KHD Humboldt Wedag International : AG CSR Report 2025

About this update from Khd Humboldt Wedag International Ag

KHD Humboldt Wedag International AG, Cologne Separate Non-Financial Group Report in accordance with Section 315b Paragraph 3 of the German Commercial Code (HGB) for the 2025 Financial Year SEPARATE NON-FINANCIAL GROUP REPORT Table of Contents GENERAL INFORMATION 3 SUSTAINABILITY CONCEPT 3 Principles 3 SUSTAINABILITY MATTERS 9 Environmental Matters 11 Employee Matters 14 Social Matters 18 Respect for Human Rights 19 Anti-corruption and Anti-bribery Matters 20 Sustainability Matters in the Supply Chain 22 THE TAXONOMY REGULATION OF THE EUROPEAN UNION 24 Reporting Framework and Scope 24 Procedures, Assessment Methods, and Assumptions 26 Taxonomy Eligibility 26 Taxonomy Alignment 27 Significant Contribution to Achieving an Environmental Objective 27 Assessment of the DNSH Criteria 28 Compliance with Minimum Standards 29 Key Performance Indicators and Reporting 30 Key Performance Indicators for the 2025 Financial Year 31 Definition of the Key Performance Indicators 31 Appendix: Reporting Forms according to the EU Taxonomy Regulation 33 For improved readability, KHD has chosen to use male pronouns when referring to concepts such as "employee", for example. These pronouns always refer to all genders: male, female, gender diverse. SEPARATE NON-FINANCIAL GROUP REPORT ‌GENERAL INFORMATION To implement guidelines in line with European requirements, the German legislature issued regulations in 2017 to strengthen non-financial reporting for companies. The CSR Directive Implementation Act concerning corporate social responsibility ("CSR"), which governs the reporting of non-financial information for certain capital market-oriented companies, became effective on April 19, 2017. KHD Humboldt Wedag International AG ("KHD AG") must provide this non-financial report for the KHD Group in accordance with Section 315b Paragraph 1 of the German Commercial Code ("HGB"). For this reason, unless otherwise indicated, this information applies to the Group associated with KHD AG ("KHD Group" or "KHD"), i.e. the global activities of the KHD Group. The Management Board of KHD AG is responsible for the preparation of this non-financial report. In accordance with the specifications of Section 315b Paragraph 3 HGB, the Management Board decided not to integrate the non-financial report for the 2025 financial year into the Group Management Report, but instead to create a separate, independent report that is published on the KHD website. In accordance with the specifications of Section 171 Paragraph 1 of the German Stock Corporation Act ("AktG"), the Management Board presented the non-financial report to the Supervisory Board for audit before publication. The Supervisory Board audited the separate non-financial Group report in accordance with the legal requirements. ‌SUSTAINABILITY CONCEPT ‌Principles For the KHD Group, acting in line with the principles of sustainability has been and remains a central business precept as this is vitally important for both the reputation and the long-term economic success and continuation of KHD. Therefore, sustainability matters play an important role in decision-making processes in various areas, and they are also incorporated into the operational processes throughout the KHD companies. KHD currently does not use a specific reporting framework to prepare the non-financial report; instead, as in the previous year as well, it is based on the legal requirements of Section 315b et seq. HGB. Based on the applicable legal requirements, the KHD Group is not subject to reporting requirements according to either the Corporate Sustainability Reporting Directive ("CSRD") or the Corporate Sustainability Due Diligence Directive ("CSDDD"). This non-financial report for 2025 was prepared in the initial months of the 2026 financial year taking into consideration the legal specifications and the mandatory formalized reporting with regard to non-financial matters. In accordance with the legal requirements for non-financial reporting, the report includes an introductory description of the business model in addition to significant and/or necessary information for understanding business development, business performance, the position of the KHD Group, and the effects that KHD activities have on the specific non-financial matters. The matters discussed in this report include: Environmental matters, Employee matters, Social matters, Respect for human rights, Anti-corruption and anti-bribery matters, Sustainability matters in the supply chain. The process for determining the significant non-financial matters was implemented for the first time in 2018 in the context of an internal project that included consultation with internal experts from a variety of key departments, such as Human Resources, Sales, Procurement, Controlling, Quality, and Research and Development, among others. For the most part, the relevant interest groups participated indirectly with regard to the approaches pursued, e.g. the human resources department and the works council supplied the perspective of employees and the sales and purchasing areas supplied the perspective of customers and suppliers. The entire process was managed by a project team under the responsibility of the Chief Financial Officer of KHD AG. The results were discussed at the level of company management (both the entire management of KHD AG and the executive management of the subsidiaries). As of the 2024 financial year, the process for determining the significant non-financial matters was redesigned based on the European Sustainability Reporting Standards ("ESRS") in order to meet the requirements of international standards. A review and update were conducted in the 2025 financial year. The business processes, products, and goods and material flows in the KHD Group and the direct business relationships were evaluated with regard to actual and potential effects, risks and opportunities in the context of a multi-stage analysis according to the principle of double materiality. The diagram below indicates the significant matters and assessments which are presented in this report along with information regarding management concepts and processes for meeting due diligence requirements. Key performance indicators that are related to management and controlling are reported in the individual sections. Potentially negative effects on human rights and/or the environment are reported with information and key performance indicators according to internationally recognized standards for disclosure, such as the UN Guiding Principles on Business and Human Rights and OECD guidelines for multinational enterprises. There were no significant changes with regard to the reportable non-financial matters in comparison with the previous year. Organization and Business Model With its subsidiaries in Europe, the Americas, and Asia, KHD AG, based in Cologne, Germany, ranks as one of the world's top equipment suppliers and service companies for the cement industry. The scope of services encompasses process know-how and design, engineering, project management, the supply of technology and equipment as well as supervising the erection and commissioning of cement plants and related equipment. It also includes customer services such as supplying spare parts, optimizing, maintaining, and repairing cement plants, conducting studies, and training plant personnel. In selected and individual cases, KHD also provides its customers with EPC (engineering, procurement, construction) solutions. In this context, KHD works with construction and assembly partners in the framework of a consortium

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