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Sustainability.It can be done.

Johannesburg World Summit on Sustainable Development

26 August – 4 September 2002

Content.

You are cordially invited to the BMW GroupSustainability Exhibition during the World Summit on Sustainable Develop-ment in Johannesburg, Sandton Square, 26 August – 4 September 2002.

Foreword. 4

Sustainability pays off. 6

How to manage sustainability. 8

Clean production for added sustainability. 10

Premium: highest standards for sustainable products. 12

Mobility: a modern challenge. 14

BMW CleanEnergy – powered by hydrogen. 16

Shaping social sustainability. 18

Human values for sustainable partnerships. 20

Tailored training. 22

Sustainable health protection. 24

Commitment to society. 26

Corporate citizenship in South Africa. 28

Sustainability. It can be done. BMW Group sites. 30

Foreword.

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As a globally active automobile manufacturer, theBMW Group assumes worldwide responsibility forthe environment as well as for the community inter-ests of employees and the society. The success ofa modern enterprise can no longer be regardedsolely from an economic point of view. This is whyour commercial activities consistently follow theguidelines of sustainability.

For the BMW Group, meeting the highest environ-mental standards is an important aspect of produc-tion quality. All BMW Group manufacturing sites arecertified according to international ISO 14001 stan-dards for environmental management systems,some in addition validated in compliance with theEuropean Eco-Management Audit Scheme(EMAS). The BMW Group is the first, and currentlythe only, automobile manufacturer to ensure that allof its production facilities comply with uniform inter-national environmental standards, and furthermoreto adapt this environmental management system tothe respective production sites.

Along with the high environmental standards in pro-duction, the BMW Group approach to sustainabilityis reflected in the ecological optimization of theproducts and the objective of sustainable mobility.We are directly involved in the development of intel-ligent traffic management systems in metropolitan

Many of you are big investors, employers andproducers in dozens of different countriesacross the world. That power brings with itgreat opportunities – and great responsibili-ties. You can uphold human rights and decentlabor and environmental standards directly byyour own conduct of your own business.

Kofi Annan, UN Secretary General

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areas as well as in alternative drive concepts. In thedevelopment of alternative drive concepts, theBMW Group focuses on CleanEnergy – hydrogengenerated from renewable energy sources as aclean fuel for the future. Our hydrogen-poweredcars have also been introduced in Johannesburgand the importance of generating, distributing, andutilizing hydrogen in automobiles has been madeclear.

Employee orientation and commitment to societyare other important aspects of the approach of theBMW Group to sustainability. Within the frameworkof the company's role as a corporate citizen, theBMW Group is directly involved in cross-culturallearning and social understanding. The companysupports not only its employees and the commu-nities at the different production sites, but extendsits commitment beyond these borders to society ona global scale. In South Africa, for example, theBMW Group has set up a comprehensive networkof social projects over the years. The focus is oneducating schoolchildren, students, and teachers aswell as on technology and science, sports, the envi-ronment, and community support.

Another focus for the BMW Group is on creating adialogue with international political stakeholders aswell as community members within the framework

of public-private partnerships. Along these lines, wesupport the Global Compact proposed by UNSecretary General Kofi Annan for a worldwide part-nership between business and industry, govern-ments, and globally active community representa-tives.

Ten years after the ratification of Agenda 21, theobjective today is to further advance its implemen-tation. The BMW Group hopes to make a significantcontribution to this end. We look forward to a suc-cessful summit meeting in Johannesburg with con-crete results that will contribute to the sustainabledevelopment of humankind.

Munich, August 2002

Dr. Norbert Reithofer, Member of the Board ofManagement of BMW AG, Production

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Sustainability pays off.

Businesses have been among the main enginesand primary beneficiaries of globalization. It isin their interest to do what they can to makeglobalizaion a sustainable process by ensuringthat its benefits are spread more evenly.

Louise Fréchette, First Deputy Secretary-General of the United Nations

“As the worldwide industry leader in sustain-ability, our goal is to further increase our com-pany’s value in respect to social, economicand ecological aspects.”

Stefan Krause, Member of the Board ofManagement of BMW AG, Finances

Companies that focus on sustainable managementcreate the best conditions for future success. At thesame time, a company’s sense of responsibility forsociety and the environment is increasingly becom-ing a standard for evaluating its success. BMW Groupis a good example: the Dow Jones SustainabilityWorld Indexes, the Dow Jones STOXX SustainabilityIndexes and the FTSE4Good Europe Indexes, themost important sustainability indexes, list the companyas one of the worldwide automotive industry leaders.Economic success for added sustainability assess-ments conducted by professional analysts showthat the commercial success of a company is notonly determined by economic figures such as sales,revenues, or profits.

