Global ResponsibilityEnvironmental Report 2003/2004

This Environmental Report, the third tobe produced by Bosch, is titled “GlobalResponsibility” in acknowledgement ofthe fact that we have expanded reportingto cover not just Europe, as in our previousreports, but also all of our other interna-tional sites. We are also publishing global-ly consolidated environmental data for theBosch Group for the first time. The reportalso addresses the formal corporate valueswe adopted in 2002 and pays particularlyclose attention to the “Responsibility” val-ue. We hope in this way to demonstratethe great importance of corporate citizen-ship at Bosch in addition to presenting ourachievements in environmental protection.

We devote much of the report to explain-ing the environmental benefits of our prod-ucts. The structure of the correspondingsection reflects the organization of ourbusiness sectors. The site examples select-ed provide an insight into the latest devel-opments across a whole range of produc-tion-related environmental protection is-sues in the three major business regions ofEurope, Asia, and the Americas. The envi-

ronmental data and indicators are present-ed in a separate section in the appendix.

What do you expect of Bosch in the areasof environmental protection and corpo-rate citizenship, and what does the com-pany have to do to satisfy your require-ments? We posed this question to fivepeople from different external stakeholdergroups in different countries. Their an-swers, which are documented in the report,indicate some of the challenges we faceover the next few years. Dialogue with ourcustomers, scientific and research bodies,environmental authorities, and trade asso-ciations is essential if we are to continueour progress, and we hope that this Envi-ronmental Report will stimulate furtheractive communication with these groupsand, in particular, with our associates inall of the Group’s regional subsidiariesaround the world.

The interviews are reproduced in fullalong with further information about this Environmental Report at www.bosch-environment.com.

3www.bosch-environment.com

About this report

4 Foreword

6 The company and its values7 The Bosch Group8 The business sectors9 The Bosch values10 The “Responsibility” value11 Responsibility and environmental protection

12 The environmental management system13 Challenges14 Global environmental policy15 Integrated management17 Supply chain management

18 Environmental protection and products19 Environmentally-oriented development20 Products and their environmental benefits21 Automotive technology25 Consumer goods and building technology28 Industrial technology

30 Global environmentally-compatible manufacturing

31 Europe33 Asia, Africa, Australia35 The Americas

36 Corporate citizenship37 Development projects supported by the

Robert Bosch Foundation38 The company and society39 Social involvement

40 Global environmental data41 Material and energy flows44 Environmental objectives of the Bosch Group46 Contacts details and addresses

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Contents

6 12 18 30 36

4

2003 2002 Units

Sales 36,357 34,977 € m

Sales outside Germany 71 72 %

Associates 231,600 224,341

Research and development spending 2,650 2,487 € m

Investment (in property, plant and equipment) 2,028 2,006 € m

Net income for the year 1,100 650 € m

Unappropriated earnings 60 60 € m

(dividend of Robert Bosch GmbH)

Energy consumption 7,307,817 5,283,577 MWh

Water consumption 22,194,575 18,046,091 m3

Total waste generated 916,840 723,824 t

CO2 emissions 623,615 308,341 t

* 2003 includes Buderus AG for the first time

Bosch Group worldwide key data*

Dear Reader,

The last two years have seen Bosch intro-duce numerous product innovations tohelp reduce our impact on the environ-ment. One of the highlights of 2003 wasthe result of our innovative achievementsin pursuit of the eco-friendly diesel en-gine. We commenced series production ofthe third generation of our common railsystem and took the decision to startmanufacturing sintered metal particulatefilters from 2005. The new diesel direct in-jection system reduces pollutant emis-sions by up to 20 percent as comparedwith the best existing diesel systems, whilethe new diesel particulate filter, which re-quires no maintenance throughout thelifetime of the vehicle, will further reduceoverall particulate emissions.

Foreword

5

Franz Fehrenbach (right), Chairman of the Board of Management of RobertBosch GmbH and Wolfgang Drees, Member of the Board of Management ofRobert Bosch GmbH with responsibilityfor environmental protection

7

Environmental awareness has a long tradi-tion at Bosch. We published the first bind-ing environmental protection regulationthirty years ago, which is around the sametime as we formally adopted our policythat all future developments in automo-tive technology should help to make auto-mobiles safer, more eco-friendly, andmore economical. This policy originatedfrom our 3-S program, an initiative that,as achievements such as our most recentinnovations in diesel technology ablydemonstrate, is more pertinent than everthree decades on. The same applies to ourenvironmental principles, which we haverecently revised and which are binding onall business sectors worldwide.

Like other companies, Bosch faces newand evolving challenges as a result of con-temporary changes in markets and soci-ety. The BeQIK company-wide changeprocess we initiated back in 1999 helps usto stay up to speed by keeping our opera-tions flexible and adaptable. As part of

this process, we decided to lay down ourcorporate values in writing for the firsttime, so that they might provide us with asource of direction and orientation throughthe ongoing cultural change and sharpenour focus on results and on the future.

The 3-S program, our environmentalprinciples, and the need to recognize thewider interests of society have all in-formed our code of values. We are confi-dent that the “Responsibility” value inparticular will engender new environmen-tal protection initiatives. In this respect,our values amount to a covenant for thefuture: we intend to remain a reliable andresponsible partner for customers and so-ciety all over the world by continuing towork closely with our associates to pursueambitious objectives in our business sec-tors and enhance our profitability.

Franz Fehrenbach Wolfgang Drees

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The company and its values

Bosch is one of the largest industrial enterprises in Germany and the world’s second

largest automotive supplier. Our more than 200 manufacturing sites span the globe,

with locations on every continent. We formally defined our corporate values in writing in

2002 as part of our BeQIK change process. The values are intended to help us keep

our bearings and to guide us as we identify and face up to the challenges of the future.

Our “Responsibility” value acknowledges both our duty to society and our obligation to

protect the environment.

Flashes of inspiration arenothing new at Bosch: pro-ducts like the spark plug,which have been with us forover a century, never ceaseto inspire participants in thecompany’s trainee programs.

7

Sales of more than € 36 billion (2003)make Robert Bosch GmbH one of thelargest industrial enterprises in Germany.The three business sectors AutomotiveTechnology, Industrial Technology, andConsumer Goods and Building Technolo-gy together employ some 232,000 people.Based in Stuttgart, the Group has been active all over the world for many years.International business activities have ex-panded rapidly in recent years and 185 ofthe Group’s 249 manufacturing sites arelocated outside Germany. With its sub-sidiaries and affiliates, Bosch has locationson every continent and in more than50 countries. The share of sales generatedoutside Germany now stands at 71 percent.

A broad product rangeThe Bosch name is closely associated withthe automobile. We develop and manufac-ture a great diversity of products for themajor automotive manufacturers, includ-ing diesel and gasoline fuel-injection sys-tems, automotive electronics, and chassissystems. Bosch products also enjoy an ex-cellent reputation in the power tools,household appliances, thermotechnology,

automation technology, and packagingtechnology sectors. Bosch successfullyconsolidated its market position as theworld’s second largest automotive tech-nology supplier in 2003. The takeover ofBuderus AG completed during 2003 meansthat Bosch is now also Europe’s largestproducer of heating technology products.

The constitution of the companyThe company traces its origins back to the“Workshop for Precision Mechanics andElectrical Engineering” opened by RobertBosch in Stuttgart in 1886. In 1964, thefounder’s heirs transferred the majority oftheir shares to the Robert Bosch Founda-tion, an organization with purely charitableaims. Today the Robert Bosch Foundationholds around 92 percent of the capitalstock of Robert Bosch GmbH – a sumamounting to € 1.2 billion. In accordancewith its charter, the foundation uses theannual dividend to support projects thatserve the common good. Responsibilityfor the executive management of theBosch Group rests with Robert Bosch Industrietreuhand KG, which holds93 percent of the voting rights.

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The Bosch Group

The constitution of the Bosch Group

Robert Bosch Stiftung GmbH

92% share, no voting rights

Robert Bosch GmbH

Capital stock € 1.2 billion

Bosch family

8% share and

7% of voting rights

Robert Bosch

Industrietreuhand KG

93% of voting rights

Associates by region in 2003(total: 231,600)

Europe

The Americas

Asia/Africa/Australia

As per January 1, 2004

166,15031,200

34,250

BeQIKThe BeQIK initiative incorporatesan entire series of projects de-signed to ensure the continuousimprovement of all of our internalprocesses. BeQIK is all aboutdoing everything at a higherspeed in order to enhance quali-ty, innovation, and customer fo-cus. Our successful quality as-surance program, including theEFQM Excellence Model andSix Sigma methodology, helpsto keep our customers satisfiedand our quality standards high.

Bosch achieved sales in excess of € 23 bil-lion in the Automotive Technology Busi-ness Sector in 2003. Automotive Technol-ogy operates around the world, employingsome 143,600 people. The four major busi-ness areas are fuel injection technology forinternal combustion engines, active andpassive vehicle safety systems, electricalmachines, and mobile communicationsystems.

Bosch’s Industrial Technology BusinessSector employs around 32,900 people inthe fields of drive and control engineering,packaging technology, and metals tech-nology. The Group’s wholly-owned sub-sidiary Bosch Rexroth AG is regarded as atechnology leader in the manufacture ofplant and equipment. Our metals technol-ogy business area specializes in casting andspecial steel products, while our packagingtechnology business area has developedinto a broad-based technology provider.

