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Sustainability strategy and target...

Sustainability strategy and targets

Sustainability is a core component of our corporate strategy. As a group of companies we aim to supply innovative products, technologies and services worldwide that contribute to the sustainable success of our customers.

Together with our customers we are looking to the future, and our decision-making processes include both business considerations and ecological and social aspects. The basis for this is a 360 degree view of our value and production chains. In this way we improve our performance and strengthen the future of our company.

Anchoring in the organization

The Chairman of the Executive Board bears responsibility for sustainability. Sustainability activities in the Group are managed and developed by the Sustainability Committee, which consists of the Group Executive Board, the CEOs of the segments, the heads of the trhe corporate centers and experts. The Committee takes decisions on thyssenkrupp´s overall sustainability strategy, including the setting and monitoring of targets as well as the review and implementation of key stakeholders' expectations.

Furthermore, a dedicated Sustainability Council, consisting of representatives of the segments, the services lines and group functions of thyssenkrupp AG, implements key processes and coordinates data collection processes as well as initiatives in the frame of thyssenkrupp’s sustainability strategy.

Overview about Indirect Financial Targets

Group		30.09.2021	30.09.2022	Change	More information
Annual energy efficiency gains of 110 GWh in 2021 / 2022 an 80 GWh in 2022 / 2023	GWh	325	255	-	Climate, energy & environment
Annual reduction of emission intensity by 1 t CO₂ per million € sales to 34.5 t CO₂ per million € sales in 2024 / 2025	t CO₂ per million € sales	-	28.9	-
Sustainable adjusted R&D intensity of around 3.0%	%	2.6	2.4	-	Technology and innovations
Increase the proportion of women in management positions by at least 1% per year to 17% by 2025 / 2026	%	12.2	13.1	+1%-pts.	Employees
Reduce the accident frequency rate by at least 0.1 per year to 2.3 by 2023 / 2024	accidents per million hours worked	2.6	2.3	(12)%	Employees
At least 60 supplier sustainability audits each year	#	69	108	+57%	Responsible Procurement

Indirect Financial Targets to secure continuous improvement

thyssenkrupp aims to continuously improve its sustainability performance.
In this frame, the Sustainability Committee has set Indirect Financial Targets (IFTs) in the areas of technology and innovations, environment, climate, energy, purchasing and people. Since fiscal year 2020 / 2021 we have been integrating sustainability activities gradually into the long-term compensation (Long-Term-Incentive) of the Executive Board and top-level management through the IFTs. This has already been implemented for the proportion of women in leadership positions and the accident frequency rate. To reflect our climate targets, since fiscal 2021 / 2022, emissions intensity excluding the steel business and, with reference to the steel business, the volume of net climate-neutral steel produced have also been integrated into long-term compensation. In the current fiscal year 2022 / 2023, the improvement in the employee net Promoter Score (eNPS), which is determined as part of the annual employee satisfaction survey, will be included in long-term compensation for the first time; the increase in the proportion of women in leadership positions is also included again (more information can be found in the Compensation Report). All established IFTs are being continued with the aim of continuous improvement and are constantly being adjusted and extended in parallel with our ongoing strategic development.

For the current fiscal year 2022 / 2023 we are aiming for energy efficiency gains at least 85 GWh. The aim is to reduce the emissions intensity excluding the steel activities by 1 ton CO₂ per million € sales to 34.5 tons CO₂ per million € sales in fiscal year 2024 / 2025. The target for R&D intensity will be around 3.0% on a sustainable basis in the future. The accident frequency rate already exceeded the target set for fiscal year 2023 / 2024 ahead of schedule. The targets previously set for the group in the planning period have therefore been reduced by 0.2 points: Accordingly, our revised target is to improve the accident frequency rate to 2.3 by fiscal year 2023 / 2024. Across the entire thyssenkrupp group, compares with 2019 / 2020, we aim to increase the proportion of women in leadership positions to 14% in the present fiscal year and to 17% by fiscal year 2025 / 2026. Sustainability audits will remain a key focus in the current reporting year and a new target of at least 88 audits has been set. Analogously to integration in long-term compensation, from the current fiscal year the improvement in the eNPS will be implemented as a new IFT with a target annual improvement of 3.0 points.

