supplierswith a certified environmental management systemincreased from about 10% in 2000 to 93% at theend of 2006.

To maintain this status at the suppliers, the productand process auditors from BMW South Africaregularly inspect the environmental managementsystems and facilities of all suppliers of major com-ponents. The objective is, in the face of continuallynew suppliers and expiring certificates, to ensurea constantly high environmental standard at thesuppliers.

WWW.b2b.bmw.com

Achievements.– Successful implemen-

tation of current require-ments from the EU End-of-Life Vehicle Directiveby the BMW Group inconjunction with its sup-pliers in 2006.

– Control and optimisationof the environmentalfriendliness of the BMWGroup’s componentsalong the supply chain.For this, there weretransmissions and ex-pert evaluations of over30,000 data sets for se-rial parts in 2006 alone.

Challenges.– Increase random inspec-

tions of the compliancewith social and environ-mental standards atsuppliers in regular visits.

– Develop suitable indica-tors for early detectionof deviations and roomfor improvement.

– Due to globalised pro-curement and costpressure, first-tier sup-pliers are increasinglooking to suppliersfrom the emergingmarkets.This requiresmechanisms that alsosecure the sub-con-tractor management ofthe BMW Group’s sup-pliers and enable thisto be checked.

52

05Employees

The BMW Group owes its success to one fact: The best talent around gets excited aboutworking for the company. For this reason, the human resources and social policy at theBMW Group is more than just a supporting instrument, it is the core task of the company’sstrategy. Its guidelines are defined and steered centrally and lived and implemented by thehuman resources departments and executives across the globe.WWW.bmwgroup.com/career

Hannah Crowder, an appren-tice at the MINI plant Oxford, isone of 4,359 young peoplewho were learning one of 23professions at the BMW Groupin 2006.

5301 Sustainability management >> 1002 Economics >> 1803 Product responsibility >> 2404 Environmental protection across the Group >> 4005 Employees >> 52

1 Attractive employer internally and externally >> 542 Performance, compensation and flexibility >> 563 Co-determination and involvement >> 584 Equal opportunities and rights >> 595 Lifelong learning >> 606 Health and safety at work >> 627 Demographic change >> 64

06 Society >> 66

appreciation and tolerance. The management styleof BMW Group is characterised by cooperation anddialogue. Executives encourage and challenge theiremployees.The goal: Creating free spaces so thateach employee can act autonomously and is em-powered to give his/her best for the company.

As an employer with over 106,000 employees, theBMW Group faces societal challenges such as de-mographic changes, unemployment with concurrentlack of qualified workers and the demand for equalrights and professional flexibility. Only by anticipatingthese trends and making the right decisions fortomorrow today, will it be possible to attract and bindpromising talents to the company in the future.Theefforts to assure employee satisfaction and equal op-portunities, employment security and occupationalhealth and safety management, training and childcareare, in the view of BMW Group, investments in thefuture that will pay off for the company, its employeesand ultimately all stakeholders. i > Page 100 et seqq.

Dedicated and competent employees are essentialfor corporate success. In times of increased com-petition it is especially important to continuously in-crease the performance commitment and capabilityof employees.That is why the BMW Group maintainsthe principle of performance and compensation. Itis the foundation of all human resources and socialpolicies, which take into consideration the interestsof both the company and the employees. In itsessence it follows the requirements of the GlobalCompact, ILO, OECD, the ICC Business Charter forSustainable Development and the Joint Declarationon Human Rights and Working Conditions at BMWGroup. In addition, the human resources and socialpolicies are shaped to a large extent by the corporateculture, which includes values such as trust, mutual

“I very much welcome theopportunity for internshipsat BMW Brilliance Auto-motive Ltd. in China, as wellas the lectures given bymanagers of the BMW Groupat Tongji University. It is im-portant for the future to havean exchange of studentsbetween countries in whichthe BMW Group is activearound the world, in order tolearn from each other and toattract qualified employeesto the BMW Group.”Jun Ma, Deputy Professor, ViceDean of Automotive College,Tongji University

BMW Group employees at year end*

110

108

106

104

102

100

02

101,395

03

104,342

04

105,972

05

105,798

06

106,575* Figures exclude suspended contracts of employment, employees in the non-workphases of pre-retirement part-time arrangements and low income earners.

54 05.1 Attractive employer internallyand externally

Committed employees are the key successfactor for the BMW Group. Therefore, the com-pany aims at winning and maintaining the bestpeople and providing them with good possibilitiesfor personal development. This includes stableemployment relationships:There have been nolayoffs for operational reasons in almost 50 years.On the other hand, the employees are moreloyal to the BMW Group than the average, asshown by a fluctuation rate of 2.68 % in 2006,one of the lowest in the industry.

cal Cooperation, the Chinese joint venture, BMWBrilliance Automotive Ltd. in Shenyang, offers train-ing courses for motor-vehicle mechanics.

Apprentices at the German sites can work towardtheir technical college entrance exam concurrentlyto their apprenticeship within the programme“Dual Professional Training With Technical CollegeEntrance Exam”. The BMW Group provides 15 ofthe most highly committed apprentices the chanceto carry out a part of their apprenticeship as “EuroApprentices” in the UK. i > Page 100

The high satisfaction of employees is reflected insurveys in which the employees are asked about theattractiveness of their employer and potential im-provements. From January 2005 until March 2006,85,309 employees from 37 countries (equal to aparticipation quota of 87.2%) participated in thesecond corporate employee survey of BMW Group.Central result: 92.6% of the participating employeesare “satisfied” or “very satisfied” at the BMW Group.The worldwide employee survey is conducted regu-larly every two years.

With the numerous new jobs the BMW Group hascreated in connection with the product and marketinitiative of recent years (around 12,900 jobs since2001), the number of employees worldwide hasreached over 106,000 (of which some 80,000 are inGermany), which is essentially the level needed in themedium term.The human resources policy at theBMW Group therefore focuses on encouragementand motivation of employees and maintaining theirability to perform and fulfil their job requirements.There is still a need for applicants with specific tech-nical qualifications, such as electrical and electronicengineers, information specialists and mechanicalengineers.

A variety of training opportunities. School grad-uates can choose among 23 different commercialand technical apprenticeships at BMW Group. In2006, 4,359 apprentices learned a trade at theBMW Group.The apprenticeship rate in 2006 was4.9%, remaining nearly constant in comparison withthe previous year.

Through so-called “Junior Companies” acting as in-ternal suppliers for different company areas, thetechnical and commercial apprentices can demon-strate their abilities and independently implementideas in a practical environment. For 30 adolescentswho find it difficult to qualify for any kind of appren-ticeship, the BMW plant Munich, in cooperation withthe Federal Employment Agency, has offered an

initial qualification year since 2006, with the prospectof a regular apprenticeship in the following year.

The training programmes of the BMW Group arematched to the conditions of the local sites. At thesame time, the BMW Group applies the dual systemof further training, which has been proven in Ger-many for decades, to some of its international sites.

Three examples: For the “Rolls-Royce ApprenticeScheme” at the Rolls-Royce facility in Goodwood(GB), a first round of twelve apprentices aged 16 to19 years has been recruited. At the three plants ofthe MINI Production Triangle in the UK, around160 apprentices are learning one of twelve trades.Together with the German Association for Techni-

Awards.– Trendence Study 2006:

BMW Group againmost popular Germanemployer among gradu-ates in engineering andeconomics.With ITgraduates, theBMW Group made 5thplace.

– Universum Study 2007:BMW Group is Ger-many’s most popularemployer among econ-omists, engineers, natu-ral scientists andinformation specialists.In the US, UK, Australia,Spain and India, theBMW Group makes thetop ten – in the regardof American engineers,the BMW Group reaches4th place.

Practical management of knowledge: Experienced employees share their know-howwith apprentices.

55

University cooperation: Work together withthe best brains. With its university cooperation, theBMW Group above all aims at furthering technicaltraining measures and research and developmentprojects. Some examples: The BMW plant Spartan-burg cooperates with eight colleges and universi-ties and has established new partnerships with theFoundation of the University of South Carolina andClemson University in South Carolina. Not far fromthe BMW plant Spartanburg is the technology cam-pus of Clemson University (Clemson UniversityInternational Center for Automotive Research – CU-ICAR). In the autumn of 2007, the Graduate Engi-neering Centre will start its teaching operation there,with two professorships funded by the BMW Group.The MINI plant Oxford in the UK, together with some

universities, offers a programme for internships ofthree to twelve months duration. In 2006, this wasused by 173 students to collect valuable practicalexperiences. In the last two years, the BMW plantLeipzig has built up a cooperation network with nineregional universities. An example of a cooperationproject is the development of a small lab vehicle,used by students to carry out electric and electronicsimulations.

WWW.bmwusfactory.com/education/clemson_icartrendence.comuniversumeurope.com

The BMW Group isGermany’s most popularemployer (Universumstudy) since:

2004

Achievements.– Participation of over

87% of employees inthe second company-wide employee survey(2005/2006). Over92.6% are “very satis-fied” or “satisfied” at theBMW Group.

– Increase of the quality ofprofessional training andthe self-reliance of ap-prentices through inno-vative didactic concepts,such as the junior com-panies and e-learningmethods.

Challenges.– Continue focussing hu-

man resources mar-keting towards specificqualifications in theareas of electrics, elec-tronics, informationtechnology and me-chanical engineering.

– In professional training,design and implementa learning unit on thesubject of hybrid tech-nology.

BMW Group supports Clemson University by funding two professorships – just oneexample of the company’s college and university cooperation.

56 05.2 Performance, compensationand flexibility

While the BMW Group has high expectations ofits employees, it also has much to offer to them.The principle of performance and compensationbenefits both the company and the employees:For the company, it is a key factor for increasingthe motivation and commitment of the em-ployees – and thus is the foundation for the com-pany’s success.

Attractive benefits for committed employees.For employees, the principle of performance andcompensation above all means secure and attractivejobs and success-based payment, which is relativelyhigh.The salaries paid by the BMW Group are withinthe upper third in comparison with the other DAXcompanies.The principle of performance and com-pensation is also evident in the employee’s sharingof success:The employees of BMW AG were paid156% of the monthly salary for the successful resultof the 2006 business year.The BMW Group supportsthe retirement planning of its employees with a com-pany-funded pension plan and contributions to per-sonal retirements schemes, which are, in the opinionof experts, among the best in the market. In additionto monetary salaries, the BMW Group – dependingon the site and the legal conditions – provides con-tributions to health and accident insurance as well asan attractive company vehicle programme. In China,for example, the BMW Group covers pension insur-ance, health and accident insurance and a yearlymedical check-up. In addition, the company offersnumerous local sports and leisure activities.

Further offers by the company to its employees in-clude sabbaticals, teleworking, further training pro-grammes, and comprehensive health care and fitnessschemes. A wide variety of work time rules andmodels meet specific needs of employees, while alsoincreasing the necessary flexibility for the company.

Achievements.– High level of social and

additional benefits foremployees in industrycomparison.

– Since 2002, increase in demand for the FamilyServices of 54% (2006).

– Further development ofparent initiatives andexpansion of capacitiesof existing facilities by10%.

– Reorientation of humanresources processeswithin the programme“Excellence in HumanResources (eHR)”. Byestablishing new accesschannels, such as thenumerous web-basedapplications for em-ployees and managersof the MyNetwork em-ployee portal, and Per-sonal Direkt – an inte-grated access channel(e-mail, phone and per-sonal contact), standardprocedures and adminis-trative processes aremade significantly moreefficient.They haveallowed to increase thequality of services forthe employees and tostrengthen the consult-ing functions of humanresource managementin all workforce-relatedissues of the depart-ments.

Challenges.– Continue to expand flexi-

ble employment struc-tures in order to increasethe company’s ability toadapt, and thus job se-curity.

>> Going to work. A voluntary serviceby the company is the support it provides toemployees in Germany for commuting to and fromwork. Because not all of the 80,000 employees atthe German sites can use public transportationservices, the BMW Group has set up its own plantbus system.There are 72 plant buses on the roadat the Regensburg plant, 76 at the Munich plant,and as many as 317 at the Dingolfing plant. All in allthey carry 21,800 employees per day.The advan-tages of the plant bus system include lower im-pact on the environment and decreased traffic.The environment benefits from CO2-reductionsamounting to up to 24,000 tons.The employeeshave a safer trip and lower commuting costs, asthe company supports the bus system financially.

Employees coming to work in their own car canlook for rideshare partners via the intranet. InLeipzig, this is done by a rideshare exchange withsystem-supported intermediary and communica-tion functions. Where buses and trains are a viableoption (such as at the Munich and Regensburgsites), BMW Group supports the purchase of aJobTicket with up to 90% of the total cost. To-gether, these measures result in an average of50% of all employees in Germany coming to workon a plant bus or by public transport.

Every day, BMW Group plant buses transport around 21,800 employees.

57

Flexibility for the company and employees. TheBMW Group expects a high degree of self-reliance,flexibility, commitment and ability to perform fromeach employee. What counts is performance anddeadlines – while a fixed schedule in which to achieveit is becoming less important.

Based on this philosophy, the majority of employeesof the BMW Group outside of production enjoyflexible working hour schemes. For managementpositions not covered by labour agreements, sharedgoals are agreed upon instead of required workingtimes, i.e. attendance sovereignty is applied. In addi-tion, there are over 300 working time models in placeat the German BMW Group sites and at the MINI plantOxford in Britain. Additional flexibility is provided bywork time accounts, which allow the actual workingtime to deviate as much as 200 hours per year fromthe negotiated working time.Thanks to these pro-visions, the BMW Group can react quickly to marketchanges, adapt its capacities, utilise production facili-ties better and operate more efficiently in general.

Since 1994, the BMW Group has increasingly offeredpart-time employment and job sharing. For manyemployees, BMW Group has implemented tele-working plans. A sabbatical model – used by over8,000 employees since 1994 – offers the opportunityto create individual free spaces.

Flexibility is the key for the company’s competitive-ness and long-term success – and thus also for jobsecurity. Last but not least, flexible, interesting andwell-balanced jobs are a convincing argument forattracting the best employees to the company andfor retaining them.

agreement with a local day-care centre. During theso-called Family Days, which took place in 2006 atthe Swindon, Oxford and Spartanburg plants, jobsand families were literally brought together. On thisday, employees showed their families the productionprocesses and their place of work. i > Page 101

Balancing family and work. An important argumentfor employees who are becoming parents: The BMWGroup sees itself as a family-friendly company. Flexi-ble working time models and the offers mentionedabove, such as sabbaticals and teleworking, makeit easier for parents to balance work and family.TheBMW Group’s family policy is firmly anchored withinthe human resources policy. Since 1992, the FamilyService has been offering independent counsellingand has acted as an intermediary in all questionsof employees surrounding the subject of family andchildren. Children of employees are cared for infour parent-initiated facilities at German sites and intwo “Early Learning Centres” at the South Africansites Rosslyn and Midrand. The MINI plant Oxfordand the BMW plant Leipzig each have a cooperation

Number of differentworking time models atBMW Group:

300In the Early Learning Centres at the South African sites Rosslyn and Midrand, childrenof employees receive qualified care.

58 05.3 Co-determination andinvolvement

In the long run, companies can only succeed if they take the interests of their workforce intoaccount. Based on this realisation, co-deter-mination is a long and good tradition at theBMW Group.

Co-determination at all sites. Institutionalisedco-determination is implemented company-wide inaccordance with the applicable legal requirements.At all plants and branches of BMW AG, electedworks councils carry out co-determination func-tions and the representation of the employees. Innegotiations with the company management, siteagreements and working time models are agreedupon, the development of the company is reviewedfrom an employee viewpoint, and there is constant –and often critical – dialogue with the corporatemanagement. Both the company leadership and theemployee representatives highly value a coopera-tive approach.The corporate works council is incharge of the regulations and agreements in effectin Germany.

The employee representatives of the sites in theUK, in Austria and in Germany have moreover joinedtogether as a Euro Works Council.

At the BMW plant Spartanburg, the company leader-ship regularly meets with employee representativesfor information talks and discussions, at whichconcerns and suggestions of employees are talkedabout as well.

At the BMW plant Rosslyn in South Africa, close to40% of the workforce are organised by the NUMSAtrade union, which represents the employees’ interestsat the negotiations about wages and working condi-tions taking place every three years.

The employees’ interests are also organised at BMWBrilliance Automotive, the distribution and produc-tion joint venture of the BMW Group in China. In Julyof 2005, an employee representation, the AssociatesClub, was elected there – one of the first of its kindat a large private company in China.This employeerepresentation was further developed in accordancewith the appropriate trade union in 2006/2007.

Sharing ideas and concepts. Ideas, creativity andpower of innovation of the employees are whatsecure the competitive advantage of the company.The BMW Group, together with the works council,has therefore installed an integrative improvementmanagement to systematically encourage andrecognise this potential. With internal innovation pro-cedures, systematic management of employee sug-gestions and innovation ideas of external partners(suppliers, customers, trade organisations), severalsources for ideas and improvements are combined.

The goal is to establish a global innovation and im-provement culture which is alive locally and guidedand encouraged by leadership at all levels. Onaverage, one out of two employees turns in an im-provement suggestion per year; the cost savingsthus realised amounted to more than euro 92 mil-lion in 2005 alone. In 2006, the amount was morethan euro 63 million. Creativity also pays off for em-ployees: For about one half of all realised sugges-tions, the supplier of the idea was awarded with apremium in accordance with the site agreement ineffect. i > Page 102

Achievements.– Founding of an employee

site representation atBMW Brilliance Auto-motive Ltd. in China andits further developmentin accord with the ap-propriate trade union in2006 und 2007.

– Cost savings of euro63 million through pro-posals by employees in2006.

Challenges.– Further anchor the

philosophy of improve-ment and continue tobuild innovation culturewithin the company byappropriate measures.

Regular works meetings promote sharing between company leadership, employeerepresentatives and the employees.

5959

Living diversity. The principles of equal oppor-tunity and diversity apply company-wide withoutexception. At some sites, additional site-specificmeasures and programmes have been developedbased on the guidelines.

In the US, for example, all employees are required totake training courses directed against discriminationand promoting diversity. In Florida and California,the BMW Group aims to encourage people of Latinorigin to consider a career in the automotive indus-try with its “Service Technician Education Program”(MetroSTEP). Thanks to the Group’s Diversity Com-mittee in North America, 7% of American BMWand MINI dealers belong to an ethnic minority today.In South Africa, the BMW Group established a pro-

Attractive employer for women. One objectiveof the BMW Group across sites and countries is in-creasing the rate of women employees with the ulti-mate goal of achieving a balanced workforce struc-ture. Currently, BMW AG has a rate of women of13.4%, with 7% in the leadership. By increasingthe rate of female employees, the BMW Groupwants to further access the potential of well-quali-fied women. With activities such as the Girls’ Day(on which around 3,500 daughters of BMW Groupemployees have gained insights into the company’swork since 2001) as well as trial internships andtechnology camps for girls, the BMW Group triesto create excitement for technical jobs and the com-pany among girls.The BMW Group and the MunichTechnical University use a programme named

gramme for ethnic and demographic diversificationof the workforce in an Employment Equity Plan forthe years 2005 through 2009, the progress of whichit reports to the government annually. At the Britishplants in Hams Hall, Oxford and Swindon, leader-ship and human resources personnel are trained inequal opportunity issues. Last but not least, the Ger-man sites also feature numerous equal opportunityinitiatives, such as for the integration of disabledemployees.Thus, the new production lines at theRegensburg plants have workstations for severelydisabled employees.