The Consumer Goods and Building Tech-nology Business Sector includes the powertools, thermotechnology, security systems,and broadband networks business areas,as well as the electrical household appli-ances such as washing machines and refrig-erators produced by the BSH Bosch undSiemens Hausgeräte GmbH joint venture,which is one of the world’s leading house-hold appliance manufacturers. ConsumerGoods and Building Technology employsa total of around 47,500 people.

Distribution of salesThe Bosch Group has acknowledged thatin the long term it would like to see itssources of revenue spread more evenlyacross the various business sectors. Theshare of total sales contributed by Indus-trial Technology rose to nearly twelve per-cent in 2003 as a result of the consolida-tion of Bosch Rexroth AG and BuderusAG, while that contributed by AutomotiveTechnology fell to 65 percent. The Con-sumer Goods and Building TechnologyBusiness Sector yielded a share of around23 percent in 2003.

The company and its values8

The business sectors

Sales by business sector in 2003(total: € 36.4 billion)

Automotive Technology

Industrial Technology

Consumer Goods and

Building Technology

€ 23.6 billion

€ 4.3 billion

€ 8.5 billion

23.1%

11.9%

65.0%

Sales by region in 2003(total: € 36.4 billion)

Europe

The Americas

Asia/Africa/Australia

€ 24.6 billion

€ 6.6 billion

€ 5.2 billion

14.4%

18.1%

67.5%

The three business sectors thatmake up the Bosch Group com-prise the following divisions:

Automotive Technology• Gasoline Systems• Diesel Systems• Chassis Systems• Energy and Body Systems• Car Multimedia• Automotive Electronics• ZF Steering Systems• Automotive Aftermarket

Industrial Technology• Bosch Rexroth• Packaging Technology• Metals Technology

Consumer Goods and Building Technology• Power Tools• Thermotechnology• Household Appliances• Security Systems• Broadband Networks

Our founder attached great importance tovalues in his lifetime, and the company stillshares his conviction. Robert Bosch ex-pressed his views most succinctly in obser-vations such as “It is better to forfeit mon-ey than trust” and “I credit my successmore to my character than to my knowl-edge.” The values that guide our companytoday were committed to writing for thefirst time in 2002 as part of the change pro-cess associated with the BeQIK initiative.

A sense of direction in a changing cultureThe code of values we now have is intend-ed to act as a beacon for all associates andmanagers in the turbulent period of cul-tural change in which we find ourselves.Shared values are an important tool forcreating unity within an organization, es-pecially one such as ours that brings to-gether people from a wide range of differ-ent countries and cultural backgrounds.Our code of values provides a platformfor effective cooperation based on trust,and helps to create a common identityuniting the Bosch companies and their as-sociates. It also encourages individual ini-tiative.

The Bosch values

Values and value enhancementWe decided to make “Future and ResultFocus” the first value in our code in orderto emphasize that whatever else weachieve, everything we do must at the veryleast help to enhance our economic suc-cess. This, in effect, links leadership by val-ues to value based management and toour ultimate objective of boosting the val-ue of the company. Management-level as-sociates have a particular responsibility inthis connection: they are expected not on-ly to be seen as people who put our valuesinto everyday practice, but also as peoplewho keep a constant eye on the value ofour company and opportunities to en-hance it. Our new “Bosch Guidelines forLeadership” provide them with a frame-work within which to act and help themto fulfill the above tasks.

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Prof. Dr. Josef Wieland,specialist in businessethics at the KonstanzUniversity of AppliedSciences in Germanyand Director of the KIeMInstitute for InterculturalManagement, Values,and Communication.

» A value focus and value management are nec-essary conditions for lasting success on theinternational stage. National and internationallegal systems place enormous emphasis on theprevention of malicious activities such as cor-ruption, fraud, deception, and dishonesty. Thepolitical community expects companies to mea-sure up to their economic, ecological, andsocial responsibilities around the world. Thisimplies the need to put in place clear and bind-ing internal values and codes of conduct andwork to see these implemented in everydaybusiness practice.

The code of values The seven Bosch values put in-to words the beliefs that guideus in our business operations.They describe our attitude tobusiness partners, investors,associates, society, and the en-vironment.

1 Future and Result Focus2 Responsibility3 Initiative and Determination4 Openness and Trust5 Fairness6 Reliability, Credibility, and

Legality7 Cultural Diversity

3www.bosch.com/en/company/values/index.htm

«

We believe our standing as a corporate cit-izen entails a particular responsibility intwo areas: we have a duty to the society inwhich we are rooted and we have a duty tothe natural environment in which we live.This belief has a bearing first and fore-most on our products and services, which,as Robert Bosch himself put it, “must beof use to the public at large.” It means,moreover, that like any decent organiza-tion we respect justice and the law andthat we stand by our word. Our company,however, also takes a more active role inhelping to address the problems of societythrough the Robert Bosch Foundation,which is funded from our dividend. Webelieve, furthermore, that there is more toresponsibility than just what we owe tothe outside world. Responsible local ini-tiatives at numerous points throughoutour company help us to seize market op-portunities, stay ahead of changes in themarket and, in the end, achieve greatereconomic success.

A tradition of benevolenceOur long tradition of involvement inbenevolent and charitable activities ex-tends all the way back to the diverse initia-tives of Robert Bosch (1861–1942). Orga-nizations such as Bosch-Jugendhilfe, whichprovided support for young people, thesociety for the promotion of public edu-cation, and the Robert Bosch Hospital, forexample, all came into being in the periodbetween 1910 and 1940 as a result of ourfounder’s commitment to social issues.The Robert Bosch Foundation, which isone of the largest company-based benevo-lent organizations in Germany, ensuresthat this commitment remains strong to-day. Founded in 1964, it permanently an-chors Robert Bosch’s sense of duty to soci-ety and concern for the wider communityinto the constitution of the Bosch Group .The foundation was created, according toits charter, to support and promote publichealthcare, international understanding,social welfare, education and training, artsand culture and the study of the humani-ties, the social sciences, and science (seepage 37 for more about current projects).

The company and its values10

The “Responsibility” value

Robert Bosch’s house, headquarters of RobertBosch Stiftung GmbH, www.bosch-stiftung.de1

Responsibility“We accept that our actionsmust accord with the interestsof society. Above all else, weplace our products and servicesin the interests of the safety ofpeople, the economic use of re-sources, and environmental sus-tainability.”

(from the Bosch values)

Responsibility for the environment is acore value at Bosch and is firmly anchoredin our principles for safety and environ-mental protection. These principles ex-tend to associates, services, and suppliers,and their aim is the continuous improve-ment of our environmental performance,allied to a concern for occupational safety.Bosch introduced its first binding guide-line on environmental protection thirtyyears ago. The principles of environmen-tal protection, which have since been up-dated a number of times, were formulatedin 1996 and apply throughout the BoschGroup worldwide.

The 3-S programThree decades old and more pertinentthan ever is the Bosch 3-S program, on thebasis of which we have been working sincethe 1970’s to make automobiles safer,more eco-friendly, and more economical.The program has inspired many of our pi-oneering achievements, including antilockbraking systems (ABS), the electronic sta-bility program (ESP), and direct fuel in-

Responsibility and environmental protection

jection systems for gasoline and diesel en-gines. The latest version of the ESP is ahighly sophisticated and extremely effec-tive safety product: studies carried out byour customers indicate that making ESPstandard equipment in road vehiclescould cut the number of serious traffic ac-cidents by up to 50 percent. Spurred on byexisting and nascent environmental con-cerns, our development engineers are alsocontinuing their efforts to make road ve-hicles more eco-friendly and more eco-nomical by cutting fleet fuel consumptionand emissions of carbon dioxide and pol-lutants. The 3-S program makes environ-mental protection a constant and integralcomponent of our business strategy. This,in turn, makes it much easier for us toidentify how environmental protection issues interact with other strategic con-cerns: if we want our eco-friendly andeconomical diesel systems to succeed, forexample, we need to make sure that theyalso deliver the higher levels of fun andsporty performance expected by today’sdrivers.

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PRINCIPLES OF WORK SAFETY AND ENVIRONMENTAL PROTECTIONSUSTAINABILITY

We accept that our actions must accord with the economy, the ecology, and the responsibility we take for the

community at large, also with a view to future generations. For this reason, respect for people’s health and safe-

ty, for an economic use of resources, and for a natural and clean environment are basic principles of our busi-

ness policy.

RESPONSIBILITY

It is the task of all associates to help prevent the endangering of people and the environment, as well as to

maintain strict compliance with all laws and regulations pertaining to work safety and the protection of peo-

ple’s health and the environment. It is a leadership task to recognize such dangers, to evaluate them, and to

undertake appropriate actions.

PRODUCTS

We develop and manufacture products that are safe, eco-friendly, and economical. Our products enhance peo-

ple’s safety and reduce burdens to the environment, also during their subsequent recycling and disposal.

PROCESSES

We design processes to ensure that – wherever economically feasible – people’s health and safety have priority

and that effects on the environment are kept to a minimum. We are prepared to cope with emergencies. This is

also the spirit in which we cooperate with suppliers of goods and services.

