Focus Topics – Employee-related issues

Diversity, equal opportunity, inclusion, and decent work

Impacts, risks, and opportunities

Impacts

Zehnder’s commitment to diversity, equal opportunity, inclusion, and decent work shapes its organisational culture and impacts the business in significant ways. By promoting diversity across gender, age, ethnicity, and other individual factors, we foster a more inclusive environment that enhances innovation and problem-solving through varied perspectives. This approach impacts not only gender diversity but also equity in terms of pay, career opportunities, and professional development.

Creating an environment where employees feel valued and respected leads to higher employee engagement and retention. Our zero-tolerance policies towards harassment, bullying, and discrimination ensure that all employees can work in a safe and supportive atmosphere, directly contributing to job satisfaction and overall productivity. This proactive approach reinforces our position as a responsible and forward-thinking employer.

Risks and opportunities

A lack of diversity and inclusivity can lead to several risks, including reduced innovation due to homogeneous thinking and missed opportunities for creative solutions. There are also reputational risks if we fail to meet legal or social expectations concerning diversity.

Poor diversity and inclusion practices can negatively impact employee retention. Individuals who do not feel a sense of belonging or experience limited opportunities for advancement are more likely to leave, leading to higher turnover rates. This is especially critical in sectors like manufacturing, where attracting diverse talent, particularly women, can be challenging.

Conversely, promoting diversity and inclusion offers significant opportunities. Diverse teams are more innovative and perform better, as varied perspectives improve decision-making and lead to more creative solutions. Zehnder’s proactive stance on diversity also serves to boost its reputation, making the company more attractive to top talent.

Management approach

Zehnder’s management approach to diversity, equal opportunity, inclusion, and decent work is guided by the Diversity, Equity, and Inclusion Directive, which was introduced in 2023. This directive outlines the company’s commitment to providing equal opportunities for all, regardless of age, gender, disability, race, sexual orientation, or religion. It also sets clear behavioural standards for employees and defines processes for addressing violations, including the company’s zero-tolerance approach towards harassment and discrimination.

Governance and accountability

Starting in 2024, Zehnder has embedded a gender diversity target into the long-term incentive plan for the Group Executive Committee. This makes gender diversity a measurable objective tied to executive performance, ensuring accountability at the highest level.

Training and awareness

We have initiated a comprehensive Diversity, Equity, and Inclusion training programme, starting with mid-level and senior managers, to ensure a widespread understanding of the importance of inclusivity and fair treatment. By 2025, the company aims to have all employees trained in anti-harassment and diversity principles. Zehnder also operates a whistleblower system (more details about the Integrity Line under Compliance and fair business practices), allowing employees to anonymously report instances of discrimination or harassment.

Equal pay and transparent practices

Further securing equal pay is a priority for Zehnder. A standardised salary increase process was introduced across the organisation to ensure greater transparency in compensation decisions. By tying salaries to clear and objective job descriptions, Zehnder prevents subjective biases from influencing pay.

In all HR-related processes, Zehnder enforces the four-eyes principle, ensuring that decisions regarding recruitment, promotions, and compensation are reviewed and approved by more than one individual. This practice promotes fairness and objectivity, further reinforcing Zehnder’s commitment to equal opportunity.

Implementation and outlook

To implement the above management approach and policies, we defined two ambitions, each supported by one or more targets and monitored via specific 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: Following the diversity, equity, and inclusion training campaign launched in 2023 for senior and mid-level managers, an anti-harassment and discrimination training has been incorporated into the mandatory Code of Conduct training, which all employees must complete by the end of Q1 2025.
• Outlook: This initiative is closely aligned with ongoing e-learning efforts, ensuring greater reach. The training is also part of the Group’s mandatory legal and compliance programme, supporting comprehensive coverage and completion by 2025.

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

Target: Achieve gender diversity

• Status: Building on the progress made in 2023, where 18.3% of senior management roles were held by women and accelerator programmes were launched in France and Poland, Zehnder is advancing efforts to enhance gender diversity across the organisation. With recruitment (internally and externally) and succession planning being the key processes to support gender diversity, the global HR management team was once more aligned toward this target, clarifying their role in ensuring fair recruitment and promotion practices, including consciously making efforts to have at least 30% female candidates on shortlists for vacancies. In 2024, 19.7% of the company’s senior management team¹ was comprised of women, including the first female Group Executive Committee member. Gender diversity targets have been formally embedded in the long-term incentive plan for the Group Executive Committee, improving accountability and strengthening the focus on this goal.
• Outlook: In 2025, the Group Executive Committee will be extended with a second woman, increasing the percentage of females on this level to 33%, and thereby role modelling gender diversity at the top. By 2026, we aim to achieve 22.5% representation of women in senior management roles, with a goal to further increase this to 30% by 2030.

Target: Further securing equal pay

• Status: The job architecture pilot has successfully concluded in three EU and three non-EU locations². All functions in the pilot countries have been evaluated and graded, ensuring comparability across locations. These roles have been integrated into Zehnder’s overall Job House project enabling consistent and equitable comparisons across roles to ensure true equality.
• Outlook: With the pilot completed, a full rollout is scheduled for 2025 to standardise equal pay practices across all EU locations. This expansion will reinforce fair compensation and reinforce our commitment to equity across the organisation. A benchmark policy will be developed to support the continued rollout, ensuring that the job architecture remains up-to-date, and salary ranges are applied accurately.
  
  In the medium term, we are working towards auditing all EU sites for equal pay by 2026, while all our sites globally are to be audited by 2028. In addition, we work on developing a foundation for pay transparency and equal pay, internally as well as externally. To this end, we will develop a global job catalogue and further invest in the digitalisation of HR data across Zehnder Group.

Target: Increase the portion of employees receiving a living wage

• Status: Following the definition of the UNGC, a living wage means a wage that enables workers and their families to meet their basic needs. While all our employees always receive the local legal minimum wage, where legal minimum wage laws exist, our routine analysis consistently reveals that the absolute majority of our employees at our sites earn at least a living wage. However, it has also revealed disparities, where at some sites a portion of our employees do not receive a living wage according to the definition of the UNGC. This initiative has been delayed, with a progress review scheduled for 2026, as the focus is on first completing the Job House project in North America to gather valuable insights from its implementation.
• Outlook: The upcoming review will determine the next steps to ensure timely progress toward the 2028 goal. We aim to define our approach towards living wages as defined by the UNGC and to understand the root causes of the gaps. Our mid-term goal is to substantially increase the portion of employees receiving a living wage across the entire organisation by 2028.

¹Senior management refers to Zehnder’s job positions within L1–L3

²Germany, Switzerland, Netherlands, United Kingdom, Türkiye, and Poland

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