EDAG Engineering : Group Sustainability Report 2025

About this update from Edag Engineering Group Ag

GROUP SUSTAINABILITY REPORT 2025 EDAG GROUP GROUP SUSTAINABILITY REPORT 2025 General Information 4 ESRS 2 General Disclosures 4 Environmental Information 25 ESRS E1 Climate change 25 Information in accordance with Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) 46 ESRS E2 Pollution 51 Social Information 53 ESRS S1 Own workforce 53 Governance Information 83 ESRS G1 Business conduct 83 Annex 88 Report of the statutory auditor 103 List of Abbreviations 108 ‌GENERAL INFORMATION ESRS 2 GENERAL DISCLOSURES Basic Principles Basic Principles for the Preparation ESRS 2 BP-1 General basis for preparation of the Sustainability Statement This Group Sustainability Report (hereinafter referred to as Sustainability Report) has been prepared based on the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS), as applicable in accordance with Directive (EU) 2022/2464 in conjunction with Regulation (EU) 2023/2772 as standards for sustainability reporting in the EU. This also includes the information required under Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) and the delegated acts issued in relation to this. With this Sustainability Report, the EDAG Group meets the legal requirements under German and Swiss law. This also includes its obligation to prepare an annual report on non-financial matters in accordance with Art. 964a of the Swiss Code of Obligations. Further, the Executive Management has authorized the auditing company Deloitte GmbH, Cologne (Germany) to audit the Sustainability Report, in order to obtain limited assurance. This Sustainability Report is published as a separate report and is not included in the EDAG Group's Management Report. Barring this exception, all other requirements of the CSRD and ESRS have been taken into account. As in the previous year, S1 metrics and the quantification of environmental risks and opportunities were omitted due to the postponed implementation dates under Regulation (EU) 2025/1416 (the so-called "quick-fix"). Due to the fact that the CSRD Implementation Act (CSRD-UmsG) was still not implemented in Germany in 2025, there is still no legal obligation for EDAG Engineering Group AG to apply the CSRD for the 2025 financial year. The legal framework for non-financial (group) reporting obligations established by the CSR-RUG of 2017 therefore continues to apply to EDAG Engineering Group AG for 2025. As a consequence, EDAG Engineering Group AG - by virtue of its listing on the Frankfurt Stock Exchange as a large capital market-oriented corporation and parent company of the EDAG Group - is still obliged to provide non-financial (group) reporting in accordance with Directive (EU) 2014/95 (NFRD) for the 2025 financial year. In German law, this has been implemented in §§ 289c to 289e / §§ 315b, 315c, and § 340a para. 1a / § 340i para. 5, and § 341a para. 1a / § 341j para. 4 of the German Commercial Code (HGB). Since 2024, the EDAG Group's sustainability report has been prepared in accordance with the CSRD and ESRS as a framework within the meaning of § 289d of the German Commercial Code (HGB). The Sustainability Report takes the following ESRS standards into account (issue-specific standards of particular relevance to EDAG are highlighted in dark gray): Cross-sectional standards ESRS 2 General Disclosures ESRS 1 General Requirements Cross-sector topical standards Environment Social issues Governance E1 Climate change S1 Own workforce G1 Business conduct E2 Pollution S2 Workers in the value chain E3 Water and marine resources S3 Affected communities E4 Biodiversity and ecosystems S4 Consumers and end users E5 Resource use and circular economy By applying the ESRS, this report complies with the requirements of § 289c of the German Commercial Code (HGB) in the following sections: Aspects of the non-financial statement in accordance with § 289c(2) of the German Commercial Code (HGB) Section in the Group Sustainability Report Environmental Issues ESRS E1 Climate change ESRS E2 Pollution Information in accordance with Article 8 of Regulation (EU) 2020/852 (Taxonomy Regulation) Employee Issues ESRS S1 Own workforce Social Issues ESRS S1 Own workforce Observation of Human Rights ESRS S1 Own workforce ESRS G1 Business conduct Combating Corruption and Bribery ESRS G1 Business conduct The Sustainability Report has been prepared on a consolidated basis for the period from January 1, 2025 to December 31, 2025, and includes the scope of consolidation as specified in the Annual Report for 2025. With the parent company EDAG Engineering Group AG, Arbon (Switzerland), the EDAG Group is one of the largest independent engineering service providers. With a global network of some 30 international subsidiaries, it handles projects in the fields of mobility, defense, industry, and public services in the Vehicle Engineering, Electrics/ Electronics, and Production Solutions segments. The entire group of companies will hereinafter be referred to as EDAG Group or EDAG. The Sustainability Report covers our own business activities and our upstream and downstream value chain. No important adjusting events took place after the reporting period. The EDAG Group has made no use of the option to omit certain information relating to intellectual property, know-how or results of innovation. ESRS 2 BP-2 Disclosures in relation to specific circumstances Time horizons When preparing the Sustainability Report, the EDAG Group has specified the following time horizons, as defined in ESRS 1.77: For the short-term time horizon: the period which the company has defined as the reporting period in its financial statements; in this case the 2025 reporting year. For the medium-term time horizon: from the end of the short-term reporting period defined in (a) up to five years; For the long-term time horizon: more than 5 years. Estimates for the value chain The parameters presented in this Sustainability Report include data on the upstream and downstream value chain, which was determined using estimates. This applies to the KPIs in the topic-specific standard E1 Climate change. The relevant KPIs for which estimates have been made for the upstream and downstream activities are presented in chapter E1 Climate change. This also includes a description of the underlying assumptions, and the resulting accuracy. Data quality The EDAG Group has set itself the goal of maintaining and continuously improving the high standards of completeness, reliability and hence also quality of the sustainability/ESG data collected throughout the Group. To ensure that sustainability/ ESG reporting uniformly covers the entire group of consolidated companies, we have defined the following quality hierarchy for the data collection process: Primary data: Actual data from direct measurements (on site if necessary), internal personnel data or third-party notifications. These are the preferred data sources, and have top priority Secondary data: Data calculated on the basis of existing information from databases (e.g. EPA, DEFRA) or adjusted data from previous periods, invoice volumes or statistics. Where no primary data is available, this type of data collection is given priority Estimated data: Calculations using industry-specific or scientifically based estimation techniques, or other methods expected to produce a data quality which is as reliable as possible. This may include projections based on experience or estimates. This type of data collection is used when neither primary nor secondary data is available The basic principles, assumptions, and calculation methods for the key figures are described in the relevant topic-specific standards under the respective key figures. In the 2025 reporting year, the EDAG Group was able to calculate emissions from air travel more accurately for the first time, thus improving data quality. The methodology is described under E1-6 in the notes to Scope 3.6. The prior-year figures have not been revised, as the data calculated using the new methodology is not available for previous periods. Disclosures stemming from other legislation or other sustainability reporting standards In addition to the information required under the CSRD, ESRS and Article 8 of Regulation EU 2020/852 (Taxonomy Regulation), this report contains information relating to the requirements of Swiss law. The following table contains the information that has been included on account of other legal provisions. Information Legal provision Information on combating corruption Art. 964b of the Swiss Code of Obligations Sustainability Governance ESRS 2 GOV-1 The role of the administrative, management and supervisory bodies As a general rule, responsibility for all material sustainability-related matters in the EDAG Group lies with the Board of Directors, which in turn has delegated this responsibility to the Group Executive Management. Within the Group Executive Management, the CFO is responsible for sustainability issues and for monitoring the impacts, risks and opportunities, and for developing the necessary internal control system (ICS). In this context, he instructs the individual departments to implement the necessary measures. In its supervisory capacity, the Board of Directors is regularly informed of sustainability matters and the associated sustainability-related targets by the CFO. This also includes information on the progress of the defined sustainability goals, which are determined in consultation with the relevant experts and topic owners representing stakeholders. The members of the Board of Directors have the knowledge and experience necessary to properly exercise the overall management of the EDAG Group and perform their supervisory duties. Further, the members of the Group Executive Management have the knowledge and experience necessary to carry out their duties properly. The Board of Directors and the Group Executive Management possess the necessary