The success of a sustainability concept is also re-flected in high product quality, customer satisfac-tion, employee motivation, and supplier support. Itcan also be seen in the development of a compa-ny’s workforce and in its share prices. In the pastyear alone, the BMW Group created nearly 5,000new jobs (+ 5.1 percent). The share price of BMWincreased by 13.8 percent in the same time period.

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Investment in the futureFirmly imbedding sustainability into the corporatestrategy helps minimize risk and secure the future ofthe BMW Group – today and tomorrow. Research &development conducted by the BMW Group hasresulted in a technically advanced concept toensure a future beyond the age of carbon-basedenergy sources. CleanEnergy is a long-term strate-gy based on hydrogen produced from renewableenergy resources: a targeted investment in thefuture of sustainable mobility – and in the future ofthe BMW Group.

300%

250%

200%

150%

100%

Development of the DJSGI, DJGI and BMW shares from December 1993 to May 2001

’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01

Dow Jones Sustainability Group Index (DJSGI), price increase from 12/93 to 05/01: 110% (in USD)

Dow Jones Global Index (DJGI), price increase from 12/93 to 05/01: 76% (in USD)

BMW shares, price increase from 12/93 to 05/01: 174% (in USD)

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How to manage sustainability.

“Sustainable management is synonymouswith management’s ability to achieve eco-nomic success while placing equal emphasison environmental protection and socialresponsibility.”

Dr. Norbert Reithofer, Member of the Board ofManagement of BMW AG, Production

Designworks/USA, 2201 Corporate Center Drive,Newbury Park, CA, USA. This unique address iswhere the Designworks Sustainability ManagementSystem together with ISO 14001 was certified byTÜV North America (technical inspection associ-ations) in November 2001 – delivering two first ever:First Environmental Management System certifiedworldwide in a Design company, and first Sustain-ability Management System ever certified by a thirdparty – truly an example of how the BMW Groupembraces the “cradle to cradle” principle. For theBMW Group, this move represents another signifi-cant milestone of a long-term development. Environ-mental Management Systems certified well abovecompliance with ISO 14001 and EMAS (EuropeanUnion’s Eco-Management and Audit Scheme)standards have been in place at all BMW productionfacilities since 1999, then – and still today – uniquein the international automotive industry. Today, at thebeginning of the 21st century, the world economy isfaced with a new challenge: sustainability.

From environmental management to sustain-ability management The Designworks Sustainability Management Sys-tem is based on the advanced environmental management approach of the BMW Group. It wasdeveloped to include the social and economicaspects and impacts of the business, and to manage

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them accordingly. The objectives take into accountthe needs of the workforce as well as the interests of other stakeholders, developed from an intensedialogue process. Furthermore, the principles ofsustainability are carefully knitted into the variousdesign proposals for the BMW Group as well as forother companies, delivering economic successbased on environmental and socially responsibledesign – truly delivering on the Triple Bottom Line.Future plans call for all BMW Group EnvironmentalManagement Systems to be developed into Sustain-ability Management Systems. Responsibility for thisimportant move is in the hands of a managementtask force that has a direct line to the company’sexecutive board and will be supported by 70 spe-cialists worldwide.

Integration of suppliers into the managementsystemsSuppliers are also fully integrated into the BMWGroup management systems. They are required tocomply with BMW Group Environmental Guidelinesto meet the company’s high environmental stan-dards for the products as well as for the productionoperations worldwide. South Africa is a good exam-ple: after certification of the Integrated Quality,Safety & Health and Environmental ManagementSystem according to ISO 9001, BS 8800 and ISO14001 – for the first time in the automobile industry

worldwide – at the Rosslyn plant in 1999, specialworkshops were held to familiarize suppliers withthe latest international standards as well as legalrequirements. From there an intensive coachingprogram was developed, covering all suppliers ofBMW SA. This approach has proved to be a greatsuccess. To date 30 percent of the BMW Groupsupplier chain have an environmental managementsystem in compliance with ISO 14001 standards,and if current commitments are met, 70 percent willbe certified by the end of 2002.

For too long, environmentalists and industrial-ists alike have seen a false trade-off betweenenvironmental protection and economic growth.We must introduce a new way of thinking – onethat sees economic and environmental healthas interlinked, mutually supportive goals.Nitin Desai, Secretary-General of the Summit and Under-Secretary-General for Economic and Social Affairs,United Nations

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“Sustainability is a corporate principle for theBMW Group. Our participation in the UNCleaner Production environmental programrepresents a further step toward our consis-tent orientation to sustainability.”

