Focus Topics – Employee-related issues

Diversity, equal opportunity, inclusion, and decent work

Impacts, risks, and opportunities

Impacts

Zehnder Group’s corporate culture is designed to prevent and mitigate the potential negative impact on employees of unequal treatment, discrimination, harassment, and barriers to equal opportunity. The Group is committed to the principles of decent work and aims to promote diversity, equal opportunities, and inclusion throughout its workforce. All employees, regardless of gender, age, ethnicity, or other personal attributes, have an equal right to fair remuneration, career progression, and professional development.

A zero-tolerance policy towards harassment, bullying, and discrimination aims to reduce the risk of unsafe or disrespectful working conditions and safeguard employees’ dignity and well-being. These measures primarily serve to mitigate the negative impact on job satisfaction, psychological safety, and employee retention. When implemented effectively, they can also contribute to stable workforce engagement and organisational performance.

Risks and opportunities

A lack of diversity and inclusion can present significant risks. Low levels of belonging or limited advancement opportunities can undermine retention and increase resignations. High turnover is particularly challenging in manufacturing, where attracting diverse talent, especially women, can be difficult. Less diverse teams may also limit creative thinking and reduce opportunities for innovation. Inadequate progress on diversity can further expose the company to reputational risks, especially as societal and legal expectations evolve.

Conversely, actively promoting diversity and inclusion offers substantial opportunities. Diverse teams bring broader perspectives, strengthen problem-solving and foster innovation. A culture that values different backgrounds and viewpoints enhances performance and reinforces Zehnder Group’s reputation as an attractive employer for highly skilled professionals.

Management approach

Zehnder Group applies a zero-tolerance approach to harassment, bullying, and discrimination and promotes a diverse and inclusive workplace with decent working conditions and equal pay, with equal opportunity ensured in recruitment, remuneration, and career progression. To strengthen executive accountability, gender diversity is included in the Group Executive Committee’s long-term incentive plan.

The Group HR department coordinates the implementation of policies and monitors progress, while local HR teams and line managers are responsible for the day-to-day execution and handling of cases, ensuring consistent application across regions and teams.

Directive on Diversity, Equality, and Inclusion

Introduced in 2023, the objective of the directive is to provide equal opportunities for all employees, regardless of their age, gender, disability, ethnicity, sexual orientation, or religion, and it shapes our broader approach to decent work. Governance and enforcement are defined by corporate standards and incentives. The Code of Conduct sets out conduct expectations and complaint handling, and an anonymous whistleblowing channel is available to all stakeholders. Any reported concerns are investigated, and appropriate action is taken. Further information about the Integrity Line can be found under Compliance and fair business practices.

Equal Pay and Transparent Practices

Achieving equal pay and transparency in remuneration decisions is a top priority for Zehnder Group. For this reason, a standardised procedure for salary increases has been introduced across the company, whereby salaries are linked to clear and objective job descriptions, reducing the influence of subjective bias on pay. Building on the progress made in 2025, the 2026 salary review will also use success profiles, job grades, internal pay ranges, and compa ratios to guide decisions, further strengthening consistency and supporting equal pay outcomes.

Furthermore, the dual control principle guarantees that decisions regarding hiring, promotion, and remuneration are subject to review and approval by multiple individuals in all HR-related processes. This approach fosters fairness and objectivity, and underlines Zehnder Group’s commitment to equal opportunities.

Implementation and outlook

Implementation of the above management approach and policies is structured around two focus areas with defined targets and KPIs.

Targets

Ambition: Apply a zero-tolerance approach to harassment, bullying, and discrimination at all times

Target: Train employees in anti-harassment and discrimination

• Status: The mandatory Code of Conduct training, covering anti-harassment and anti-discrimination topics, was launched in 2024 and continued through 2025. Completion rates were high, with participation close to full coverage. The Code of Conduct e-learning module is now mandatory for all new hires as part of onboarding, while new blue-collar employees participate in quarterly classroom workshops. Dedicated values trainings were held across several locations, tailored to local needs.
• Outlook: Dedicated training programmes are no longer planned at Group level beyond the ongoing mandatory Code of Conduct sessions, as our principles around anti-harassment and discrimination are embedded in multiple processes, aiming at compliant behaviour in day-to-day operations. Local initiatives will continue based on identified needs. In addition, the roll-out of the Values Campaign in 2026 is expected to further strengthen respectful workplace behaviour and reinforce awareness of diversity and inclusion principles across the organisation.

Ambition: Create a diverse work environment and provide decent work and equal pay

Target: Achieve gender diversity

• Status: In 2025, women accounted for 20.9% of senior management positions (management levels 1 to 3) compared to 19.7% in 2024. Of internal promotions and external hires into senior management positions, 43.6% and 33.3% respectively were women, indicating a positive trend towards achieving the 2026 gender diversity target.
• Outlook: By 2026 we aim to reach 22.5% women in senior management, rising to 30% by 2030. Internal guidance on recruitment activities and internal opportunities requires consideration of qualified candidates of all genders, deliberately integrating our gender diversity target into existing processes with the ambition to further increase the share of female candidates, both internally and externally. The Group Executive Committee is confident that continued talent movements will support progress in 2026.

Target: Further securing equal pay

• Status: Significant progress was made towards securing equal pay. The Job House framework has been rolled out to nearly all sites in EMEA and North America; the remaining part is planned for 2026. Approximately 3000 positions have been mapped to success profiles and job grades, and internal pay structures and annual base salary ranges have been established for all locations. Separate approaches were applied for apprentices, trainees, interns, positions under union agreements, where pay is determined by the respective agreement, and contingent positions due to differing compensation mechanisms.
  
  The annual base salary pay ranges are based on Korn Ferry benchmarking data, reflecting median market pay per country, job grade, and function, and can include regional and/or industry variations. The first pay gap analysis was conducted, identifying employees whose pay falls outside defined ranges, and targeted actions are being planned to close these gaps. Initial mapping of gender pay differences has also started in preparation for compliance with upcoming EU Pay Transparency regulations.
• Outlook: In 2026, the equal pay analysis by gender will be implemented by the EU Pay Transparency Directive implementation deadline, ensuring readiness for the first EU reporting cycle in 2027.

Target: Increase the portion of employees receiving a living wage

• Status: Progress towards increasing the share of employees receiving a living wage is embedded in the Job House roll-out in North America and the associated internal pay structures and salary ranges. Initial planning has begun to address these cases gradually, considering cost implications and potential adjustments to existing compensation programmes. This transition will require time and is expected to be completed by 2028 at the latest.
• Outlook: Work will continue in a phased manner between 2026 and 2028 to close identified gaps and aim to ensure that all employees receive at least a living wage. Insights from the Job House framework will guide the development of consistent living-wage standards across relevant locations.

Metrics

GRI 405: Diversity and Equal Opportunity 2016
Disclosure 405-1 Diversity of governance bodies and employees
Diversity within the Board of Directors

GRI 405: Diversity and Equal Opportunity 2016
Disclosure 405-1 Diversity of governance bodies and employees
Diversity within the Group Executive Committee

GRI 405: Diversity and Equal Opportunity 2016
Disclosure 405-1 Diversity of governance bodies and employees
Diversity among employees

Gender diversity among senior management

GRI 406: Non-discrimination 2016
Disclosure 406-1 Incidents of discrimination and corrective actions taken

Trained employees for harassment, bullying, and/or discrimination