expertise to address both the strategic and risk-related components of sustainability. The Board of Directors and the Group Executive Management have the necessary skills and expertise - acquired by taking advantage of training programs for example -relating to the impacts, risks and opportunities of the EDAG Group set out in the sections on the topic-specific standards under ESRS 2 SBM-3. Relevant fields of competence include international strategy development and implementation know-how, IT and digitalization, legal and compliance, risk management and accounting. Their many years of experience in an international, multidisciplinary corporate environment is the foundation on which the expertise of the administrative and management bodies is built, with regard both to the abovementioned fields of competence and to aspects of business conduct. As of December 31, 2025, the Board of Directors and the Group Executive Management are divided into executive and non-executive members as follows, unchanged from the previous year: Number of executive and non-executive members Board of Directors Group Executive Management Number of executive members 0 2 Number of non-executive members 5¹ 0 1 Manfred Hahl was a member of the Board of Directors until June 25, 2025 On June 25, 2025 Frank Leidenberger was elected to the Board of Directors. On December 31, 2025, the Board of Directors comprised four male members and one female member, and the Group Executive Board comprised two male members. This results in the following percentages by gender, unchanged from the previous year: Gender diversity Board of Directors Executive Management Percentage, male 80% 100% Percentage, female 20% 0% There is no employee representation at EDAG Engineering Group level (holding level). Like in the previous year, 100 percent of the members of the Board of Directors are independent within the meaning of ESRS 2.21e), based on No. 15 of the Swiss Code of Best Practice for Corporate Governance. ESRS 2 GOV-2 Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies The Board of Directors meets at least six times a year. Whenever necessitated, the CFO, at regular meetings held during the financial year, reports to the Board of Directors and its committees on the implementation of due diligence obligations in the field of sustainability, and on the results and effectiveness of the strategies, measures and goals adopted. Regular meetings are held, in which the CFO is kept informed by each of the departments in direct contact with our stakeholders, and any sustainability-related action needing to be taken is identified at these. The basic strategic direction of the EDAG Group is discussed in annual strategy meetings. Where necessary, this also includes sustainability matters. The Group Executive Management monitors implementation of the strategy. The CFO has particular responsibility for sustainability. The CFO regularly consults with the Board of Directors on transactions of significance to the Group and on the fundamental structure of the risk management process. This might also involve possible compromises with regard to the impacts, risks and opportunities if these are affected in different ways. A list of the impacts, risks and opportunities addressed by the Board of Directors and Group Executive Management during the reporting period is included in the topic-specific standards in section ESRS 2 SBM-3. ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes The members of the Board of Directors receive a fixed compensation. This is not calculated on the basis of specific sustainability-related targets and/or impacts. Nor are sustainability-related performance metrics or climate-related considerations included. The compensation of the members of the Group Executive Management consists of a fixed compensation and a variable performance and success-based compensation ("variable compensation"). The variable compensation is based on the level of achievement of specific predefined targets for a one-year performance period. The targets can depend by at least 50 percent (i) on financial performance indicators - i.e. revenues, EBIT, net income - and by up to another 50 percent (ii) on the achievement of special projects, other company-related and/or individual target values, and also on financial key figures. In particular, goals for sustainable corporate development can also be taken into account appropriately. At the proposal of the Nomination and Compensation Committee, the Board of Directors is responsible for the selection and weighting of target categories at its discretion. The level of the variable compensation is determined by the Board of Directors for each member of the Group Executive Management as a percentage of the fixed compensation, and may not exceed an amount equal to 100 percent of such compensation. The targets for each member of the Group Executive Management are determined annually by the Board of Directors, at the request of the Nomination and Compensation Committee, at the beginning of the one-year performance period. Unlike for the previous year, no sustainability-related KPIs were incorporated into the compensation policy as part of the variable compensation for the 2025 financial year. Nevertheless, the established initiatives and measures will continue without change. ESRS 2 GOV-4 Statement on due diligence The following table shows where the core elements of the EDAG Group's due diligence process for people and the environment can be found. Core elements of due diligence Paragraphs in the Sustainability Report Embedding due diligence in governance, strategy and business model Engaging with affected stakeholders in all key steps of the due diligence process ESRS 2 GOV-2, ESRS 2 GOV-3, ESRS 2 SBM-3 ESRS 2 GOV-2, ESRS 2 SBM-2, ESRS 2 IRO-1, ESRS 2 IRO-1, ESRS E1-2, ESRS S1-1, ESRS S1-4, ESRS S1-5, ESRS G1-1 Identifying and assessing adverse impacts ESRS 2 IRO-1, ESRS E1 in conjunction with ESRS 2 SBM-3 Taking actions to address these adverse impacts Tracking the effectiveness of these efforts and communicating ESRS E1-3 ESRS E1-3 ESRS 2 GOV-5 Risk management and internal controls over sustainability reporting The EDAG Group is among the companies applying the CSRD and ESRS standards for the first time for the 2024 reporting year, and publishing the results. The information and data contained in this Sustainability Report was collected in the course of a sustainability-related process. It is the responsibility of the Group Sustainability Reporting team, headed by the Vice President Accounting & Tax, to maintain a consolidated data model for the entire group. This process structures data acquisition, provides the data transparency and traceability required for our reporting and management, and takes the terms, formulas and key variables such as emission factors into account in accordance with the greenhouse gas protocol. Risks associated with the preparation of this Sustainability Report, particularly with regard to data collection and analysis, have been minimized by implementing controls. This was primarily ensured by carrying out plausibility checks and reviews, in which the administrative, management and supervisory bodies were involved. A materiality-oriented risk prioritization with regard to sustainability reporting forms part of the regular exchange between the employees involved in the reporting process and the Group Executive Management. The Group Executive Management and Audit Committee are regularly informed of any material potential weaknesses in controls. Any risk mitigation strategies that may be required are developed, approved and implemented by the Group Executive Management. Strategy, Business Model and Value Chain ESRS 2 SBM-1 Strategy, business model and value chain Business model and value chain With the parent company, EDAG Engineering Group AG, Arbon (Switzerland), the EDAG Group is one of the largest independent engineering service providers. The section Basic Information on the Group in the Management Report included in our Annual Report for 2025 includes a presentation of our business model, which is derived from our vision, our business segments and the departments assigned to them, and also addresses relevant sustainability issues in the current reporting year. In its 2025 Annual Report, the EDAG Group presents revenue figures for the most significant markets and customer groups for the 2025 reporting year. Since these figures cannot be allocated to the ESRS sectors, total revenue from third parties in the amount of €713,991 thousand and the business segments (Vehicle Engineering, Electrics/Electronics, and Production Solutions) are allocated to the ESRS sector "Other". Within the value chain, the main activities of the EDAG Group focus on the product design and development phases. The EDAG Group supports customers in the planning, design, optimization and implementation of efficient and resource-saving production processes and plants. As an engineering service provider, our employees are our most important input factor. They are crucial to the company's success, particularly when it comes to their professional and intellectual abilities. On the reporting date of December 31, 2025, 8,303 employees were employed by the EDAG Group: 5,205 in Germany and 3,098 in the rest of the world (previous year: 9,133 employees: 6,010 in Germany and 3,123 in the rest of the world). Our global network and our international subsidiaries ensure our local presence for our customers. The customers are B2B customers operating in particular in the following sectors: Automotive and automotive suppliers, motorcycle, commercial & off-road vehicles, special-purpose vehicle, bicycle & pedelec, aviation, rail, the semiconductor industry, chemical industry, other industries, industrial solutions and defence. For the most part, we supply our B2B customers with datasets, but also with systems, devices, prototypes and low-volume series. The