Dr. Norbert Reithofer, Member of the Board ofManagement of BMW AG, Production

Efficient BMW Group management systems are aprerequisite for optimizing production oriented alongsocial, ecological, and economic guidelines. Thefact that these measures are successful has beenconfirmed by a large number of independent assess-ments. Rosslyn Plant, for example, was awarded Goldfor outstanding product quality by the prestigiousmarket research institute JD POWER & Associatesin 2002 – testimony of how environmental, safety,and health measures can contribute to employeeawareness and improved performance. The BMWplant in Munich received the same award in silver.

BMW Group signs UNEP’s InternationalDeclaration on Cleaner ProductionThe signing of the United Nations EnvironmentProgramme’s Declaration in 2001 confirms the dedication of the BMW Group to cleaner production.Instead of “end-of-pipe” solutions, BMW productionis committed to avoiding negative environmental

Clean production for added sustainability.

impact from the very beginning. With this in mind, 6 percent of the company’s annual investments in2000 were earmarked for environmental protectionprograms. These investments are clearly worth-while: CO2 emissions from manufacturing opera-tions were reduced by 15 percent per unit producedin the past 5 years. Energy consumption decreasedby 20 percent and wastewater per unit was reducedby 16 percent.

Conserving natural resources: waterThe BMW Group has also effectively reduced pro-duction-related water consumption by 15 percentover the past 5 years. Water re-circulation will fur-ther improve the savings potential. By e.g. modern-izing the “water test booth”, where newly producedBMW vehicles are tested with state-of-the-artwater-recycling equipment, as well as through amultitude of other water saving projects, water con-sumption at the Rosslyn plant has been reduced by50 percent since 1998. In fact, fresh water is quiteseldom really required for industrial processes. Forexample, the BMW plant in Landshut, Germany,already covers around 40 percent of its needs withhigh-level groundwater. Computer simulations usedfor new construction projects make it possible tocreate clear-cut plans to minimize the impact on the flow of groundwater and define effective waterconservation measures.

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New painting technologies The use of powder clear coat and water-basedpaints is another example of how advanced tech-nologies contribute to environmental protection.These innovative technologies have been consis-tently implemented by the BMW Group since 1997.In 5 years, the emission of volatile organic solventshas been reduced by nearly 30 percent.

Over the last twenty-five years, there has beena gradual conceptual shift in the way privatesector approaches society’s environmentalconcerns, from the reactive, end-of-pipe com-pliance approach of the 1970s, to a more publicrelations approach of the ‘80s, to the preventive,cleaner production, eco-efficiency approach ofthe 1990s.Jacqueline Aloisi de Larderel, Assistant Executive Director UNEP, Director Division of Technology, Industry and Economics

CO2 emissions per unit produced in tons

1.3

1.2

1.1

1.0

0.9

‘96 ‘97 ‘98 ‘99 ‘00

1.23

1.161.14

1.10

Process water per unit producedin cubic meters

1.3

1.2

1.1

1.0

0.9

‘96 ‘97 ‘98 ‘99 ‘00

1.271.23

1.15

Energy consumed per unit produced in MWh

4.00

3.75

3.50

3.25

3.00

‘96 ‘97 ‘98 ‘99 ‘00

3.94

3.76

3.56

3.421.04

3.16

1.27

1.06

Premium: highest standards for sustainable products.

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“For BMW Group engineers, sustainability hasbecome the most important focus of productdevelopment.”

Dr. Burkhard Göschel, Member of the Board of Man-agement of BMW AG, Development and Purchasing

The BMW Group sustainable mobility model isbased on an environmentally oriented productdevelopment and an intelligent networking of vari-ous means of transport as well as the technicaldevelopment of alternative drive concepts.

The demands on BMW Group automobiles areextensive. Along with the highest standards for safe-ty, comfort and quality, they have to fulfill environ-mental and recycling requirements. To implementthis, the BMW Group pursues a comprehensiveapproach. Based on advanced engine technologiesand intelligent lightweight design, these require-ments are integrated consistently into the productdevolopment. This supports the objective of sus-tainable products for all customers.

Reducing fleet fuel consumption – forward-looking technologies help protect the envi-ronmentThe BMW Group uses advanced engine designs toreduce fleet fuel consumption and CO2 emissions.VALVETRONIC, a new technology that controls in-take valves electronically, reduces fuel consumptionby around 10 percent based on EU norms. CommonRail direct injection improves fuel economy for dieselengines manufactured within the BMW Group.

Beyond the advanced motor technology, intelligentlightweight design and innovative materials are thekey technologies of the BMW Group for a sustainableproduct development. Reducing vehicle weight by100 kg effectively saves up to 0.5 liters of fuel per100 km. As a technology of the future, lightweightdesign focuses on a material mix. For example, lightmetals, carbon fiber-reinforced materials and plas-tics offer potentials to lower the weight of vehicles.

