Dear readers,

Since the financial crisis expanded to become a global recession, I’ve been asked on several occasions whether we at Daimler “still have time” to deal with the issue of sustainability. This question has surprised me every time, because it implies that sustainability is a “fair weather” topic that has to be shelved when the going gets tough. We see things differently at Daimler. For us, sustainability is a basic principle governing our business operations.

Dr. Dieter Zetsche, Chairman of the Board of  Management of Daimler AG and Head of Mercedes-Benz Cars

What does this mean in practice? It means that our economic, environmental, and social targets must be in harmony. After all, lasting business success is possible only if environmental and social concerns aren’t neglected. The long-term results of pursuing business targets without considering their risks and side effects can be seen in the financial crisis and its consequences. At the same time, we as a company can do little for the environment or for society if our business isn’t competitive. In other words, these three dimensions are interdependent — perhaps even more so in difficult times.
A good example is provided by the automotive industry, which is facing a major technological transformation. Our society is entering an age of mobility based on post-fossil fuel sources. Up to now, automobiles have been powered almost exclusively by oil-based fuels, but in the future electric drive components will play an increasingly important role. Here, environmental and economic goals will enter into a symbiosis: Only drive systems that are environmentally friendly will also be profitable in the long run.

And that’s why we’re forging ahead with our efforts to make our vehicles even “greener”. For example, the CDI diesel model of the new E-Class consumes only 5.3 liters per 100 kilometers (44 miles per gallon) and emits only 139 grams of CO2 per km (224 g CO2 per mile). These are fantastic numbers for a vehicle in this class, and they show that modern internal combustion engines are far from obsolete. On the contrary, over the medium term they will be the most important lever for decreasing CO2 emissions from road traffic.

The year 2009 will also mark the start of Daimler’s hybrid offensive, which will kick off this fall with the launch of the Mercedes-Benz S 400 BlueHYBRID — the luxury sedan with the world’s lowest CO2 emissions. What’s more, it will be the world’s first series-produced vehicle with a lithium-ion battery. These batteries have a key role to play in achieving electric mobility. And the fact that our e-mobility projects are now starting up in several European cities demonstrates that we’re making good progress toward zero-emission driving. In these projects we are cooperating with energy providers to put electric vehicles in customers’ hands, while at the same time building up the necessary infrastructure. In addition, the first limited-volume series of fuel cell vehicles will be produced by Mercedes-Benz this year.

The actual engine of creativity behind all these technological innovations is our workforce. Our employees’ skills and motivation are ultimately the foundation of our success. Here, our experience has shown us that performance is independent of age, gender or place of origin. And as our customers become increasingly diverse, so too should our workforce. That’s why we systematically promote diversity and equal opportunities within our Group as part of our diversity management strategy.

In particular, we can’t afford to neglect our top performers who are women. Accordingly, we aim to increase the proportion of women in management positions to 20 percent by 2020. To this end, we are supporting women “high potentials” with the help of mentoring programs and specifically addressing women university graduates through our CAReer trainee program. And because we consider it important to help our employees reconcile their career and family responsibilities, we have created almost 600 places for employees’ children in our “sternchen” (Little Star) daycare centers.

We take our sense of responsibility for our employees very seriously. In return, we also expect our employees to behave responsibly. Anyone working at Daimler or acting in the name of our Group must comply, without any “ifs, ands, or buts,” with the legal regulations and the ethical principles to which we have voluntarily committed ourselves — for example, in the “Global Compact” of the United Nations. There can be no exceptions to this rule — at any time or in any place. Anyone who violates the law or our internal Daimler regulations will be appropriately disciplined in accordance with our “zero tolerance” principle.

Within Daimler, we have therefore created an effective compliance organization that on the one hand oversees our compliance with regulations, and on the other hand provides appropriate training and support for our employees. But compliance doesn’t end at our factory gates or office doors. Last year we instituted a set of sustainability guidelines for our suppliers all over the world. We expect our suppliers to insist that their suppliers also comply with our standards.

As you can see, sustainability is a key principle of our corporate culture. That’s why we anchored it in our corporate structure last year at the Board of Management level in our Corporate Sustainability Board, which consolidates all of our existing management processes related to sustainability.

In conclusion, I’d like to come back to the idea I mentioned at the outset: Sustainability doesn’t depend on whether business is booming or experiencing a recession. It is an ethical imperative, but it’s also a basic principle of legitimate business self-interest. Above all, this basic principle dictates responsible and future-oriented behavior — and it’s valid every day, everywhere, with 360-degree coverage.

Pleasant reading!
Sincerely,

Dr. Dieter Zetsche
Chairman of the Board of Management of Daimler AG
and Head of Mercedes-Benz Cars
© 2009 Daimler AG. All rights reserved.