EDAG Group's upstream value chain includes Every stage of the value chain of the goods purchased by EDAG, from the extraction of raw materials to delivery to EDAG (e.g. components for prototypes, operating and office equipment) and Every stage of the value chain of the services purchased by EDAG (e.g. cloud storage space, hardware and software maintenance). Company vision and strategy Sustainability is of special importance to our business model, our value chain, and therefore to the entire EDAG Group. This involves both long-term business alignment and the integration of ecological and social aspects into the management system, and is part of our corporate culture which is built upon shared values such as trust, transparency, reliability and fairness in dealings with our business partners. We see sustainability as a contribution towards safeguarding the future of our company and towards economic and social development. The special importance we attach to sustainability is reflected in our vision: "Working together to shape the mobility and industry of the future. Efficiently. Safely. Sustainably." This gives us a clear guiding principle for the future, the compass of our company, our mission. Accordingly, EDAG pursues the following strategic goals: A talent factory for all employees A competence center for new technologies and solutions An agile market and future-shaping company A source of inspiration and vision based on clear values An economically, ecologically and socially sustainable engineering service provider Sustainability in its economic, ecological and social dimensions is therefore an elementary component of EDAG's corporate strategy. The individual characteristics are interlinked, and form a basis for sustainable corporate management. The core element of our strategic concept is to be our customers' first choice, as an efficient, innovative and sustainable engineering service provider. We plan to achieve this by further diversifying our customer base in the direction of industrial solutions and by expanding our software organization on the one hand, and by continuing with the internationalization of the EDAG Group on the other, particularly in terms of sales, by means of a further diversification of our revenues. In this way, we aim to expand our customer base, while strengthening our presence in various countries. Production-wise, we are accelerating our best-cost strategy, i.e. a cost-efficient employment structure oriented towards our customers' locations. Our sustainability goals are formulated in line with the strategic concept applicable throughout the Group. Unless stated otherwise, they apply to the EDAG Group as a whole. The overall strategic alignment is being further operationalized within the EDAG Group. This process is carried out in both directions - bottom-up and top-down - to ensure that the specific conditions in individual countries and fields are taken into account in the same way as the overall Group strategy is. At the same time, this also allows our most important stakeholders to be taken into account by their representatives. The EDAG Group has not set itself any specific sustainability goals with regard to the main groups, namely products and services, customer categories, geographical areas and stakeholder relations. ESRS 2 SBM-2 Interests and views of stakeholders Communication with our stakeholders is of great importance to the EDAG Group's value creation and our long-term success. To this end, our experts engage in regular and open dialog with our stakeholders, using a variety of formats. Essentially, the most important stakeholders include employees, customers, investors, suppliers, and nature as a silent stakeholder. The regular exchange with our stakeholders forms an important basis for our actions. This dialog is a means of communicating the various positions, and helps us to constantly align our decisions and goals with the different interest groups. We are in regular communication with our customers, both in the course of joint projects, mails, through our website, and also at conferences and trade fairs. Our employees have the support of the HR department and employees' representatives. We keep our staff informed by means of staff assemblies, our intranet and case-related employee surveys, and also maintain a permanent exchange through an open culture. Our purchasing department, which is in regular communication with our major suppliers, is the point of contact for our suppliers. Our Investor Relations department is responsible for the dialog with analysts and investors in particular, and to this end uses a variety of different media and attends investor events. In the course of the year, the various departments and topic owners inform the Group Executive Management of the views and interests of the affected stakeholders, using a number of different formats. The Group Executive Management arranges for the necessary action to be taken and informs the Board of Directors where necessary. S1 Own Workforce (ESRS 2 SBM-2 in conjunction with S1) The workforce is a key success factor for an engineering service provider's business model. For this reason, our personnel policy is systematically aimed at ensuring that, in order to be able to handle projects, execute orders and supply temporary staff, the employee qualifications and capacities required by our customers are available at all times. The observation of shifts in demand on the part of our customers, constant monitoring of the labor markets relevant to EDAG, and anticipation of changes in our employees' attitude and expectations are all inducements to us to constantly examine and adapt our personnel policy strategies and activities. Accordingly, two social aspects are also defined in our mission statement: talent factory for all employees and social sustainability. We regularly communicate with our own workforce and its representatives, and this can take the form of staff appraisals, staff assemblies and regular contact between the works council and management (see ESRS S1 Social Dialogue). As an internationally active company, EDAG makes a point of ensuring compliance with human rights and accepted labor standards at our numerous sites across the globe and, with its Code of Ethics, affirms its commitment to the principles of the UN Global Compact. Double Materiality Assessment ESRS 2 IRO-1 Description of the process to identify and assess material impacts, risks and opportunities The first ESRS-based double materiality assessment was carried out for the 2024 reporting year. The materiality assessment in accordance with the ESRS is designed to identify material impacts, risks and opportunities. The materiality analysis for the 2025 reporting year was updated in collaboration with our topic owners based on the initial materiality analysis for the 2024 fiscal year, with both the identified and material IROs remaining essentially unchanged. As in the previous year, no individual or specific activities, business relationships or geographical circumstances that give rise to a heightened risk of adverse impacts were identified. Identification of sustainability issues The first step in the ESRS materiality analysis is to identify relevant sustainability topics. This identification process takes into account our business activities and business relationships (outlined in ESRS 2 SBM-1), our value chain (outlined in ESRS 2 SBM-1) and the affected stakeholders (outlined in ESRS 2 SBM-2). The basis for this were the sustainability matters set out in ESRS 1, paragraph AR16. No additional entity-specific disclosures were identified. In line with the principle of double materiality , these sustainability matters were analyzed to determine whether, on the one hand, there were any impacts on people or the environment, caused either by the EDAG Group or by actors in our value chain (i.e. impact materiality , inside-out perspective). On the other hand, they were also analyzed to establish whether a sustainability matter could result in risks and opportunities for the EDAG Group (i.e. financial materiality , outside-in perspective). When assessing impact materiality, we looked into whether our own operations or the upstream or downstream value chain could have material actual or potential, positive or negative impacts on people or the environment. When assessing the financial materiality, we looked into whether present or future developments of a sustainability matter could have a material impact on the development, financial position, financial performance, cash flows, access to finance or the cost of capital of the EDAG Group over the short, medium or long term. Stakeholder engagement The identification and assessment of impacts, risks and opportunities is an ongoing, interdisciplinary process involving in-house experts representing our stakeholders and external consultants, and which is headed and organized by the Group Accounting's Group Sustainability Reporting team. To perform this assessment, we worked with representatives (referred to as topic owners) of various internal and external stakeholders including employees, customers, suppliers, investors, analysts and banks, to identify the material sustainability matters for the EDAG Group. External stakeholders were represented by EDAG experts (topic owners) who, on account of their expertise and position in the organization, as described in ESRS 2 SBM-2, are in regular contact with our external stakeholders, and are therefore familiar with their interests. Their task was to provide information on the various sustainability issues and evaluate any impacts, risks and opportunities ( IROs ) identified. Involvement of the topic owners took the form of interviews and desktop research. At the same time, and on the basis of our risk management process, we also assessed the financial risks and opportunities for sustainability-related matters, in consultation with our risk management