Although it is the role of governments to estab-lish such incentives and regulatory structures,it is the role of the private sector to lead tech-nological innovation, to invest in cleaner tech-nology, to develop sustainable products, todevelop sustainable management practices.Jacqueline Aloisi de Larderel, Assistant Executive Director UNEP, Director Division of Technology, Industryand Economics

120%

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100%

90%

80%

70%

60%

50%

’78 ’80 ’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’99 ’00 ’01 ’05

Introduction of catalytic converter

New European Driving Cycle (NEDC) (for comparison converted into the previous DIN 1/3 mix)

VDA commitment:Reduce fleet consumption by 25 percent from 1990 to 2005

BMW fleet fuel consumption for new registered vehicles in Germany (DIN 1/3 mix, weighted according to number of vehicles)

- 25%

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Environmentally oriented product developmentThe BMW Group follows the principles of Designfor Recycling and Life Cycle Assessment (LCA) tointegrate environmental and recycling requirementsinto the product development process.

Design for Recycling ensures that after its usefullifetime a BMW Group vehicle can be recycledsimply and economically. To achieve this, recyclingrequirements are taken into account in the productdevelopment process. In this respect, the selectionof materials is as important as the joining techniquesand the construction of individual components.

Fundamental requirements for recycling-orienteddesigned vehicles are:• Use of pure-grade and recyclable plastics• Reduction of the variety of plastics• Use of composite materials compatible in recy-

cling• Selection of suitable joining techniques• Material labeling• Use of secondary materialsThe result: current BMW Group vehicles can berecycled economically and almost completely.

The environmental management tool Life CycleAssessment (LCA) is more comprehensive. It evalu-ates the ecological impact of new component concepts and bodywork variants over their entireproduct life cycle. From the extraction of raw materi-

als and the manufacturing process to vehicle utiliza-tion and recycling all environmental impacts areanalyzed. The aim is to identify among the develop-ment alternatives those which possess the greatestpotential for increasing environmental compatibilitythroughout the entire life of the vehicle.

With BMW Technik GmbH, the Innovation and Tech-nology Center, and the Recycling and DismantlingCenter, the BMW Group operates specialized competence centers. This is an ideal environmentenabling research and promoting a sustainableproduct development. Among the integration of theResearch and Innovation Center, the design centerof the BMW Group, this knowledge and experienceflows directly into the product development process.

The sustainable mobility model of the BMW Group

Products: Reduction of fleet fuel consumption and environmentally oriented product development

Benefit: Intelligent mobility management

Future: Development of alternative fuel concepts for series production

Automotive life cycle

design and development

productionplant

advice and sale

utilization and service

recycling and disposal

materialsproduction

Mobility: a modern challenge.

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“As an automobile manufacturer, we are vitallyinterested in maintaining an efficient, inter-modal transport system in which road trafficplays a key role in the future. Supporting per-sonal mobility, the transport of goods, anddata communications should be regarded as aprimary task for securing the future. Mobilitypromotes individual freedom, social interac-tion, and economic prosperity.”

Dr. Burkhard Göschel, Member of the Board ofManagement of BMW AG, Development andPurchasing

Efficient traffic systems worldwide are a key require-ment for ensuring economic prosperity, quality oflife, and social stability.

The BMW Group is directly involved in a number ofresearch projects (www.mobinet.de) aimed at intelli-gent traffic management systems adapted to socialand environmental norms. The company’s ownInstitute for Mobility Research in Berlin (www.ifmo.de)makes significant contributions to fundamental sci-entific study in this area.

Networking different means of transportThe BMW Group research focuses on the intelligentnetworking of different means of transport. Theobjective is to exploit the strengths of each mode oftransport, to use available space as efficiently aspossible, and to reduce traffic volume. This results inless traffic congestion, and reduces environmentalimpact.

Developing solutions to traffic problems is a taskcommonly shared by government and industry. TheBMW Group is involved in a variety of pilot projectsin Germany’s major cities. These projects are aimedat developing new approaches to efficient trafficcontrol. In Munich, BMW cooperates with the localauthorities and about 20 other partners to jointlycreate solutions for the local traffic problems.

The transport sector has an essential and posi-tive role to play in economic and socialdevelopment, and transportation needs willundoubtedly increase. However, since thetransport sector is also a source of atmosphericemissions, there is need for a review of existingtransport systems and for more effectivedesign and management of traffic and transportsystems.Agenda 21

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Today’s main project – MOBINET – implementsinnovative telematics applications and new mobilityservices designed to control local traffic. The focusin Berlin and Dresden is on improving Park & Rideservices for more efficient organization of traffic indowntown metropolitan areas.