“MentorIng” to network young female engineerswithin the BMW Group with high school girls andfemale students of technical subjects to allow theminsight into working life. A programme named“Cross Mentoring” is used to identify and promotewomen with great potential.The “Female Leader-ship Dialogue” network offers a platform for womenin leadership positions to discuss information andshare experiences to the mutual benefit of the com-pany and the participants. Dedicated monitoringand continuous evaluating of the programmes isused to check whether the regulations and processesfor equal opportunities at the BMW Group are suffi-cient or need to be adapted. i > Page 102

05.4 Equal opportunities and rights All employees of the BMW Group enjoythe same opportunities and rights at thecompany – independent of gender, origin,age or beliefs.These principles are an-chored in the guidelines for employeesand leadership of the BMW Group, thestandards of the long-term human re-sources policy and the Joint Declarationon Human Rights and Working Conditionsat the BMW Group.

Share of women in the total workforce of BMW AGin %

15

14

13

12

11

10

02

12.5

03

12.8

04

13.2

05

13.4

06

13.4

Achievements.– Increase in the rate of

female apprentices intechnical trades to20.5% within BMW AGin 2006. This representsan overall increase of14.5% from 2002.

– Increase in women inmanagement positionsin Germany of 25%since 2002.

Challenges.– Further increase in the

rate of women in techni-cal jobs and in leadingpositions.

– Strengthen the com-pany values of diversityand equal opportunityinternationally.

At BMW AG, some 13% of the workforce is female – the company aims at furtheraccessing the potential of well-qualified women.

60 05.5 Lifelong learning It is an objective of the BMW Group to adaptquickly to changes and to act proactively. Inthe interest of this goal, its employees areexpected to continuously develop their abilities.The company provides support with a widevariety of learning opportunities.

In this way the company wants to develop todaythe capabilities of its employees that will be the keyfor success tomorrow. All employees are expectedto actively acquire additional skills and further de-velop existing ones – throughout their entire workinglife. In 2006, the BMW Group invested over euro184 million in the education and further training ofits employees.

Personal development worldwide.The numer-ous training and development measures that theBMW Group initiated in 2006 were both nationaland international in scope. On average, each BMWGroup employee attended 1.8 days of training in2006.The BMW plant Hams Hall has concluded apartnership with Sutton Coldfield College to offer

Knowing what will count tomorrow. The traininginitiatives of the BMW Group are based on needspredictions that are a combination of an analysis ofage structures, the actual qualifications of the em-ployees and future technological and structural de-velopments. The process of strategic needs analy-sis at the BMW Group is guided by the QualitativePersonnel Planning (QPP). With the help of QPP,and based on corporate strategy, changed structuralrequirements, needs profiles and employee capabil-ities are identified for the future. If a new technologyis planned to be deployed in three to five years, itmust be clear first how, and in how much time thenecessary capabilities can be created. QPP sup-ports the analysis whether the right employees withthe necessary knowledge and skills are at the right

place and can become active at the right time. Aspecific example is the adaptation of the qualifi-cation of employees in the areas of electronics andITsystems in vehicles that has become necessary.This can also affect the new qualification for jobsthat are just being created. For example, in the areaof hybrid drives, the BMW Group is working to qual-ify the employees for the design and safe handling ofhigher voltage technology.

individually tailored development programmes for theBMW Group workforce. The MINI plant Oxford runstraining programmes in cooperation with the Auto-motive Academy. All British sites of BMW Group to-gether use the BMW Group Academy UK in WokefieldPark near Reading, which opened in February 2007.At this training centre, in addition to the instructionsessions for BMW Group employees, extensivetraining and development programmes take place

Achievements.– Successful introduction

of the “Wiki Pilot” intranetportal as a platform forexchanging company-relevant knowledge atthe beginning of 2006.Wiki Pilot has since be-come the second mostpopular freely selectableportal in the intranet.

– Since the beginning of2006, opening of newafter sales training cen-tres that follow world-wide standards inGreece, the UK, Italy,Portugal, the Czech Re-public, Mexico, India,South Korea and Japan.

– Combination of atten-dance training and on-line training through in-novative, easy to usee-learning and trainingmanagement systemsintroduced worldwide.

Challenges.– Interrelate working and

learning processesmore strongly to allowfor daily learning withinthe specific areas ofresponsibility.

– In the BMW Group’sgrowth markets, suchas China and USA, thequalification level ofemployees needs to beincreased further, partic-ularly in the light of highfluctuation and a strongneed for employees.

Further training within the practical context: Approximately 23,000 participants weretrained at the BMW GroupTraining Academy in Unterschleißheim, near Munich, in 2006.

Capital expenditure on education and further training*

of the BMW Groupin euro million

250

225

200

175

150

125

* The BMW Group’s capital expenditure depends on education and further trainingrequirements and thus fluctuates from year to year.

02

210.5

03

196.3

04

231.7

05

194.2

06

184.1

61

Shanghai, Shenyang, Guangzhou and Chengdu)has been completed in 2006.This basic training isscheduled to be introduced to other countries thatalso do not have a concurrent work and trainingsystem.

The company’s specially designed leadership pro-gramme includes strategic management qualifi-cations, strengthening of individual capabilities anddiscussions of current trends and developments.

Fundamentally, the BMW Group encourages em-ployees to take on tasks in other areas and sites ofthe company in order to link, broaden and deepentheir knowledge base. i > Page 103

for apprentices and employees of BMW and MINIdealers in the UK. The Swindon plant supports pro-duction environment employees with a technicaland general qualification programme (mathematics,English and information technology). In SouthAfrica, the BMW Group has issued the first Auto-motive Manufacturing Certificates to employees. Atthe BMW plant Spartanburg, an e-learning lab forall employees was inaugurated in 2006.

Since the beginning of 2006, the German plants havecarried out comprehensive qualification measures ofall employees for an added value creation-orientedproduction system. Through integrated learning con-cepts – combining attendance events and e-learningmeasures – process changes are trained, especiallyfor the logistics and development areas. Overall in2006, 4,800 training measures for around 50,000employees were carried out in Germany.

At the BMW Group Training Academy at Unter-schleißheim near Munich, over 300 after sales trainingcourses for around 9,000 employees of the Germandealer network took place in 2006. Overall, about23,000 participants from around the world took partin seminars about new models and brand behaviour,as well as courses about systems and processes.

The optimal learning conditions at the Academy aresetting standards in the automotive industry. Thestrategy pursued with the Academy has also beenapplied to other BMW Group markets. In 2006,new training centres have opened in Greece, the UK,Italy, Portugal, the Czech Republic, Mexico, India,South Korea and Japan. Trainers with worldwidestandardised certifications ensure a high level ofqualification. The implementation of a basic techni-cal course for employees of Chinese BMW dealersin cooperation with five universities (Nanjing,

The successful concept of the BMW Group Training Academy in Unterschleißheimwas applied to further markets such as the UK, Mexico, India, South Korea and Japanin 2006.

62 05.6 Health and safety at work The leadership position that the BMW Groupclaims is also evident in the areas of occupationalsafety and health management. For the BMWGroup, health management is much more thansimple healthcare. Rather, the goal is – in con-formity with the Luxembourg Declaration onWorkplace Health Promotion in the EU – an all-inclusive, continuous and effective support ofthe physical and mental well-being.

The “Health Forum”, a voluntary health check withindividual consultation about risk factors and per-sonal lifestyle, was offered in 2006 to all employeesof the BMW plants Landshut, Leipzig and Munich.It was followed up with measures such as smokingcessation courses or nutrition classes. After the suc-cess of the Health Forum – two thirds of plant em-ployees participated – the activity was offered also tothe employees at the Munich headquarters in 2007.A Health Forum is planned for the Dingolfing site inthe fall of 2007.

The BMW Group also supports its employees in thecase of acute disease and in reintegration after alonger absence due to disease.Thus, the “RehabNetwork” optimises rehabilitation processes throughthe cooperation of hospitals with BMW Group’s healthservice and the BMW AG Health Insurance Plan (BKK).

Avoid accidents, increase safety at work. Occu-pational safety is a priority at the BMW Group andis firmly rooted in all work processes. It is based oncertified occupational health and safety managementsystems (OHRIS/OHSAS), which are adhered to atall sites. In order to avoid physical stress, the ergo-nomics of work procedures are reviewed – a pre-ventive measure increasing in importance due tothe demographic change and the ageing workforce.In 2006, workplaces at the BMW plant Munich wereredesigned ergonomically, for instance changingsewing stations into sitting-standing stations.TheBMW Group takes care that employees with chronicdiseases are employed at the workplace most suitedto them, based on a standardised performance pro-file created by the plant physician. i > Page 103 et seq.

This philosophy is brought to life by the BMW Group’shealth service, which is located at sites around theworld with 30 physicians and around 80 occupa-tional medicine assistants, and plans its activities inclose consultation with the employee representa-tives. In addition, all employees working abroad haveaccess to an assistance hotline around the clock.

WWW.enwhp.org

Strengthening health, facilitating rehabilitation.Employees are responsible for keeping themselveshealthy.That is why the BMW Group supports aresponsible approach to one’s own health: diseaseprevention, e.g. influenza protection measures, can-cer prevention and courses about body weight and

nutrition are some of the offers. Also contributing toa healthy lifestyle are the labelling of food by nutri-tional quality in the company restaurants and thecompany-owned fitness centres within the corporatescope of the “MoveUp” concept.

Company-owned fitness centres help employees maintain physical balance andhealth.

63

>> Fighting against HIV/AIDS. Out of responsibility towardsits employees and society, but also out of economic necessity, the BMW Grouptakes comprehensive measures to fight HIV/AIDS at affected sites.

In South Africa, where more than one fifth of the population is infected with HIV,the company already in 2000 defined an HIV/AIDS strategy and set up a com-prehensive prevention and treatment programme. The HIV/AIDS Task Force isresponsible for monitoring, risk analysis and development of appropriate strate-gies for action. HIV risks are explained already in the plant daycares, whilewomen – affected especially by HIV/AIDS in South Africa – have their own fo-rum. Employees have access to the “AID for AIDS” health service. Amongst itsservices is all-inclusive care for affected employees and their families. Includedare the provision of medications, health tests, psychological counselling andnutrition and lifestyle education.

By various communication measures, but also by furthering the developmentof human resource processes to guarantee absolute anonymity of HIVstatus, the BMW Group in South Africa has managed to establish a culture oftrust in the handling of HIV/AIDS.The central starting point for the effectivenessof all measures is the knowledge of one’s own HIV status. A comprehensive,individualised testing programme ensures more self-responsibility. In orderto be a model for the employees, the entire management level had themselvestested at the company clinic and has documented and communicated thatfact. Each test includes a preliminary talk and a final consultation, encouragingthe participants to match their lifestyle to their HIV status: Anyone who is HIVnegative should be able to do everything to prevent a future infection, where-as HIV positive employees are given the chance to continue their work andprivate life as normal as possible through therapy and reintegration measures.Thanks to this comprehensive programme, the BMW Group in South Africahas lost only 17 employees to the pandemic in the last six years.

The Chinese BMW Brilliance Automotive Holding Ltd. integrates educationabout a variety of infectious diseases into its “Infectious Diseases AwarenessProgram” (IDAP). The employees of the Shenyang plant and the distributioncompany in Beijing are informed at quarterly workshops about the preventionof infectious diseases such as HIV, hepatitis, SARS (Severe Acute RespiratorySyndrome) and bird flu. Participation in these workshops is mandatory for all em-ployees; since the beginning of 2007 they have been an integral component ofthe orientation courses for new employees. (Further information about the com-mitment of the BMW Group to the fight against HIV/AIDS on pages 74 and 75.)

WWW.bmw.co.za

Achievements.– Introduction of occupa-

tional health and safetymanagement systemsat all BMW Group sites –the BMW plant Leipzigwas the last to beOHRIS-certified in No-vember of 2006.

– Reduction of the num-ber of reportable workaccidents between1996and 2006 by 55%, from6.6 to 3.0 accidents perone million workinghours performed atBMW AG.

– Substantial investmentin the ergonomic designof workplaces – theMunich plant alone in2005 invested euro 25million in the design ofergonomically optimisedworkplaces.

– 46,800 participants inthe Health Forum by themid-2007.

Challenges.– Maintain the perform-

ance and employabilityof a workforce that is in-creasing in average age.

– Further strengthenhealth prevention andresponsibility of em-ployees for their health.

64 05.7 Demographic change The industrial nations are currently experiencinga demographic change. For years, the numberof newborns has fallen below the number ofdeaths. In Germany, where BMW Group employsaround 80,000 people, this development isespecially severe.

Ergonomic workplaces. Workplaces are designedto reduce stress on the body as much as possible.Rotation models in production – controlled changesof workplace at regular intervals – are designed tofurther reduce physical stress.

Health management.This includes offers such asthe Health Forum, where employees can receive acomplete examination.The MoveUp programme,developed together with the BMW Health InsurancePlan (BKK), integrates training, therapy and reha-bilitation measures (more on page 62, chapter onHealth and safety at work).

Learning across generations. Individual qualifica-tions strengthen exactly those skills that the BMWGroup will require in the future. With specific educa-tion and further training, the company supports itsemployees throughout their careers (see page 60,chapter on Lifelong Learning) New ways of learningneed to be found, for example matching the require-ments of older employees – they prefer application-oriented learning to theoretical learning. The newlydeveloped Project Camp is such a way of learning,consciously aiming at learning at the workplace, atthe experience of participants and at knowledgetransfer between younger and older employees. InAge Management Seminars, leaders are trainedspecifically in concepts and instruments of age-ap-propriate leadership. In addition, mixed-age teamsserve learning across generations: In such innovativework structures, older and younger employees canexchange their knowledge “on the job” every day.

Needs-based retirement models. Despite en-hanced prevention measures, not every employeewill be able or willing to work up to the legal retire-ment age.That is why the BMW Group, together withthe Works Council, is developing new, needs-basedretirement models.They are supposed to take into

Today for tomorrow.The average age of the BMWGroup’s workforce will increase by five years withinthe next ten years – an effect that in Germany canbe traced to demographic change, but also to theraising of the legal retirement age and the termina-tion of the Federal Labour Agency’s support forsenior part-time employment.

In order to continue to lead in performance and com-petitiveness, the BMW Group must on the one handstrengthen the health and capability of its workforceand on the other hand match the working and learn-ing environments to the changing age structure.TheBMW Group is meeting this extraordinary challengewith an ambitious project.Today for tomorrow is an all-inclusive package of measures directed at employees

of all age groups at the BMW Group in Germany.Thegoal is to create the conditions for a continuouslycapable workforce for the future, above all throughpreventive measures.

“Today for tomorrow.” (Project started: April 2004) ismanaged by the central human resource and socialdepartment at the Munich headquarters and guidedby a leadership circle established for the purpose.The project includes five areas of action:

No bending, no stretching: Ergonomically optimised workplaces reduce stress on the body.

65

consideration the life plans of employees and thecompany’s needs and to be supported by newfinancing schemes. The financial base for this is laidalready today.

Communication creates awareness. A variety ofcommunication measures strengthen the aware-ness of leadership and employees for societal andcompany changes and promote self-reliance. Since2006, the intranet portal “My Future Provision” offersemployees a wealth of information and support insubjects such as training and work environment, aswell as financial and health planning.

These initiatives will be decisive factors for the com-petition of the future.The competition for the best

employees will become dramatically stronger. More-over, the age structures will change significantly inthe next ten years.To react to the demographicchange then would be much too late.To anticipateit today means utilising the opportunities providedby demographic change.

Number of employees whohave participated in theHealth Forum as of 2007:

46,800

Achievements.– Since 2007, series of

“Age ManagementSeminars” and healthcourses conducted tofurther strengthen em-ployees’ awareness ofhealthy diet, fitness andphysical health.

– Establishment of “MyFuture Provision” – an in-tranet portal that servesas the central informa-tion medium for all pen-sion schemes – in 2006.

Challenges.– Integration of the

measures taken in the“Today for tomorrow”project into the standardprocesses, and therebyinto the company’s dailyroutine.

– Conclusion of detailedarrangements with theWorks Council to enableearly withdrawal fromthe labour force.

– Further adaptation ofwork structures andmodels to the higheraverage age of em-ployees.

In 2006/2007, employees at the BMW plants in Landshut, Leipzig and Munich, alongwith their colleagues from the headquarters in Munich, were able to have themselvesexamined and receive individual consultation at the “Health Forum”.

66

06Society

Anyone who aims to be successful tomorrow must today create the conditions that will enablesuccess in future. Companies such as the BMW Group operate today in a complex, fast-changing environment.Their success depends not only on their own performance and inno-vations, but also on the conditions and developments of the surrounding social environment.WWW.bmwgroup.com/socialcommitment

Makwena Sibiya’s responsi-bilities include HIV/AIDS pre-vention in her job as a nurse atthe medical centre of the BMWplant Rosslyn, South Africa.

67

“The overall strategy of theBMW Group to promotesustainable mobility andefficient driving contributesto improved energy effi-ciency and therefore helpsto reduce CO2-emissions.With the support of theBMW Group the Chair ofSustainability will conductfurther research regardingthe different dimensions of climate change in SouthAfrica and beyond.”Prof. Coleen Vogel, BMW Chairof Sustainability, University ofthe Witwatersrand

01 Sustainability management >> 1002 Economics >> 1803 Product responsibility >> 2404 Environmental protection across the Group >> 4005 Employees >> 5206 Society >> 66

1 Traffic concepts for the future >> 682 Traffic safety projects >> 703 Education and intercultural understanding >> 724 Commitment to fighting HIV/AIDS >> 745 Worldwide cultural commitment >> 766 Foundations >> 77

The activities of the BMW Group in the area of (inter-cultural) education are as vitally important for societyas for the company. A high level of education andintercultural understanding among its employees aredecisive factors in the BMW Group’s success – andin dealing with the social challenges confronting to-day’s knowledge society.

The mutual dependence of company and societycan also be seen in the case of the immune defi-ciency disease HIV/AIDS. This pandemic representsa serious threat – not only for the society in general,but for the BMW Group and its employees too. Bycountering this danger with effective measures, thecompany not only protects its workforce but at thesame time generates added value for society.

Such added value is generated in another formthrough the promotion of culture.The BMW Groupseeks to have a positive influence on the societyby promoting innovative ideas, young artists andartistic excellence. In so doing, the company pro-motes social values on which its success as an inno-vative premium manufacturer depends.

