5. Responsibility

Accountability within the company’s management with regard to sustainability is disclosed.

FMG has clearly defined the departments with responsibility for sustainability.


FMG adopts a central approach to managing sustainability, whereby responsibility lies with Strategic Sustainability Management, part of the Corporate Development division. It consolidates the entire Group’s sustainability activities and sets the tone for the strategic approach.  


FMG has defined targets within its five strategic fields of action, geared toward sustainable corporate development. These targets take the form of specific initiatives and measures within the sustainability program. While the Executive Board and divisions are responsible for achieving these targets, all first and second-tier managers are responsible for implementing them. Manager remuneration then contains a variable element calculated according to the success of the initiatives and measures. FMG monitors target achievement in an internal management report prepared on a quarterly basis. This approach aims to ensure that the strategic targets are incorporated into day-to-day work.

6. Rules and Processes

The company discloses how the sustainability strategy is implemented in the operational business by way of rules and processes.

Sustainable policy/business was incorporated long-term in FMG. External standards are used as a basis (e.g., GRI standards, IIRC general concept, Sustainability Code) for developing specific sustainability activities, which are then transferred into operations by applying internal measures (including diversity concept, digital strategy), communication measures (integrated report, sustainability conferences, workshops), and external measures (including stakeholder dialog, presentations/publications). Higher-level standards and social requirements are used at the same time to determine relevant influences and value drivers and thus serve to enhance the business model.  

The main sustainability issues for FMG are identified during an annual online survey of stakeholders and compared with the results of a survey of the Group’s managers. The materiality matrix prioritizes these issues and presents them in a clear manner. The sustainability program sets out specific short-term and medium-term goals, initiatives, and measures for the topic areas. The individual business divisions are responsible for implementing the sustainability measures. The majority of Group processes are recorded in organizational manuals, which, for example, set out transparent and verifiable regulations to ensure adherence to public procurement law in the Procurement division. An online compliance training program for all employees was launched at the end of 2014.

7. Control

The company states how and what performance indicators related to sustainability are used in its regular internal planning and control processes. It discloses how suitable processes ensure reliability, comparability and consistency of the data used for internal management and external communication.

Within the scope of the integration report, FMG publishes both the key performance indicators (financial and non-financial) in the annual financial statement and the transparency indicators in accordance with GRI guidelines.      
 

Key performance indicators:

Indicators that measure corporate sustainability and quality are the focal point in this respect. Accordingly, the perception of traditional sustainability management is governed economically by earnings before taxes (EBT) and ecologically by CO2 reductions. Munich Airport uses the Passenger Experience Index (PEI) to determine the achievement of quality objectives, which act as strategic impetus for ensuring increased customer satisfaction. FMG surveys internal and external interest groups each year to determine and regularly affirm the relevance of the performance indicators for stakeholders.  

Key Performance Indicators to criteria 5 to 7

Key Performance Indicator GRI SRS-102-16: Values
The reporting organization shall report the following information:

a. A description of the organization’s values, principles, standards, and norms of behavior.

Compliance management system
A compliance management system ensures compliance with all airport-related laws, specifications and regulations, national and international rules and standards, and in-house rules and guidelines. The Group-wide compliance management system encompasses all organizational provisions ensuring compliance with the aforementioned rules.   
 
The Compliance department submits reports on the current status of the compliance management system to the Executive Board on a regular basis and to the Supervisory Board on an annual basis.   
 
The position of anti-corruption officer is exercised by the head of the Compliance department. There were no confirmed cases of corruption in 2017. 


Communication and training
A key task of the Compliance department is to train and advise employees and managers in compliance matters as a preventative measure to stop compliance breaches from occurring.  
 
Group compliance regularly provides training and publishes information to ensure that all employees and managers are familiar with the guidelines and any updates or amendments to them. Every year they must provide their signature to confirm that they have read the compliance documentation.   
 
In 2017, some 61 managers of the Munich Airport Group took part in the three-hour training module on compliance as part of the Leadership Excellence Program. In addition to the legal fundamentals and the responsibilities of managers, this also covers Munich Airport Group’s specific guidelines on compliance and the prevention of corruption.   
 
The Executive Board and Supervisory Board deal with compliance issues at regular intervals.  
 