team. To ensure proper compliance with the regulations, external consultants monitored the implementation of the first materiality assessment in the 2024 fiscal year as part of the process rollout. Materiality assessment The material sustainability matters were assessed and determined in accordance with the requirements in ESRS 1, applying the principle of double materiality with the help of a scoring model. Assessment of material impacts When defining material actual negative impacts, the severity of the impact was determined on the basis of the following factors: scale, scope and irremediable character of the impact. In the case of a potentially negative impact, the likelihood of the impact was also taken into account. In the case of a potential negative human rights impact, the severity of the impact takes precedence over its likelihood. When defining material actual positive impacts, the severity of the impact was determined on the basis of the factors scale and scope of the impact. In the case of a potentially positive impact, the likelihood of the impact was also taken into account. With the exception of the likelihood of occurrence, if the above factor comes into play, a five-step scale is used: if the factors are combined without taking into account the likelihood of occurrence, a maximum value of 15 can result. The resulting value is multiplied by the likelihood of occurrence (6-step scale from 0 to 1). An impact was classified as material if a threshold value of 8 or more was reached in the assessment described above. Assessment of material risks and opportunities Material risks and opportunities were defined with the help of a scoring model, in consultation with our risk management team. To this end, possible risks and opportunities were identified by analyzing dependencies on resources required for business processes or the dependency on relationships and evaluated, taking into account a combination of the likelihood of occurrence and potential magnitude. The resulting significant risks and opportunities were classified using the following presentation: Risks & opportunities matrix severity catastrophic major moderate likelihood unlikely possible likely very likely guaranteed minor superficial In terms of financial materiality, all risks and opportunities were classified as material if they were: Classified as significant opportunities/risks (Dark Gray) Classified as high-level opportunities/risks (Black) Any positive or negative impacts or existing dependencies identified could represent a starting point for potential risks and opportunities. No scenario analyses were carried out. In the future, the identification and assessment of sustainability-related risks and opportunities will be part of the risk management process established for financial reporting. In this context, risk assessment tools and risk mitigation and limitation measures will also be evaluated. Results of the double materiality assessment The results of the double materiality analysis are shown in the following image, and more detail is provided for the relevant standards in the appropriate topical standard: Material impact 2 3 4 5 6 8 Non-material Financially material 0 Doubly material 1 7 9 EDAG's impact on people and the environment Financial impact for EDAG Environment Social issues E1 Climate change S1 Own workforce 0 Climate change adaptation 7 Working conditions 1 8 Climate change mitigation Equal treatment and opportunities for all 2 Energy 0 Other work-related rights Environment Social issues E2: Pollution S2 Workers in the value chain 3 Pollution of air 0 Working conditions 4 Pollution of water 0 Equal treatment and opportunities 5 Pollution of soil 0 Other work-related rights 0 Pollution of living organisms and food resources S3 Affected communities 0 0 Substances of concern Communities' economic, social and cultural rights 0 Substances of very high concern 0 Communities' civil and political rights 6 Microplastics 0 Rights of indigenous peoples E4 Biodiversity & ecosystems 0 Social inclusion of consumers and/or end-users 0 Direct impact drivers of biodiversity loss 0 Impacts on the state of species Governance G1 Business conduct 0 Water 0 Information-related impacts for consumers and/or end-users 0 Marine resources 0 Personal safety of consumers and/or end-users 0 Impacts on the extent and condition of ecosystems 9 Corporate culture 0 Impacts and dependencies on eco system services 0 Protection of whistleblowers 0 Animal welfare E5 Circular economy S4 Consumers and end users E3 Water and marine resources 0 0 Resource inflows including resource use 0 0 Resource outflows in conjunction with products and services Political engagement Management of relationships with suppliers, including payment practices 0 0 Waste Corruption and bribery Monitoring and review The EDAG Group reviews and, if necessary, updates the process to identify its impacts, risks and opportunities and assess the materiality of these annually, taking into account emerging trends, underlying assumptions and contextual and regulatory changes. In the process, developing trends, underlying assumptions, and contextual and regulatory changes will be taken into account. Only minor adjustments were made for the 2025 fiscal year. As part of the update to the materiality assessment, the result for IRO "Measures against violence and harassment in the workplace" has changed. While EDAG continues to adhere to clear principles and consistently rejects any form of violence or harassment, this issue was classified as non-material in the current analysis. This reassessment is based on the fact that EDAG has established prevention and intervention mechanisms that ensure a high level of awareness, protection, and transparency. At the same time, our findings show the potential risk in the context of our business operations to be comparatively low. This remains an identified positive impact; however, from a materiality perspective, it does not meet the threshold for a material impact as defined in our materiality assessment and therefore does not constitute a material positive impact on our employees. In addition, updates were made to the IRO regarding collective bargaining and freedom of association. EDAG employees are free to organize themselves into trade unions. Only in a few small subsidiaries are collective pay agreements in place. Therefore, the identified IRO has been classified as non-material in the assessment. Furthermore, as part of the update, we have assessed the financial impact of the positive corporate culture to be less significant than in the initial assessment, which means that the opportunity is now classified as non-material. E1 Climate change (ESRS 2 IRO-1 in conjunction with E1) The positive and negative impacts set out in chapter ESRS E1 Climate change relate to our strategy and business model as follows: Our own economic activity results in greenhouse gas emissions, both in our own business activities and in the downstream value chain, including production and use phase. As an engineering service provider, the EDAG Group can have a positive impact on the downstream value chain and subsequent use phase by providing efficient and climate-friendly engineering services. Our vision and corporate strategy (see ESRS 2 SBM-1) directly address these points, with goal 2 (competence center for new technologies and solutions) and goal 5 (economically, ecologically and socially sustainable engineering service provider). Aside from the viewpoints of our stakeholders (as communicated by our in-house experts), the starting point for the IROs identified are the greenhouse gas emissions (Scope 1 and 2) in the previous financial years. For the 2025 financial year, the EDAG Group's total greenhouse gas emissions (Scope 1 to 3) amounted to 39,707 metric tons (previous year: 42,114 tons), measured using the market-based method 1 . 1 The Scope 2 greenhouse gas emissions are identified using the location-based and market-based method. The location-based method quantifies the EDAG Group's Scope 2 greenhouse gas emissions on the basis of average energy generation emission factors within national borders. With the market-based method, the EDAG Group draws on the greenhouse gas emissions of the generators - where available - to determine the Scope 2 greenhouse gas emissions. If this data is not available, an estimate is made. 2 Data cleansing and updates were carried out for the activities covered to ensure that external factors, particularly a reduction in business travel and office attendance due to the COVID-19 pandemic, do not influence the baseline year. Details can be found in ESRS E1-6. For this Sustainability Report, the actual and locked-in (potential future) greenhouse gas emissions (see ESRS E1-1) were validated for our baseline year, adjusted 2 and determined for the reporting year. The underlying assumptions are set out in ESRS E1-6, section Explanatory notes on the methodology and data sources. Greenhouse gas emissions relate to our own operations (Scope 1 and Scope 2) and those along the value chain (Scope 3). For EDAG, the following Scope 3 categories were classified as material: 3.1 Purchased goods and services, 3.3 Fuel- and energy-related activities (not included in Scope 1 or Scope 2), 3.6 Business travel and 3.7 Employee commuting. The transition risk was assessed in coordination with our risk management and will become part of the risk management process established for financial reporting in the future. The EDAG Group did not perform a detailed analysis of short-, medium- or long-term transitional events based on the TCFD classification for the reporting year, nor did it determine the magnitude of the risk to individual assets or business activities. However, it did carry out a resilience and climate scenario analysis, which is presented in section ESRS 2 SBM-3, in the E1 topical standard. A qualitative assessment was performed to evaluate the greenhouse