Integrated reporting approach

thyssenkrupp provides continuous and fully integrated reporting on its sustainability performance in its annual report and on its corporate website, based a set of national and international standards like the Global Reporting Initiative (GRI), the UN Global Compact, Greenhouse Gas Protocol, Task Force on Climate-related Financial Disclosures (TCFD), International Integrated Reporting Council (IIRC), Sustainability Accounting Standards Board (SASB), IFRS and others as well as applicable regulations like the German Commercial Code (HGB), the EU CSR Directive and the German Accounting Standards (DRS). The company does not publish a printed sustainability report or a separate online report. All essential content is published in our annual reporting and additional information on our webpages.

A central element of the materiality analysis of sustainability issues is the view of the company’s management. This approach is based on established management reporting standards (such as the German Accounting Standards, DRS). Management’s view naturally includes the interests of the various stakeholders as well as the requirements of the reporting standards, and assesses them in the context of the company. Accordingly, the sustainability strategy is fully integrated in the corporate strategy.

Our integrated sustainability reporting system is based on the reporting boundary of our financial reporting, which in turn is based on IFRS standards and the German Commercial Code (HGB). Unless otherwise stated, the information refers to all fully consolidated operations. In accordance with IFRS we also report on our 50% shareholding in Hüttenwerke Krupp Mannesmann GmbH (HKM).

Our Annual Report includes key information for the fiscal year, which at thyssenkrupp starts on 1st October and ends on 30th September. Additional reporting on the webpage takes place on an ongoing basis and is not tied to a specific reporting cycle. Performance indicators refer to a fiscal year. Unless otherwise indicated, the data always refer to the past fiscal year.

Integrated sustainability reporting includes a large amount of data collected via a variety of data systems. These data systems are adapted to the specific challenges of the area involved. All content in the Annual Report is audited externally, as are relevant environmental and energy data (e.g. CO₂ emissions or energy consumption).

Overview of non-financial disclosures

The full non-financial disclosures pursuant to § 289b HGB are integrated in the various sections of the combined management report as this information is important for understanding the business performance and position of the Group. In fiscal year 2021 / 2022 thyssenkrupp AG was exempt for the first time from the obligation to present on non-financial statement nevertheless still applies equally to the group and thyssenkrupp AG. For the reporting period we are required for the first time to make disclosures within the framework of the EU Taxonomy.

In compiling the information, various frameworks, e.g. UN Global Compact, were used as a guide. Risks of negative environmental and social impacts from thyssenkrupp’s business activities are also addressed in the various sections of the management report. Based on this, there are no additional risks to be reported in the risk report. Respect for human rights and social matters in the meaning of German GAAP (HGB) are addressed as cross-cutting issues which have large overlaps with each other and with employee concerns. Beyond this, the aspect of social matters is important but not necessary for an understanding of our business performance, the situation of the Group, or the impacts of business activity.

The folllowing overview of the non-financial disclosures refers to the relevant sections in the annual report 2021 / 2022. Furthermore, additional information can be found in the relevant sections of the tk website.

Environmental issues	Employee issues	Respect for human rights	Social issues	Anti-corruption and prevention of bribery
Sustainability and Indirect Financial Targets	Sustainability and Indirect Financial Targets	Sustainability and Indirect Financial Targets	Social responsibility	Sustainability and Indirect Financial Targets
Environment, climate and energy	Employees	Sustainability in supplier management		Compliance
Sustainability in supplier management	Sustainability in supplier management	Employees		Sustainability in supplier management
Opportunity and risk report	Opportunity and risk report	Opportunity and risk report		Opportunity and risk report
EU Taxonomy				Corporate governance statement

ESG Ratings

ESG rating agencies assess a company's engagement in sustainable business practices. The rating results, known as score, enable transparency as well as comparability of a company's sustainability performance with respect to environmental, social and governance factors. Various stakeholder groups such as investors, customers and creditors demand ESG ratings as a prerequisite for business relationships.

Leading rating agencies regularly recognize thyssenkrupp's engagement in environmental, social and responsible corporate governance with good results.

We regard the ratings by the rating agencies as valuable feedback on our sustainability performance. We use the results as an opportunity to analyze our sustainability activities, continuously drive improvements and integrate new requirements into our sustainability management.

thyssenkrupp is a group of companies consisting of industrial and technology businesses. The rating assessments listed below are answered by thyssenkrupp AG and relate to the sustainability performance of the thyssenkrupp Group.