Electronic whistle-blower system
Through an electronic whistle-blower system, the Business Keeper Monitoring System (BKMS®), Munich Airport employees, business partners, and customers can report behavior potentially damaging to our organization. People inside the Group and outside can also contact the Compliance department by other means of communication (telephone, e-mail, face-to-face discussions) if they wish to draw attention to compliance infringements and need advice. Tender documents inform potential bidders of the possibility of using the BKMS® should compliance infringements be suspected.

8. Incentive Systems

The company discloses how target agreements and remuneration schemes for executives and employees are also geared towards the achievement of sustainability goals and how they are aligned with long-term value creation. It discloses the extent to which the achievement of these goals forms part of the evaluation of the top managerial level (board/managing directors) conducted by the monitoring body (supervisory board/advisory board).

The Executive Board of FMG comprises three members who are responsible for the Group’s corporate policy and strategic focus. It determines the budget and monitors business developments.  
While the Executive Board and divisions are responsible for achieving these targets, all first and second-tier managers are responsible for implementing them. Members of top management take responsibility for the sustainability program initiatives, while members of middle management are responsible for implementing the associated measures. Manager remuneration then contains a variable element calculated according to the success of the initiatives and measures. Munich Airport measures the performance of its managers using financial and non-financial indicators. In doing so, it focuses primarily on indicators that measure corporate sustainability and quality. FMG monitors target achievement in an internal management report prepared on a quarterly basis. This approach aims to ensure that the sustainable strategic targets are incorporated into day-to-day work.

 

Key Performance Indicators to criteria 8

Key Performance Indicator GRI SRS-102-35: Renumeration policies
The reporting organization shall report the following information:

a. Remuneration policies for the highest governance body and senior executives for the following types of remuneration:
i. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, and deferred or vested shares;
ii. Sign-on bonuses or recruitment incentive payments;
iii. Termination payments;
iv. Clawbacks;
v. Retirement benefits, including the difference between benefit schemes and contribution rates for the highest governance body, senior executives, and all other employees.

b. How performance criteria in the remuneration policies relate to the highest governance body’s and senior executives’ objectives for economic, environmental, and social topics.

In addition to individual target agreements, the performance of Munich Airport’s managers is measured by the indicators EBT (earnings before taxes), carbon reductions, and PEI (passenger experience index).  

The remuneration of the members of the Executive Board comprises a fixed salary and variable, performance-based bonus.  

Key Performance Indicator GRI SRS-102-38: Annual total compensation ratio
The reporting organization shall report the following information:

a. Ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country.

 

Remuneration of the members of the Executive Board in 2018 (total) in TEUR

Dr. Michael Kerkloh 504
Thomas Weyer: 452
Andrea Gebbeken: 342  

Total: 1,298

Other remunerations include non-cash remunerations, contractual ancillary benefits, and one-off payments. The provisions for post-employment pension benefits to executive officers amounted to TEUR 6,276. Payments to the Supervisory Board amounted to TEUR 31. 
 
Further information: Notes to the consolidated financial statements    
 
Munich Airport’s personnel expenses are largely driven by the number of and the amount of remuneration paid to employees employed under the collective pay scale agreement for public sector employees. Following negotiations with the labor unions ver.di and dbb, the remuneration for employees of FMG and AeroGround was increased as at March 1, 2018; in the first step this increase was on average 3.19 percent. Lower-paid wage groups tended to profit more from this collective agreement. In addition, two further wage increases were agreed: For April 2019, an average increase of 3.09 percent was agreed and from March 2020, employees will receive on average 1.06 percent more in their pay packets.  
  
Information on salaries is treated as confidential. It is not published to any extent further than that required by law.  
 
The ratio of the annual total compensation is not determined at present.
 
Further information: Employee satisfaction and codetermination    

9. Stakeholder Engagement

The company discloses how the socially and economically relevant stakeholders are identified and integrated into the sustainability process. It states whether and how an ongoing dialogue takes place with them and how the results are integrated into the sustainability process.

A comprehensive analysis of our stakeholder groups was carried out on the basis of systematized interviews with the internal contacts in the respective dialog group and is reviewed annually as part of the materiality process.


Central stakeholders 
Airlines, business partners, the media, employees, passengers and visitors, politicians and public authorities, the region, associations, and organizations




FMG applies a three-stage approach to stakeholder dialog, thereby encouraging transparency and increasing social acceptance. 