But the BMW Group does not hesitate to fully en-gage itself even where there is no direct benefit forthe company. Out of a sense of duty and responsi-bility, the BMW Group willingly deploys its economicstrength for the benefit of those affected by devas-tating catastrophes such as the Tsunami in South-east Asia.

With its own two independent foundations, theBMW Group is committed to social concerns in aspecial way. The BMW Foundation Herbert Quandtpromotes interdisciplinary dialogue among decision-makers from business, politics, culture and themedia. The Eberhard von Kuenheim Foundationpromotes active entrepreneurship. i > Page 106

Because of this, the BMW Group believes that takingsocial responsibility always represents an investmentthat is every bit as worthwhile as it is necessary. Underthe slogan “We take responsibility”, the company fo-cuses its commitment toward the solution of socialchallenges in regions and countries of relevance tothe company, and in those where it actually operates.In so doing, the BMW Group pursues a consistent,results-oriented approach: rather than participating inpure sponsorship activities, the BMW Group activelycommits itself to projects with long-term objectives.In this context, its commitment is dedicated to thepremise of “helping others to help themselves” andpromotes initiatives that help to bring measurableprogress towards the solution of specific social chal-lenges. Where it makes sense to do so, the companycooperates with external experts.

The BMW Group concentrates on approaches aimedat achieving long-term solutions that can be trans-ferred across national borders as “best practices”.Most of the activities are carried out directly at theBMW Group sites. However, when initiatives can bemore efficiently managed on a centralised basis,specialised central divisions such as Group Corpo-rate Affairs, the Group’s foundations, the Scienceand Transportation Policy Division, or the Institutefor Mobility Research (ifmo) become involved.

Mobility research and international projects for thepromotion of traffic safety represent key aspects ofthe social commitment of the BMW Group. In bothareas, the company provides outstanding expertiseas a manufacturer of premium automobiles whilehelping to make its own future more secure throughpath-breaking transportation concepts at the sametime.

“For the BMW Group it is im-portant to give attention tocultural values and culturaldifferences in the marketswhere it is present, becausecross-cultural competencehelps to improve productsand raise corporate value.”Prof. Fabio Orecchini,Faculty ofEngineering, Sapienza Univer-sity of Rome

68 06.1 Traffic concepts for the future Society today is more mobile than ever before.Infrastructure and transportation systems havenever before so frequently reached their limits.As a conscientious automobile manufacturer,the BMW Group has a vital interest in enablingindividual mobility in the future as well. For 20years now, the company has also been workingon transportation concepts.

WWW.ifmo.de bmwgroup.com/mobility

Path-breaking transportation concepts. Withthe aim of solving traffic problems jointly with thestakeholders of the transportation sector, the BMWGroup established the Inzell Initiative in 1995 to-gether with the Bavarian capital, Munich. Followingthe successful implementation of a parking spacemanagement system, current concepts are focusedon promoting public transport with Park-and-Rideprogrammes, on the municipally acceptable handlingof transportation in the primary transportation road

network (Red Routes Network), and on the regionalplanning of transportation development. In a numberof research projects in cooperation with the publicsector, the BMW Group is participating in the devel-opment and implementation of measures for im-proving transportation systems and offerings. Since2005, for example, the BMW Group has been in-volved in the further development of instruments andprocesses for transportation planning and manage-ment as part of the collaborative project “arrive –Offerings for a mobile region”. The project has beenset up to run for three-and-a-half years, and enjoysconsiderable support from the BMW Group in termsof material and personnel resources. And the intro-duction of quality assurance for traffic managementsystems also plays a role here: more efficient use ofthe existing infrastructure and more efficient trafficpatterns are designed to improve the region’s qualityof life and economic power, and to reduce the effectsof traffic. In so doing, special emphasis is placed onthe ability to take the solutions developed in Munichand transfer them to other cities. In addition, theBMW Group’s experts have developed a guidelinefor generating traffic management plans. This isintended to help local authorities in the actual imple-mentation of newly developed traffic managementsystems.

WWW.inzell-initiative.dearrive.de

With some 80,000 employees in Germany who driveto their place of work and back on every working day,the BMW Group itself contributes to the load on themain traffic routes. But the company reduces theseeffects with its comprehensive employee mobilityconcept. (Read more about “Mobility of employees”on page 56).

Research for future mobility. For the “Institute forMobility Research” (ifmo), which was established bythe BMW Group in 1998, the increasing volume ofroadway traffic is only one of many research con-siderations. The Berlin-based institute draws on the

One of the BMW Group’s strategic objectives is toenable the most efficient and environmentallyacceptable use of the existing road network whileminimising the negative side effects of mobilitysuch as traffic jams, accidents and pollution. Rele-vant research projects and initiatives are being ledby the Science and Transportation Policy Divisionof the BMW Group. Further valuable impetus formobility research is generated by the “Institute forMobility Research”, an independent research or-ganisation of the company. Through these institu-tions, the BMW Group contributes to the publicdiscussion of mobility today and in the future, anddevelops practical initiatives on cooperative trafficmanagement in urban centres.

Awards.– March 2006: Presenta-

tion of the “ADAC Mo-bility Prize 2005” for theInzell Initiative of theBMW Group and theCity of Munich.

Steering traffic along the right path – the BMW Group is making a major contributionto this effort with mobility research and transportation concepts.

69

knowledge and know-how of the BMW Group, aswell as that of well-known experts from the scientificcommunity, to study physical mobility in the broadestsense of the term. It examines influences from so-ciety, business, politics, technology, and the environ-ment, and derives specific elements to ensure ac-ceptable mobility with a viable future. One exampleof this is a study issued by ifmo in 2005 in coopera-tion with Deutsche Lufthansa, Deutsche Bahn andMAN. Entitled “The Future of Mobility – Scenariosfor 2025”, the study proposed comprehensivescenarios for the transportation of people and goodsby road, rail, air and water. Typical of ifmo’s inter-disciplinary approach, this research effort involvedabout 80 experts from the scientific community,business and associations. In 2006 ifmo hosted an

expert workshop on the financing of transportationinfrastructure, thereby carrying forward the dia-logue initiated in 2004 with the various players whohave a stake in the future of mobility in Germany.Other current fields of research of the ifmo includethe connection between the growth of businessand the increase in traffic, future developments in themobility behaviour of private households and atransportation infrastructure benchmark for Europe,as well as “Utopian Realities”, a project that testswhether or not innovative approaches and method-ologies from Future Studies can be applied to mo-bility research.

Achievements.– Around 41% of em-

ployees travelled to theResearch and Innova-tion Centre in Munichby bus and the under-ground in 2006 com-pared with 34% in 2001.

– Within the framework ofthe “arrive” initiative,proven quality assurancemethods were for thefirst time transferred totraffic management inMunich in 2007.

– Mobility projects for em-ployees such as plantbuses and subsidiseduse of local public trans-port: decongestion ofmain traffic routes, andreduction of the load onthe environment byabout 24,000 tons ofCO2 per annum.

Challenges.– Early recognition of

future challenges in thearea of mobility, and de-velopment of practicaland realisable solutionsby means of scientificresearch.

– Handling increasingtraffic volumes in theMunich metropolitanregion, also relative toCO2, NOx and fine par-ticulate emissions, e.g.through improved trafficmanagement.

ifmoCommunication for the mobility and transportation of tomorrow

Parliamentary parties, parliamentary factions

Ministries

Generalpublic

Commercial enterprises, esp. transport providers

Media

Universities, research institutions

ifmoInstitute for Mobility Research

70 06.2 Traffic safety projects The effects of mobility are not limited to thetransport infrastructure. One of its serious con-sequences is traffic accidents. As an automotivecompany, the BMW Group is vitally concernedwith the safety of all travellers. For this reason,one of the key aspects of the company’s socialcommitment for many years has been its in-volvement in the promotion of traffic safetyprojects all over the world.

Primary school teachers and parents in Great Britaincan find information on traffic education for 7-to-11-year-olds on the interactive “Safe on the street”website – a part of the BMW Education Programme.Especially intended for children between 10 and12 years of age, the “Coolwayz” website was set upin 2006. It helps students to plan a safe route to theirnew school on their own when they make the switchfrom primary to secondary school.

WWW.bmweducation.co.uk

Traffic safety worldwide. The jointly conducted“Ability through Experience” programme is a BMWGroup project with a longstanding tradition, by meansof which first-time drivers in Bavaria are taught de-fensive driving techniques. But the challenge of trafficsafety is even more serious in South America andAsia than in Germany. Argentina and Brazil, for ex-ample, take the top position in the number of trafficaccidents per 100,000 inhabitants. In fact, traffic ac-cidents are the number one cause of death among18-to-25-year-olds in Argentina. The BMW Grouphas therefore begun arranging explanatory presen-tations for upper secondary school classes andconducting driver training courses in both countries.The aim is to raise young drivers’ awareness oftheir safety and their responsibility in road traffic. Sofar the BMW Group has been educating a good thou-sand Argentinean and Brazilian students, teachersand parents each year.

WWW.bmw.com.ar

Traffic education in the emerging market ofChina. More than 70 children are seriously injuredin road traffic each day in China. The BMW Grouplaunched the “Slow Down for Children” project therein 2005. After theoretical traffic training for childrenand their parents, the youngest road users can use

Prevention avoids accidents. The BMW Groupsupports numerous initiatives dedicated to the safetyof children and adolescents in road traffic. By explain-ing the risks involved with road traffic and effectiveprevention work, the BMW Group aims at preventingpeople from becoming the victims of road traffic ac-cidents. In addition, the BMW Group shares its know-how related to traffic safety, for example in the form ofinformation material, and cooperates with specialistsworldwide. The projects are designed and coordi-nated by the Social Policy Division at the corporateheadquarters. They are implemented on a decen-tralised basis at the company’s respective locations.

In the case of the youngest road users, for example,the programme “Safety on the way to school for first

graders” is in place in Germany. As children just start-ing school are often travelling in traffic on their ownresponsibility for the first time, the BMW Group andits partners provide primary school children in Mu-nich and Berlin with individual maps of their way toschool.The orientation guidelines include indicationsof particularly dangerous points along the way toschool, recommendations for a safe path to school,and explanations about the most important trafficrules and signs.

In the BMW Group’s traffic safety projects, the youngest drivers are already learningthe road rules in a playful way.

71

the fleet of BMW Baby Racers for practical experiencein what they have just learned. In 2006, the pro-gramme was expanded to cover the entire countryand, among other things, integrated into the “TrafficSafety Angel” Day programme. Together with part-ners from business and government, the BMW Groupin China published four books on the subject oftraffic safety in 2006. The book “Drivers’ TrainingPass” is aimed at beginner drivers and provides ba-sic knowledge needed for passing the driving test.Building on this foundation, the “Drivers’ Handbook”contains further information on driving safety foradvanced drivers. These books are complementedby two children’s books that treat the topic of trafficeducation in a playful manner. The books are dis-tributed free of charge through driving schools and

BMW dealership operations, as well as at trafficeducation events at Chinese preschools.

WWW.bmwgroup.com/socialcommitment

Achievements.– 10,456 people partici-

pated in the “Abilitythrough Experience”programme in 2006.According to TÜVBavaria (an independenttechnical inspectioncompany), participationin the training pro-gramme reduced thenumber of accidents by36.1% in the first twoyears.

– The programme “Safetyon the way to schoolfor first graders” hasresulted in a significantdrop in the number ofchildren injured on theirway to school. During36 million trips to schoolper annum since 1993,no first grader at a par-ticipating school inMunich has suffered afatal accident on theway to or from school.

Challenges.– Implementation of fur-

ther traffic safetyprojects in internationalmarkets.

– Expansion of the schoolroute map project toother major cities in Ger-many.

The BMW Group’s traffic safety projects in China are helping to reduce the highnumber of child casualties in China’s road traffic.

72 06.3 Education and interculturalunderstanding

As a company whose success largely dependson the qualification and expertise of its em-ployees, the BMW Group places particular em-phasis on the promotion of education andintercultural understanding. With initiatives foreducation and intercultural learning, the BMWGroup takes responsibility for a high-perform-ance society, thus laying the foundation for thefuture success of the company.

ical engineering and logistics. Thanks to the BMWGroup, the University of Witwatersrand in Johannes-burg boasts South Africa’s only Chair for Sustain-able Development. In South Korea, the BMW Groupdonates development vehicles to the universities,thereby enabling students to work with high qualityautomotive components and vehicles. In China, theBMW Group concentrates its efforts on promotingstudents from socially disadvantaged families andexceptionally talented students of engineeringscience. To this end, the company joined with theChina Soong Ching Ling Foundation to establishthe “BMW Excellent University Students AwardFund” in 2006.This 2.5 million-renminbi fund (aroundeuro 240,000) supports 500 students in the engi-neering sciences for a full five years. At two-year in-tervals, the BMW Group honours university graduateswith the “Scientific Award”. With its 70,000-euroendowment, the prize recognizes excellent graduatetheses from all over the world in 24 disciplines. It willbe awarded for the ninth time in 2007.

The BMW Group is also committed to providingeducational support in structurally lagging areas,adapting its programmes to local conditions. BMWSouth Africa, for example, is using the SEED project(Schools Environmental Education Development) toawaken the environmental consciousness of schoolchildren. Meanwhile more than 70 schools are par-ticipating in the project, which started in 1996.To-gether with Xylocom-Link, the BMW Group in SouthAfrica installed fully equipped computer rooms atSoshanguve High School near the BMW plantRosslyn in 2006/2007. For the first time, the SouthAfrican students can gain first-hand experience withmodern communication technologies through theBMW XYLOCOM CYBERLAB. An option that canplay a key role for the future of South African studentsfrom less fortunate backgrounds.

WWW.bmw.co.zaseedprog.co.za

Passing on knowledge. One of the key aspectsof the BMW Group’s commitment in the area ofeducation involves projects directly related to theirareas of expertise – technology, production and newforms of energy such as hydrogen. In this way theBMW Group supports, for example, school activitieslike “Energised”, an energy project especially tailoredfor primary school students. The “CleanEnergy”Internet portal and the “H2 – Mobility of the Future”classroom folder provide answers to questions aboutenergy for today and for the future.

WWW.bmweducation.co.ukbmwgroup.com/socialcommitmentbmw.com/cleanenergy

At some of the company’s international locations,secondary school students attend classes at pro-duction sites. For example the BMW plant HamsHall in the UK: secondary students from Birming-ham take technical courses here. With plant toursand teaching materials on vehicle and engine pro-duction, the BMW Group aims to provide basicunderstanding of technical concepts for studentsaround the world. Another example is the two-weekprogramme “Teens and Wheels” conducted byBMW of North America. In Spring 2007 this courseprovided more than 1,000 students with a betteridea of professional requirements and opportunitiesin the automotive distribution business.

The so-called Junior Campus in the BMW Welt of-fers a new kind of place of learning for studentsfrom 7 to 13 years of age. Under the slogan “Dis-cover mobility, using all your senses”, the new auto-mobile delivery centre in Munich presents knowledgeabout automotive development and production.

Promoting others’ knowledge. The BMW Groupis also committed to promoting the next generationof scientists and engineers at colleges and univer-sities. In Great Britain it supports Sutton ColdfieldCollege with courses in vehicle construction, mechan-

Awards.– “Jewish Museum Berlin

Prize for Understandingand Tolerance” for thepromotion of toleranceand understanding in2006.

73

Since the catastrophic flood of December 2004, theBMW Group has also been involved with secondaryeducation in Banda Aceh, Indonesia.Together withthe “Yayasan Mitra Mandiri/United Way” organisa-tion, BMW Indonesia has drafted a new educationalconcept. Bintang Mobile Center is the name givento three mobile learning centres. These are equippedwith computers, projectors, books and teachingmaterials, and wend their way through the area hit bythe catastrophe to communities where classroomfacilities are not yet available. Each mobile learningcentre is staffed by a volunteer and a teacher.

WWW.bmw.co.id/eng/fascination/build.html

Promoting intercultural understanding. Formore than 20 years now, the BMW Group has beenactively working to promote intercultural learningand understanding among peoples. Not least owingto its international orientation, the BMW Group be-lieves it has a moral and business obligation to pro-mote openness and understanding vis à vis othercultures within and outside of the company. In thearea of intercultural learning, the BMW Group’s LIFEproject has been supporting learning beyond disci-plinary, national and linguistic boundaries since1997. Jointly developed with the State Institute forSchool Quality and Education Research, the con-cept includes a comprehensive collection of ideasand materials related to the subject of interculturaleducation.

Based on the LIFE idea, the BMW Group has beenpresenting the “BMW Group Award for InterculturalLearning” for the past ten years now. The 22,500-euro prize has so far been awarded to more than40 laureates from 20 nations, whose projects pro-mote understanding of foreign cultures, languagesand religions.

WWW.bmwgroup.com/award-life

Achievements.– Some 8,788 “Nothing

works without energy”course material pack-ages and 16,831 “LIFE”course material pack-ages on the subject ofintercultural learningwere distributed world-wide in 2006.

– Euro150,000 was pro-vided to support thereconstruction of theDalit communities ofSouth India.

– Euro 270,000 has beenprovided so far in sup-port of reconstructionand education measuresin Banda Aceh.

Challenges.– Strengthening the

application of the BMWGroup’s expertise inworldwide educationprojects.

– Broadening supportactivities in South Indiain the form of a morecomprehensive SocialInvestment Programme.

>> Tsunami. The violent flood wave thatcost more than 200,000 human lives and robbedhundreds of thousands of their existence in South-east Asia in December 2004 was a natural disasterof unprecedented proportions. That’s why the aidinitiatives of governments, aid organisations andcompanies were also extraordinary. The BMWGroup participated in this effort with measures inSouth India and Indonesia. In cooperation with theYayasan Mitra Mandiri/United Way organisation,the company is supporting the reconstruction ofschools and community facilities in Banda Aceh,Indonesia. These activities have been integratedwithin the framework of the social initiative “BMWBuild Programme”, through which the BMW Groupcoordinates its social commitment in Indonesia.

In South India, the BMW Group is supporting aproject of the Welthungerhilfe (German AgroAction) for the reconstruction of Dalit communities.Some 275 families who lost their homes and theirmeans of subsistence in the Tsunami of 2004 andin further floodings at the end of 2005 have beenable to erect new, flood-proof housing with the helpof the BMW Group.The Dalit communities them-selves also actively participated in the constructionof these homes. In the medium-term, the com-pany is providing euro 1 million for reconstructionand to repair the damage caused by the tsunami.

Recovery aid: In the wake of the devastating tsunami at the end of 2004, theBMW Group provided support for the reconstruction of houses destroyed incommunities of South India.