gas emissions involved as a transitional event within the framework of the measures outlined in the transition plan for climate neutrality. This is described in more detail in the section on ESRS E1-1 transition plan. E2 Pollution (ESRS 2 IRO-1 in conjunction with E2) No material impacts of pollution have been identified in the business activities of the EDAG Group, its sites and operations (see also the explanations in ESRS 2 IRO-1 Double Materiality Analysis, which apply analogously to ESRS E2). Potential impacts relating to air, water and soil pollution and microplastics were identified in the downstream value chain. No consultations, in particular with affected communities of our customers and suppliers, or audits of their sites or operations were conducted. This also pushes us to our technical limits, as, in the next stage, we have no knowledge of or influence over how our customers subsequently utilize or apply the services we provide. This also applies to the geographical location at which they are utilized. Our customers decide whether, for what purpose, in what form and at which of their sites the concepts developed by EDAG are implemented or put to further use. In concrete terms, this means that the decisions on the quantity produced, future adjustments or modifications to components, selection of materials, etc. are the sole responsibility of our customers. For this reason, it is not feasible for us to present a list of sites or operations in which pollution is a material impact. G1 Business conduct (ESRS 2 IRO-1 in conjunction with G1) All relevant EDAG Group activities and sectors were taken into account when identifying and evaluating the impacts, risks and opportunities of the G1 Business conduct standard. Further topical standards with no material impacts, risks or opportunities No material impacts, risks or opportunities relating to ESRS E3 Water and marine resources, ESRS E4 Biodiversity and ecosystem Services or ESRS E5 Resource use and circular economy were identified in EDAG's value chain in the course of the materiality assessment. Regular certifications by independent auditing organizations in areas such as quality management, information security, environmental management, occupational health and safety, and sustainability confirm that common, internationally acknowledged standards are adhered to at EDAG Group. Furthermore, we see it as our task to employ a continuous improvement process to make the working environment safe for our employees, to minimize negative impacts on the environment, and to establish sustainable management as a key component of our management systems. With regard to the above-mentioned points, our assets and business activities are regularly reviewed for actual and potential impacts, risks and opportunities in our own operations. Analogous to the comments on E2, no consultations were conducted, in particular with affected communities of our customers and suppliers. As explained above, this also pushes us to our technical limits, as we have no influence over how our customers actually utilize the services provided by EDAG. Our customers decide whether, for what purpose, in what form and at which of their sites the concepts developed by EDAG are implemented. In concrete terms, this means that the decisions on the quantity produced, future adjustments or modifications to components, selection of materials, etc. are the sole responsibility of our customers. For this reason, it is not feasible for us to present a list of the geographical areas in which water or marine resources are essential to the company's activities and its upstream and downstream value chain. No special dependencies on biodiversity and ecosystems and their services were identified, nor were transition risks or physical risks. No scenario analysis in line with the requirements of ESRS E4 was carried out. ESRS 2 IRO-2 Disclosure requirements in ESRS covered by the undertaking's sustainability statements The ESRS 2 IRO-2 disclosures, which include the index of ESRS disclosure requirements (content index) and the list of datapoints deriving from other EU legislation, can be found in Annex 2 and 3 respectively. Datapoints in the topic-specific standards are material if they are related to impacts, risks and opportunities material to us, and assist users of our Group Sustainability Report in their decision-making. For more information on the double materiality analysis, please refer to section ESRS 2 IRO-1 Description of the process to identify and assess material impacts, risks and opportunities. ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model The material impacts, risks and opportunities identified in the materiality assessment are explained in the relevant topical standards. They refer to the standards ESRS E1 Climate change, E2 Pollution, S1 Own workforce, and G1 Business conduct in this Sustainability Report. 3 Group-wide and country-specific guidelines and concepts come under the heading of "policies". The statements included there indicate that the reporting refers to information provided with regard to the impacts, risks and opportunities presented and the associated policies 3 , actions and targets derived from the business processes available to the EDAG Group, and that this information and data thus forms part of the Sustainability Report. If information concerning policies, actions and targets relating to the material IROs identified in the materiality analysis is not disclosed, this is because this specific information is not generally available, as it was not previously relevant to decision-making and management processes. Detailed information on risks and opportunities can be found in the Forecast, Risk and Reward Report section of the Group Management Report in the Annual Report for 2025. Currently, the identified sustainability-related risks and opportunities do not have a financial impact under topic-specific standard E1. The carrying amounts of the assets or liabilities recognized in the Annual Report for 2025 have not been adjusted with respect to the significant risks and opportunities. At present, there is nothing to indicate that we might not be able to manage the material risks and rewards or take advantage of the opportunities we have identified. The risk identified in the topic-specific standard S1 currently has a financial impact in the time horizon of the Risk and Reward Report (short and medium-term). For further details, please see the Risk and Reward Report in the Annual Report for 2025. ‌ENVIRONMENTAL INFORMATION ESRS E1 CLIMATE CHANGE Impacts, Risks and Opportunities ESRS 2 GOV-3 Integration of sustainability-related performance in incentive schemes The information required under ESRS E1 in conjunction with ESRS 2 GOV-3 is set out in section ESRS 2 GOV-3. ESRS 2 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model The materiality assessment described in ESRS 2 IRO-2 has identified the following impacts, risks and opportunities for the topical S1 Climate Change standard: E1 Climate Change Position in the VC Time horizon GHG emissions from own operations Negative actual and potential impacts on people and the environment of GHG emissions occurring in the undertaking's own business activities. Negative actual impacts ● ● ● ● GHG emissions from the downstream value chain Negative actual and potential impacts on people and the environment of GHG emissions occurring during production and the use phase. Negative actual impacts ● ● ● ● Climate-friendly mobility solutions in the downstream value chain Positive potential impacts on people and the environment through the provision of climate-friendly industrial and mobility solutions that effectively reduce GHG emissions. Positive potential impacts ● ● ● ● Energy consumption in the downstream value chain Negative actual impacts on people and the environment due to high energy consumption during production and use, and the resulting need for this energy to be produced. Negative actual impacts ● ● ● ● Climate-friendly engineering and mobility solutions in own operations Market opportunities arising from efforts to mitigate climate change in the economy, and regulatory requirements. Expanding our sustainability expertise enables us to develop new business areas, and defend and expand existing ones. Opportunity ● ● ● ● Greenhouse gas targets of our customers There is a potential risk of orders and projects being lost if EDAG is unable to reduce GHG quickly enough, or if our customers demand unrealistic GHG reduction targets, giving competitors with lower GHG emissions better market opportunities. Risk ● ● ● Upstream Own operations Downstream Short-term Medium-term Long-term The identified opportunities and risks are climate-related opportunities or climate-related transition risks relating to the company's own operations, as, for EDAG, these can only materialize during the transition to a low-carbon, climate-resilient economy. We carried out a resilience and climate scenario analysis in the 2024 financial year and updated it in the 2025 financial year. The following climate-relevant time horizons were assessed: In addition to the current reporting year (1 year), the two time horizons medium-term (2030) and long-term (2050) were factored in, and particular use was made of the publications of the IPCC WGI Interactive Atlas for the EDAG Group's key sites. The focus here was on the IPCC's worst-case climate-related scenario "SSP5-8.5". Reference is made here to the critical assumptions and uncertainties mentioned therein. The focus of the analysis was on our sites. On the basis of regional data from the IPCC's maps, the regions in which major EDAG Group sites are located were analyzed with regard to the impact of climate hazards such as heatwaves and cold spells, wildfires, heavy precipitation and flooding, and rising sea levels. Even taking the worst-case scenario into account, no material physical risks or transition risks