Stage 1: Precise information via dedicated target group channels 
For the information of the various interest groups, the airport has defined customized communication content and developed the appropriate communication formats. The integrated report, which FMG is now publishing for the ninth time, is an important tool in this regard. It brings together financial and sustainability reporting within a central publication and addresses all target groups. 

Stage 2: Exchanging and gathering stakeholder feedback 
 
The airport engages its stakeholders in discussions and decisions regarding issues that are of importance to them, thus creating the basis for trust and long-term acceptance. Via the reader survey, for example, the airport checks on the acceptance of the integrated report every year and determines the significance of key issues for stakeholders. 

Stage 3: Results of dialog flow into business operations Finally, Munich Airport also takes into account stakeholder feedback in relation to its business activities. Its stakeholders force FMG to confront new issues and thereby act as a mirror of society. This in turn makes it possible to identify issues and trends at an early stage and benefit from outside knowledge.       
Related link to stakeholder dialog 
Related links to social media:
Facebook (https://www.facebook.com/flughafenmuenchen)
Twitter

Instagram


Materiality process The results of the annual stakeholder and FMG management survey are presented in a materiality matrix with two equivalent axes, which represent the importance of the individual issues for internal and external stakeholders. These issues are then discussed with experts within the company, and content is allocated to the strategic fields of action. The issues are also incorporated into the targets process.

Further information on the materiality process and on the materiality matrix 

Key Performance Indicators to criteria 9

Key Performance Indicator GRI SRS-102-44: Key topics and concerns
The reporting organization shall report the following information:

a. Key topics and concerns that have been raised through stakeholder engagement, including:
i. how the organization has responded to those key topics and concerns, including through its reporting;
ii. the stakeholder groups that raised each of the key topics and concerns.

Complaint management: Handling feedback professionally
The central complaint management team quickly responds to, categorizes, and analyzes all customer feedback on a case-by-case basis. It records not just complaints, but also constructive criticism and positive feedback. In order to elaborate optimal process solutions for passengers and, if required, to develop improvements, the divisions, authorities, and system partners active all along the passenger experience chain are closely networked with one another. In 2018, Munich Airport recorded 79 complaints per one million passengers handled.




Dialog management  
Number of entries 2018
Total complaints 3,660
Number of complaints on key issues  
Airline 181
Airport facility 533
Baggage collection 678
Parking 113
Passport control 279
Security checks 1,092
Performance indicator GRI SRS-102-43 (see G4-26) Approach to stakeholder engagement  

Noise complaints
Noise emissions in particular are a major challenge for airports. FMG wants to work together with industry and air traffic control to actively reduce these emissions using technical innovations and improved flight procedures. The telephone line for aircraft noise complaints can be used to submit questions and complaints to FMG.

Noise complaints  
  2018
Noise complaints received via telephone 185
Complainants 116

Using 16 fixed measurement points, FMG continuously monitors aircraft noise within a radius of about 20 kilometers around Munich Airport. It also performs mobile measurements as a voluntary service for municipalities that are not covered in the stationary measurement network. In 2018, eight mobile aircraft noise measuring systems recorded values on a total of 306 days, including – for the first time – in Berg, Kranzberg and Ast, Tiefenbach. Mobile measurements have already been performed on multiple occasions in Velden, Krüglau, Wurmsham, Sünzhausen, Zieglberg, and Rudelzhofen. There are plans in place to procure new mobile measurement stations in the future, which will be equipped to take their power supply from environmentally-friendly solar panels.  

Measured noise1)    
In dB(A) 2018  
Measurement point (nearest municipality) Night2) Day
Brandstadl (municipality of Hallbergmoos) 50 58
Pallhausen (town of Freising) 48 54
Reisen (municipality of Eitting) 49 56
Viehlaßmoos (municipality of Berglern) 47 54
 1)Leq3 continuous sound level in dB(A) for the six busiest months at four aircraft noise measuring stations situated on each of the main flight paths
 

2)Period from 10 pm to 6 am




10. Innovation and Product Management

The company discloses how innovations in products and services are enhanced through suitable processes which improve sustainability with respect to the company’s utilisation of resources and with regard to users. Likewise, a further statement is made with regard to if and how the current and future impact of the key products and services in the value chain and in the product life cycle are assessed.