74

Due to the serious situation in South Africa, thecompany’s commitment extends beyond the bound-aries of its own community. For this reason, in co-operation with the LoveLife Trust, an HIV/AIDS pre-vention centre is being established in Knysna, SouthAfrica. This youth centre, opened in the autumn of2007, offers educational and recreational activities toyoung South Africans. In particular, they are to besensitised and informed about HIV/AIDS prevention.

Together against HIV/AIDS. The continuous ex-change of information with companies, non-govern-ment organisations and governmental agenciesrepresents a further aspect of the BMW Group’scommitment. In so doing, the company informsothers about its experience with its workforce pro-

grammes. Doctors and traditional healers are trainedby the BMW Group’s health service in order to im-prove local medical care.The dealers and suppliersof the BMW Group in South Africa are being en-couraged to launch their own programme againstHIV/AIDS, and receive support to get started. As amember of the “South African Business Coalitionon HIV/AIDS” (SABCOHA), the BMW Group in SouthAfrica is working in cooperation with other compa-nies on a joint strategy against HIV/AIDS. At a globallevel, the company is committed to a bundle ofcompany initiatives against the pandemic within theframework of the “Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria” (GBC).

HIV/AIDS projects in South Africa. The BMWGroup’s most comprehensive public commitment tofighting HIV/AIDS is being applied in South Africa,where an estimated 20% or more of the populationis now infected with HIV. In addition to the numerousmeasures for employees at the BMW locations (seepage 63), the company has not only been providingeffective support to the surrounding communitiesfor the past several years, but is also bringing itsresources and experience to work throughout so-ciety as a whole. In 2005, for example, the BMWGroup joined with partners (e.g. SEQUA – a non-profit organisation of the German Federal Ministryfor Economic Cooperation and Development) toopen a community and health centre to provide med-ical and psychological support to the residents of

Soshanguve near the BMW plant Rosslyn. It includesa health service, a library, a training centre and avegetable garden. In addition, an advisory serviceoffers information on HIV/AIDS-related topics. All700,000 residents of the community can use thisfacility, thereby helping to further reduce the rate ofHIV infection among young people.

WWW.lovelife.org.za sequa.de

06.4 Commitment to fightingHIV/AIDS

The BMW Group operates in countries wherethe HIV/AIDS pandemic represents a seriousthreat for the entire population, and thereforealso for the employees of the company. Outof a sense of responsibility and economicnecessity, the BMW Group actively promotesprogrammes beyond those intended for itsown workforce, aimed at preventing the spreadof HIV/AIDS in society.

Up to 5,000 people are advised in the centre’s facilities every month on all health,social and psychological questions related to HIV/AIDS.

For the people of the region, the Soshanguve community and health centre near theBMW plant Rosslyn has become an information centre for all questions concerningHIV/AIDS.

75

Moreover, the company is also fighting the spread ofthe immune deficiency disease by actively support-ing a whole range of local activities in other countries.In Thailand, the BMW Group supports the “BaanGerda” children’s village, where HIV-infected orphanshave found a home. Medical and social care pre-pares the children for their reintegration into societyand their return to a normal life.

WWW.bmw.co.zabmwgroup.com/socialcommitmenthouseofhope.de

Support at all levels. For the third Cologne OperaGala, the company donated a BMW 530i to theGerman AIDS Foundation for auction to benefit in-

ternational HIV/AIDS prevention projects. Anotherbrand-specific charity project is the Vienna Life Ball.As it has done for each of the past six years, theBMW Group once again provided a MINI Cooper,which was auctioned to benefit international aidprojects following Europe’s biggest AIDS charityevent. On 26 May 2007 the Life Ball MINI, designedby Mario Testino, brought in a total of euro 24,550for national and international HIV/AIDS projects.

WWW.lifeball.org

Achievements.– 4,000 to 5,000 people

receive health and socialservices as well as psy-chological support everymonth in the communityand health centre inShoshanguve.

– The Love Life Y-Centrefor AIDS prevention wasopened in Knysna in thefall of 2007.

Challenges.– Implementation of the

“Dealer HIV/AIDS”project in South Africa,designed to use socialnetwork mapping in theneighbourhood ofBMW dealers to lay thefoundation for sustainedHIV programmes.

– Expansion of socialprogrammes againstHIV/AIDS to furthermanufacturing sites.

The Baan Gerda orphanage in Thailand gives HIV-infected orphans a new home.

76

Strengthening cultural diversity. Long-term part-nerships with cultural institutions, announcement ofcompetitions, the establishment of new, unique for-mats and the promotion of the next generation of in-novative artists are all used to guarantee the greatestpossible degree of freedom for creative potential.Culture should not be instrumentalised, but ratherstrengthened in its diversity and independence. Withits commitment, the BMW Group supports furthercultural development at its locations – but also in theplants themselves, where a cultural programme oftheir own is frequently offered for employees. An over-view of the spectrum of cultural support is posted onthe Internet.

WWW.bmwgroup.com/kultur

Promoting creative potential. Recent additions inthe area of film promotion projects include, amongothers, the short film competition “BMW Shorties”,by means of which BMW Malaysia joins with partnersto support up-and-coming filmmakers from the lo-cal film scene. This programme initially allows up to25 competitors to be coached by film pros in aworkshop. The best short film concept in 2006 ad-dressing the topic of mobility received a productioncost allowance of ringgit 50,000, i.e. about euro11,000; the winning “BMW Shorty” is also being dis-tributed over the BMW Malaysia’ website.

WWW.bmwshorties.com.my

In the area of plastic and graphic arts, the BMWGroup supports young contemporary artists. As anexclusive partner of the National Gallery in Berlin, itmakes the “Nationalgalerie Prize for Young Art” pos-sible. This prize is awarded every two years to inter-national artists who are below the age of 40 and cur-rently working in Germany. The prize’s 50,000-euroendowment is the highest prize money in the con-temporary art world.

Since May 2007, the BMW Group has made it pos-sible for some 20,000 people to partake of a free-of-charge cultural pleasure staged by the State Opera

artist Olafur Eliasson has taken the notion of exteriordesign well beyond that of his predecessors: ratherthan merely changing the surface of a BMW, theDane of Icelandic origin altered the whole structureof the BMW H2R Hydrogen Record Car. In consul-tation with researchers and designers of the BMWGroup, Eliasson recreated the bodywork of the vehi-cle from a large number of stainless steel plates andcross braces, from which hang thousands of icicles.The low temperatures required for this are providedby a special refrigeration unit in which the work ofart is situated. From September 2007, the 16thBMW Art Car by Olafur Eliasson will be presented tothe public in museums worldwide under the title“Your mobile expectations: The BMW H2R Project”.

Unter den Linden at Bebelplatz in Berlin. Under theslogan “State Opera for All”, a live transmission of anopera performance is shown and a live concert isplayed at the start of each season. The initiative inBerlin was inspired by Munich’s “Opera for All”,which the BMW branch there launched together withthe Bavarian State Opera in 1996.

WWW.staatsoper.de/operfuerallestaatsoper-berlin.de/staatsoperfuerallefreunde-der-nationalgalerie.de

Another work of art with a long tradition is the BMWArt Cars, on which artists such as Andy Warhol, DavidHockney and Roy Lichtenstein have been leavingtheir mark since 1975. The internationally renowned

06.5 Worldwide culturalcommitment

KulturKommunikation has one of the longest-standing traditions among BMW Group’s socialcommitments. For more than 30 years now, thecompany has been promoting artistic exchangebetween cultures, the general public and itsown workforce. The BMW Group’s KulturKom-munikation is currently supporting more than100 projects around the globe. Any such com-mitment always maintains a high regard for thefreedom of creative potential, the expression ofcultural diversity and the unmistakable characterof great ideas – characteristics all shared by thework of the BMW Group.

Achievements.– The tenth anniversary of

“Opera for All” was cele-brated with the BavarianState Opera in 2006.

Challenges.– Establishment of au-

thentic cultural supportfor all three BMW Groupbrands at all locationsworldwide.

Opera for All: 20,000 enthusiastic Berliners watched the live transmission of Berlin’sUnter den Linden State Opera in May 2007.

77

BMW Foundation Herbert Quandt. Establishedin 1970, the BMW Foundation Herbert Quandt isdedicated to interdisciplinary and international dia-logue. The aim of the foundation is to bring deci-sion-makers and opinion leaders from differentsocial sectors and cultures together in a discussionof issues of importance to a world that is growingincreasingly complex, to communicate currentlymeaningful political knowledge, and to deepen un-derstanding of the appropriate rules of action.

This occurs, on the one hand, in international con-ferences such as the Europe Forum Berlin and theMunich Economic Summit, as well as in luncheonroundtables and workshops on current political andeconomic themes. Themes addressed by theseforums in recent years have included Europeanidentity, Europe’s responsibility in the world, theglobal distribution of work, and demographics.

Another instrument of the foundation is the YoungLeaders Forums, in which young managers fromEurope, the USA, Russia, China, Southeast Asia andIndia come together and examine current political,economic and social questions. The joint dialoguegenerates transparency and understanding forone another, and personally addresses the youngmanagers’ sense of commitment. In so doing, theseforums go beyond the pure communication ofknowledge and education, and promote the creationof personal networks.

The foundation intends to place greater emphasison educating and strengthening this internationalnetwork in the future.The goal is not only to givethe young leaders orientation in questions of socialrelevance, but also to inspire them to undertakeactions of their own, and to encourage them to as-sume responsibility for society. To this end, thealumni should become mutually committed inprojects, making their socio-political contributionthrough their own resources and talents.

WWW.bmwstiftunghq.com

06.6 Foundations With its own two independent foundations,the BMW AG has been committed to socialconcerns in a special way for many yearsnow.

Eberhard von Kuenheim Foundation. Estab-lished in 2000 and named for the former ChiefExecutive Officer of the BMW AG, the Eberhard vonKuenheim Foundation fosters active entrepreneur-ship. It supports people who exercise responsibility,courage and entrepreneurial spirit to generatemovement in society’s “stagnant areas”. One exam-ple is the German labour market: the foundationsupported the individual initiative of the long-termunemployed glassmakers who wanted to revive theTheresienthal crystal glass factory. It developed aninnovative employment model for the unemployedworkers and assembled a network of experts whoapplied their expertise – in questions of design,marketing strategy, legal issues etc – usually withoutremuneration. The company now has a successful

presence in the market once again – after three yearsof non-profit development support by the foundation.

Another example is the education system where,together with its partners, the foundation is activelyguiding the municipal Luisengymnasium in Munichon its way to becoming a mandatory attendance all-day school: new approaches to instruction, financingand public relations work are being tested, and thespace concept, self-image and need for reform arebeing examined.The objective: to create a model foreducation system reforms that schools can adopt.And the foundation will grant this project its independ-ence, too – after successful development support.

WWW.kuenheim-stiftung.de

Achievements.– 700 young managers

from all over the worldtook part in the YoungLeaders Forums of the BMW FoundationHerbert Quandt.

– Top representatives frombusiness, the scientificcommunity and thepolitical arena engagedin an intensive exchangeof views during the in-ternational conferencesof the BMW FoundationHerbert Quandt, gener-ating important impetusfor Europe’s future.

– More than120 partnersfrom business, politics,science and the non-profit sector activelyengaged in an honorarycapacity within theframework of the Eber-hard von KuenheimFoundation’s projects.

– Prototypes from projectwork by the Eberhardvon Kuenheim Founda-tion were adopted intoBavarian school policyand in the developmentprogrammes of theEuropean Union.

Challenges.– Through the alumni

network and dedicatedspokespeople, the workof the BMW FoundationHerbert Quandt shouldenjoy a sustained, in-terdisciplinary and inter-national effect.

– The Eberhard von Kuen-heim Foundation aimsto transfer its experienceand knowledge fromprevious project work tofurther gridlocked areas,using specific exemplarycases to provide impe-tus for movement.

The Eberhard von Kuenheim Foundation promotes active entrepreneurship in specificproject work – for example in the restart of the insolvent Theresienthal crystal glassfactory.

79

Action BringsBenefits. Measurable. Com-parable.Targeted.Indicators for sustainability. >>

Indicators for sustainability

i>

Indicators for sustainability80

01

02

03

04

05

06

Sustainability managementStakeholder dialogue 81

Sustainability objectives 82

Economics 83

Economic factor BMW Group 85

Sustainability objectives 86

Product responsibilityCO2 reduction – a challenge 87

Innovative technologies for reduced consumption 87

Integrated climate protection in the traffic sector 88

Product recycling 88

Sustainability objectives 89

Consumption data 90

Environmental protection across the GroupEnvironmental protection management 92

Energy consumption and emissions 94

Protecting resources and nature conservation 96

Efficient transportation logistics 98

Sustainability in the supply chain 98

Sustainability objectives 99

EmployeesAttractive employer internally and externally 100

Performance, compensation and flexibility 101

Co-determination and involvement 102

Equal opportunities and rights 102

Lifelong learning 103

Health and safety at work 103

Sustainability objectives 105

SocietySustainability objectives 106

GRI Index 107

Global Compact – Communication on Progress (COP) 109

Indicators for sustainabilityFurther information, indicators and factsregarding the following topics:

i>

81

01Sustainability management

01.3 Stakeholder dialogue

Perception and rating of the BMW Group commitment to sustainability*

in % according to rating scale

Economics

Very good 30

Good 56

Moderate 7

Adequate –

Poor 7

Very poor –

Product responsibility

Very good 33

Good 30

Moderate 17

Adequate 7

Poor 12

Very poor 1

Environmental protection

Very good 34

Good 36

Moderate 23

Adequate –

Poor 5

Very poor 2

Supply chain management

Very good 13

Good 47

Moderate 28

Adequate 9

Poor 3

Very poor –

Employees

Very good 49

Good 40

Moderate 8

Adequate 3

Poor –

Very poor –

Society

Very good 39

Good 43

Moderate 16

Adequate 1

Poor 1

Very poor –

* International stakeholder survey in winter 2006/2007: 189 stakeholders from 21 countries were interviewed by telephone; multiple answers were possible.

Perception and rating of the BMW Group commitment to sustainability*

in % according to rating scale

Very good 35

Good 36

Moderate 18

Adequate 5

Poor 5

Very poor 1

* International stakeholder survey in winter 2006/2007: 189 stakeholders from 21 countries were interviewed by telephone; multiple answers were possible.

The ratings refer to the commitment specified by the stakeholdersof the BMW Group in the subject areas economics, supply chainmanagement, environmental protection, product responsibility,employees and society.

82 Indicators for sustainability

Strategic objectives Measures Deadline

Strategy and organisation

Sustainability management of value and values

Further development of the BMW Group Efficient resource management: Environment, human resources, ongoingsustainability management finances

Further development of the sustainability strategy and increased 2008coordination of individual divisions worldwide

Further development of the sustainable value approach for 2009a sustainability controlling

Management of sustainability related opportunities and risks relevant ongoingfor sustainability

Areas of activity

Integration of sustainability subjects into the Socially responsible investment (SRI) roadshows, conference 2008investor relations work calls, 2006 approx. 5% all IR contacts specifically on SRI, objective

by 2008 10%, of roadshows on SRI and alternative/environmentally sound drives

Stakeholder dialogue

Commitment to global and domestic initiatives and UN: Global Compact ongoingRio+10 process econsense: Forum on sustainable development

UNEP: Mobility forum

Maintaining good community relations Immediate processing of complaints ongoing

Improve stakeholder dialogue Further institutionalise stakeholder surveys and events 2009

Sustainability objectives for sustainability management*

* An overview on the status of the objectives from the Sustainable Value Report 2005/2006 is available on the Internet at www.bmwgroup.com/sustainability.

* International stakeholder survey in winter 2006/2007: 189 stakeholders from 21 countries were interviewed by telephone; multiple answers were possible.

Relevant trends and subjects for the BMW Group in the area of corporate sustainability*

Areas Number of answers Examples of trends and topics

Product responsibility 149 Climate protection, alternative drive technologies, traffic safety, product recycling

Economics 104 Anti-corruption, risk management, investments

Employees 95 Demographic change, safety at work/health protection, equal opportunities

Environmental protection 68 Energy management, resource consumption, sustainable transportation logistics

Society 64 Sustainable mobility, HIV projects in countries with BMW Group activities, education

Supply chain management 24 Transparency in the value added chain with regard to maintaining environmental and socialstandards, cooperation with (system)suppliers

83

02Economics

GRI G3 Indicator EC1 BMW Group Revenuesin euro billion

50

45

40

35

30

25

* reclassified after harmonisation of internal and external reporting systems

02

42.4

03

41.5

04

44.3

05

46.7

06

49.0

BMW Group Profit before taxin euro million

4,000

3,500

3,000

2,500

2,000

1,500

* adjusted for new accounting treatment of pension obligations

02

3,297

03

3,205

04

3,583

05

3,287

06

4,124

* *

GRI G3 Indicator EC3 Pension provisionsin euro million

6,000

5,000

4,000

3,000

2,000

1,000

* adjusted for new accounting treatment of pension obligations

02

2,257

03

2,430

04

4,224

05

5,255

06

5,017

GRI G3 Indicator EC1 Financial indicators 2002 2003 2004 2005 2006 Changein euro million in %

Revenues 42,4111] 41,525 44,335 46,656 48,999 5.0

Capital expenditure 4,042 4,245 4,347 3,993 4,313 8.0

Depreciation and amortisation 2,143 2,370 2,672 3,025 3,272 8.2

Operating cash flow3] 4,553 4,970 6,157 6,184 5,373 –13.1

Profit before tax 3,297 3,205 3,5832] 3,287 4,124 25.5

Net profit 2,020 1,947 2,2422] 2,239 2,874 28.41] reclassified after harmonisation of internal and external reporting systems2] adjusted for new accounting treatment of pension obligations3] In its financial statements for 2005, the BMW Group brought the cash flow computation into line with standards normally applied on the financial markets. Since then, the

BMW Group discloses the figures for the cash flow from operating activities (operating cash flow), corresponding to the cash flow from Industrial Operations reported in thecash flow statement.

*

The fluctuations in pension provisions result from the changes tothe actuarial calculation parameters, in particular discounting rates.In turn, these are in principle guided by the applicable currentmarket interest rates.

84

GRI G3 Indicator LA1(graphic on the left)

BMW Group employees at year end*

110

108

106

104

102

100

* Figures exclude suspended contracts of employment, employees in the non-workphases of pre-retirement part-time arrangements and low income earners.

02

101,395

03

104,342

04

105,972

05

105,798

06

106,575

Contract portfolio BMW Group of Financial Servicesin 1,000 units

2,400

2,200

2,000

1,800

1,600

1,400

02

1,443

03

1,623

04

1,843

05

2,087

06

2,271

BMW Group Deliveries of automobilesin 1,000 units

1,400

1,300

1,200

1,100

1,000

900

02

1,057.3

03

1,104.9

04

1,208.7

05

1,328.0

06

1,374.0

GRI Indicator A4 (Sector Supplement)

BMW Group deliveries to customers by vehicle 2002 2003 2004 2005 2006

BMW 913,225 928,151 1,023,583 1,126,768 1,185,088

MINI 144,119 176,465 184,357 200,428 188,077

Rolls-Royce – 300 792 796 805

Total automobiles 1,057,344 1,104,916 1,208,732 1,327,992 1,373,970

Motorcycles* 92,599 92,962 92,266 97,474 100,064* excluding C1, sales volume to 2003: 32,859 units

Indicators for sustainability 85

02.2 Economic factor BMW Group

The BMW Group obtained around half of the raw materials and vendor parts fromGermany in 2006. In the rest of Europe, the purchase volumes grew proportionally tothe production volumes within the BMW Group.