Personal mobility to and from work Creative solutions for reducing personal traffic arealso in demand within the BMW Group. To take oneexample of the global production network, an intelli-gently organized shuttle bus system with 300 vehi-cles is used by two-thirds of the 21,000 employeesat the BMW plant in Dingolfing, Germany, to travelto and from work each day. The buses travel around40,000 kilometers each day – that is equivalent to halfway around the world and back. A similar bussystem is also in service at the BMW plant inRosslyn, South Africa.

The sustainable mobility model of the BMW Group

Products: reduction of fleet fuel consumption and environment-oriented product development

Benefit: intelligent mobility management

Future: development of alternative fuel concepts for series production

BMW CleanEnergy – powered by hydrogen.

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“BMW CleanEnergy is our way of respondingto the international question regarding thefuture of individual mobility. Our answer is nota car that consumes only 3 liters of fuel per100 kilometers. Our solution is the zero-litercar. One that does not require gasoline ordiesel fuel: a hydrogen powered car with cleanemissions.”

Dr. Helmut Panke, Chairman of the Board ofManagement of BMW AG

Fossil fuel resources are finite in the long term. Burn-ing these fuels has a negative impact on the envi-ronment, especially by increasing the CO2 emission.Today, there is an alternative: as the fuel of the future,hydrogen generated from renewable energy sourcescan help resolve global environment problems.

Since the seventies, the BMW Group has put majorresearch efforts into the development of hydrogenpowered vehicles. As part of the BMW CleanEnergyproject presented in 1999, 15 hydrogen poweredBMW 750hL cars have successfully completed over170,000 kilometers on public roads in every-dayuse. The tanks in these vehicles are filled with liquidhydrogen cooled to minus 253° C.

Series production planned The near-series study BMW 745h is equipped witha dynamic internal combustion engine that can beoperated either in a gasoline or hydrogen mode – a precondition to implement such technologies intothe market as long as a hydrogen infrastructure is not completed. Within the next few years, BMWplans to start series production of a hydrogen powered 7-series car. The MINI Cooper Hydrogenpackage study gives the perspective: hydrogen canalso be used to power compact cars.

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Developing strategic partnerships The BMW Group is dependent on strong partner-ships for the implementation of the BMWCleanEnergy project. Establishing an infrastructurefor liquid hydrogen is only possible in conjunctionwith other companies backed by governmentpolicymakers. The BMW CleanEnergy World Tourpresented in major cities around the world success-fully promoted the concept of the BMW Group of“mobility based on renewable energy.” The WorldTour 2002 also visits the Johannesburg World Sum-mit on Sustainable Development from 26 August to4 September 2002.

Within the framework of the initiative TransportEnergy Strategy (TES), automobile manufacturersare working together with the mineral oil industry,the energy industry and the German federal govern-ment to develop an initial strategy for producing anddistributing hydrogen and to disseminate the initia-tive throughout Europe.

We believe that hydrogen is extraordinarilypromising. Prof. Klaus Töpfer, Executive Director, UNEP

The sustainable mobility model of the BMW Group

Products: reduction of fleet fuel consumption and environment-oriented product development

Benefit: intelligent mobility management

Future: development of alternative fuel concepts for series production

Shaping social sustainability.

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“Global networking is still the best way topromote worldwide growth and prosperity. Itoffers opportunities for industrial nations aswell as for rapidly developing and third-worldcountries.”

Dr. Helmut Panke, Chairman of the Board ofManagement of BMW AG

As a global corporation, the BMW Group plays animportant role in implementing sustainable devel-opment and is engaged in the related politicalprocesses. Working together with 400 internationalcompanies, the BMW Group supports, for example,the Global Compact introduced by UN SecretaryGeneral Kofi Annan. The BMW Group is committedto ensuring that its worldwide business activitiescomply with UN guidelines and sustainable devel-opment principles. For the BMW Group, this impliesrespecting human rights and upholding social andecological standards.

Global responsibility The World Summit on Sustainable Development inJohannesburg is an important platform for theBMW Group to take part in the international discus-sion on sustainability. The BMW Group was activelyinvolved in the preparatory phase of the world sum-mit, for example through its presence at the MobilityForum of the UN Environment Program (UNEP).The BMW Group initiated, organized, and mediatedthe resulting Global Sustainability Report for theAutomotive Industry. This report will be officiallyincluded in the political decision-making process inJohannesburg.