CONTINUOUS IMPROVEMENT

We review our processes and our behavior on a regular basis, just as we measure their effects on people and on

the environment. This is how we identify weak points and potential for improvement, and ensure the effective-

ness of our program for work safety and protection of people’s health and the environment.

1

2

34

5

Environmental protectionlogoThe Bosch environmental pro-tection logo symbolizes uncon-taminated water, clean air, andunspoiled nature. Measures de-veloped to protect the environ-ment often draw attention topotential cost savings. Environ-mental protection is an integralpart of our business strategyand plays a significant role instimulating and guiding productinnovations. It thus helps notonly to ensure our profitability,but also to open up new busi-ness areas.

12

The environmental management system

Bosch introduced a global integrated management system for quality, environment, and

safety in 2001. The system translates our values into practical action and helps us to

meet new demands placed on us by customers, society, and legislators. An international

steering committee set up in 2002 makes certain that we live up to the tenets of our envi-

ronmental policy wherever our operations take us. Even today, every single site in the

Automotive Technology Business Sector has successfully gained accreditation under

international environmental management standard ISO 14001. And our new supplier

evaluation process will incorporate our suppliers more effectively into our environmental

protection efforts.

Second meeting of the internationalsteering committee for occupation-al safety and environmental protec-tion in Campinas, Brazil (left); Hart-mut Müller, Head of our CorporateDepartment for Environmental and

Fire Protection, Safety (right) 3

Our environmental system will face chal-lenges from ever more regulations acrossthe whole of the product life cycle over thenext few years, with the EU Directives onwaste electrical and electronic equipment(WEEE), restrictions of the use of certainhazardous substances in electrical andelectronic equipment (RoHS), and end oflife vehicles (ELV) imposing new require-ments on both product development andproduct labeling.

The WEEE and RoHS Directives came intoforce at the start of 2003. As they relate toelectrical and electronic equipment, theyare of concern primarily to the IndustrialTechnology and Consumer Goods andBuilding Technology Business Sectors. Ourpower tools and household appliances, forexample, are likely to be affected by provi-sions banning the use of certain heavymetals from mid-2006 and the require-ment that from 2007, a certain portion ofeach obsolete part must be recyclable. TheELV Directive, on the other hand, only af-fects Automotive Technology. This instru-ment prohibits the use of certain heavy

metals in automobiles put on the marketafter July 2003. Rules for the use of recy-clable materials come into force in 2006and will be replaced by a more exacting re-quirement in 2015.

Legislation in the automotive areaThe most significant challenges for Auto-motive Technology come from morestringent exhaust gas standards in Europeand the U.S. and from the European auto-motive industry’s self-imposed commit-ment to cut the carbon dioxide emissionsof new vehicles to 140 grams per kilome-ter by 2008. The new U.S. exhaust gas reg-ulation, which comes into force from2007, requires further substantial cuts inparticulate and NOx emissions and willtherefore have a particularly pronouncedeffect on diesel engine technology. Morestringent regulations are also expected inChina, where the EU II standard is to beintroduced in 2004. The relevant interna-tional standards are not, however, expect-ed to become mandatory in China until2010.

13

Yuansheng Fan, Vice President, Chinese Research Academy ofEnvironment Science(CRAES), Beijing (China)

»

«

For the purpose of keeping the environmentcontinually upgraded, Chinese businesses haveto follow a new path with high technologies, lowconsumption of resources, and little environ-mental contamination. To encourage businessesinto adopting environment-friendly productiontechnologies, the environmental authority hasput in place numerous measures. Resulting fromthe government’s incentive of tax reduction, mostlight motor vehicles manufactured now in Chinahave come to the EU II Standard. We call forfurther exchange and cooperation with overseasbusinesses: Get involved in addressing theenvironmental protection problems faced byChina!

Challenges

Production of diesel in-jector pumps on the Indiansubcontinent

7

The creation of our Health, Safety, andEnvironment Steering Committee repre-sents another milestone in the global im-plementation of our environmental policy.The primary objectives and duties of thisinternational steering committee, whichcomprises the occupational safety and en-vironmental protection coordinators fromthe Asia, Europe, and North and SouthAmerica regions, are to enhance knowl-edge sharing and cooperation betweencountries and improve our performancein environmental protection and occupa-tional safety. The committee held its firstmeeting in 2002 at the plant in Bangalore,India, and aims to convene once annually.The most recent meeting, which tookplace at Campinas, Brazil, in May 2003,concentrated on topics including interna-tional environmental standards, manage-ment systems, the involvement of suppli-ers, and the expansion of the DfE (Designfor Environment, see page 19) coordina-tor network. The steering committee alsoagreed to update the internal reportingsystem in order to make our global re-porting more uniform and more efficient.

Global environmental policy

Activities in ChinaBosch intends to continue expanding itsbusiness activities in China. Our sub-sidiaries and affiliated companies in Chi-na employ just under 9,000 people andachieved sales in 2002 of around € 1.2 bil-lion. A joint venture founded in 2003 bythe Bosch Group and China’s Wuxi WeifuGroup for the development, application,and manufacture of electronic diesel sys-tems has now commenced operations.The rapid pace of economic developmentin China requires that occupational safetyand environmental protection measuresbe implemented very quickly. We set up adedicated corporate department in Shang-hai in 2002 to coordinate environmentalactivities and introduce management sys-tems to integrate these requirements intobusiness processes across all 13 Chineseplants. The corporate department orga-nized an environmental conference in itsfirst year, to which the relevant manage-ment staff from all of our Chinese plantswere invited.

The environmental management system14

* International forum forstrategic HSE re-quirements across or-ganizations (mem-bers: regional HSEcoordinators, Z4U)

How environmental protection is organized at Bosch

Assignment/reporting

Advice/supervision/support Plants and Sites

Departments Environmental Protection andOccupational Safety Officer

Regional subsidiariesSubsidiariesDivisions

Board of Management

Corporate Depart-ment for Environ-mental and Fire

Protection, SafetyZ4U

Regional Coordinatorfor Environmental

Protection and Occupational Safety

European emissions tradingThe EU Directive on the tradingof greenhouse gas emissionspermits came into force in Oc-tober 2003. Bosch is commit-ted to climate protectionthrough its environmental policyand has been making the nec-essary preparations for the startof emissions trading. Emissionstrading will affect the few plantsin Germany that operate largefurnaces and ovens. We arecurrently working to determinethe required quantity of emis-sions permits and to identifymeasures to reduce our totalemissions.

Steering Committee*

Bosch introduced a global managementsystem integrating quality, environmentalprotection, and occupational safety in 2001.The system is subject to continuous devel-opment in a process that considers sug-gestions from our sites as well as externalcertification requirements. The scope ofthe system has recently been expanded toincorporate the areas of site security, dataprotection, and information security. Theresulting modifications are detailed in theupdated manual Management System forQuality, Environment, Safety, and Security,published in September 2003.

Award-winning managementSuccessful environmental protection is notsolely the result of an effective, networkedmanagement system. It is the level of per-sonal commitment demonstrated by man-agers and associates that makes the realdifference. One person who has made thatdifference is Dr. Robert Kugler, ExecutiveVice-President of our joint venture BSHBosch und Siemens Hausgeräte GmbH,who was voted “Eco Manager of the Year2002” by the environmental and conserva-tion group Umweltstiftung WWF Deutsch-

Integrated management

land and the German business magazineCapital. The honor recognizes the compa-ny’s many years of pioneering work in in-dustrial environmental protection and itsexemplary environmental performance in-dicators: since 1990 BSH has cut specificenergy consumption in manufacturing by34 percent in Germany alone and slashedwater consumption by 72 percent.

Internal quality competitionThe success of our business depends inlarge measure on the quality of our prod-ucts and services. As part of our qualitymanagement offensive, we drew up a newset of principles for quality in 2003. Theseprinciples make the quest for quality a du-ty for everyone, from the newest trainee tothe most experienced senior manager. Wealso used the opportunity to initiate a newinternal Bosch quality competition. Ourunit injector products, the EV6 fuel injec-tor, and the new ABS 8 system all receivedthe Quality Prize 2003 in recognition oftheir success in meeting quality and costtargets and of the significant contributionthey have therefore made to maintainingand enhancing customer satisfaction.

15

Dr. Robert Kugler, ExecutiveVice-President of BSH Bosch

und Siemens HausgeräteGmbH with responsibility for

product divisions and environ-mental protection was voted“Eco Manager of the Year” in

2002. 3

Tarja Halonen, President ofthe Republic of Finland, awardsBosch the European QualityAward for 2003 at the EFQMForum in Helsinki.

7

EFQM prizeOur regional subsidiary in Bur-sa, Turkey, had particular causeto celebrate in 2003 when theDiesel Systems Division’s localsite won the prestigious Euro-pean Quality Award (EQA) inthe Operational Unit category.Presented by the EuropeanFoundation for Quality Manage-ment (EFQM), the award recog-nizes outstanding performanceacross nine different evaluationcriteria, including areas such asresources and social issues.

ISO 14001 certificationAn environmental management systemhas been in place at all Bosch manufactur-ing sites worldwide since 2000. Our sitesare audited internally or externally pur-suant to international environmentalmanagement standard ISO 14001 in ac-cordance with a formalized plan. Automo-tive Technology became the first businesssector to complete certification of its sitesin 2003 and is thus now fully compliantwith the stringent requirements of the au-tomotive industry. The certificationprocess has reached an advanced stage inother business sectors and divisions too,and at the start of 2004 no fewer than 111Bosch sites held an ISO certificate issuedby an accredited certification body.