GRI Indicator A4 (Sector Supplement)

BMW Group Deliveries of automobiles* by region and market 2002 2003 2004 2005 2006in 1,000 units

Rest of Europe 261.6 264.6 299.7 350.8 375.0

North America 273.2 294.9 315.9 329.0 337.4

Germany 258.2 255.8 283.6 295.9 287.7

United Kingdom 120.9 134.5 145.3 156.2 154.1

Asia 89.3 103.5 106.4 125.7 142.1

Other markets 54.2 51.6 57.9 70.4 77.7* including Rolls-Royce from 2003 onwards

GRI G3 Indicator EC9 (graphic on the left)

GRI G3 Indicator EC6 (graphic on the right)

Automobile production of the BMW Group by plant in 2006in 1,000 units

Dingolfing 286.6

Regensburg 269.9

Munich 196.6

Oxford 186.7

Leipzig 120.8

Spartanburg 105.2

Rosslyn 54.8

Goodwood 0.8

Shenyang (joint venture) 31.1

Contract production Magna Steyr 114.3

GRI G3 Indicator EC1

Regional mix of BMW Group purchase volumes 2006in %, basis: production material

Germany 54

Rest of Western Europe 20

Central and Eastern Europe 10

NAFTA 9

Africa 3

Asia/Australia 3

South America 1

BMW Group value added 2006in %

Net value added 27.1

Cost of materials 53.1

Depreciation and amortisation 9.8

Other expenses 10.0

54.9 % Employees

12.0 % Providers of finance

12.0 % Government/public sector3.4 % Shareholders

17.7% Group

Indicators for sustainability86

GRI G3 Indicator EC4 Public sector grants: Public subsidies in the form of reduced taxes on assets and consumption-based taxes in euro million

30

25

20

15

10

5

02

18

03

15

04

13

05

15

06

11

Other public sector grantsin euro million

60

50

40

30

20

10

02

11

03

33

04

39

05

36

06

32

GRI G3 Indicator EC1 Current tax expensein euro million

1,200

1,000

800

600

400

200

02

324

03

441

04

841

05

437

06

993

Strategic objectives Measures Deadline

Economics

Most successful premium manufacturer Profitable growth ongoing

1.6 million automobiles sold by 2010 2010

Expansion of the product portfolio for the brands BMW, MINI, ongoingRolls-Royce

Strengthening worldwide presence by developing global networks ongoingvia new partners and sites (production/CKD/sales/purchasing)

Sustainability objectives in the area of economics*

* An overview on the status of the objectives from the Sustainable Value Report 2005/2006 is available on the Internet at www.bmwgroup.com/sustainability.

BMW Group Capital expenditurein euro million

5,000

4,500

4,000

3,500

3,000

2,500

02

4,042

03

4,245

04

4,347

05

3,993

06

4,313

87

03Product responsibility

03.1 CO2 reduction – a challenge

GRI Indicator A4 (Sector Supplement)

(graphic on the left)

Sources: IPCC Fourth Assessment Report, WG III, 2007. World Business Council forSustainable Development, 2004. Figures have been rounded.

Deliveries of BMW diesel automobiles worldwidein 1,000 units

600

500

400

300

200

100

units

as a percentage of total volume

03

273.7

29

02

245.9

27

04

352.5

34

05

438.3

39

06

472.7

40

03.2 Innovative technologies for reduced consumption

GRI Indicator A6 (Sector Supplement)

Fuel consumption of BMW Group cars according to VDA commitment(Index: 1990 = 100; Basis: fleet consumption of newly registered cars in Germany measured on the basis of the New European Driving Cycle in accordance with theVDA commitment for passenger/estate cars*)

100

95

90

85

80

75

70

65

60

* The adoption of the uniform VDA computation method for the various DIN-1/3-Mix measurement methods (used up to 1996) and the New European Driving Cycle (used from1997 onwards) gives rise to minor discrepancies compared to earlier BMW Group Annual Reports.

90

100.0

91

97.5

92

90.9

93

89.3

94

85.8

95

83.7

96

86.3

97

87.3

98

85.6

99

82.1

00

79.6

01

77.3

02

74.3

03

74.0

04

74.0

05

70.7

06

69.4

GRI Indicator A6, A7 (Sector Supplement)

Fuel efficiency and CO2 emissions of the vehicles

Most efficient model Best-selling model Best-selling modelof the BMW Group in Germany in 2006 in EU15 in 2006

MINI Cooper D (manual transmission) BMW 320d (manual transmission) BMW 320d (manual transmission)

Combined in l /100 km 3.9* 5.7/4.8* 5.7/4.8*

CO2 emission in g/km 104* 153/128* 153/128*

* since September 2007

Share of traffic sector in worldwide CO2 emissions in 2004as a percentage of 37,000 million tons of CO2

Power/heating stations 27.0

Industry 25.0

Deforestation 22.0

Households, small consumers 9.0

Cars 7.0

Road haulage 4.0

Air traffic 2.0

Shipping 2.0

Bus traffic, 2-/3-wheeled vehicles 1.5

Rail traffic 0.5

88

GRI G3 Indicator EN26 Technologies for reduced fuel consumption in the various BMW Group vehicles in Europe(Model-specific variations possible – as of September 2007)

BMW BMW BMW BMW BMW MINI MINI1 Series 3 Series 5 Series 6 Series X5 Clubman

High Precision Injection with lean operation x x x x

Common rail with piezoelectric injectors (up to 2,000 bar) x x x x

Fully variable valve train (VALVETRONIC in BMW models) x x x x x x

Auto Start Stop Function (only for 4-cylinder, manual transmission) x x x x

Brake Energy Regeneration x x x x x x x

Electric steering assistance x x x x

Active aerodynamics (e.g. air flap control) x x x x x

Gear shift indicator (only for manual transmission) x x x x x x

Tyres with reduced roll-resistance x x x x x x x

Demand-controlled fuel, coolant and oil pump x x x x x x x

03.3 Integrated climate protection in the traffic sector

03.6 Product recycling

GRI G3 Indicator EN1GRI Indicator A10(Sector Supplement)

Cooperation among all stakeholders within the integrated approach Automobile Fuel Politics/ Customerindustry and industry infra-

suppliers structure

Further development and increase of market share for efficient vehicle technologies

Increase share of alternative fuels (blending)

Implementation of driver assistance systems, e.g. gear shift indicator/efficiency display

Activities on driving in a fuel-efficient manner

Further development and increase of market share for tyres with reduced roll-resistance

Tyre pressure control system

Ensure consistency in legislation

Improvement of traffic infrastructure/management

Support of research and development for new technologiesResponsibility Support/contribution

Average distribution of materials in vehicles of the BMW Groupas a percentage of vehicle weight

Steel and iron 50

Nonferrous metals 25

Thermoplastic resins 8

Elastomers* 4

Duroplastic resins 4

Textiles and other composites 3

Other 6

* such as tyres, seals

Indicators for sustainability 89

Strategic objectives Measures Deadline

CO2 reduction and integrated approach

Reduction of CO2 emissions to fulfil the BMW Group Introduction and further development of innovative drive concepts as of 2007contribution to reduction of CO2 emissions in the based on the BMW EfficientDynamics concept:ACEA fleet average to 140 g/km for 2008 – consumption-optimised combustion engine technology with

High Precision Injection in BMW 4-cylinder and 6-cylinder engines– Auto Start Stop Function in BMW and MINI models produced in volume– Brake Energy Regeneration in BMW and MINI models produced

in volume

Cooperation with GM and DaimlerChrysler on developing ongoinghybrid drives

Diesel vehicles in the U.S./Canada Introduction of diesel vehicles with SCR technology 2008(Selective Catalytic Reduction) in the U.S./Canada

Promotion of biofuels Contribution to introducing increased system-compatible ongoingamounts of biofuels in traffic

Contribution to initiatives to evaluate biofuels using sustainability ongoingcriteria in an international context

Development of hydrogen infrastructure Partnerships on global introduction of hydrogen as an energy ongoingsource: Both for the technology and the hydrogen infrastructure– Participation in demo projects to prove that hydrogen can be ongoing

used safely in road traffic and that renewable energy sources can be used

– Continue participation in the second project stage of the ongoingClean Energy Partnerships (CEP) in Berlin

Product safety

Increase vehicle safety with a wide range of driver Driver assistance systems providing high levels of safety, ongoingassistance systems such as Lane Departure Warning and Night Vision in a number

of models

Product recycling

Development of new recycling techniques Large-scale attempt to optimise the processes of shredder residue 2008recovery and selective measures to promote preparation procedures for shredder fractions that are ecologically useful as a whole

Returning end-of-life vehicles Continue to further develop return system 2008

Environmental protection in the service sector

Reduction of the environmental impact of the Establish and further develop return systems for end-of-life 2008products in each lifecycle stage parts from maintenance and repair in service shops in Western

Europe and optimise the recovery paths

Develop methods for a streamlined lifecycle assessment approach, 2009i.e., comprehensive assessment of material groups for a more efficient and faster accounting of entire vehicles

Determination of the optimum product lifecycle of vehicles while 2008taking into account technological, economical, ecological and legal aspects

Information on markets for product responsibility Advance the technical network on environmental protection subjects 2008with regard to environmental law in the sales organisations worldwide and develop the network of

environmental managers in the individual sales markets

Global introduction to the dealer and service operations of one of the 2008market-specific shop disposal systems that are recommended by the BMW Group, as well as integration of related requirements in the importers contracts

Sustainability objectives in the area of product responsibility*

* An overview on the status of the objectives from the Sustainable Value Report 2005/2006 is available on the Internet at www.bmwgroup.com/sustainability.

90

Model Urban Extraurban Combined CO2 emissions(l /100 km) (l /100 km) (l /100 km) [g/km]

Consumption data as of September 2007

Model Urban Extraurban Combined CO2 emissions(l /100 km) (l /100 km) (l /100 km) [g/km]

BMW116i 3-door 7.5 (8.3) 4.8 (5.3) 5.8 (6.4) 139 (152)118i 3-door 7.9 (8.2) 4.7 (5.0) 5.9 (6.2) 140 (148)120i 3-door 8.7 (8.4) 5.1 (5.1) 6.4 (6.3) 152 (150)130i 3-door 12.2 (12.3) 6.0 (6.0) 8.3 (8.3) 197 (198)118d 3-door 5.4 (6.9) 4.0 (4.5) 4.5 (5.4) 119 (144)120d 3-door 6.1 (7.2) 4.1 (4.4) 4.8 (5.4) 128 (144)123d 3-door1] 6.5 4.4 5.2 138116i 5-door 7.5 (8.3) 4.8 (5.3) 5.8 (6.4) 139 (152)118i 5-door 7.9 (8.2) 4.7 (5.0) 5.9 (6.2) 140 (148)120i 5-door 8.7 (8.4) 5.1 (5.1) 6.4 (6.3) 152 (150)130i 5-door 12.2 (12.3) 6.0 (6.0) 8.3 (8.3) 197 (198)118d 5-door 5.4 (6.9) 4.0 (4.5) 4.5 (5.4) 119 (144)120d 5-door 6.1 (7.2) 4.1 (4.4) 4.8 (5.4) 128 (144)123d 5-door1] 6.5 4.4 5.2 138135i Coupé1] 13.0 7.0 9.2 220120d Coupé 6.1 (7.2) 4.1 (4.4) 4.8 (5.4) 128 (144)123d Coupé1] 6.5 4.4 5.2 138

318i Sedan 7.9 (8.5) 4.8 (5.2) 5.9 (6.4) 142 (152)320i Sedan 8.4 (8.9) 4.8 (5.1) 6.1 (6.5) 146 (156)325i Sedan 9.8 (9.7) 5.5 (5.6) 7.1 (7.1) 170 (170)325xi Sedan 10.9 (10.8) 6.1 (6.2) 7.9 (7.9) 189 (189)330i Sedan 9.9 (9.9) 5.6 (5.6) 7.2 (7.2) 173 (173)330xi Sedan 11.0 (11.0) 6.2 (6.2) 8.0 (8.0) 193 (193)335i Sedan 13.2 (13.1) 6.7 (6.9) 9.1 (9.2) 218 (221)335xi Sedan 14.1 (13.8) 7.1 (7.3) 9.7 (9.7) 232 (232)318d Sedan1] 5.7 4.1 4.7 123320d Sedan 6.0 (7.1) 4.1 (4.4) 4.8 (5.4) 128 (144)325d Sedan 7.8 (8.3) 4.8 (5.3) 5.9 (6.4) 155 (169)330d Sedan 8.2 (9.0) 4.9 (5.2) 6.1 (6.6) 160 (175)330xd Sedan 9.1 (9.7) 5.5 (5.7) 6.8 (7.2) 178 (190)335d Sedan2] 9.1 5.3 6.7 177

318i Touring 8.0 (8.6) 4.9 (5.3) 6.0 (6.5) 144 (156)320i Touring 8.5 (9.1) 4.9 (5.3) 6.2 (6.7) 148 (160)325i Touring 9.9 (9.8) 5.6 (5.7) 7.2 (7.2) 173 (173)325xi Touring 11.0 (10.9) 6.2 (6.3) 8.0 (8.0) 193 (191)330i Touring 10.0 (10.1) 5.7 (5.8) 7.3 (7.4) 175 (178)330xi Touring 11.1 (11.1) 6.3 (6.3) 8.1 (8.1) 194 (194)335i Touring 13.4 (13.2) 6.9 (7.0) 9.3 (9.3) 222 (223)335xi Touring 14.2 (13.9) 7.2 (7.4) 9.8 (9.8) 235 (235)318d Touring1] 5.8 4.2 4.8 125320d Touring 6.1 (7.3) 4.2 (4.6) 4.9 (5.6) 131 (146)325d Touring 7.9 (8.4) 4.9 (5.4) 6.0 (6.5) 158 (172)330d Touring 8.3 (9.1) 5.0 (5.3) 6.2 (6.7) 163 (176)330xd Touring 9.2 (9.8) 5.6 (5.8) 6.9 (7.3) 181 (193)335d Touring2] 9.2 5.4 6.8 178

BMW320i Coupé 8.7 (8.9) 4.9 (5.1) 6.3 (6.5) 151 (156)325i Coupé 9.8 (9.7) 5.5 (5.6) 7.1 (7.1) 170 (170)325xi Coupé 10.9 (10.8) 6.1 (6.2) 7.9 (7.9) 189 (189)330i Coupé 9.9 (9.9) 5.6 (5.6) 7.2 (7.2) 173 (173)330xi Coupé 11.0 (11.0) 6.2 (6.2) 8.0 (8.0) 193 (193)335i Coupé 13.2 (13.1) 6.7 (6.9) 9.1 (9.2) 218 (221)335xi Coupé 14.1 (13.8) 7.1 (7.3) 9.7 (9.7) 232 (232)320d Coupé 6.0 (7.2) 4.1 (4.5) 4.8 (5.5) 128 (145)325d Coupé 7.8 (8.3) 4.8 (5.3) 5.9 (6.4) 155 (169)330d Coupé 8.2 (9.0) 4.9 (5.2) 6.1 (6.6) 160 (175)330xd Coupé 9.1 (9.7) 5.5 (5.7) 6.8 (7.2) 178 (190)335d Coupé2] 9.1 5.3 6.7 177M3 Coupé1] 17.9 9.2 12.4 295

320i Convertible 9.0 (9.4) 5.2 (5.4) 6.6 (6.9) 157 (165)325i Convertible 10.4 (10.6) 5.9 (6.1) 7.6 (7.8) 181 (187)330i Convertible 10.5 (10.6) 6.0 (6.1) 7.7 (7.8) 185 (187)335i Convertible 13.6 (13.4) 7.1 (7.2) 9.5 (9.5) 226 (226)325d Convertible 8.1 (8.6) 5.1 (5.6) 6.2 (6.7) 164 (176)330d Convertible 8.6 (9.3) 5.3 (5.5) 6.5 (6.9) 170 (181)

520i Sedan 9.2 (9.4) 5.4 (5.4) 6.7 (6.9) 162 (164)523i Sedan 10.1 (10.3) 5.7 (5.9) 7.3 (7.5) 174 (178)525i Sedan 10.3 (10.4) 5.7 (5.8) 7.4 (7.5) 176 (178)525xi Sedan 11.3 (11.2) 6.2 (6.3) 8.1 (8.1) 193 (193)530i Sedan 10.9 (10.8) 5.8 (5.6) 7.7 (7.5) 182 (178)530xi Sedan 11.5 (11.6) 6.2 (6.0) 8.2 (8.1) 194 (193)540i Sedan 15.8 (14.4) 7.4 (6.9) 10.5 (9.7) 250 (232)550i Sedan 16.6 (15.5) 7.6 (7.2) 10.9 (10.3) 260 (246)520d Sedan 6.5 (7.5) 4.3 (4.6) 5.1 (5.6) 136 (149)525d Sedan 8.2 (8.5) 5.0 (5.3) 6.2 (6.5) 165 (172)525xd Sedan 8.8 (9.1) 5.4 (5.6) 6.7 (6.9) 179 (183)530d Sedan 8.6 (9.1) 5.1 (5.2) 6.4 (6.6) 170 (176)530xd Sedan 9.2 (9.6) 5.5 (5.5) 6.9 (7.0) 183 (186)535d Sedan2] 9.0 5.4 6.7 178M51] 22.7 10.2 14.8 357

520i Touring 9.4 (9.5) 5.6 (5.5) 6.9 (7.0) 166 (167)523i Touring 10.6 (10.6) 6.0 (6.0) 7.7 (7.7) 183 (184)525i Touring 10.8 (10.7) 5.9 (6.0) 7.7 (7.7) 183 (184)525xi Touring 11.8 (11.7) 6.4 (6.5) 8.4 (8.4) 201 (201)530i Touring 11.1 (11.0) 6.0 (5.8) 7.9 (7.7) 187 (184)530xi Touring 12.0 (12.1) 6.4 (6.3) 8.5 (8.4) 203 (201)550i Touring 17.0 (16.1) 7.8 (7.5) 11.2 (10.7) 267 (254)520d Touring 6.7 (7.7) 4.5 (4.7) 5.3 (5.8) 140 (154)525d Touring 8.4 (8.6) 5.2 (5.4) 6.4 (6.6) 171 (176)525xd Touring 9.1 (9.2) 5.6 (5.7) 6.9 (7.0) 184 (187)