I call on you – individually through your firms,and collectively through your business associ-ations – to embrace, support, and enact a set of core values in the areas of human rights, laborstandards, and environmental practices.Kofi Annan, UN Secretary General

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International dialogueA mutual understanding and close cooperationbetween business and industry, the society, associ-ates, customers, and government policymakers areessential for long-term stability and economic suc-cess. With this in mind, the BMW Group supportsinternational dialogue, for example through theHerbert Quandt Foundation. This organizationoffers high-ranking experts from around the worldthe opportunity to exchange knowledge and experi-ence. The most recent discussion forum was theMunich Economic Summit, where around 100 top-ranking representatives from 19 countries inEurope, America, and Asia came to Munich to dis-cuss future European developments. Anotherexample is the 3rd U.S.-German State LeadershipForum, held in 2001 in San Francisco, USA, about“Screening the Environmental Component of theGlobal Compact: Transatlantic Efforts and Goals”with highly acclaimed participants from government,research, and industry.

The BMW Group also actively supports the sustain-ability dialogue on a national level. As a chartermember of “econsense,” a sustainability forum initi-ated by the German industry, the BMW Group workstogether with other leading companies in Germanyon the development of industry-wide ecological andsocial solutions.

Principles of BMW Group personnel andsocial policy1 Mutual respect – a positive culture of conflict2 Thinking beyond national and cultural bound-

aries 3 The performance of our employees is the

basis for remuneration4 Team performance is more than the sum of

individual contributions5 Secure and attractive jobs for committed and

responsible employees6 Respect for human rights is a given7 Social standards for suppliers and business

partners are the basis for doing business8 Outstanding benefits for employees and a

strong commitment to societyThe BMW Group also refers to the principal docu-ments of the ILO (International Labour Orga-nisation), the OECD (Organisation for EconomicCooperation and Development) and the UNGlobal Compact concerning social standards.

Human values for sustainable partnerships.

We need decent work for all workers, womenand men, formal and informal, waged and self-employed. They all need work where basicrights are respected, people are protected andrepresented, and where economic and socialefficiency are pursued hand in hand. That’s thereal development goal.Juan Somavia, Director General of the International Labour Organization (ILO)

“An employee’s motivation to perform effec-tively, be creative, and enjoy working are keyfactors in a company’s sustainability. That’swhy the BMW Group sets high personnel policystandards.”

Ernst Baumann, Member of the Board ofManagement of BMW AG, Human Resources andIndustrial Relations Director

Employees are the key to the success of a company.Since 1983, the BMW Group has adopted the prin-ciple of a value-oriented human resources policy.On the basis of this policy the BMW Group estab-lishes overall conditions conducive to an atmo-sphere of trust, mutual respect, fairness, creativityand willingness to learn.

Employee-oriented managementThe BMW Group implements sustainable personnelpolicies by e.g. using models that enable employeesto share in the company’s success. This, amongstother things, entails empowering co-workersthrough the assignment of greater individual andteam responsibility.

Working in teams, BMW Group employees areinvolved in decision-making processes, and in thisway their own knowledge and experience are put toconcrete use.

Regularly conducted and standardized surveys pro-vide insight into the success of personnel manage-ment within the BMW Group and show whereimprovements can be made.

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Challenge: HIV/AIDSAIDS is one of the biggest challenges for the development of Africa. Around30 percent of the population suffers from the disease. Each year, an averageof 1 in 10 Africans becomes infected with HIV.

The BMW Group is committed to fighting HIV/AIDS in South Africa. Thegoal is to help people who are infected and to minimize the social and eco-nomic impact of the disease. Prevention through education and informationprograms is one of the most important aspects. Assistance available toemployees and their families includes voluntary, free HIV testing, councelingand full medical benefit coverage in the event of an employee testing posi-tive. Employees who are afflicted with HIV/AIDS are guaranteed the sameemployment rights as other workers.

Balance between work and leisure A progressive personnel policy makes it easier forindividuals to plan their life. At the BMW Group, work-life balance means that, above all, the job must bedelivered on time and meet the company’s premiumquality standards, while taking into account theemployees personal interest and situation. BMWGroup employee’s work on flextime schedules.Altogether, the company has over 300 differentwork schedule agreements. This enables the BMWGroup to respond promptly to market fluctuations –an important factor when it comes to profitabilityand job security.

The social security benefits available to BMWGroup employees are wide-ranging. In South Africa,these benefits include, e.g., pension plans, healthand accident insurance, medical care, and interestassistance for first-time home owners.

From automotive technology and project manage-ment to personality training, the BMW Group offersa full range of educational programs that are con-tinuously tailored to the needs of the workforce.

The BMW Group invested nearly €160 million ineducation and training in 2001 with over 89,000employees worldwide participating in BMW Grouptraining programs. In South Africa, over 4,700people – including managers, skilled workers, and external BMW dealership personnel – took part ininternal training sessions in 2001.