Expanded environmental controllingPart of the purpose of the environmentalcontrolling activities is to identify the keyenvironmental aspects of our processes.The environmental impact of each processis assessed using a set of predefined criteria.We introduced a standard procedure forone more area, traffic, in 2003 and are con-sequently now able to analyze and evaluatethe significant traffic parameters consistent-

ly at every site. We require each of our sitesworldwide to record certain energy andmaterial flow data. This information isstored in a new database developed on thebasis of our existing energy and materialflow register. The new system collates all sitedata and standardizes recording of firmlydefined environmental, fire protection, andoccupational safety indicators, therebystreamlining our internal reporting regime.

Environmental protection trainingOur latest revised training concept espe-cially targets managers, developers, envi-ronmental protection officers, and inter-nal auditors. Seminars on environmentalmanagement systems and a special coursefor environmental auditors provide a solidgrounding for both internal audits andexternal certification processes. Anotherseminar offered gives our designers, devel-opers, and suppliers the opportunity tofind out about new requirements and thelatest developments in environmentally-compatible product design.

The environmental management system16

Bosch sites certified to ISO 14001 by region (as at January 1, 2004)

20 40 60 80 100 120

2003

2002

2001

Europe

The Americas

Asia, Africa, Australia

The Bosch Group’s total purchasing vol-ume of some € 20 billion comprises man-ufacturing material, commodities, operat-ing resources/services, and capital goods.We expect our suppliers to provide com-petitive, high quality products and ser-vices with good delivery reliability in allpurchasing segments. Every two years wepresent our best performing suppliersworldwide with the Bosch Supplier Award.The most recent award ceremony held inBamberg, Germany, in July 2003 honoredno fewer than 60 suppliers for theirachievements in 2001/2002.

Environmental protection and the preferred supplier conceptIn accordance with its environmentalprinciples and purchasing guidelines,Bosch seeks to commit suppliers to envi-ronmental protection. The complex andinadequately integrated EnvironmentalProtection Survey previously used to eval-uate the environmental performance ofour suppliers was replaced with a new andimproved method in 2003. This method,which we have also presented before the

Supply chain management

Committee for Environmental Manage-ment of VDA, the German automotive in-dustry association, incorporates environ-mental requirements into the preferredsupplier concept in such a way that infor-mation on environmental performancenow flows into our basic supplier evalua-tion and selection process. Environmentalissues and fire safety also form part of theCorporate Agreement, our frameworkcontract with suppliers.

Evaluating supplier potentialWe evaluate supplier potential by carryingout a series of assessments at the supplier’ssite. The scope of evaluations has recentlybeen expanded to include assessment crite-ria that estimate the supplier’s potential inthe areas of environmental protection andfire safety. We plan to integrate environ-mental protection into the supplier auditprogram in a similar way in the future, andalso intend to ensure that environmentalfactors are taken into account when pur-chasing operating resources and plant andequipment.

17

Supplier integration at Bosch

Other suppliers

Incr

easi

ng im

porta

nce

Preferred

suppliers

Supplier potential evaluation

Corporate agreement

Supplier audits

Bosch presents the SupplierAward to its best suppliers

every two years. 3

IMDSChanges in the law mean thatour customers in the automotivesector are demanding more andmore information about the ma-terials and components used inour products. Such disclosuresare necessary in order to helpthem ensure compliance withsubstance bans and recyclingrequirements in the supplierchain. The Bosch Group sup-ports a uniform inter-companyprocedure for the provision ofthe type of information requiredwhen using IT tools such as theInternational Material Data Sys-tem (IMDS).

18

Environmental protection and productsEnvironmental labels such as the Blue Angel seal awarded by the German Federal Envi-

ronmental Agency (UBA) identify products that feature particular environmental and/or

health benefits. A number of Bosch products carry the Blue Angel, documenting our

commitment to our corporate value of responsibility. Right from the development stage,

various programs set the requisite standards. Environmental protection is a major inno-

vation driver – and a significant source of new competitive advantages – in all divisions

and each new product generation we release is more eco-friendly, quieter, and more

energy-efficient than the last. We operate our own recycling systems and support and

encourage the harnessing of renewable energy resources through a number of our

products.

The environmentally-ori-ented design of Boschpower tools simplifies

disassembly and facili-tates the recycling of

end of life equipment. 3

Endeavors to limit the environmental im-pact of our products start in the designphase. Bosch Standard N33-6 Environ-mentally-Oriented Product Developmentprovides clear directions to help designersand developers optimize the environmen-tal performance of our products through-out their life cycle, as specified in the Eu-ropean Union’s Integrated Product Policy(IPP) requirements. This ensures that ourproducts are able to meet the demandsboth of the law and of our customers.

Bosch Automotive Technology’s 3-S pro-gram (see page 11), which is in effect onemodule of an integrated product policy,has proved to be particularly effective inreducing product resource consumptionduring the use phase; its stated develop-ment objectives, “more passive and activesecurity,”“lower motor vehicle emissions,”and “more efficient driving” will thus con-tinue to guide our development activities.

Design for environmentThe rather more recent Design for Envi-ronment (DfE) program primarily targetsthose stages of the product life cycle that

come before and after use. The programaims to minimize overall material con-sumption and increase the proportion ofenvironmentally-friendly materials usedright from the outset by encouraging ap-propriate design considerations. It alsotries to improve environmental perform-ance at the end of the product life cycleby ensuring straightforward product dis-assembly and maximum recyclability ofthe materials used. There is more to theBosch DfE program than limiting materi-al consumption and improving end of lifeperformance, however, with knowledgemanagement also playing a central role.Effective sharing of expertise and experi-ence right across the company is invalu-able in areas such as environmental de-sign. Our DfE network, which we set up in 2000, now links 24 coordinators fromthe various divisions and regional sub-sidiaries. The seminar concept for envi-ronmentally-oriented product design,which was revised in 2003, has done muchto assist the implementation of the DfEprogram.

19

» Our relationship with our suppliers has becomeincreasingly interconnected. We work togetherat all stages of our product life cycle – from pro-duct development to sale, to use and service,to end of life. Sustainability, safety and environ-ment remain a challenge and the technologiesthat Ford and our suppliers, like Bosch, havedeveloped are pushing us in the right direction.The future of our industry depends on creatinga sustainable business model that uses renew-able resources as it continues to delight andhelp protect customers, reward shareholdersand protect the planet. Continue to bring usyour ideas. Your creativity is essential to ourfuture and to yours.

Susan M. Cischke, Vice President, Environ-mental and Safety Engineering, Ford MotorCompany, Dearborn(USA)

Environmentally-oriented development

Abstatt development centerNature conservation and envi-ronmental protection played acentral role in the design andconstruction of our new devel-opment center at Abstatt, Ger-many. The open space plan pro-vides for the planting of 1,063trees and for vegetation to cov-er two thirds of the total areaand 23,480 square meters ofroof space. An ecologicallyvaluable belt of mixed fruit treeshas been created around thesite, while design features suchas separate sewerage andwastewater systems, heat re-covery systems, and a rainwatercollection and utilization systemminimize ongoing resource con-sumption.

«

1 ZF Lenksysteme GmbH (50 % Bosch)2 Blaupunkt GmbH (100 % Bosch)3 including Buderus AG (more than 97 % Bosch)4 BSH Bosch und Siemens Hausgeräte GmbH (50 % Bosch)

Environmental protection and products20

Condensing boilers,

solar collectors,

heat pumps

Washing machines,

dishwashers,

refrigeration appliances,

cookers

Silent shredders,

rotary hammers

Fire alarm systems

25

26

26/27

27

Thermotechnology3

Household Appliances4

Power Tools

Security Systems

Consumer Goods and Building Technology

Improved energy efficien-

cy, reduced emissions,

harnessing of renewable

energy resources

Improved energy

efficiency,

lower water

consumption

Reduced noise,

recycling

Damage/accident

reduction, reduced

release of harmful sub-

stances, recycling

Area of activity

Automotive Technology

Diesel Systems

Gasoline Systems

Energy and Body Systems

Automotive Electronics

ZF Steering Systems1

Car Multimedia2

Automotive Aftermarket

Chassis Systems

Page

21

22

23

23

23

24

24

24

Main environmental

benefits

Lower fuel consumption,

reduced emissions

Lower fuel consumption,

reduced emissions

Lower fuel consumption,

reduced emissions,

recycling

Lower fuel consumption,

reduced waste generation

Lower fuel consumption

Recycling

Recycling

Damage/accident

reduction, recycling

Typical products

Common rail system (3rd generation),

diesel particulate filters

Electronic gasoline direct injection

(DI-Motronic) and additional functions

LI-X generator, engine thermal manage-

ment, automatic start-stop systems

Electronic transmission control, sensors

Electric power steering system

Travelpilot EX navigation system

Factory remanufacturing through the

eXchange Program

Braking systems, brake calipers

Pitch drives for wind turbine generators,

axial piston pumps (whispering hydraulics)

Bag form, fill and seal machines

Special steel products, cast iron pipes,

brake disks

28/29

29

29

Drive and Control Engineering

Packaging Technology

Metals Technology

Industrial Technology

Harnessing of renew-

able energy resources,

reduced noise

Reduced packaging

material consumption

Recycling

Products and their environmental benefits

The market for diesel vehicles is currentlybooming, with Bosch alone supplyingaround 10 million diesel injection systemsworldwide in 2002. While the short-termfuture looks bright for diesel technology,we cannot overlook the possible increasedcompetition from alternative hybrid drivesand fuel cell systems in the longer term.The likely course of events suggests threemain drivers:• The need to make further reductions in

emissions as a result of more stringentexhaust gas standards in Europe and theU.S.