GRI Indicator A6, A7(Sector Supplement)

Indicators for sustainability 91

Model Urban Extraurban Combined CO2 emissions(l /100 km) (l /100 km) (l /100 km) [g/km]

Model Urban Extraurban Combined CO2 emissions(l /100 km) (l /100 km) (l /100 km) [g/km]

BMW530d Touring 8.8 (9.3) 5.3 (5.3) 6.6 (6.8) 176 (180)530xd Touring 9.6 (9.9) 5.8 (5.6) 7.2 (7.2) 192 (192)535d Touring2] 9.2 5.6 6.9 182M5 Touring1] 22.4 10.6 15.0 361

630i Coupé 11.2 (11.0) 6.0 (5.8) 7.9 (7.7) 188 (184)650i Coupé 17.8 (15.9) 8.1 (7.4) 11.7 (10.5) 279 (249)635d Coupé2] 9.2 5.6 6.9 183630i Convertible 11.8 (11.6) 6.3 (6.0) 8.3 (8.1) 198 (192)650i Convertible 19.2 (16.5) 8.8 (7.7) 12.6 (10.9) 299 (258)635d Convertible2] 9.6 5.8 7.2 190M6 Coupé1] 22.7 10.2 14.8 357M6 Convertible1] 22.8 10.7 15.2 366

730i2] 14.6 7.5 10.1 241730Li2] 14.6 7.5 10.1 242740i2] 16.3 8.2 11.2 267740Li2] 16.3 8.2 11.2 268750i2] 16.9 8.3 11.4 271750Li2] 16.9 8.3 11.4 272760i2] 20.7 9.5 13.6 327760Li2] 20.7 9.5 13.6 327730d2] 10.9 6.2 7.9 210730Ld2] 11.0 6.3 8.0 212745d2] 12.8 6.8 9.0 239

X3 2.0i1] 12.6 6.9 9.0 215X3 2.5si 12.8 (13.1) 7.3 (7.4) 9.3 (9.5) 224 (228)X3 3.0si 13.4 (13.3) 7.3 (7.6) 9.5 (9.7) 229 (233)X3 2.0d 8.2 (8.3) 5.5 (5.8) 6.5 (6.7) 172 (178)X3 3.0d 9.7 (9.9) 6.0 (6.4) 7.4 (7.7) 196 (206)X3 3.0sd2] 9.7 6.7 7.8 208

X5 3.0si2] 13.7 8.2 10.2 244X5 4.8i2] 16.9 9.2 12.0 286X5 3.0d2] 10.2 6.9 8.1 214X5 3.0sd2] 10.3 7.0 8.2 216

Z4 2.01] 10.6 5.5 7.4 176Z4 2.5 11.8 (12.0) 6.1 (6.3) 8.2 (8.4) 197 (202)Z4 2.5si 11.9 (12.4) 6.2 (6.6) 8.3 (8.7) 199 (207)Z4 3.0si 12.4 (12.7) 6.2 (6.5) 8.5 (8.8) 204 (211)Z4 3.0si Coupé 12.8 (12.7) 6.3 (6.5) 8.7 (8.8) 207 (209)Z4 M Roadster1] 18.2 8.6 12.1 292Z4 M Coupé1] 18.2 8.6 12.1 292

MINIMINI One 6.8 (9.0) 4.4 (5.0) 5.3 (6.5) 128 (155)MINI One Convertible1] 9.8 5.4 7.0 168MINI Cooper 6.9 (9.1) 4.5 (5.0) 5.4 (6.5) 129 (156)MINI Cooper Convertible 10.0 (10.7) 5.7 (5.8) 7.3 (7.6) 174 (182)MINI Cooper D 4.7 (6.5) 3.5 (4.2) 3.9 (5.0) 104 (134)MINI Cooper S 7.9 (9.7) 5.2 (5.3) 6.2 (6.9) 149 (165)MINI Cooper S Convertible 11.3 (12.7) 6.6 (6.4) 8.3 (8.7) 199 (208)MINI Cooper S Convertible (JCW)1, 3] 11.3 6.6 8.3 199MINI Clubman1] 7.1 4.5 5.5 132MINI Clubman D 4.9 (6.6) 3.6 (4.2) 4.1 (5.1) 109 (136)MINI Clubman S 8.0 (9.8) 5.3 (5.4) 6.3 (7.0) 150 (168)

Rolls-RoyceRolls-Royce Phantom2] 23.2 11.3 15.7 377Rolls-Royce Phantom Long wheel base2] 23.3 11.4 15.8 380Rolls-Royce PhantomDrophead Coupé2] 23.2 11.3 15.7 377

Figures in brackets only valid for automatic transmissions1] only available with manual transmission.2] only available with automatic transmission.3] John Cooper Works GP Kit

Further information and constantly updated data for the vehicles is available on the Internet at www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com.

as of September 2007

92

04Environmental protection acrossthe Group

04.1 Environmental protection management

GRI G3 Indicator EN30 Ongoing expenditure on environmental protectionin euro million

45

40

35

30

25

20

Figures from the German production plants* from 2004 including Leipzig plant

02

33.2

03

33.5

04

40.5

05

38.9

06

43.1

To attain the objective of constantly improving the accomplishmentsin environmental protection, every plant of the BMW Group developsits environmental protection programme each year. The environ-mental indicator is used to check if the accomplishments in environ-mental protection are being improved across the group. To thisend, each plant determines the water and energy consumption, thequantity of wastewater produced, emissions from volatile organiccompounds (VOC), CO2 emissions as well as the quantity of wastefor each unit produced in each month. The monthly values are ag-gregated and compared to the average of the prior year. This allowsthe BMW Group to determine whether or not the effects of produc-tion on the environment have changed in the six individual cate-gories. For a comprehensive survey, an average value is calculatedfrom the individual values and compared to the value of the pre-vious year.

*

Environmental indicator

Relative waterconsumption

2006 < 12005

Relative wastequantity

2006 < 12005

RelativeVOC emissions

2006 < 12005

Relative waste-water quantity

2006 < 12005

Relative energyconsumption

2006 < 12005

RelativeCO2 emissions

2006 < 12005

>

+

+

Total quotients

Number of target fields

20062005

< 1

Investment in environmental protectionin euro million

40

35

30

25

20

15

Information excludes major investments for production sites of BMW AG in Germany.* The rise in 2004 resulted from the overall and environmental protection investmentsin the construction of the BMW plant Leipzig, Germany.

02

20.7

03

25.3

04

34.2

05

20.8

06

20.7

*

Indicators for sustainability 93

Environmental management systems at the BMW Group sites Environmental Year of firstmanagement system certification

Berlin plant ISO 14001/EMAS 1997

Dingolfing plant ISO 14001/EMAS 1999

Eisenach plant ISO 14001/EMAS 2002

Goodwood plant, GB ISO 14001 2003

Hams Hall plant, GB ISO 14001 2001

Landshut plant ISO 14001/EMAS 1997

Leipzig plant ISO 14001/EMAS 2005

Munich plant ISO 14001/EMAS 1997

Oxford plant, GB ISO 14001 1997

Regensburg plant ISO 14001/EMAS 1997

Rosslyn plant, South Africa ISO 14001 1999

BMW Brilliance Automotive Ltd., Shenyang, China ISO 14001 2006

Spartanburg plant, USA ISO 14001 1997

Steyr plant, Austria ISO 14001/EMAS 1998

Swindon plant, GB ISO 14001 1996

Wackersdorf plant* ISO 14001 1997

CKD production Cairo, Egypt ISO 14001 2005

CKD production Chennai, India ISO 14001 planned 2008

CKD production Jakarta, Indonesia ISO 14001 2004

CKD production Kaliningrad, Russia (certified according to national corporate standard) ISO 14001 planned 2008

CKD production Kuala Lumpur, Malaysia ISO 14001 2004

CKD production Rayong,Thailand ISO 14001 2004* Joint certificate with the BMW plant Regensburg

94

GRI G3 Indicator EN3, EN4 Energy consumption in detail 2002 2003 2004 2005 2006in MWh

Total energy consumption 3,503,102 3,295,277 3,672,212 3,861,253 3,959,908

Energy consumed per unit produced 3.21 2.94 2.94 2.94 2.90

Electricity (external source) 1,180,217 1,501,045 1,586,457 1,671,928 1,667,122

Electricity (produced internally) 95,057 115,323 127,981 125,229 125,414

Community heating 166,159 209,677 187,418 180,403 295,245

Fuel oil 27,536 22,237 17,008 14,021 14,364

Natural gas 2,129,190 1,562,309 1,881,329 1,994,901 1,983,177

Coal 0 0 0 0 0

Mineral oil 0 0 0 0 0

04.2 Energy consumption and emissions

GRI G3 Indicator EN3

BMW Group key figures include the following automobile and engine production plants worldwide: automobile production Dingolfing,component assembly Landshut, automobile production Leipzig, automobile production and engine production Munich, automobileproduction Regensburg, automobile production Rosslyn, South Africa, automobile production Spartanburg, USA, engine production Steyr,Austria, since 2002 MINI production in Oxford, GB, and since 2003 engine production Hams Hall, GB.

Energy consumed per unit producedin MWh/unit

3.75

3.50

3.25

3.00

2.75

2.50

02

3.21

03

2.94

04

2.94

05

2.94

06

2.90

Indicators for sustainability 95

GRI G3 Indicator EN16, EN20 Emissions 2002 2003 2004 2005 2006

Total CO2 emissions* in t 1,068,690 1,125,939 1,169,786 1,304,971 1,280,639

thereof CO2 direct** in t 408,034 349,927

thereof CO2 indirect*** in t 896,938 930,711

Total CO2 emissions per unit produced in t/unit 0.98 1.00 0.94 0.99 0.94

Nitrogen oxide (NOx) in t 481 533 559 546 586

Particulate, dust in t 28 38 43 35 35

Sulphur dioxide (SO2) in t 7 10 10 8 9

Carbon monoxide (CO) in t 283 315 399 397 561

Volatile organic compounds (VOC) in t 3,521 3,219 2,817 2,726 2,783

Volatile organic compounds (VOC) per unit produced in kg/unit 3.23 2.88 2.26 2.07 2.04* including CO2 emissions from external power generation** Emissions from the BMW Group sources and that arise from generating its own energy from fuels (e.g. combined heat and power generation).***Emissions from sources of a different organisation (e.g. energy supplier). Indirect emissions arise due to generation of electricity, heat or steam, which the BMW Group has

received.

GRI G3 Indicator EN17, EN29 Indirect CO2 emissions from employees’ commuter traffic in 2006* in % in t CO2

Cars 47 26,180

Public transport 10 1,430

Plant bus 38 10,590

Bicycle/on foot 5 0

Total 100 38,200* Research and Innovation Centre Munich as well as Munich, Dingolfing, Regensburg, Leipzig plants. Corresponds to 53% of the BMW Group employees.

Volatile organic compounds (VOC) per unit producedin kg/unit

3.25

3.00

2.75

2.50

2.25

2.00

02

3.23

03

2.88

04

2.26

05

2.07

06

2.04

GRI G3 Indicator EN16(graphic on the left)

GRI G3 Indicator EN20(graphic on the right)

CO2 emissions per unit producedin t/unit

1.15

1.10

1.05

1.00

0.95

0.90

* The increase is due to a change in the energy mix.

02

0.98

03

1.00

04

0.94

05

0.99

06

0.94

*

96

* The “process wastewater” indicator is measured by the wastewater treatment in the BMW Group plants.Together with the wastewater from the sanitation area of the plantlocations this results in the total wastewater value. Due to factors such as evaporation, the water input does not correspond to the total wastewater.

GRI G3 Indicator EN21 Wastewater* 2002 2003 2004 2005 2006

Total wastewater in m3 2,324,655 2,419,775 2,239,646 2,139,322 2,271,729

Process wastewater in m3 998,917 1,101,988 1,041,526 1,000,938 911,386

Process wastewater per unit produced in m3/unit 0.92 0.98 0.83 0.76 0.67

Total heavy metals and heavy metal compounds in kg 347 412 439 239 354

04.3 Protecting resources and nature conservation

GRI G3 Indicator EN8 Water* 2002 2003 2004 2005 2006in m3

Water consumption 3,618,995 3,633,135 3,789,703 3,417,341 3,500,197* The indicators for water consumption refer to the production sites of the BMW Group.The water consumption includes the process water input for the production as well as thegeneral water consumption e.g. for sanitation facilities.

BMW Group key figures include the following automobile and engine production plants worldwide: automobile production Dingolfing,component assembly Landshut, automobile production Leipzig, automobile production and engine production Munich, automobileproduction Regensburg, automobile production Rosslyn, South Africa, automobile production Spartanburg, USA, engine production Steyr,Austria, since 2002 MINI production in Oxford, GB, and since 2003 engine production Hams Hall, GB.

GRI G3 Indicator EN8(graphic on the left)

GRI G3 Indicator EN21(graphic on the right)

Water consumption* per unit producedin m3/unit

3.75

3.50

3.25

3.00

2.75

2.50

* The indicators for water consumption refer to the production sites of the BMW Group.The water consumption includes the process water input for the production as wellas the general water consumption e.g. for sanitation facilities.

02

3.32

03

3.25

04

3.03

05

2.60

06

2.56

Process wastewater* per unit producedin m3/unit

1.1

1.0

0.9

0.8

0.7

0.6

* The indicators for process wastewater refer to the wastewater generated in theproduction process.

02

0.92

03

0.98

04

0.83

05

0.76

06

0.67

Indicators for sustainability 97

Land development 2003 2005

Land development* in % 21.5 24.7

Property area in m2 15,746,127 15,278,584

GRI G3 Indicator EN22 Waste 2002 2003 2004 2005 2006

Total waste in t 317,129 399,876 397,151 454,821 469,691

Total waste per unit produced in kg/unit 291 357 318 346 344

Materials for recycling in t 295,275 372,268 375,924 438,436 450,165

Waste for removal in t 21,854 27,301 21,227 16,385 19,526

Scrap in t 326,364 315,222 344,746 366,347 383,301

* proportion of developed to undeveloped area. Survey conducted every two years.

GRI G3 Indicator EN22 Waste per unit producedin kg/unit

450

400

350

300

250

200

02

291

03

357

04

318

05

346

06

344

98

04.5 Sustainability in the supply chain

The BMW Group continually controls and optimises the environ-mental friendliness of the components used in the vehicles through-out the supply chain. For this purpose, about 30,000 datasets forserial parts were transmitted and evaluated in 2006 alone.TheBMW Group purchasing terms explicitly define the requirements forthe environmental friendliness of the components. These are furthersubstantiated by specification requirements and material and com-ponent tests. Thus the BMW Group ensures that the regulations ofthe company are fulfilled. The “Component Materials” work group,which is an interdisciplinary team, evaluates in advance the risksassociated with the use of certain materials and takes action in theselection process and development activities. In close consultation,future shipments are thereby checked against the exacting standardsof the BMW Group. In addition to series parts, all production sup-plies and process materials, such as paint or glue, are subjected toa precisely defined qualification process.

Information on environmental compatibility of componentsCumulated number of material data sheets for purchased parts

120,000

110,000

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

03

4,791

04

32,231

05

52,856

06

82,360

Proportion of vehicles delivered without surface protection*

in %

70

60

50

40

30

20

* Project to reduce surface protection began in 2004.

04

26.7

05

42.5

06

53.4

04.4 Efficient transportation logistics

GRI G3 Indicator EN29GRI Indicator A9 (Sector Supplement)

Percentage of transport used for land transportin %

90

75

60

45

30

15

Land transport for inbound material (Germany, UK), spare parts shipping (Europe) andcar distribution (global), measured in ton-kilometres

Road

Rail

03

71.4

28.6

04

70.6

29.4

05

67.8

32.2

06

68.5

31.5

GRI G3 Indicator EN29GRI Indicator A9 (Sector Supplement)

(graphic on the left)

GRI G3 Indicator EN27(graphic on the right)

Percentage of vehicles* shipped via rail from the BMW Group plants*

in %

70

60

50

40

30

20

* excluding Rolls-Royce automobiles

04

56.6

03

51.1

05

54.1

06

55.4

Total percentage of transport usedin %

90

75

60

45

30

15

Inbound material (Germany, UK), spare parts shipping (Europe) and car distribution(global), measured in ton-kilometres.

Sea

Road

Rail

Air

03

77.8

15.7

6.2

0.3

04

79.0

14.7

6.1

0.2

05

77.6

15.0

7.2

0.2

06

76.9

15.7

7.2

0.2

Indicators for sustainability 99

Strategic objectives Measures Deadline

Environmental protection management

Environmental management Creation of a central Centre of Competence for environmental 2008management in the sales division

Further development of the central environmental strategy for the 2008entire BMW Group

Beyond the objective of continuous improvement, breakthrough 2012objectives were set for environmental protection across the Group, for energy consumption, CO2, VOC, waste and water consumption and were broken down according to individual years

Energy consumption and emissions

Implementing energy strategy, reducing energy Lower the relative energy consumption per vehicle in 2008 by 2008consumption about 5%

– by further optimised management of buildings and production 2008facilities (combined heat and power generation, optimised control of air conditioning units)

– by increased implementation of alternative, innovative concepts for 2008generating energy

Protecting resources and nature conservation

Introduce waste management worldwide Introduce ABIS in the Goodwood (UK), Rayong (Thailand) and 2008Chennai (India) plants

Sustainability in the supply chain

Anchor ecological and social standards in processes Increase random inspections on the compliance with social ongoingbetween purchasing and suppliers/partners and ecological standards at suppliers during visits

Develop suitable indicators for early detection of deviations and ongoingroom for improvement at suppliers

Efficient transportation logistics

Increase proportion of low-emissions transportation Keep the currently high percentage of 55.4% for shipments 2007made by rail when shipping vehicles from the plants. Integration of regular rail transport into the markets in Spain and the UKfrom the Leipzig plant (objective for 2007 – approx. 20% of the production volume of the Leipzig plant)

Optimise transport volume Improve the utilisation of means of transportation and transport net- 2007works. In 2007, completion of project “Europe” (= transport concept for the material supply in Europe for more efficient utilisation ofheavy goods vehicles). Switch to activity-related billing in USA

Optimise utilisation of packaging space by constructively influencing 2008the product design in the early stages of vehicle projects. Use virtual methods (CAD) to examine components, to simulate utilisation of the packaging space, and to create logistical design proposals

Reduce environmental impact of the surface Switch to vehicle distribution without surface protection. 2008protection materials for new vehicle transport (by the start of 2008, 95% of the BMW Group vehicles are to be

delivered without extra surface protection)

Sustainability objectives in the area of environmental protection across the Group*

* An overview on the status of the objectives from the Sustainable Value Report 2005/2006 is available on the Internet at www.bmwgroup.com/sustainability.

100

05Employees

05.1 Attractive employer internally and externally

GRI G3 Indicator LA1

* Figures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time arrangements and low income earners.