Knowledge as a resource An active “knowledge culture” is another importantsuccess factor for the BMW Group. As one of themost essential resources of the future, knowledgemust be permanently integrated into businessprocesses. Effective knowledge management at theBMW Group means passing on information andusing it collectively. This approach is promoted bythe networking of all BMW Group facilities and jobrotation. The Trainee-Exchange program is a goodexample. More than 400 trainees have been qualifiedand worked in the UK and Germany since 1996.

Tailored training.

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“What makes a company successful? Thepeople who work there make all the difference.Through their skills and performance, ouremployees contribute directly to the successof the BMW Group.”

Ernst Baumann, Member of the Board ofManagement of BMW AG, Human Resources andIndustrial Relations Director

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Experiencing equality Educational programs sponsored by the BMWGroup in South Africa are based on the guide-lines of the National Skills Authority. The focuson Adult Basic Education and Shop FloorTraining is intended to help improve the basicskills of formerly underprivileged social groups.The BMW Group is also committed to equalopportunity in its hiring practices. The composi-tion of salaried employees – grouped accordingto Africans, other races, Asians, women, andmen – is gradually being brought in line with theguidelines of the Employment Equity Act.

It has been increasingly recognized that peo-ple’s endowment of skills and capabilities, andinvestment in education and training, consti-tute the key to economic and social develop-ment. Skills and training increase productivityand incomes, and facilitate everybody’s par-ticipation in economic and social life.“Learning and Training for Work in the Knowledge Society,” ILO-Report IV (1), 2002

Source: BMW Group

People/C ulture

IT

Processes/O rganiza

tio

n

Is user orientation assured(interface between IT and user)?

Basic questions of knowledge management

To what extent does the cor-porate culture promote the

sharing of knowledgeand the use of knowledge

of others?

Is knowledge management integrated into the existingbusiness processes, or is it

regarded as “extra” work?

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Sustainable health protection.

“Health and work safety are integral parts ofthe long-term BMW Group personnel policy.The focus is on effective, early prevention inall relevant corporate processes.”

Manfred Schoch, Chairman of the Euro Committeeand Works Council of BMW AG

Health and physical well-being are primary require-ments for developing an employee’s job perfor-mance. Protecting and supporting personal health isthe primary goal preventive health and work safetyprogram of the BMW Group.

The health and work safety program of theBMW Group operates on three levels: � Guidelines for health protection and work safety� Promotion of personal responsibility on the part

of employees and plant managers � Safe organizational structures and working en-

vironments

High standards of safety Both the company and its employees are taskedwith promoting safety on the job. This approach hasbeen successful at the BMW Group as demonstratedby the fact that, e.g., in Germany the number ofwork-related accidents decreased over the past 10years by about 50%, which is one of the lowest in theautomotive industry. Safety standards exceed legalrequirements in many cases. In 1999, an integratedsafety, health, environmental and quality manage-ment system was implemented at the BMW GroupRosslyn plant in South Africa. This system is basedon the British Standard BS 8800 Guideline for Safety

Safe work creates no obstacles to being com-petitive and successful. In fact, no country –and no company in the long run – has been ableto jump to a high level of productivity withoutmaking sure that the work environment is safe.Global Employment Agenda, ILO, 2002

Frequency of industrial accidents at BMW AG*

12

11

10

9

8

7

6

5

‘96 ‘97 ‘98 ‘99 ‘00

11.7

9.8

8.37.8

6.6

*Number of registered industrial accidents per 1million man-hours

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and Health, the ISO 14001 Environmental Manage-ment Standard, and the ISO 9001 Quality Manage-ment Standard. As an integrated system, this is aworld’s first in the automotive industry. The BMWGroup Rosslyn has one of the lowest injury figureswithin the South African automotive industry, as wellas within the BMW Group.

Rigorous controls The labor and environmental protection committeeand the labor and health care committee shareresponsibility for controlling and auditing BMWGroup plants. These committees define the targetsand programs for health protection and safety andmonitor their implementation and effectiveness.

Health standards: from prevention to rehabilitationPrevention is the main focus of the health protectionof the BMW Group. Along with comprehensivesports and recreation programs, the BMW Groupplant in Munich operates its own fitness center.Other services in Munich include a doctor’s office,a rehabilitation center, mental health services, andsubstance abuse programs. Similar facilities are inplace at other BMW Group plants around the world.

Commitment to society.

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“Within the BMW Group, we practice a phil-osophy that successfully unites multinationaltolerance with equal opportunity and respectfor human dignity. We strive for fairness onand off the job.”