The main issues of strategy and sustainability management, brand management and innovation, as well as guideline planning and master planning are dealt with within the Corporate Development division. The Corporate Development division therefore acts as the strategic link between Group and brand, an engine for innovation and the driver and guiding hand for the long-term and sustainable growth of the Munich Airport Group.  
  
Munich Airport applies a systematic approach to innovation management in an effort to develop new, innovative, and customer-driven service solutions. Under this approach, innovation research fields cover the areas where key customer requirements meet major social trends. 
 
Munich Airport’s innovation management strategy aims to increase customer satisfaction and enhance the customer experience through new services and products.    
 
By analyzing trends and market needs, innovation management develops targeted innovations for passengers and customers. The feasibility and cost-effectiveness of innovations is reviewed in pilot projects and subsequently a decision is made on whether they should be continued, implemented and possibly extended to other divisions. Munich Airport’s innovation management unit cooperates in this respect with start-ups and established companies in the region, but also increasingly with global players so that it can continually access the latest scientific and entrepreneurial expertise.    
 
Further important input for innovation management comes from the ideas of the company’s own employees. Some 604 ideas in total were submitted in the 2018 year under review via the in-house open innovation and ideas management system «InnovationPilot» on topics such as employees, spaces and buildings, and technical facilities and vehicles.    

Munich Airport is fully aware that a major transport infrastructure can naturally also negatively impact the environment. It therefore pursues an environmental program that is as ambitious as it is innovative, going far beyond legal requirements and industry standards. It is continuing to even further advance its role as a pioneer: Munich will become Germany’s first airport with carbon-neutral operations by 2030. All carbon emissions and reduction measures are managed at Munich Airport in its own CO2 database. This database documents all activities related to the area of carbon footprint, carbon reduction, and energy efficiency and thus allows these activities to be managed and controlled.

Key Performance Indicators to criteria 10

Key Performance Indicator G4-FS11
(report also in accordance with GRI SRS): Percentage of assets subject to positive and negative environmental or social screening. Link (Page 38)(Note: the indicator should also be reported when reporting to GRI SRS)

There are currently no financial assets that are subject to positive or negative environmental or social screening.
Performance indicator SRS-302-5 (see G4-EN7)
Reductions in energy requirements of products and services  


FMG has lowered carbon emissions from around 162,000 tonnes in the reference year 2005 to around 150,000 tonnes to date. Had the some 249 individual measures not been taken, CO2 emissions at Munich Airport would have been around 36,000 tonnes a year more than they actually are. Added to that is the more than 400 tonnes of savings generated by the commissioning of the first large-scale photovoltaic system by the Munich Airport Group on the roof of the P51 parking structure. In 2018, Flughafen München GmbH invested around 2.1 million euros to reduce greenhouse gas emissions by 3,667 tonnes in the long term. The improved energy efficiency is particularly evident in this comparison: While passenger figures at the airport have increased by around 62 percent since 2005 and the building areas have grown by around 16 percent, the CO2 emissions of buildings, systems, and vehicles fell by some seven percent. CO2 emissions per air passenger in the same period thus fell by 43 percent. These successes make it clear that even the most ambitious of climate goals can be achieved by continuously improving efficiency in existing stock, through sustainable building construction and through the increased use of renewable energy.   
 
This outcome was achieved almost completely through own efficiency measures in energy consumption and production. In contrast, external effects – such as falling specific emissions in electricity energy purchases – had only a minimum influence. These successes make it clear that even the new ambitious climate-related goals are achievable.  

Energy intensity coefficient1)  
In kWh/passenger 2018
Power consumption 5,02
 1)Power consumption is responsible for more than two thirds of the total CO2 emissions produced by energy-induced processes at the airport (excluding emissions generated by airlines). Furthermore, it is only very slightly linked to weather conditions. For this reason, the power consumption per passenger is the most useful indicator for energy consumption at Munich Airport. The power consumption is made up of total power consumption of all buildings and installations on the airport campus, including hosted electricity. It includes power consumption by FMG and its subsidiaries, consumption by external companies, and all losses at the low-voltage level.
   

Related link to the climate protection strategy and individual measures: Climate protection strategy