BMW Group apprentices at December 31

4,800

4,600

4,400

4,200

4,000

3,800

02

4,199

03

4,306

04

4,464

05

4,464

06

4,359

GRI G3 Indicator LA2 Employee fluctuation ratio BMW AG*

as a percentage of workforce

3.0

2.5

2.0

1.5

1.0

0.5

* Number of employees on unlimited employment contracts leaving the company

02

1.40

03

1.43

04

1.91

05

2.45

06

2.68

GRI G3 Indicator LA1 BMW Group employees 2002 2003 2004 2005 2006

Employees at year end* 101,395 104,342 105,972 105,798 106,575

thereof Germany 76,143 78,569 80,005 80,020 79,896

thereof outside Germany 25,252 25,773 25,967 25,778 26,679

Workforce according to segment

Automobiles 93,216 95,913 99,043 98,260 98,505

Motorcycles 2,847 2,954 2,918 2,838 2,782

Financial Services 2,196 2,476 2,841 3,093 3,478

Other 3,136 2,999 1,170 1,607 1,810

Apprentices 4,199 4,306 4,464 4,464 4,359

BMW Group employees at year end*

110

108

106

104

102

100

02

101,395

03

104,342

04

105,972

05

105,798

06

106,575* Figures exclude suspended contracts of employment, employees in the non-workphases of pre-retirement part-time arrangements and low income earners.

Indicators for sustainability 101

Profit-share scheme of BMW AG in year of payment*

in percent of monthly remuneration

200

175

150

125

100

75

* New employees share fully in the company’s profit after four years of employment.

03

140.7

04

153.4

05

155.9

06

156.8

07

156.3

05.2 Performance, compensation and flexibility

GRI G3 Indicator EC1(graphic on the left)

BMW Group personnel costs per employee*

in euro

80,000

75,000

70,000

65,000

60,000

55,000

* Figures exclude suspended contracts of employment, employees in the non-workphases of pre-retirement part-time arrangements and low income earners.

02

69,560

03

73,499

04

73,241

05

75,238

06

76,621

GRI G3 Indicator LA1 Alternative work forms at BMW AG 2002 2003 2004 2005 2006

Part-time employees at BMW AG 2,483 2,632 2,800 2,909 3,070

as a percentage of the total number of employees 3.4 3.5 4.0 4.2 4.4

Teleworking within BMW AG 2,006 2,711 3,936 4,276 4,836

as a percentage of the total number of employees 2.7 3.6 5.6 6.2 7.0

Sabbaticals 628 746 915 1,559 1,401

as a percentage of the total number of employees 0.9 1.0 1.3 2.2 2.0

Means of transportation used by BMW Group employees when commuting to and from work 2006in %

Cars 47

Public transport 10

Company bus 38

Bicycle/on foot 5

Total 100

Research and Innovation Centre Munich as well as Munich, Dingolfing, Regensburg, Leipzig plants. Corresponds to 53% of the BMW Group employees.

102

05.4 Equal opportunities and rights

GRI G3 Indicator LA13

Savings for the BMW Group resulting from suggestions forimprovementineuro thousand

120,000

100,000

80,000

60,000

40,000

20,000

02

62,830

03

65,152

04

67,855

05

92,374

06

63,045

05.3 Co-determination and involvement

Share of women in management/executive positions of BMW AGin %

9

8

7

6

5

4

02

5.6

03

6.2

04

6.6

05

6.9

06

7.0

GRI G3 Indicator LA13 Share of employees with disabilities at BMW AGin %

6

5

4

3

2

1

02

3.4

03

3.7

04

3.8

05

4.0

06

4.2

Share of women in the total workforce of BMW AGin %

15

14

13

12

11

10

02

12.5

03

12.8

04

13.2

05

13.4

06

13.4

Indicators for sustainability 103

05.5 Lifelong learning

GRI G3 Indicator LA10 (graphic on the left)

Average days of training and development per employee at theBMW Group

2.8

2.6

2.4

2.2

2.0

1.8

03

2.4

04

2.4

05

1.8

06

1.8

GRI G3 Indicator LA7

Shows the number of notifiable industrial accidents per one millionhours worked

Definition of industrial accident according to the German Code ofSocial Law: Industrial accidents are accidents involving insured indi-viduals and resulting from the pursuit of these individuals’ insuredactivity on the industrial site. Accidents are events of limited durationthat externally impact the body leading to damage to health or death.

Accident frequency at the BMW Groupper one million hours worked

4.50

4.25

4.00

3.75

3.50

3.25

03

4.3

04

3.8

05

3.3

06

3.3

05.6 Health and safety at work

* number of notifiable industrial accidents per one million hours worked** assessment of workplaces and sub-processes with regard to possible ergonomic and health-related strains (ABATECH method).

GRI G3 Indicator LA7, LA8 Occupational health and safety in the BMW Group 2002 2003 2004 2005 2006

Total accidents Quantity 523 479 413 409

Accident frequency* 4.3 3.8 3.3 3.3

Fatal accidents Quantity 0 0 1 0Only refers to the BMW AG

Courses on occupational safety

Occupational safety courses Quantity 1,399 1,384 2,001 1,982 1,799

Risk assessments** Quantity 1,174 4,451 5,625 3,044 1,426

Capital expenditure on education and further training*

of the BMW Groupin euro million

250

225

200

175

150

125

* The BMW Group’s capital expenditure depends on education and further trainingrequirements and thus fluctuates from year to year.

02

210.5

03

196.3

04

231.7

05

194.2

06

184.1

104

* OHRIS includes OHSAS** HS(G) 65, Successful health and safety management, guidelines from the British government on safety at the workplace.*** Certificate together with the BMW plant Regensburg, Germany

GRI G3 Indicator LA8 Occupational health and safety management systems at the BMW Group sites

Site Management system Year of first certification/introduction

Berlin plant OHSAS 2004

Dingolfing plant OHRIS* 2003

Eisenach plant OHRIS* first OHRIS elements introduced in 2004

Goodwood plant, GB OHSAS planned 2007

Hams Hall plant, GB HS(G) 65** 2001

Landshut plant OHRIS* 2003

Leipzig plant OHRIS* 2006

Munich plant OHRIS* 2003

Oxford plant, GB OHSAS planned 2007

Regensburg plant OHRIS* 2001

Rosslyn plant, South Africa OHSAS 1999

BMW Brilliance Automotive Ltd., Shenyang, China OHSAS planned 2007

Spartanburg plant, USA OHSAS first OHSAS elements introduced in 2006

Steyr plant, Austria not certified

Swindon plant, GB OHSAS planned 2008

Wackersdorf plant*** OHRIS* 2001

CKD production Chennai, India OHSAS planned 2007

CKD production Jakarta, Indonesia national standard introduced

CKD production Cairo, Egypt OHSAS 2005

CKD production Kaliningrad, Russia national standard 1999

CKD production Kuala Lumpur, Malaysia national standard introduced

CKD production Rayong,Thailand OHSAS planned 2008

Indicators for sustainability 105

Strategic objectives Measures Deadline

Attractive employer internally and externally

Continuous pursuit of a high level of employee Implementation of the third employee survey across the group 2007satisfaction

Promote personal responsibility of apprentices by Further develop the concept of the junior company and 2008new work structures rollout at other sites. By 2008 at Oxford site

Joining the BMW Group

Balanced proportion of female apprentices in Further develop the concept for hiring after apprenticeship is ongoingtechnical professions and integration into the hiring completeddepartments

Lifelong learning

Develop the training academies Establish an aftersales training centre in China 2009

Deepen and expand the implementation of the Create the conditions for the specific stages of life and ongoingessential elements for long-term human resources individual safeguarding of professional and private obligationspolicy (LPP) worldwide and interests of the employees within the long-term human

resources policy. Ensure the proper prerequisites for an enduring provision of service by the employees. Regularly examine the instruments with regard to the constantly changinginternal and external conditions

Further develop the human resources systems based on the ongoinglong-term human resources policy (LPP) worldwide

Healthy employees

Occupational safety New occupational safety film for the initial briefing of new employees 2007

Introduction of a new IT-supported accident management system 2007in conjunction with the BMW Group Health Service

Combating HIV/AIDS HIV retesting campaign with the slogan “Vision of Life” at 2008BMW South Africa

Demographic change

Project “Today for tomorrow” Completion of the “Today for tomorrow” project and integration 2007of the measures into the standard processes and thereby into the company’s daily routine

Sustainability objectives in the area of employees*

* An overview on the status of the objectives from the Sustainable Value Report 2005/2006 is available on the Internet at www.bmwgroup.com/sustainability.

106 Society06Strategic objectives Measures Deadline

Traffic concepts for the future

Further development of traffic concepts Identify future changes to mobility of private households due 2008to changes in the cost of mobility and incomes in Germany

Identify potential for improvement by comprehensive benchmarking 2007of traffic infrastructures (road, rail, air) in Europe

Traffic safety projects

Internationalisation Further internationalisation of traffic safety projects at the 2009BMW Group sites

Education and intercultural understanding

Focus on educational projects Increased dovetailing of the BMW Group competences with the 2007educational projects in the area of natural sciences

Commitment to fighting HIV/AIDS

Expansion to other sites of activities aimed at Transfer the activities from South Africa to e.g. China, Russia and ongoingcombating HIV/AIDS Thailand

Expand the HIV/AIDS programme from BMW South Africa to include 2011the local dealers

Sustainability objectives in the area of society*

* An overview on the status of the objectives from the Sustainable Value Report 2005/2006 is available on the Internet at www.bmwgroup.com/sustainability.

107

Profile Degree of Referenceperformance**

1. Strategy and analysis

1.1 Statement from the Board of Management 02–031.2 Impacts of operational activity, key risks and opportunities 12, 14–15, 20–21, AR***

2. Organisational profile

2.1 Name of the organisation 062.2 Primary brands, products and services 062.3 Operational structure of the organisation 06–07, 18–192.4 Location of organisation’s headquarters 06, 092.5 Countries where the organisation operates 08–092.6 Ownership structure and legal form AR***

2.7 Markets served 852.8 Scale of the organisation profile 06, 83–842.9 Significant changes regarding size, structure or ownership 19, AR***

2.10 Awards 14–15, 36, 44, 54, 68, 723. Report parameters

3.1 Reporting period Cover3.2 Date of most recent previous report (www.bmwgroup.com/responsibility) Internet3.3 Reporting cycle3.4 Contact persons for questions regarding the report 1143.5 Process for defining report content Cover3.6 Boundary of the report Cover3.7 Limitations on the scope or boundary of the report Cover3.8 Basis for reporting on joint ventures Cover3.9 Data measurement techniques and bases of calculations3.10 Restatements of information n. r.3.11 Changes from previous reporting periods in the scope, boundary, or measurement methods n. r.3.12 GRI Content Index 1073.13 External assurance for the report n. r.4. Governance, commitments and engagement

4.1 Governance structure of the organisation AR***

4.2 Independence of the Chairman of the Supervisory Board AR***

4.3 Number of independent members in the highest governance body AR***

4.4 Co-determination right of employees and shareholders 58, AR***

4.5 Linkage between executive compensation and achievement of sustainability goals AR***

4.6 Process in place to avoid conflicts of interest 20–21, AR***

4.7 Qualifications and expertise of the highest governance body regarding economic, environmental and social topics 02–05, AR***

4.8 Values, mission statements, principles and codes of conduct of the organisation relevant to sustainability 10–13, 40–41, 52–53,(www.bmwgroup.com/responsibility) Internet

4.9 Oversight of the sustainability performance and relevant risks by the Board of Management 10–134.10 Assessment of the performance of the Board of Management regarding sustainability 12–13, 26–274.11 Precautionary approach 02–03, 12–13, 20–21,

24–25, 40–414.12 Support for external economic, environmental and social activities 11, 16–17, 30, 744.13 Memberships in associations and representation of interests 16 –174.14 Stakeholder groups engaged by the organisation 16 –174.15 Basis for identification and selection of stakeholders 16 –174.16 Approaches to stakeholder engagement 16 –174.17 Key stakeholder topics 16 –17, Cover

Indicator Degree of Referenceperformance**

Economic

Management approach 12, 20–21,18–23,86, AR***

EC1 Direct economic value generated 22–23,83,85– 86,101, AR***

EC2 Financial implications due to climate change 02–03,12,18–33, AR***

EC3 Organisation’s defined benefit plan obligations 56–57, 64–65, 83, AR***

EC4 Significant financial assistance received from government 86, AR***

EC5 Range of ratios of standard entry level compared to local minimum wage 56–57EC6 Policy, practices and proportion of locally based suppliers 85, AR***

EC7 Procedures for local hiringEC8 Impact of infrastructure investments and services 66–77EC9 Indirect economic impacts 22–23, 85

GRI Index This index identifies how the GRI indicators (G3) were taken into accountin this Sustainable Value Report.*

* The GRI Index with comments on individual indicators is available on the Internet at www.bmwgroup.com/sustainability.** This indicator is answered completely and supported with information.

This indicator is answered in part and supported with information.This indicator is currently not answered.

n. r. not relevant*** AR Annual ReportAll additional indicators are printed in grey. Sector supplement indicators are listed separately (see page 109).

108

Indicator Degree of Referenceperformance**

Environment

Management approach 12, 24–33, 38–51, 99EN1 Materials used by weight or volume 12–13, 38–41, 44–47, 88EN2 Percentage of used materials that are recycled materials 38–39EN3 Direct energy consumption 44, 94EN4 Indirect energy consumption 94EN5 Energy savings 44–45, 94EN6 Energy-efficient products and services 24–33EN7 Reduction of indirect energy consumption 48–51, 56EN8 Total water withdrawal 96EN9 Water sources affected by withdrawal of water n. r.EN10 Percentage of water recycled and reused 46–47EN11 Production plants in protected areas 47EN12 Significant impacts upon biodiversity in protected areas 47EN13 Habitats protected and restored 47EN14 Strategies for managing impacts on biodiversity 47EN15 Endangered species in areas affected by operations of the organisation n. r.EN16 Direct and indirect greenhouse gas emissions 44, 95EN17 Other relevant greenhouse gas emissions 95EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved 44–45, 48–49, 56, 95EN19 Emissions of ozone-depleting substancesEN20 NOx , SOx and other significant emissions 95EN21 Total water discharge 46, 96EN22 Total weight of waste by type and disposal method 47, 97EN23 Significant spillsEN24 Cross-border transport or treatment of hazardous waste n. r.EN25 Areas impacted by the organisation’s discharges of water and runoffEN26 Initiatives to mitigate of harmful environmental impacts of products 24–33, 38–39, 88EN27 Percentage of products sold and their packaging materials that are reclaimed by category 49, 98EN28 Significant fines and sanctions for non-compliance with environmental lawsEN29 Significant environmental impacts of transporting products, goods, materials and members of the workforce 48–49, 56, 95, 98EN30 Environmental protection expenditures and investments 41, 92Employees

Management approach 12, 52–65,105LA1 Breakdown of workforce by employment type, contract and region 53, 84,100–101LA2 Employee fluctuation ratio 100LA3 Benefits provided only to full-time employeesLA4 Percentage of employees covered by collective bargaining agreements 58LA5 Minimum notice period(s) regarding significant operational changesLA6 Percentage of total workforce represented in occupational health and safety committeesLA7 Injuries, occupational diseases, working days lost, absentee rate and work-related fatalities 103LA8 Preventive healthcare, counselling and training regarding serious diseases 62–63, 103–104LA9 Health and safety topics covered in agreements with trade unionsLA10 Education and further training measures 60–61, 103LA11 Skills management and lifelong learning that support the continued employability of employees 64–65LA12 Employee performance and career development reviewsLA13 Diversity in senior management and employee structure 59,102LA14 Ratio of basic salary of male and female employeesHuman rights

Management approach 11, 50–51, 52–65, 99HR1 Investment decisions that include human rights clausesHR2 Percentage of suppliers that have undergone screening on human rights 50–51HR3 Employee training on human rightsHR4 Incidents of discrimination and actions takenHR5 Operations with significant risk concerning the freedom of association and collective bargaining 50–51HR6 Operations with significant risk for incidents of child labor 50–51HR7 Operations with significant risk for incidents of forced and compulsory labor 50–51HR8 Percentage of security personnel trained on aspects of human rights that are relevant to operations n. r.HR9 Incidents of violations involving rights of indigenous people

Indicators for sustainability 109

Indicator Degree of Referenceperformance**

Society

Management approach 10–17, 20–21,82,106,AR***

SO1 Impacts of operation on local communities and regions 22–23SO2 Number of business units analyzed for corruption-related risks 20–21SO3 Employee training regarding anti-corruption 20SO4 Anti-corruption measures 20–21SO5 Public policy positions and participation in public policy development and lobbying (www.bmwgroup.com) 26–33SO6 Financial and in-kind contributions to political parties and politiciansSO7 Number of legal actions for anti-competitive behaviourSO8 Number of fines for non-compliance with lawsProduct responsibility

Management approach 24–39, 89PR1 Life cycle stages in which health and safety impacts of products and services are assessed 34–35PR2 Incidents of non-compliance with regulations concerning health and of safety of productsPR3 Principles and measures related to product and service information and labelling 24–39PR4 Incidents of non-compliance with regulations and voluntary codes concerning product information and labellingPR5 Customer satisfaction 36–37PR6 Programs for compliance with laws, standards and voluntary codes related to marketing communicationsPR7 Incidents of non-compliance with regulations and voluntary codes related to marketing communicationsPR8 Number of substantiated data protection complaints 37PR9 Significant fines for non-compliance with laws and regulations concerning the provision and use of products Sector Supplement****

A1 Stipulated work hours per week and average hours worked overtime in productionA2 Percentage of employees not managed with overtime compensation schemesA3 Percentage of major fist-tier supplier facilities with independent trade union organisations 50–51A4 Numbers of vehicles sold, broken down by type, fuels, power train technologies, and region 84–85, 87, AR***

A5 Compliance of vehicles sold with the respective existing and next defined emissions standards 26 –33A6 Average fuel economy by type of vehicle 87, 90–91A7 Average carbon dioxide emissions by type of vehicle 87, 90–91A8 Compliance of vehicles sold with the respective existing and next defined noise standardA9 EN29 relevant indicator for automotive sector 48–49, 56, 95, 98A10 Weight of vehicle and percentage breakdown of generic, recyclate, and renewable material of a best selling vehicle 24–25, 38–39, 88

Global Compact – Communication on Progress (COP)With the Sustainable Value Report, the BMW Group also reports on advances implementing the ten principles of the UN Global Compact. Page references on this are in the following table.