• The need to achieve the ongoing cuts inconsumption to which the European au-tomotive industry has voluntarily com-mitted itself.

• The need to satisfy customer expecta-tions and demand for an ever more en-joyable driving experience.

Reducing emissionsWe are confident that even the diesel en-gine will be able to meet future U.S. emis-sions standards. Progress has been madethanks to a steady flow of significant in-novations, many of them generated by

Automotive Technology

Bosch, and there are no indications thatthis trend will let up. Since the early 1990s,particulate emissions from diesel cars havethus been cut by 80 percent and emissionsof other substances such as carbon mon-oxide, oxides of nitrogen, and hydro-carbons have fallen by at least 90 percent.

Innovations in diesel engine technologyThree innovations announced by Bosch in2003 – the third generation of the com-mon rail injection system, the sinteredmetal particulate filter, and the Denox-tronic system – provide an excellent basisfor future progress. The new generation ofthe common rail system, which uses fastpiezoelectric inline injectors, promises tohelp deliver a further cut in emissions ofup to 20 percent. Putting the particulatefilter into series production in 2005 willhelp to move forward our preparations forU.S. exhaust gas standard US07, whichcomes into force in 2007 and is the nextbig challenge for diesel systems. Bosch De-noxtronic, a system for selective catalyticexhaust gas reduction, substantially im-proves exhaust gas values in commercialvehicles over 7.5 metric tons.

21

European exhaust gas thresholds for cars

HC + NOx (g/km)

Particulates (g/km)

Spark ignition engine: HC + NOx (from EU III on, separate limits for HC + NOxreplace the cumulative value previously used)

Compression ignition engine: HC + NOx (additional threshold for NOx:

0.50 g/km from EU III on; 0.25 g/km from EU IV on)

Compression ignition engine: particulates

0.3 0.6 0.9 1.2

0.05 0.10 0.15 0.20

Sintered metal dieselparticulate filter 5

EU I (1992)

EU II (1996)

EU III (2000)

EU IV (2005)

particulate matter

Reducing consumptionThe great strength of diesel direct injec-tion as compared with traditional gasolinemanifold injection is its 30 percent lowerfuel consumption. The average fleet fuelconsumption of the passenger vehiclessold in Germany has improved over thelast decade from 8.7 to 7.2 l/100 km, animprovement that coincides with and is toa large degree attributable to the growingmarket share of efficient high pressure di-rect injection diesel engines.

Innovations in spark ignition enginetechnologyThe spark ignition engine, however, hasnow started to close the gap in fuel con-sumption. Bosch’s DI-Motronic electronicgasoline direct injection system uses strat-ified charge technology to reduce fuel con-sumption by up to 15 percent over mani-fold injection. Other developments willmake gasoline direct injection even moreefficient in future. Downsizing, for exam-ple, will see conventional engines replacedby smaller turbo-charged engines that of-fer the same power but lower fuel consump-tion, while the direct start system, with itsefficient start-stop function, and the con-tinuing development of the DI-Motronic

system from wall-guided to spray-guidedcombustion promise further savings.

A look at the futureGiven the innovations currently planned,we expect further savings of 20 percent forgasoline engines and 15 percent for dieselengines. Overall, this means that moderninternal-combustion engines will be justas capable of meeting the strict U.S.thresholds of the future as hybrid drivesand fuel cell systems. A cost-benefit analy-sis of the various alternatives, however, re-veals some substantial differences. Reduc-ing the carbon dioxide emissions of acompact car by one percent involves anadditional cost of around one percent fora diesel or gasoline engine. According topresent calculations, the same improve-ment would cost approximately twice asmuch with a hybrid drive and at least fourtimes as much with a fuel cell system.Looking to the future, therefore, we canconclude that optimized spark ignitionand compression ignition engines will re-main the dominant source of motive pow-er for private vehicles for a long time tocome, with predicted market shares above90 percent until 2015 and still in the re-gion of 85 percent until 2025.

Environmental protection and products22

DI-Motronic highpressure injector forgasoline engines

1

DI-MotronicEngine management with theDI-Motronic system cuts fuelconsumption, especially underpartial load, by enabling a verylean air-fuel mixture. Its closed-loop exhaust gas recirculationcontrol system also reduces ni-trogen oxide emissions. Used incombination with a lean NOxcatalytic converter and a spe-cial catalytic converter controlsystem, DI-Motronic is also wellprepared for stringent futureNOx limits.

Fleet consumption 1990–2010

250

200

150

100

50

0

CO2(g/km)

Fuel consumption l/100km

Gasoline Diesel

2010Year 19951990 2000 2005

1995 (EU): 186 g/km(7.75 l/100km gasoline7.02 l/100km diesel)

–25%

8.7

5.8

5.0

3.75

7.8

5.2

4.5

3.372001 (EU): 168 g/km(7.00 l/100km gasoline6.34 l/100km diesel)

ACEA* voluntary commitment 2008: 140g/km

* ACEA: European Automobile Manufacturers Association

To convert liters per 100 km into miles per (U.S.) gallon, divide 235.21 by thenumber of liters per 100 km.

Power supply system efficiencyWork on developing and refining ourpower supply systems for motor vehiclesnever ceases. We concentrate here on threeprimary objectives: we have to improvethe capacity and efficiency of our systemsto keep pace with the growing number ofelectrical loads, we have to achieve furthercuts in volume and weight on account ofthe shrinking installation space available,and we have to ensure that both fuel con-sumption and costs continue to fall. Thenew LI-X generator, which will belaunched in 2004, serves as a good exam-ple of how to combine all three aims. Itsefficiency has been boosted to over 70 per-cent, its volume reduced by up to 20 per-cent and its fuel consumption cut by up to0.5 l/100 km. Not only that, but it is alsovery noticeably – 5 dB(A) – quieter in op-eration.

Electrical loadsThe energy demands of new safety sys-tems and features are such that enginethermal management and energy savinghave also become issues for the electricalloads. We are increasingly concentratingour efforts in this area on technical inno-vations such as electrical power steering,

electromechanical brakes, electromagneticvalve control, and heated catalysts. Thepurpose of engine thermal management isto optimize onboard thermal economy inenergy terms. Good engine thermal man-agement can trim fuel consumption by upto five percent, which of course also deliv-ers a corresponding drop in emissions.

Steering and transmission systemsThe new electric power steering system(Servolectric) completely eliminates theneed for hydraulic oil and, consequently,the need for complex hose assemblies.Moreover, depending on vehicle type,the Servolectric system consumes up to 85 percent less energy than hydraulic power steering, since power only has to be supplied when the driver actually steers.Electronic transmission control for auto-matic transmissions also helps to reduceenergy consumption. Adaptive shiftingstrategies make it possible to change gearat lower engine speeds.

23

Energy system

LI-X Generator

Electromagnetic

valve control

Electrically heated

catalyst

Electrical power steering

Electrical water pump

with engine thermal

management

Peak power

4,000 watt

4,000 watt

4,000 watt

1,500 watt

600 watt

Environmental benefits

of energy systems

Environmental benefits

Fuel saving of up to 0.5 l/100 km,

reduced emissions,

up to 5 dB(A) quieter

Fuel saving of 10%

Reduced emissions

Fuel saving of 3 to 6%

Fuel saving of 5%

LI-X generator withimproved efficiency1

SensorsSensors supply a wide range ofdata for vehicle managementand thus contribute to cleanerand more efficient driving. Knocksensors, for example, monitorfor irregular combustion in theengine. Controlling engine knockcan cut fuel consumption by upto nine percent. Another sensor,the oil condition and level sen-sor, makes it possible to leavelonger intervals between oilchanges, which obviously re-duces oil and filter waste.

Factory remanufacturingBosch has been remanufacturing usedparts on an industrial scale since the1960’s. Our facility in Göttingen, Ger-many, alone currently remanufacturesmore than 565,000 generators and startersto full working order every year by repair-ing worn-out parts and defective compo-nents or replacing them with originalspare parts. All remanufactured productsare tested before leaving the facility to en-sure that they are as good as new. Onceidentified with the eXchange brand seal,they carry the same warranty as newproducts. The international eXchangeProgram not only goes a long way towardimplementing the end of life vehicle direc-tive, but also fits in very well with thetrend toward keeping repair costs propor-tionate to the current value of the vehicleconcerned and helps us to meet our re-placement parts supply obligations. Airmass sensors and brake calipers wereadded to the remanufacturing program in2003. This expansion and its highly com-petitive performance have enabled theGöttingen plant to increase output overthe past year.