could be identified for the EDAG Group's own operations or assets. Further, EDAG can also see no significant climate-related risks in the upstream and downstream value chain. With our strategic objective of achieving net carbon neutrality by 2039 (detailed in ESRS E1-1), we are well equipped to address our material impacts, risks and opportunities. With our greenhouse gas reduction targets (see ESRS E1-4) and change mitigation actions (see ESRS E1-3), we plan to minimize the negative impacts our GHG emissions and the emissions in the value chain have on people and nature. At the same time, this allows us to minimize our risks and to expand existing business activities and develop new business opportunities by providing climate-friendly mobility solutions. Strategy Approach & strategy We, the EDAG Group, recognize the urgent need for climate change mitigation actions and sustainability in mobility and industry. Taking responsibility for this is part of our corporate vision and mission. Shaping the future of mobility and industry together . Efficiently. Safely. Sustainably. The EDAG Group supports and is committed to the goals of the Paris Agreement. We have set ourselves the overall strategic goal of achieving (net) carbon neutrality in 2039 and for our short-term emissions reduction targets, have committed to the Science-Based Targets initiative (SBTi). Validation is pending. We want to compensate for any unavoidable remaining emissions. In this section, we will present our transition plan, our goals, and the actions we plan to take in order to achieve our goals. Product life cycle o e s n a f l o i i l t c f r u e o d s a e o n M a r a e a r P r c l l k y h s d e i t a s n d d i M e C p c o i n h v r c a e e s s p e / t e s U e f i g R e l n i c f n y o n c a l i l t n p r n g n a o i & o t t i a S t z r c i e l u a u e E d s R o e n r P d o f l i f e D i s p To pool expertise relating to the ecological transformation of mobility and industry, the EDAG Group has set up the interdisciplinary "Team Sustainable Engineering" (TSE). The TSE pools together ecological issues concerning our services in a competence center and then consider them from a fully integrated perspective - in the sense of the entire product life cycle. The TSE promotes cross-departmental collaboration and supports our departments with ecological issues related to our engineering services on the market. ESRS E1-1 Transition plan for climate change mitigation In order to achieve our primary strategic goal, we have developed "Roadmap way 2 zero", a transition plan for climate change mitigation. This comprises different actions and interim targets, is applicable to the entire EDAG Group, and is embedded in the company's general financial planning. We will have the 2030 emissions reduction targets connected with this transition plan (see ESRS E1-4) validated by the SBTi. Owing to our overall strategic goal, we see ourselves as being well prepared to fulfill our commitment to the short-term SBTi targets in the future, and so demonstrate that our emission reduction targets are scientifically sound. On account of our commitment to meeting SBTi goal requirements, we consider our business model to be in line with the Paris Agreement on climate change, which aims to limit global warming to 1.5° C. As an engineering service provider, the EDAG Group is involved in development and conceptual design at an early stage in the engineering value chain. This means that, alongside our own greenhouse gas emissions (Scope 1 and 2), the indirect greenhouse gas emissions (Scope 3) are important, as these are influenced by the selection and use of various components. However, it is our customers who decide what actual use is made of the services provided by EDAG. They decide whether, for what purpose, to what extent and in what form the concepts developed by EDAG are implemented, and therefore also determine the volume of greenhouse gases emitted in the EDAG Group's downstream value chain. By the same token, we are also reliant on the cooperation of our stakeholders to achieve our strategic goal and the necessary reduction in emissions this involves, as the EDAG Group cannot fully control or influence all sources of emissions. Actions and decarbonization lever The EDAG Group's transition plan is therefore centered on the following decarbonization levers and actions: The decarbonization of our own operations Reduction of heating energy from fossil sources in the properties and office space utilized Conversion of the vehicle fleet to climate-friendly powertrain technologies Purchase of 100 percent green electricity at all EDAG Group sites The decarbonization of the key categories in our upstream value chain Reduction of GHG emissions where district heating is used Development and, as far as possible, support for our key suppliers in decarbonization, with the aim of achieving carbon neutrality. To this end, we draw on our supplier qualification process in order to ensure sustainable procurement. Important contracts will in future be subject to predefined criteria for achieving carbon neutrality. Reduction of greenhouse gas emissions resulting from our business travel Optimization of commuting and incentives for climate-friendly mobility Further details of the EDAG Group's decarbonization actions and the climate change mitigation actions initiated in 2024 and continued in 2025 can be found in ESRS E1-3 and ESRS E1-4. As we are an engineering service provider, changes to our product and service portfolio as a result of changes in the market, technological developments or changing regulatory requirements are a constant occurrence. Responding to these changes and offering attractive solutions on the market is part of our approach. In particular, the steady increase in regulatory emissions standards and fleet-related regulations, along with our customers' greenhouse gas reduction targets, can influence the product and service portfolios we offer and lead to lower greenhouse gas emissions overall throughout the entire product life cycle. To implement our transition plan, we anticipate the following capital expenditures (CapEx) for our climate change mitigation measures between now and 2039: CapEx Scope Category Decarbonization lever Total in € thousand 1 EU Taxonomy performance indicator Scope 1 Scope 2 Heating energy Vehicle fleet Electricity District heating Reduction of fossil heating energy in the properties utilized 2 Conversion of the vehicle fleet to climate-friendly powertrain technologies 3 Purchase of 100% green electricity at all sites Reduction of carbon emissions where district heating is used 1,820 7.3 2,739 6.5 and 7.4 1,732 7.6 n/a n/a Total Scope 1 and 2 6,291 CapEx Scope Category Decarbonization lever Total in € thousand 1 EU Taxonomy performance indicator Scope 3 Purchased goods and services Fuel and energy-related activities Business traveling Commuting Carbon-neutral supplier management Fuel and energy-related activities Reduction in the amount of business travel Optimization of commuting and incentives for climate-friendly mobility n/a n/a n/a n/a n/a n/a n/a n/a Total Scope 3 0 Sum total 6,291 1 This is an estimate of the cumulative, undiscounted amount in thousands of euros from 2026 to 2039, based on current price levels. 2 Most of the office space used by the EDAG Group is rented. In such cases, investment decisions regarding renovation or energy-efficiency measures are primarily made by the landlord, not EDAG, and have no effect on the cash flow of the EDAG Group. For this reason, these investments are not taken into account. 3 The CapEx for the vehicle fleet, which relates to the conversion to climate-friendly powertrain technologies, is the additional planned CapEx that we estimate will be incurred in the conversion of the vehicle fleet to climate-friendly powertrain technologies by 2039. For a year, this would amount to approx. € 196 thousand. The calculated amounts of money (CapEx) set out in the diagram above are estimates based on the data and forecasts available on the reporting date. When calculating the CapEx for the reduction of fossil heating energy, particular account was taken of energy efficiency improvement measures such as the replacement of lighting. On the one hand, investments in the vehicle fleet include the scheduled additions of vehicles with climate-friendly powertrain technologies, valued according to IFRS 16, and on the other hand investments in the charging infrastructure required. Investments in relation to the use of electricity in real estate included investments for the construction of photovoltaic systems to generate electric power. No future CapEx was identified for activities related to the use of district heating or for Scope 3. The EDAG Group has no aims or plans to adapt its economic activities to the criteria set out in the Commission Delegated Regulation (EU) 2021/2139, as the majority of our activities cannot be assigned to taxonomy categories. Our capitalized assets will also cause future greenhouse gas emissions throughout their period of use and/or functional life (these are referred to as potentially locked-in greenhouse gas emissions). For the EDAG Group, this applies in particular to the balance sheet item "Rights of use from leased assets", to gas-powered heating systems (Scope 1) and the use of district heating energy (Scope 2). In the future, this may also apply to refrigerants in heat pumps if these are used to provide heat energy and refrigerants leak. No stranded assets were identified. Our products and services may cause greenhouse gas emissions in the downstream value chain and subsequent use and recycling phases. As already explained, EDAG has no influence over how customers actually utilize our services and put them on the market. For this reason, we are unable to track the locked-in greenhouse gas emissions of our products and services. Our transition plan will enable us to gradually reduce the