Principle Reference

UN Global Compact – Communication on Progress

Global Compact PrinciplesPrinciple 1 Businesses should support and respect the protection of internationally proclaimed human rights; and 37, 50–53, 58–59, 62–63, 102–103Principle 2 make sure that they are not complicit in human rights abuses. 50–51Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; 50–51, 58Principle 4 the elimination of all forms of forced and compulsory labour; 50–51Principle 5 the effective abolition of child labour; and 50–51Principle 6 the elimination of discrimination in respect of employment and occupation. 50–51, 59,102Principle 7 Businesses should support a precautionary approach to environmental challenges; 02–03, 12, 20–21, 24–25, 40–41Principle 8 undertake initiatives to promote greater environmental responsibility; and 26–33, 38–39, 42–51, 56, 94–99Principle 9 encourage the development and diffusion of environmentally friendly technologies. 24–33, 38–39, 44–51Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. 20–21

* The GRI Index with comments on individual indicators is available on the Internet at www.bmwgroup.com/sustainability.** This indicator is answered completely and supported with information.

This indicator is answered in part and supported with information.This indicator is currently not answered.

n. r. not relevant*** AR Annual Report**** GRI Sector Supplement Automotive Sector, pilot version 1.0, 2004All additional indicators are printed in grey.

110 Glossary

AABIS waste information systemSystem for the recording, cost tracking and controlling of wastedisposal.

ACEAEuropean Automobile Manufacturers Association (Association desConstructeurs Européens d’Automobiles).

Alternative fuels Fuels that can replace conventional fuels derived from petroleum.

AuditInvestigation that assesses the process procedures with regard tomeeting requirements and guidelines, e.g. the operational testingof environmental or occupational health and safety managementsystems

CCleaner Production declaration Declaration of the United Nations Environment Programme (UNEP).In September 2001, the BMW Group signed the declaration, there-by reinforcing its commitment to environmentally responsible pro-duction.

Carbon dioxide (CO2)Results mainly from burning fossil fuels such as coal, oil and naturalgas. The CO2 generated from burning these fuels is the primaryman-made contributor to the greenhouse effect.

Corporate Governance In general, Corporate Governance encompasses the entirety of allinternational and national values and principles for a proper andresponsible company leadership, which apply both to the employeesand to the company leaders.The German Corporate GovernanceCode is a body of rules and regulations adopted on February 26,2002 by a government commission called into existence for expresslythat purpose and which contains most notably recommendationson conduct pertaining to proper corporate governance.

DDalit communitiesThe Dalit are the descendents of the natives of India. Due to theircaste and status as seasonal workers, they are some of the poorestpeople in India. In 2005, the BMW Group gave euro 150,000 insupport of reconstruction efforts in Dalit communities that weredestroyed by the tsunami at the end of 2004.

Demographic change Describes the change to an ageing structure of a population result-ing from an increase in life expectancy and reduction of the age-based mortality rate and the accompanying increase in the midliferange under otherwise equal conditions.

DJSI WorldDow Jones Sustainability World Index, index family created by DowJones and the Swiss agency SAM Sustainable Asset Managementfor companies with strategies based on a sustainability concept.The BMW Group has been one of the leading companies in the DowJones Sustainability indexes since 1999.

EEconsenseForum for Sustainable Development, initiated by the Federation ofGerman Industries, but with its own legal personality. The BMWGroup is one of the founding members of this organisation whichwas established in the summer of 2000.

EfficientDynamics Encompasses all of the BMW Group activities for developing driveconcepts for the future. With highly efficient engines, improvedaerodynamics, lightweight construction and energy managementon board, the BMW Group is continually reducing the consumptionof its latest fleet of vehicles and is introducing these innovationsgradually across the entire model range. In the medium term, thecompany will be implementing additional consumption advantagesby electrifying the power train. In the long term, the BMW Group isfocussing on using hydrogen generated from renewable sources inthe combustion engine.

EMASEco Management and Audit Scheme, a standard for environmentalmanagement systems comparable to the ISO 14001.

EU 15European Union of 15 member states prior to the start of the EUeastern enlargement at the beginning of 2005.

Emissions Emission (from the Latin emittere “to send out, to emit”) means ingeneral to emit particles, radiation or forces into the environment.Examples include emissions of gaseous pollutants, liquid emissionssuch as wastewater, particulate emissions or noise emissions.

FFIZThe German acronym for the BMW Group Research and InnovationCentre in Munich.

Fleet consumption Weighted average fuel consumption of the new vehicles of a singlemanufacturer or of the entire automobile industry registered in thereporting period.

Fossil fuelsThese are energy sources from fossils that emit their stored energyby a chemical combustion process with oxygen. Examples of fossilfuels include oil, natural gas and coal.

FTSE4Good Index Index of Financial Times and London Stock Exchange, in which theBMW Group has been included. FTSE4Good listings depend onadherence to environmental and ethical criteria.

GGlobal Business Coalition on HIV/AIDS, Tuberculosis and Malaria Established in 2001, the Global Business Coalition on HIV/AIDS,Tuberculosis and Malaria has been fighting the spread of thesethree diseases for five years.

Global Compact An international initiative by the former UN Secretary General KofiAnnan that brings together the representatives of private enterprisewith establishments of the United Nations, workers and civil societyto promote universal social and environmental principles.

Global Reporting Initiative (GRI) The Global Reporting Initiative is an independent institution whosetask is to develop and publish globally applicable guidelines for sus-tainability reporting in a multi-stakeholder process.

HHigh Precision Injection Second-generation petrol direct injection system that reduces con-sumption over a wide engine speed and load range during day-to-day driving.

111

HIV/AIDSHIV (Human Immunodeficiency Virus) is a virus that can cause thechronic and life-threatening disease AIDS (Acquired ImmuneDeficiency Syndrome).

HS(G) 65 – Successful health and safety managementGuideline from the British government on safety at the workplace.

HybridA hybrid drive consists of a combination of at least two differentdrive types. Usually, the hybrid is a combination of a combustionengine and one or more electric motors in one vehicle.

Hydrogen and Fuel Cell Strategy Council Body of political, industrial and academic representatives who takeon tasks in the field of hydrogen and fuel cells. This body unites in-dividual strategies in one National Hydrogen and Fuel Cell Roadmapand promotes the trustful exchange of information among govern-ment, industry and research communities.

IImmissionDescribes the entrance of pollutants, as well as noise, light, radia-tion or vibrations in an environmental medium. Examples includepollutant immissions in the air, in the groundwater or in rivers. Eachimmission is the result of a preceding emission (discharge).

ISO (International Organization for Standardization)Institution for the international coordination of standards.

ISO 14001A globally recognised standard for environmental managementsystems.

KKyoto Objectives/Kyoto ProtocolIs an additional protocol adopted in 1997 and intended to embodythe United Nations Framework Convention on Climate Change(UNFCCC) with the aim to protect the climate.

LLCA – Life Cycle AssessmentLife Cycle Assessment is a systematic analysis of the environmen-tal impact of products during the entire lifecycle.

Luxembourg Declaration on Workplace Health Promotion in theEuropean UnionLuxembourg Declaration on Workplace Health Promotion in theEuropean Union was adopted on the occasion of the assembly of allmembers of the European Network for Company Health Promotionon November 27/28 1997.

MMaterial data sheetsUsed as proof of material composition of a component, semi-fin-ished product, material and pure substance in the automobile in-dustry.

Methane (CH4)Gaseous hydrocarbon, main component of natural gas. Emerges,for example, when fossil fuels are not completely burned or as aresult of fermentation processes (biogas). Not toxic to humans, buta relevant contributor to the greenhouse effect.

MINI Production TriangleThe three British plants (Hams Hall, Oxford and Swindon) are jointlymanufacturing the MINI – with greater capacity levels, flexibilityand efficiency. The Hams Hall plant produces the new MINI petrolengines; the Oxford plant remains responsible for chassis construc-tion, painting and assembly.The Swindon plant produces the pressedpanels and chassis components.

NNitrogen oxides (NOx) Nitrogen oxides or oxides of nitrogen are collective descriptions forthe gaseous oxides of nitrogen.

OOECD (Organisation for Economic Cooperation and Development) Headquarters of the Organisation for Economic Cooperation andDevelopment is located in Paris. The OECD guidelines for multina-tional corporations form a code of conduct for globally responsiblecorporate dealings. They represent to date the most comprehen-sive recommendations by governments to the economic sector.

Occupational Health and Risk Management System (OHRIS)A certifiable and internationally recognized occupational health andsafety management system in Bavaria, Germany.

Occupational Health and Safety Assessment Series (OHSAS)OHSAS 18001 is an international standard to assess and certify anoccupational health and safety management system.

PPowder-based clear paintClear coat is the uppermost layer painted on a vehicle.This processdoes not require water or solvents and utilises nearly 100% of thematerial.

SSabbaticalLimited part-time/flexible work time model that gives BMW Groupemployees the chance to arrange a block of free time from one tosix months.

StakeholderGroups or individuals with a vested interest in a company or who areaffected by the entrepreneurial activity. For the BMW Group, theseare primarily customers, employees and shareholders and specialinterest groups, as well as municipalities worldwide where the BMWGroup operates.

Supply chainDescribes the production process of a product from the raw mate-rials production to delivery to the end user or a related service.

SustainabilitySustainability or sustainable development takes equal account ofenvironmental, social and economic development. In 1987, the UNCommission on Environment and Development defined sustain-ability as a development that satisfies the needs of the presentgeneration without endangering the bases for life of future genera-tions. For the BMW Group, the economic relevance of sustainabilityis seen in three elements: resources, reputation and risks.

TTeleworkingTeleworking comprises various forms of work where employeescarry out part of the work outside the employer’s buildings.

Ton-kilometre (tkm)A unit of measure for the transport performance of goods andpeople, also known as the transport capacity. This is calculatedfrom the product of the mass to be transported in ton (t) and thedistance travelled in the process in kilometres (km).

VVALVETRONICThanks to its operating principle, VALVETRONIC permits fully vari-able valve stroke. It performs the task of the throttle valve, which isno longer needed. The result is an engine that can breathe freelyand thus offers drivers the prospect of lower fuel consumption.

112 Index

AAccident 08, 34–35, 56, 62–63, 68, 70 –71, 103, 105Accident frequency 103Active safety 34–35Airbag 34–35, 38Alternative fuels 32–33, 88, 110arrive 68– 69Association des Constructeurs Européens d’Automobiles (ACEA) 89, 110Audits 14, 37, 42–43Awards 14, 36, 44, 54, 68, 72, 107

BBiodiversity 47, 108BMW CleanEnergy 28, 30–31, 72BMW Foundation Herbert Quandt 67, 77BMW High Precision Injection 28–29, 88–89, 110Brands 06, 12, 19, 36–37, 76, 86, 107, Cover

CCertification 41– 43, 61, 93, 104Clean Energy Partnership (CEP) 16, 30, 89Cleaner Production 11, 40, 110Clemson University 55Climate protection 13, 17, 25–27, 32, 82, 88Club of Pioneers 31CO2 08–09, 26–33, 42–45, 48–49, 56, 68–69, 87–89, 95, 99,110Combined heat and power generation 44–45, 95, 99ConnectedDrive 34Corporate culture 05, 07, 53Corporate Governance 21, 110Corporate strategy 60Corruption 17, 20–21, 82, 109Customer 34, 36–38, 89

DData protection 37, 109Dealer 06–07, 36, 39, 59, 61, 74–75, 89, 106Demographic change 02, 14, 17, 20, 53, 62, 64–65, 82, 105, 110Design for Recycling 38Disabled 59Dismantling 38Dow Jones Sustainability Index 14–15, 19, 110

EEberhard von Kuenheim Foundation 67, 77Eco Management and Audit Scheme (EMAS) 42, 50, 93, 110Education 08–09, 36, 38, 59–60, 63–64, 67, 70–73, 77, 103, 106,108EfficientDynamics 04, 12, 26, 28–30, 32, 89, 110eHR 56Emissions 26–33, 44, 45, 48–49, 87, 89, 94–95, 99, 110Emission standard 49Emissions trading 45Employee satisfaction 53, 105Employee survey 54–55, 105End-of-Life Vehicle Directive 51End-of-life vehicles 25, 38, 51, 89Energy consumption 43–44, 92, 94, 99, 108, CoverEnergy management 17, 25–28, 44, 82, 110Energy strategy 30, 99Environmental guidelines 40, 42Environmental indicator 43, 92Environmental management14, 40–42, 50–51, 93, 99,110–111, CoverEqual opportunity 59European Hydrogen and Fuel Cell Technology Platform (EHP) 17

FFinancial Services 06, 19 –20, 36–37, 84, 100First-time drivers 70Fleet consumption 26, 28, 87, 100Fuel cell 16–17, 111Fuel consumption 04, 12, 17, 26, 28–29, 31–32, 48, 87–88,110–111Further education 12, 14, 38, 54, 56, 60, 64, 103, 108

GGlobal Compact 11, 16, 20, 50, 53, 82, 109–110, CoverGlobal Reporting Initiative (GRI) 107, 109–110, CoverGlossary 110

HH2R 76Health 12, 14, 17, 41, 50, 53, 56, 62–65, 74–75, 82, 103–105,108–109, 111HIV/AIDS 02, 16, 63, 66–67, 74–75, 105–106, 110–111Human resources and social policies 53Hybrid 04, 25–26, 28–29, 55, 60, 89, 111Hydrogen 04, 14, 16–17, 25–26, 30–33, 38, 72, 76, 89, 110–111Hydrogen combustion engine 26, 30–31HyICE 31

Iifmo 67–69Integration 12, 15, 37, 59, 62–63, 65, 75, 82, 89, 99, 105Integrated approach 32–33, 88–89Intercultural learning 72–73International Labour Organisation (ILO) 11, 50, 53Investment 05–06,15,18–19, 22–23, 41, 43, 63, 67, 73, 82, 92,108Inzell Initiative 68ISO 14001 41–43, 50, 93, 110–111

KKyoto Protocol 26, 111

LLIFE 73Life Cycle Assessment (LCA) 25, 39, 111Lightweight construction 25–29, 110Logistics 17, 41, 48, 61, 72, 82, 98–99, Cover

MMaterial packages 73Materiality analysis CoverMINI 19, 22–23, 28, 32, 34, 84, 88, 91MINI Production Triangle 09, 19, 23,111Mobility 04, 07,11–12,14, 24–25, 28, 30, 32, 67–70, 72, 76, 82,106Monitoring 27, 37, 46, 59, 63Motorcycle 06, 19–20, 49, 84,100

NNitrogen oxides (NOx) 69, 95, 108,111

OOccupational health and safety 17, 50, 53, 62–64, 82, 103–105,108,110–111OECD 11, 53,111

PPaint shop 45–46Passive safety 25, 34–35Personnel costs 101Philanthropy 11Plastics 38–39, 45, 47, 88

113

Powder-based clear paint 45, 111PReVENT 20, 34–35, 63Production 22–23, 40 –51Product and market initiative 06, 41, 54Product lifecycle 89,111Purchasing terms 98

QQuality management 14–15, 50

RRanking 14–15Raw material 12, 20, 22, 39, 50, 85,111, CoverRecycled materials 108Recycling 14, 17, 24–25, 38–39, 46–47, 50–51, 82, 88–89, 97Recycling and Dismantling Centre (RDZ) 38Remuneration 77, 101Renewable resources 33, 89,109–110Reputation management 12,16,111Research and Innovation Centre (FIZ) 07–08, 42, 44, 69, 95,101,110Resources 12–14, 46–47Risk 05, 12, 16–18, 20–21, 27, 35, 50–51, 62–63, 70, 82, 98,103,107–109,111Rolls-Royce 06, 08, 19, 22–23, 36, 54, 84–86, 91, 98, Cover

SSafety systems 34–35Safety training 35Schools Environmental Education Development (SEED) 72Science 16, 34, 67, 68, 72, 77, 106Service 14, 22–25, 34, 36–39, 41, 47–50, 56–57, 59, 62–63,74–75, 89,105,107–109,111Share of women 59,102Shared leadership 58Social standards 14, 17, 41, 51, 82, 99Solvents 41, 45, 49,111Specialists 10, 13, 31, 39, 41, 45, 54, 70Stakeholder 02,11–12,14,16–17, 53, 68, 81–82, 88,107,110–111,CoverStakeholder dialogue 16–17, 81–82Suppliers 22, 43, 50–51, 99Supply chain 16–17, 50–51, 81– 82, 98– 99, 111Surface protection 49, 98–99Sustainability 10 –17, 50–51, 81–82, 98,111Sustainability criteria 11, 50Sustainable mobility 04, 14, 17, 25–28, 30, 67, 82Sustainable value 12–13, 82

TTeleworking 56–57, 101,111Today for tomorrow 20, 64–65, 105Traffic education 70–71Traffic management 25, 32, 35, 68–69Traffic safety 17, 34, 67, 70–71, 82, 106Transport 09,11, 30, 48–49, 56, 68–70, 95, 98–99,101,108,111, CoverTransport Energy Strategy (TES) 16, 30Transport used 49, 98

UUnited Nations Environment Programme (UNEP) 11, 82, 110Use stage 50

VValue added 03, 05, 11–12, 14, 17, 20, 22, 50–51, 82, 85, 98–99Value added chain 03,11,14,17, 82VALVETRONIC 28, 88,111Volatile organic compounds (VOC) 43, 45, 92, 95, 99, Cover

WWaste 39, 41– 43, 46–47, 97, 99,110Wastewater 08, 46, 96,110Water consumption 96, 99Work time 12, 56–57, 111

Contacts114

Your BMW Group contactsDr. Verena SchulerCommunications SustainabilityTelephone + 49 89 382-4 11 25Fax + 49 89 382-2 44 18E-mail verena.schuler@bmw.de

Konstanze CarrerasCommunications Social Policy Telephone + 49 89 382-5 28 94Fax + 49 89 382-2 80 17E-mail konstanze.carreras@bmw.de

Michael BlabstTechnology communicationTelephone + 49 89 382-2 46 97Fax + 49 89 382-2 39 27E-mail michael.blabst@bmw.de

The BMW Group on the Internetwww.bmwgroup.com

The BMW Group brands on the Internetwww.bmw.comwww.mini.comwww.rolls-roycemotorcars.com

Tours of the Munich plantThe BMW Munich plant offers tours with the focus on sustainability in production forgroups of seven to thirty people. Please send an e-mail with the period desired andthe subject “sustainability” to this address: produktionsmeile@bmw.de. We will try toschedule a tour date for you.

Individuals and small groups up to six people can register on the Internet to join a generalplant tour. : www.bmw-werk-muenchen.de

Further information and publications are available atwww.bmwgroup.com/responsibility

The manufacture of, and the paper used for, the BMW Group’s Sustainable Value Report 2007/2008, have been certified inaccordance with the criteria of the Forest Stewardship Council (FSC). The FSC prescribes stringent standards for forest manage-ment, thus helping to avoid uncontrolled deforestation, human rights infringements and damage to the environment. Sinceproducts bearing the FSC label are handled by various enterprises along the processing and trading chain, the FSC chain ofcustody certification rules are also applied to enterprises which process paper e.g. printing companies.

As of September 2007The next Sustainable Value Report will be published in 2009.

Published byBayerische Motoren WerkeAktiengesellschaft80788 MunichGermanyTelephone +49 89 382-0