End of life automobile recycling The European end of life vehicle directivestipulates that, from 2006, at least 80 per-cent of the average weight of an end of lifevehicle must be made up of recyclable ma-terial and reusable components. This fig-ure rises to at least 85 percent if recoveredmaterial used for energy generation is in-cluded. Although these requirements areaimed first and foremost at manufactur-ers, the recovery and disposal of automo-bile components is plainly also an issuefor us as a supplier.

Bosch subsidiary Blaupunkt is conse-quently conducting a pilot project to in-vestigate options for removing and recy-cling the Travelpilot EX navigation sys-tem. The study uses a special softwarepackage to calculate the recycling and re-covery rates for the device and to establishhow easily it can be removed. One of theresults of the project will be a product re-cycling pass that tells the customer aboutthe materials used and the options for re-covery and reuse.

Environmental protection and products24

The eXchange ProgramThe eXchange brand seal iden-tifies remanufactured parts suchas generators, starters, and in-jection and braking systemcomponents. All parts bearingthis seal carry the same warran-ty as new products and are ide-al for keeping repair costs pro-portionate to the current valueof the respective vehicle.

Factory remanufacturing at the Göttingen plant 2001–2003(in thousands of units)

100 200 300 400 500 600 700

2003

2002

2001

Passenger car starters

Heavy-duty starters

Hot-wire air mass sensors

Generators

Ignition distributors

Brake calipers

The products of our Consumer Goodsand Building Technology Business Sectordeliver most of their environmental bene-fits in the home. Bosch refrigerationappliances, for example, help to reducedomestic energy consumption, while in-novations from the ThermotechnologyDivision seek to exploit the potential ofrenewable energy resources.

Environmentally-friendly heating technologyFor the Bosch Thermotechnology Divi-sion, providing safe, energy-saving, andenvironmentally-friendly products is oneof its main tasks. Efficient and environ-mentally-compatible technologies are thebasis of a significant competitive advan-tage and open up new business opportu-nities. Condensing technology, for exam-ple, deserves much of the credit for the di-vision’s growth in Europe. The productportfolio of Bosch’s new subsidiaryBuderus, especially its condensing and so-lar systems, further strengthens our posi-tion in this area.

Consumer Goods and Building Technology

Gas condensing heating systems cut ener-gy consumption by up to 40 percent overtraditional boilers, because they also makeuse of what would otherwise be wastedexhaust heat. They thus achieve excellentenergy conversion rates and also have verylow pollutant emissions. The Cerasmartand Cerapur condensing appliances haveboth received the Blue Angel seal from theGerman Federal Environmental Agency(UBA) in recognition of their low emis-sions and energy consumption(www.blauer-engel.de). We expanded ourrange of condensing heaters in 2003 to in-clude new higher capacity appliances.

The renewable energy visionThe Bosch Thermotechnology Divisionused the opportunity afforded by the ISHinternational trade fair for building andenergy technology in Frankfurt in 2003 topresent its vision of a renewable energyfuture with new products launched underthe Junkers brand. The range includesmore efficient solar collectors, heatpumps, and a complete package for lowenergy houses. Two new solar collectorsfrom Junkers have further enhanced the

25

Junkers Junkers

Buderus

Bosch gas condensing appliances

Blue Angel (environmental label RAL-UZ 61)

“for low emissions and energy consumption”

3 CERAPUR Types ZBR/ZSBR/ZWBR 3-16A,

ZBR/ZSBR/ZWBR 7-28A, ZBR 11-42A

3 CERASMART Types

ZB/ZSB/ZWB/ZBS 3-16A, ZWB 7-26A

3 SUPRAPUR Type KBR 15-60

Condensing technologyCondensing technology is par-ticularly efficient because itmakes use of exhaust heat. Theexhaust gases from the burnerare cooled to below the dewpoint and the additional heat re-leased on condensation of thewater vapor component of theexhaust is fed back into the sys-tem. This technique enablescondensing appliances toachieve nominal utilization ratiosof up to 110 percent dependingon thermal power. Old boilersachieve no better than 70 per-cent and standard appliances amaximum of 94 percent. Con-densing appliances can cut car-bon dioxide emissions by up to38 percent as compared withan old system too, so somecountries, including Germany,offer financial incentives to en-courage their use. The U.K. in-tends to legislate to ensure thatcondensing appliances areused for all new installationsfrom 2005.

Bosch solar collectors

Blue Angel (environmental label RAL-UZ 73)

“for high efficiency”

3 Flat plate collector Type FK 260

3 Flat plate collector DIAMANT Type SKS 2.1

3 Flat plate collector TOPAS Type K 108

3 Flat plate collector Type K 218

3 Flat plate collector Type Logasol SKN 2.0

3www.blauer-engel.de

division’s tried and tested solar program,which now includes products capable ofproviding up to 35 percent of the total en-ergy required for heating and hot water.Heat pumps are a particular attractive op-tion in areas not connected to the gas sup-ply. They are able to supply a house withheat and warm water throughout the yearand reduce carbon dioxide emissions by40 percent as compared with an oil-firedheating system.

Resource-friendly household appliancesA trailblazer in product-related environ-mental protection in its sector, our jointventure BSH Bosch und Siemens Haus-geräte GmbH has built its sustainabilitystrategy around the concept of efficientand economical household appliancesthat set the standard worldwide for re-source conservation. In the period be-tween 1990 and 2003, BSH managed toachieve cuts of more than 40 percent inthe average energy consumption of all ofits appliances, and of between 30 and 50 percent in average water consumption.Around three-quarters of the householdappliances produced by BSH in Germanyqualify for the European Energy Label’s“A” energy efficiency rating.

Innovations in garden productsShredders and hedge trimmers were thestar performers in the Power Tool GardenProduct Group in 2003 and were thus alsothe focal point of our innovative efforts.The silent shredder received the Blue An-gel seal in recognition of its low noiseemissions and also featured prominentlyin the “Aktion Blau” campaign launchedby the German Federal EnvironmentalAgency (UBA) in summer 2003 to cele-brate the 25th birthday of the Blue Angelseal. Associates of the Power Tool Divisionwere pictured with the silent shredder inthe Germany-wide photo campaign(www.aktionblau.de) that accompaniedthe event.

Power tool designSUN 21 is our Power Tool Division’s pro-gram to “protect nature and the environ-ment in the 21st century”. The extensivewebsite at www.sun21.de and events suchas the annual environmental day, whichcelebrated its tenth anniversary in 2003,provide information about the programnot only for associates, but also for suppli-ers, customers, and the public. The envi-ronmentally-oriented design of the divi-sion’s products also owes much to SUN 21.

Environmental protection and products26

BSH appliances in energy efficiency class* “A” 2001–2003(in percent)

75 1005025

Refrigerators 2003

2002

2001

Dishwashers 2003

2002

2001

Washing 2003

machines 2002

2001

Freezers 2003

2002

2001

*as per the European Energy Label

3www.aktionblau.de

3www.sun21.de

For example, the fourth revised edition ofthe Environmentally-Oriented Power ToolDevelopment guideline has recently beenreleased. The guideline’s aims include en-couraging the use of environmentally-compatible materials wherever possible.One exemplary result of the guideline isthe Bosch rotary hammer, which featureseasily removable plug-in connections, onestandard screw size, and clear labeling onthe plastic parts. The rotary hammer alsouses biodegradable lubricants and has nocomponents that contain cadmium.

Recycling center for power toolsGermany’s leading power tool manufac-turers set up a joint recycling system backin 1993. The initiative set up a recyclingcenter under the management of Bosch atWillershausen, the site of our power toolsservice center in Germany. A total of15 manufacturers representing 23 differ-ent brands and more than 80 percentof the market volume have now joinedthe system, which returns in excess of560 metric tons of old power tools to theraw material cycle every year. The systemalso covers gardening tools, digital meas-urement tools, and batteries.

Take-back systemPrivate users are able to return end of lifedrills or jigsaws to their specialist retailerfree of charge. Professional users can alsotake advantage of the system at no extraexpense, as the manufacturers involvedmeet all costs. The Willershausen recyclingcenter organizes the logistics, sorting, andrecovery. Virtually all parts are labeled,which makes it much easier to separate outthe 13 different types of material. Onceprocessed, the raw materials are eitherused to produce new power tools or soldon for other industrial applications.

Battery recyclingThe recycling center at Willershausen col-lected more than 100 metric tons of bat-teries in 2003, around 50 percent of whichwere returned together with the powertools collected. The number of nickel-cad-mium batteries returned has more thanquadrupled since the new German legisla-tion was introduced. The cadmium recov-ered from the batteries, 83 percent ofwhich are suitable for recovery, is used inthe manufacturing of new batteries.

27

Take-back of end of life power tools at the Willershausen service center

2001–2003 (in metric tons)

100 200 300 400 500 600 700

2003

2002

2001

Discontinuation of chromesurfacesOur security technology fire andsmoke detector units no longeruse components with yellowchromed surfaces, as thesehave been phased out in com-pliance with the requirements ofthe EU’s waste electrical andelectronic equipment and haz-ardous substance prohibitiondirectives. Instead, we are nowusing non-corroding alternativematerials or, in exceptional cases, galvanized surfaces. Thesmoke detectors are recyclableand can be sent for recovery viacertified specialist agents.