amount of locked-in greenhouse gas emissions stemming from our assets. Our aim is to achieve this by reducing the use of fossil fuels for heating in the properties we use, by renovating existing buildings to make them more energy efficient for example, or by renting new properties with more climate-friendly energy concepts, and also by gradually converting our vehicle fleet to climate-friendly powertrain technologies. The EDAG Group leases most of the properties it uses. Therefore, energy-efficient refurbishments are carried out in coordination with landlords or through new leases in order to implement the measures outlined in the "Roadmap way 2 zero". Responsibilities The CFO of the EDAG Group is responsible for ensuring implementation of the ESG strategy, in particular implementation of the transition plan, management of climate-related risks and opportunities, and the provision of information to the Board of Directors. As a result of the regularly updated materiality and risk management assessment, climate risks are integrated into our governance, management and strategic processes whenever necessary. Under the Delegated Regulation (EU) 2020/1818, the EDAG Group is not exempt from the EU Paris-aligned benchmarks. The details of our transition plan - the "Roadmap way 2 zero" - which is geared towards achieving our strategic goal of carbon neutrality by 2039, were worked out by an interdisciplinary team and approved by the Group Executive Management in the 2024 financial year. Our strategic goal of carbon neutrality by 2039 was already externally communicated to our stakeholders in the 2023 Sustainability Report. From our point of view, compared to our baseline year, 2021, we succeeded in significantly reducing greenhouse gas emissions in Scope 1 and Scope 2 in the reporting year. Specifically, our Scope 1 GHG emissions fell by 28 percent and our Scope 2 GHG emissions by 86 percent. The main reason for this is our switch from conventional to 100 percent green electricity for our German sites. Furthermore, we were able to reduce emissions by decreasing the use of fossil fuels for heating in the properties and office space used and by gradually converting our vehicle fleet to climate-friendly powertrain technologies. Scope 3 provides an inconsistent picture compared to 2021. While greenhouse gas emissions from fuel and energy-related activities in the upstream value chain were halved and there was a decrease in greenhouse gas emissions in the category of purchased goods and services, increasing greenhouse gas emissions were registered in the categories of business travel and commuting. The increase in greenhouse gas emissions from business travel and commuting is primarily due to an increase in business activities, longer flight distances, increased office attendance, and the general increase in the Group's workforce. Management of the Impacts, Risks and Opportunities ESRS E1-2 Policies related to climate change mitigation and adaptation With a view to the long-term implementation of our overall strategic goal of carbon neutrality by 2039, an interdisciplinary team developed our transition plan, "Roadmap way 2 zero", the first details of which are presented in section ESRS E1-1. This is the central concept we use to achieve our strategic sustainability goals and interim targets, which are to be validated by the SBTi. The CFO is the most senior executive responsible for implementation within the EDAG Group. By implementing the transition plan, we intend to gradually decrease greenhouse gas emissions in our own operations and value chain, and increase the use of renewable energies. In this way, we should be able to gradually reduce or completely eliminate the negative impacts of our operations and value chain on the environment. At the same time, it makes it easier for us to meet our customers' requirements for a low greenhouse gas footprint in their value chain, and to minimize any resulting risks. In this sense, the "Roadmap way 2 zero" factors in the following areas: climate protection and the use of renewable energies. The transition plan is reviewed annually to check that objectives are being met and actions are effective. The planned actions or interim targets are adjusted where necessary. There were no changes in the 2025 fiscal year. The transition plan addresses the interests of our stakeholders, customers and employees for instance, and also nature as a silent stakeholder, for whom a reduction of our greenhouse gases is important. The stakeholders are informed of the most important decarbonization levers and actions in the Sustainability Report. Since EDAG has little or no influence over the issue, the EDAG Group has not adopted a policy for addressing the potential adverse impacts on people or nature resulting from high energy consumption and greenhouse gas emissions during production or use in the downstream value chain. What is more, an engineering service provider has a significantly lower energy consumption than a company in the manufacturing industry, for example. Due to climate change mitigation efforts in the business sector and regulatory requirements, there is growing demand for climate-friendly mobility and industrial solutions. The EDAG Group is expanding its sustainability expertise into new business areas, partly through the TSE team, and through continuous adaptation to technological advancements, market trends, and customer requirements. In doing so, the company is tapping into new business areas and further expanding existing ones. The EDAG Group has not developed a concept that meets the requirements of E1-2 in conjunction with MDR-P. When awarding contracts, customers are increasingly expecting companies to commit to CO 2 reduction targets. For the EDAG Group, there is a potential risk of orders and projects being lost if EDAG is unable to reduce GHG emissions quickly enough, or if our customers set unrealistic GHG reduction targets, possibly giving competitors with lower GHG emissions better market opportunities. Thanks to its "Roadmap way 2 zero", however, the EDAG Group considers itself well-equipped to meet its customers' CO 2 reduction requirements and thus minimize this risk. The EDAG Group has therefore developed a concept that meets the requirements of E1-2 in conjunction with MDR-P for the "Roadmap way 2 zero" explained in section E1-1. Therefore, the EDAG Group does not see the need for an individual concept for this risk within the meaning of E1-2 in conjunction with MDR-P. 4 Only the combined target figure for Scope 1 and 2 is relevant for achievement of the target. The 46% reduction in Scope 1 emissions and 92% reduction in Scope 2 are only mentioned to fulfill reporting requirements. There is no separate control. ESRS E1-4 Targets related to climate change mitigation and adaptation The EDAG Group is committed to the goals of the Paris Agreement. In line with our strategy, we have committed to achieving net carbon neutrality by 2039. This also forms the basis for our other goals: Reduction of gross greenhouse gas emissions (Scope 1 and Scope 2) measured in t CO 2 by a total of 81 percent in 2030 compared to our base year 2021, with 46 percent relating to Scope 1 and 92 percent to Scope 2 (market-based method) 4 . Reduction of gross greenhouse gas emissions (Scope 3), measured in t CO 2 by a total of 43 percent in 2030 compared to our baseline year 2021, in our key categories. 80 percent of the electricity we purchase is to come from renewable sources by 2025, and 100 percent by 2030. The interim target for the proportion of renewable energy was met as planned: In 2025, the proportion of renewable energy for which energy suppliers had provided documentation already stood at 86.7 percent, exceeding the set target of 80 percent. The starting points for the greenhouse gas reduction targets are the actual emissions calculated for our baseline year 2021 and the reporting year 2024. These are shown in detail in section ESRS E1-6. In 2021, our baseline year, the following carbon emissions were emitted (reference values): Summary of GHG emissions 2021 Scope 1 5,018 t Scope 2 - market-based method 16,920 t Scope 3 37,038 t Total GHG emissions (market-based method) 58,976 t Greenhouse gas intensity (t / € million) (market-based method) 85.8 As can be seen in ESRS E1-6, our greenhouse gas emissions occur in our own operations (Scopes 1 and 2) and for the most part in the upstream value chain (Scope 3). To establish our greenhouse gas reduction targets for 2030, in addition to the historical figures for 2030, the following future developments in particular were adopted or assumed: Both national and international political stability Affordable availability of heating energy technologies Technological and economically viable availability of climate-friendly powertrain technologies and green electricity for the pursuit of our operations Reduction of CO 2 emissions by the district heating companies from which EDAG purchases energy Commitment of our major suppliers to the Paris Agreement and consequently the implementation of the necessary actions within the framework of their transition plans Targets are monitored at least once a year; this is the responsibility of the CFO, who has delegated operational implementation within his department. If, at a future date, it turns out that the underlying future developments will not materialize as assumed, the targets can be revised in the future. As explained in ESRS E1-1, the greenhouse gas emission reduction targets set are compatible with limiting global warming to 1.5° C. We have committed to the short-term targets of the SBTi and the underlying climate and policy scenarios. To date, there are no indications that the EDAG Group will not be able to meet these requirements. Depending on the baseline year selected and the date on which the documents are submitted to the SBTi, in a 10-year period, greenhouse gas emissions must, in accordance with