Dr. Helmut Panke, Chairman of the Board ofManagement of BMW AG

The social and political involvement of the BMWGroup has represented both an opportunity and acommitment for many years. As a globally activecompany, BMW stands behind its community res-ponsibility for manufacturing plants and subsidiariesworldwide – from Russia to South Africa, and fromGermany to the USA. A company’s success dependson the social environment. On the other hand, citizensexpect the company to be trustworthy and activelystrengthen the local community. As a corporatecitizen the BMW Group takes on worldwide socialresponsibility not only through programs especiallyadapted to local situations, but also through projectswhich extend beyond the scope of the companyitself. One example is the international project“Leave me alone!”, a CD-ROM and Internet siteaimed at preventing all forms of violence among,and against, young people.

Training todays needs and future talentThe BMW Group cooperates in many ways witheducational facilities throughout the world. Projects,donations, lectures, internal and external trainingsare some examples. The US plant in Spartanburg,e.g., co-operates, amongst others, with theSpartanburg Technical College and GreenvilleTechnical College. The colleges provide moderneductional training, according to the needs of theassociates of the BMW Group. Students, on theother hand, can develop their skills in projectssupported by the Spartanburg plant or in internships.

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Commitment to understandingThe BMW Group employs people from over 90 dif-ferent nations. “Thinking beyond national and cul-tural borders” is a company tradition. For over 20years, the BMW Group has been working withsome of the world’s leading institutions on projectsto promote social understanding. The LIFE Concept,a series of educational publications for interculturallearning, is one example of the many current projectsworldwide. The BMW Group Award for InterculturalLearning is presented each year to internationalapplicants for exemplary projects in this field.

None of us is born intolerant of those who differfrom us. Intolerance is taught and can beuntaught – though often with great difficulty.But in this area, as in others, prevention is farpreferable to cure. We must work to preventintolerance from taking hold in the next genera-tion. We must build on the open-mindedness of young people, and ensure that their mindsremain open.Kofi Annan, UN Secretary General

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Corporate citizenship in South Africa.

“We come from a history riddled with inequal-ity caused by apartheid policies. As a respon-sible corporate citizen, BMW could not, onentering the South African market, ignore thissituation.”

Ian Robertson, Managing Director, BMW South Africa

The BMW Group has been active in South Africa for30 years. Today, the Rosslyn plant is one of thecompany’s most modern production facilities. Thistradition-rich presence in South Africa is accompa-nied by a huge social responsibility to employeesand their families, and to society. With this in mind,the BMW Group joined government representativesin initiating a Social Responsibility Desk. The com-pany entered into partnerships with the local com-munities where most of the Rosslyn plant employeeslive. The focus is on increasing the level of educa-tion – which is also a primary objective of the SouthAfrican government.

The Corporate Social Investment Programof the BMW Group

Current activities:� Education� Technology� HIV/AIDS awareness, prevention and treatment� Sport� Environment� Local community development

Youth perspectives The BMW Group has been directly involved in orga-nizing school projects in South Africa since 1976.

Africa has reached a critical turning point in itshistory. After an era of decolonization and aperiod characterized by civil wars, military ruleand economic stagnation, a third wave isbeginning in Africa – one of peace, democracy,human rights, and sustainable development.This is indeed an opportune time for us and ourpartners to coordinate and harmonize our pro-grams, mobilize support for the development ofAfrica, and increase aid effectiveness. Kofi Annan, UN Secretary General

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The Schools Environmental Education DevelopmentProject (SEED) has been the most successful todate: South African children in over 60 schools aretaught environmental awareness and encouraged toactively participate in community life. The BMWGroup plans to implement this award-winning pro-ject nationwide.

With the Shoshanguve School Recycling Project,the BMW Group has extended youth services workto nearly 50 other schools located near the Rosslynplant. The students participate in projects focusingon collecting, separating, and recycling discardedmaterials. They also learn about water conservationand grow vegetables on the school grounds. Theharvested vegetables are distributed among theschoolchildren or sold at market to help buy educa-tional materials.

Creating new structures Following a suggestion from Nelson Mandela, theBMW Group invested around 5 million Rand inbuilding a school and a clinic in Ndonga, a remotevillage in the Eastern Cape province. The facilities inthe new school building include a computer roomand a library. The clinic provides basic medical ser-vices including family planning.

Sustainable Technology and ScienceEducation The BMW Science Program supports the upgrad-ing of teachers’ and students’ skills. The scienceequipment provided to schools under this programis intended to address issues related to access andequity in science, mathematics, and technologyeducation for children whose language of instruc-tion in these subjects is not their mother tongue.The use of the equipment in the classroom ensuresthat all learning modes – visual, audio, motor, andsensory – of the learner are catered to.

Sustainability. It can be done. BMW Group sites.

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Editorial Office

BMW GroupPetuelring 13080788 MunichGermany

Internet: www.bmwgroup.com

Hans-Christian LangeE-mail: hans-christian.lange@bmw.de

Headquarters Production Assembly