Industrial Technology is made up of thePackaging Technology, Metals Technology,and Bosch Rexroth AG divisions. In itsPackaging Technology Division, Boschmanufactures fill and seal machines, car-toning machines, and multi-bag packers,for use in the foodstuffs, confectionery,pharmaceuticals, and cosmetics sectors.The Metals Technology division, set up in2003, comprises casting and special steelproducts. Our subsidiary Bosch Rexrothoperates in the fields of industrial hy-draulics, electrical drives and controls, lin-ear motion and assembly technologies,pneumatics, and mobile hydraulics.

Hydraulics for wind power systemsOne area of application where BoschRexroth’s hydraulic control technologydemonstrates its value is the generation ofrenewable energy. Visitors to the 2003HUSUMwind trade fair in Schleswig-Hol-stein saw us demonstrate our comprehen-sive expertise in the drive, control, and reg-ulation technology of wind power systems.With its broad-based range of gears and hy-draulic modules, Bosch Rexroth is playing a

Industrial Technology

defining role in the further development ofeco-friendly wind power, and in making itmore efficient: generator gears, yaw gears,pitch gears and drives, and braking unitsprovide complete solutions for all the rota-tional and braking movements in windpower plants.

“Whispering” hydraulicsBosch Rexroth is looking to solve a classicdilemma with its “whispering” hydraulicsrange: the performance of hydraulic sys-tems can only be increased by boostingthe pressure applied, something that is in-evitably linked with higher noise levels.Thanks to computer-aided modal analy-sis, it has now proved possible to harmo-nize and ultimately reduce the overallnoise and vibration produced by the indi-vidual components. The year 2003 saw usaugment our wide-ranging program ofnoise-reduced power units and valves byintroducing a new generation of extra-silent axial piston pumps. Compared withprevious models, they achieve greater effi-ciency while cutting noise levels sharply,by up to 20 dB(A).

Environmental protection and products28

“Green” energy generation with hydrauliccontrol technology from Rexroth1

1

2

3

1 Pitch drive for setting angleof rotor blades

2 Drive train brake for rotorbraking

3 Yaw adjustment to allow forchanges in wind direction

The pitch drivePitch drives adjust the rotorblades of wind turbine genera-tors according to the windstrength or the mains capacity.When the wind is light, thepitch drive swivels the rotorblades flat against the wind, inorder to maximize the powergenerated. In strong winds, itturns the blades far enough outof the wind that they produceonly the rated output, thus pre-venting the drive train or gener-ator being overloaded. And instormy conditions, the pitch drive “feathers” the bladesedge-on to the wind direction,and the system shuts down.

Packaging optimizationThe majority of the Packaging TechnologyDivision’s customers are in the foodstuffsand pharmaceuticals sectors. The technol-ogy used for packaging milk and choco-late or tablets and capsules must first andforemost guarantee the quality and pre-servation of the contents. As well as pro-tecting the product, however, packagingtechnology also needs to minimize thematerial and energy consumed. Ongrounds of cost alone, the optimizing ofpackaging material is a key aspect in thedesign of cartoning or sealing machinery,for instance. We already fully exploit mostof the available potential here, so that in-novations can achieve only marginal im-provements.

The new version of our tried and testedType SVE 2510 bag form, fill, and seal ma-chine is an exception to this rule, however,as it allows us to save relatively high levelsof packaging material. Thanks to strongercrimps, the bags produced are stable

enough to stand on shelving, renderingany further card packaging redundant.They are employed primarily in the food-stuffs and confectionery sector.

Metal products from recycled scrapOur Metals Technology Division producesmost of its special steel and cast metalcomponents from recycled material. Thespecial steel products are almost entirelymade from recycled scrap, while castproducts, such as the metal material forbrake disk manufacturing, mainly consistof steel scrap, return scrap, and castingswarf from our own mechanical process-ing operations. Among other areas, specialsteel and cast products are employed inthe construction of power-generatingplant (turbine housings and shafts).Drinking water supply systems and waste-water disposal are other applications inwhich our cast iron pipe products are em-ployed.

29

The manufacture of a cast boiler commences with the smelt-ing procedure, which predominantly makes use of castingscrap, making possible a closed-loop recycling process. The parts of the boiler are then individually cast. 5

30

Global environmentally-compatiblemanufacturingA steering committee coordinates the worldwide implementation of environmental policy

at all Bosch’s manufacturing sites. Some topical examples from the regions will serve to

illustrate the broad span of production and site-related environmental protection involved.

They typify our high standards in the fields of energy and waste management, waste-

water treatment, and the utilization of rainwater, site contamination and emission protec-

tion, hazardous substance management, and distribution. Awards for achievements in

environmental protection and our participation in World Environment Day are evidence

of the great commitment demonstrated “on the ground.”

UNEP’s World Environ-ment Day 2003 promptedthe plants belonging to theIndian regional company MICO to organize a widerange of environmental pro-tection activities.

7

Rainwater utilization in AnsbachOur new development center in Abstatt,Germany, is not the only one of our facili-ties to protect valuable water resources byutilizing rainwater. At another Germanplant in Ansbach, for example, we use it tocool the power generation and manufac-turing plants. This is why rainwater collec-tion plant was installed while expandingthe heat exchanger system in 2002, allow-ing the use of around 8,000 cubic metersof precipitation annually. The investmentwill pay for itself in five years, bringingannual savings on water costs totalingnearly € 18,000.

Energy requirements in LohrSome 20 percent of Bosch Rexroth’s entireglobal energy needs are attributable to asingle site, with iron-smelting operationsat the foundry of the facility in Lohr, Ger-many, consuming 90 gigawatt hours ofenergy a year. New medium frequencyfurnaces have been in operation theresince mid-2003, bringing to an end the200-year era of coke-fired cupola fur-

naces. Instead of coke, electricity now pro-vides the power needs of the new fur-naces, significantly reducing not just dustemissions, but also the levels of fumes andnoise produced at Lohr. The site has adedicated project group to investigate en-ergy-saving and CO2 reduction. It hasdrawn up optimization measures aimed atimproving heat insulation for the build-ings, utilizing waste heat in the produc-tion of compressed air, as well as intro-ducing energy-saving lamps for lightingsystems.

Dry machining in BambergBosch has already successfully switched todry machining at a number of its sites.The benefits are obvious, since drilling,milling and turning can all be performedwithout the need for cooling lubricants.This also does away with the laboriouspreparation of these lubricants, and thelarge plants required. Several automaticlathes at the Bamberg plant in Germanyhave been converted in the course of on-going upgrading.

31

Energy consumption of Bosch manufacturing sites in Europe 2001–2003*(in megawatt hours)

3,250,000650,000 1,950,0001,300,000 2,600,000

Electricity 2003

2002

2001

Natural gas 2003

2002

2001

Heating oil 2003

2002

2001

District 2003

heating 2002

2001

Smelting iron in the newmedium frequency furnacesat Bosch Rexroth 5

Europe

* 2003 includes Buderus AG for the first time

Waste and hazardous substance management in BursaThe three plants which manufacture com-ponents for the automotive industry inBursa, Turkey, operate according to Bosch’sintegrated management system, and in2003, their local management systemswere certified to ISO 14001. Waste andhazardous substance management at-tained the same high standard. The year2003 saw the installation of a new surfacegas container and storage tank at thediesel systems plant, while a new wastestorage facility went into operation at thechassis systems facility. In the latter, soiland groundwater are protected by the spe-cial floor lining, enclosed leakage chan-nels, and the separate collection of oil.

Substitution of CHCs in TienenBy 2005, all sites around the world musthave completed the replacement of chlori-nated hydrocarbons (CHCs), which dam-age the ozone layer. The Belgian facility inTienen is one example, having completedthe switch to solvent-free alternatives inJanuary 2003, enabling the closure of itslast CHC plant. Until then, rubber pads in

the local windshield wiper manufacturingshop had had to be pretreated with sol-vents, using some 50 metric tons of CHCsevery year.

Pollution remediation at EngelsThe removal of residual contamination atour sites is a continuous process. Ninetypercent of the manufacturing sites in Eu-rope have already been investigated forresidual pollution. Where necessary, reme-diation measures have been initiated. Themost frequent contaminants identified bythe analyses included oils, CHCs, andheavy metals. This was true, for example,of our spark plug factory in Engels (Rus-sia), where soil contaminated with oil wasrecultivated biologically using bacteriaand mineral supplements. In its modern-ization of the plant itself, Bosch has setbenchmarks in Russia, for example, a newneutralization system featuring a closedwater purification loop has allowed thepreviously high water consumption to becut by nearly 90 percent.

Global environmentally-compatible manufacturing32

Waste volumes from Bosch manufacturing sites in Europe, 2001–2003*(in metric tons)

325,000 390,00065,000

* 2003 includes Buderus AG for the first time

130,000 195,000 260,000

Waste for recovery 2003

2002

2001

Waste for disposal 2003

2002

2001

Biological soil clean-up at the Engels site 3

TurkeyWith a workforce of around6,600 at four manufacturingsites in Turkey, Bosch is one ofthe country’s largest non-in-digenous employers. The year2001 saw the inauguration of acenter of competence for dieselfuel injection and a new manu-facturing plant for unit injectorsat the Bursa facility. Bursa is afast-growing site, currently pro-viding employment for some3,000 people.