the requirements of the SBTi's short-term science-based target, be reduced by 79 percent (Scope 1 and Scope 2) across all sectors, subject to the condition that 95 percent of all Scope 1 and Scope 2 emissions must be covered. For Scope 3: If 40 percent or more of total greenhouse gas emissions (Scope 1, 2 and 3) is attributable to Scope 3, then a 42 percent reduction in greenhouse gas emissions must be achieved across all sectors within a 10-year period, subject to the condition that 67 percent of all Scope 3 emissions are covered. The goals we have set ourselves will enable us to meet these requirements. To determine the target figure for Scope 1, 2 and 3 greenhouse gas emissions, an analysis was carried out to identify which actions can be directly influenced by EDAG. It was assumed: That it will be possible and economically feasible to replace heating systems, renovate buildings and implement individual energy-saving measures within the planned time frame, and that it will be possible to purchase biogas at a reasonable cost That sufficient climate-friendly transport technologies will be available at acceptable market prices and that the requisite (charging) infrastructure will be sufficiently available in all regions in which the EDAG Group operates That local green power tariffs will be available at reasonable prices for all our sites That district heating providers will themselves reduce their greenhouse gases That reductions in greenhouse gas emissions can also be achieved in our value chain in collaboration with our stakeholders At the time this Sustainability Report was being prepared, SBTi had not published a sectoral decarbonization pathway suitable for EDAG. EDAG has therefore taken into account the cross-sector absolute reduction target with the baseline year 2021. To achieve this greenhouse gas reduction, EDAG has identified actions and decarbonization levers, as set out in ESRS E1-1. The contribution to the achievement of our greenhouse gas emission targets is estimated as follows: Contribution of decarbonization levers to the achievement of the GHG emission reduction targets for 2030 compared to 2021, as percentages: Decarbonization lever Scope 1 Scope 2 Scope 3 Reduction of fossil heating energy in the properties utilized Conversion of the vehicle fleet to climate-friendly powertrain technologies Purchase of 100% green electricity at all sites -42% -50% -95% Reduction of carbon emissions where district heating is used -27% Scope 1 & Scope 2 (weighted) -46% -92% Carbon-neutral supplier management -53% Fuel and energy-related activities (achieved by implementing Scope 1 and 2 decarbonization -68% levers) Reduction in the amount of business travel¹ 9% Optimization of commuting and incentives for climate-friendly mobility¹ -16% Scope 3 -43% Total for Scope 1, 2 and 3 -57% 1 The greenhouse gas emission targets for the decarbonization levers "Reduction in the amount of business travel" and "Optimization of commuting and incentives for climate-friendly mobility" are also determined by the volume of future business development and developments in the size of the workforce. As a result of the increase in both business volume and headcount since 2021, greenhouse gas emissions in 2025 were higher than in the baseline year (see ESRS E1-6). This historic increase also accounts for the lower GHG emission reduction targets for 2030 compared to the other decarbonization levers. No new technologies need to be adopted to achieve the decarbonization levers described above. The SBTi requirements (short-term target) were used as the basis for calculating the quantitative reduction targets. No other climate scenarios were considered. Since EDAG has little or no influence over the matter, the EDAG Group has not set any targets for addressing the potential adverse impacts on people or nature of high energy consumption during production or use (IRO "energy consumption in the downstream supply chain", in section ESRS 2 SBM-3 of ESRS E1). Where possible, the EDAG Group draws the attention of its customers to these impacts. EDAG is not, however, in a position to monitor how effective this is, or whether it is taken into account. With our know-how, sales activities and the pooling of expertise in our Team Sustainable Engineering (TSE), we are already well positioned to address not only the potential positive impacts on people and nature of providing climate-friendly mobility solutions (IRO "Climate-friendly mobility solutions in the downstream value chain" in section ESRS 2 SBM-3 of ESRS E1), but also the resulting market opportunity (IRO "Climate-friendly mobility solutions in the own business activities" in section ESRS 2 SBM-3 of ESRS E1). The EDAG Group does not define specific targets that meet the requirements of the ESRS. The reason for this is that our operative targets are determined by our customers. ESRS E1-3 Actions and resources in relation to climate change policies In order to achieve the targets set out in ESRS E1-4, and in line with its strategic goals and the transition plan (see ESRS E1-1), the EDAG Group has planned the following actions and resources related to climate change mitigation: Cumulative Expected Expected GHG GHG GHG Decarbonization lever Actions & resources Scope in the value chain reduction by 2025 1 in % compared reduction by 2030 1 in % compared reduction by 2039 1 in % compared to the to the to the baseline year baseline year baseline year green electricity at all sites Reduction of carbon emissions where district heating is used entire EDAG Group to 100% renewable energies by 2030 Reduction of fossil heating energy in the properties Optimization of leases by means of targeted measures such as renovation, individual Own operations -16% -42% -83% utilized climate protection measures, relocation, etc. Conversion of the vehicle fleet to climate-friendly Car policy: Gradual conversion of the vehicle fleet to climate-friendly powertrain Own operations -39% -50% -100% powertrain technologies technology by 2035 Purchase of 100% Switching the power consumption of the CO 2 regulations for district heating companies Supplier management focusing on decarbonization with a view to achieving Own operations -89% -95% -100% Own operations -27% -27% -83% Carbon-neutral supplier management 2 Fuel and energy-related carbon neutrality and sustainable procurement. Important contracts will in future be subject to predefined criteria for achieving carbon neutrality. Achieved by implementing measures for Upstream value chain Upstream value -17% -53% -90% activities 2 Scope 1 and 2 relating to heating energy, vehicle fleet, and green electricity. Reduction of business travel, with preference given to virtual tools (e.g. meetings in MS chain -51% -68% -97% Reduction in the amount of business travel 2 Optimization of commuting Teams) Use climate-friendly transport options where possible (electric cars, rail instead of air travel) Development and implementation of targeted measures to reduce emissions from Upstream value chain Upstream value 107% 9% -90% and incentives for climate- friendly mobility 2 commuting and create incentives for climate- friendly mobility (e.g. job bikes, charging stations at company sites) chain 9% -16% -90% Sum total -33% -57% -93% 1 Compared to emissions in baseline year 2021. 2 The EDAG Group has only limited influence on the emission reductions achieved by actions taken using these decarbonization levers, since the emissions depend on the decisions and behavior of others, and are largely determined by them. In such cases, the EDAG Group can only provide incentives for emission-reducing behavior. The following table contains further information on our actions and resources. Decarbonization lever Actions & resources CapEx 2025 in € thousand Assets in the balance sheet Items in P&L 1 Performance indicator according to EU Taxonomy CapEx plan Reduction of fossil heating energy in the properties utilized Conversion of the vehicle fleet to climate-friendly powertrain technologies Purchase of 100% Optimization of leases by means of targeted measures such as renovation, individual climate protection measures, relocation, etc. Car policy: Gradual conversion of the vehicle fleet to climate-friendly powertrain technology by 2035 Switching the power consumption of the 59 2,791 Rights of use from leasing Rights of use from leasing Property, Depreciation, amortization and impairment Depreciation, amortization and impairment Material CapEx n/a CapEx n/a green electricity at all sites Reduction of carbon entire EDAG Group to 100% renewable energies by 2030 CO regulations for district heating 0 plant and equipment expenses n/a n/a Material emissions where district heating is used 2 companies Supplier management focusing on decarbonization with a view to achieving 0 n/a expenses n/a n/a Carbon-neutral supplier management carbon neutrality and sustainable procurement. Important contracts will in future be subject to predefined criteria for achieving carbon neutrality. Fuel and energy-related activities: achieved 0 n/a Material expenses Rights of n/a n/a Fuel and energy-related activities by implementing measures for Scope 1 and 2 relating to heating energy, vehicle fleet, and green electricity. Reduction of business travel, with preference 0 use from leasing Material expenses n/a n/a Reduction in the amount of business travel given to virtual tools (e.g. meetings in MS Teams) Use climate-friendly transport options where possible (electric cars, rail instead of air travel) 0 n/a Other operating n/a n/a Optimization of commuting Development and implementation of targeted measures to reduce emissions from and incentives for climate- friendly mobility commuting and create incentives for climate- friendly mobility (e.g. job bikes, charging stations at company sites) 0 n/a n/a n/a n/a Sum total 2,851 expenses 1 Disclosure of the material items.

View stock analysis, news, and events for Edag Engineering Group Ag