Distribution optimizedOver recent years, truck-based transporta-tion in Germany has been reduced withthe aid of the regional shipping compa-nies. In Japan too, Bosch is pursuing thegoal of minimizing traffic-related CO2emissions. Our aim for 2002 was to cut fuel consumption by 10 percent comparedwith the previous year. By optimizingtransport routes, both to customer loca-tions and between the plants, Bosch actu-ally managed to exceed its CO reductiontargets by an impressive 30 percent. Thanksto the reuse of the wooden pallets used forfreight purposes, transport-related wastefell by half.

Soil vapor remediation in Higashi MatsuyamaInvestigation of the groundwater at the twoJapanese facilities in Higashi Matsuyamarevealed contamination with volatile chlo-rinated organic compounds such as tri-chloroethylene. Remediation measureswere immediately set in motion, using aprocedure whereby the groundwater and

Asia, Africa, Australia

soil vapor are first extracted by suction,and then cleaned by means of activated-charcoal filters (stripping).

Water treatment in ShanghaiThe technology center of our joint ven-ture United Automotive Electronic Sys-tems Co. Ltd. in Shanghai leads the field inChina in exhaust emission tests, which arecarried out on behalf of automobile man-ufacturers. The site also plays a pioneeringrole on the water conservation front, col-lecting recycled water in a reservoir andusing it to irrigate the site’s grassed areas.In 2003, this initiative saved more than7,500 cubic meters of water, around two-thirds of the fresh water required for theplanted areas. The Shanghai site was firstcertified to ISO 14001 as long ago as 1998.

33

Wastewater treatment reduces freshwater requirements at many sites. Atthe Technical Center in Shanghai, thewater collection reservoir forms part ofthe garden layout.

7

JapanIn its third-largest overseas mar-ket, Bosch operates 25 sitesemploying some 12,000 people.In Japan, we were the first sup-plier to provide indigenous au-tomobile manufacturers withsecond-generation common railsystems. Yokohama is the siteof the Bosch Group’s largestoverseas research and develop-ment center for diesel andgasoline systems.

World Environment Day in IndiaEvery year, some regions of India are con-fronted with serious water supply prob-lems, and so the economical and efficientuse of water is a vital issue for our Indianregional company Motor Industries Co.Ltd. (MICO), which operates four manu-facturing facilities. For MICO, the UnitedNations’ World Environment Day, heldunder the banner “Water – Two billionpeople are dying for it” on June 5, 2003,was the ideal opportunity to launch an in-formation campaign at all its plants.

“Water – every drop counts” – the campaignTo accompany the campaign, the compa-ny printed around 10,000 copies of the in-formation booklet “Water – every dropcounts,” and distributed them to all as-sociates. Posters were put up in offices,manufacturing shops, and staff restau-rants as part of a month-long awareness-raising initiative. The plants used WorldEnvironment Day and the accompanyingcampaign as the framework for a wholerange of activities. Plant management inBangalore received its ISO 14001 certifi-cate at a high-profile official ceremony,and the facility in Nashik organized a tree-

planting drive. Banners over the entrancesto the Jaipur plant also reminded the localpopulation about the activities surround-ing World Environment Day, while in Na-ganathapura, the occasion gave rise to aphoto and “good ideas” competition cen-tering on water conservation. Duringlunch breaks at the latter facility therewere street theater performances aimed atraising associates’ awareness of the need toconserve precious water, and activitiesculminated in the distribution of cottonbags bearing the slogan of World Environ-ment Day to the plant’s workers.

Saving water in BangaloreDespite the growth in its sales during theperiod, the plant in Bangalore succeededin cutting its consumption of fresh waterby a third between 1998 and 2003, from855 to just 570 cubic meters a day. The sitemakes use of many advanced wastewatertreatment techniques. For example, theconditioning of wastewater from manu-facturing and sanitation allows it to be re-circulated for reuse many times over.

Global environmentally-compatible manufacturing34

Water consumption at MICO manufacturing sites in India, 2001–2003(in cubic meters)

500,000125,000 250,000 375,000

From public 2003

supply 2002

2001

From own 2003

sources 2002

2001

Each day, wastewater treatment plantsat all the plants belonging to our Indianregional company MICO process morethan 600 cubic meters of wastewater for reuse. As here in Bangalore, theycontribute to substantial savings in freshwater requirements.

7

Australia and South AfricaBosch operates just one facilityin Australia and South Africa re-spectively. As in Germany, cli-mate protection is an importantobjective here too: accordingly,the Australian body electronicsplant in Clayton is taking part in“Greenhouse Challenge”, thegovernment’s CO2 reductionprogram. The South Africanplant at Brits, which produceselectronic control units,starters, and ignition coils,gained ISO 14001 certificationin 2002.

“Zero waste” in BrazilThe complete recovery of all waste is theaim of “Descarga Zero,” or “zero waste”,the environmental program conducted byfour sites in Brazil and one in Argentina.Since 2000, we have been implementing awide-ranging raft of measures. These in-clude both organizational controllingmeasures and cost-center-related wastedocumentation. We record all waste flowsand stringently separate waste. Liquidwaste such as emulsions or chemical bathagents are processed, and mineralbearingwaste is reused for road construction.

We channel metallic raw materials into re-covery processes, while wood waste is re-cycled or thermally reprocessed. Interimfigures for the period from 2000 to 2002reveal a 57 percent reduction in waste volumes passed on for landfill, and planscall for a further 50 percent cut by 2005.In recognition of its waste managementachievements, the Curitiba plant has sev-eral times won the environmental prizeawarded by a trade journal.

Environmental prize for San Luis PotosíIn 2002, the Mexican environmental au-thority PROFEPA awarded the country’sSan Luis Potosí site its Clean IndustryAward. The body particularly lauded thecomprehensive environmental programdrawn up following an environmental au-dit, while the sanitary wastewater plantand the remediation of oil-contaminatedsoil earned praise too. The site is also evi-dence that improved environmental pro-tection can have a positive effect on occu-pational safety as well: the plant has beenaccident-free for three-and-a-half years.

Occupational safety prize for AlbionIn 2003, the Albion site became Bosch’sfirst U.S. plant to receive the OSHA StarAward, a prestigious award recognizingoccupational safety measures. The Occu-pational Safety and Health Administra-tion (OSHA) makes the award to compa-nies exceeding its standards on their owninitiative. The effectiveness of these stan-dards is borne out by the fact that compa-nies participating in the OSHA occupa-tional safety program record up to 80 per-cent less downtime.

35

The Americas

» The multinational corporations in Brazil are avery important fraction of the local industry andare treated like Brazilian companies. What wedo expect from them is that the technology theydevelop and use in their mother countries wouldbe transferred through a process of building upthe quality of local companies – with local engi-neers and local people. What we do expect aswell is that multinational companies will alsobring their environmental standards. My impres-sion is that nowadays many multinationals havealready decided that this is a good policy forthem to follow.

Prof. Dr. José Goldem-berg, Secretary for theEnvironment, São PauloState (Brazil)

BrazilAfter the U.S., the BoschGroup’s second largest over-seas market is Brazil, where it isone of the leading suppliers ofvehicle equipment. The largestfacility in Brazil, Robert BoschLtda, is headquartered inCampinas and there are furthermanufacturing facilities in Aratú,São Paulo, and Curitiba, provid-ing employment for some10,200 people.

«

36

Corporate citizenship

Bosch acknowledges its obligation to play an active role in society – an obligation

stemming from its founder, its corporate constitution, and its values. Our commercial

success directly benefits the community: the annual dividend of the Bosch Group funds

the Robert Bosch Foundation, whose charitable projects help to overcome social chal-

lenges. We place great importance on harmony between our entrepreneurial actions

and the interests of society as a whole. Bosch and its associates involve themselves

actively in social and cultural projects at many sites across the world.

The Robert Bosch Founda-tion translates its founder’swill into modern projects. Itencourages young peopleto assume responsibility. 3

The Robert Bosch Foundation seeks to develop new approaches to the issues andproblems confronting society by devisingprogressive concepts that are put into ef-fect in model development projects in fiveprogram areas. Apart from the resourceschanneled into the foundation’s ownRobert Bosch Hospital and healthcareprojects, the majority of the funds madeavailable in 2003 went to projects to pro-mote international understanding andinitiatives focusing on youth, education,and citizenship.

International understandingThe Foundation focuses on a number ofobjectives, including fostering relationsbetween people in Germany, the U.S.,Turkey, France, and the nations of centraland eastern Europe. In 2003, the Founda-tion sought to strengthen fellowship be-tween German towns and communitiesand their counterparts in the Czech Re-public and Poland, setting up a competi-tion focusing on partnerships betweencommunities and their citizens. This gaverise to cross-border projects involving en-

vironmental groups, youth clubs, and ed-ucational institutions, which the founda-tion supported with grants of € 265,000last year. In 2003, it hosted its first event inthe new representative office of RobertBosch GmbH in Berlin, devoted to the re-lationship between Europe and the U.S..More than 200 guests gathered to discuss“Tomorrow’s Europe in the transatlanticcontext” with former German PresidentRichard von Weizsäcker and Robert BoschFoundation scholars.

Citizenship for young peopleThe Robert Bosch Foundation deliberate-ly targets young people by setting upscholarship programs and competitions,such as the “Youth debates” contest. As animportant prerequisite for genuine partic-ipation in civic society, students nation-wide hone their skills in public speakingand debating. At a nation