ESG Ratings – Overview

For the seventh time in a row, CDP has recognized thyssenkrupp as one of the world's leading companies in climate protection by including the company in its Climate Protection A List. CDP is a non-profit organization that collects climate data from companies, cities, countries and regions worldwide and makes it available to investors. CDP conducts its annual assessment on behalf of more than 680 investors with more than USD 130 trillion in assets, among others, and has reviewed a total of almost 15,000 companies worldwide as part of its assessment. The rating scale ranges from A for best performance to D-. thyssenkrupp is one of 330 international companies on CDP's "Climate Protection A List" last year, 15 of which are from Germany, placing it within the two percent of rated companies that made it into the best category.

Find more information about CDP here.

MSCI ESG Research, is a global leader in ESG sustainability analysis and ratings, with the aim of identifying material ESG risks and opportunities and measuring a company's resilience to long-term, industry-relevant ESG risks. The rating scale ranges from AAA for the best-rated companies to CCC. thyssenkrupp received an "AA" rating in 2022, confirming the previous year's result. thyssenkrupp is therefore among the top 13 percent of companies in the same industry rated by MSCI.

Find more information about MSCI here.

Sustainalytics rates more than 14,000 companies worldwide, making it one of the largest sustainability rating agencies. Sustainalytics measures the degree of material ESG risk a company is exposed to on a scale of 0 to100 and assesses how well it manages its risks.

Due to its industry classification, thyssenkrupp is already rated with a high ESG risk exposure in the baseline, which can be reduced through strong ESG risk management. In 2022, thyssenkrupp significantly improved its performance and achieved a rating of 32.1, which made it one of the top 12% of the "Industrial Conglomerates" sector.

Find more information about Sustainalytics here.

ISS ESG is one of the world's leading rating agencies in the area of sustainable investments. The rating scale ranges from A+ to D-. thyssenkrupp was awarded a "C" in 2021. In the industry comparison the so-called Decile Rank, which ranges from 1 (high (relative) performance) to 10 (low (relative) performance) and indicates how well a company performs in its industry, thyssenkrupp received a 2.

Find more information about ISS ESG here.

The Ecovadis rating analyzes and evaluates policies, measures and published reporting of over 100,000 companies of all sizes and sectors in the areas of environment, labor and human rights, ethics and sustainable procurement. The rating scale ranges from 0 to 100. thyssenkrupp was awarded a score of 72 in June 2023 and has repeatedly improved over the past years. With this result thyssenkrupp is among the top 3% of companies in the same sector rated by Ecovadis.

Find more information about ecovadis here.

Further information

Sustainabilityteam thyssenkrupp AG

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We have compiled answers to frequently asked questions. As a general rule you will also find most of the information on the relevant pages, e.g. environment, climate & energy or compliance. Our experts would be pleased to help with any further information you may require on sustainability at thyssenkrupp. Direct your inquiries to the “Sustainability Strategy, Reporting & Ratings” team. Please note that due to the large number of inquiries, it is not always possible to answer all questions. In addition, journalists can contact the press department, investors and analysts our Investor Relations team, and suppliers our Purchasing function.

Where can I find thyssenkrupp’s sustainability report?

thyssenkrupp provides continuous and fully integrated reporting on its sustainability performance within its annual report and on its corporate website. Accordingly, the sustainability report is made up of various documents. The overview page on sustainability provides links to all key content.

Can you send me a printed sustainability report?

As neither our website content nor our annual report is published in printed form, the content is only available online.

Who is responsible for sustainability at thyssenkrupp?

At thyssenkrupp, responsibility for sustainability lies with the Executive Board and the Sustainability Committee. Activities are coordinated by the corporate function Technology, Innovation, and Sustainability. Click here to find out more.

How does thyssenkrupp manage the area of human rights?

Human rights play a relevant role in various management processes at thyssenkrupp. Accordingly, our human rights policy is made up of various documents, above all the Code of Conduct, the Supplier Code of Conduct, further policy for Occupational Safety and Health, and the International Framework Agreement. It is therefore implemented in particular in the Group’s processes relating to compliance, procurementand employee rights.

I have a project that could be of interest to thyssenkrupp and am looking for support. Who should I contact?

thyssenkrupp is involved in a large number of projects around the world. In your inquiry please indicate the connection your project has with thyssenkrupp’s business and which of the company’s sites it could fit in with.

In which sustainability indexes is thyssenkrupp listed and how well does the company rank?

thyssenkrupp is included in a variety of indexes and rankings, such as CDP, oekom, sustainalytics and MSCI. These days, the majority of indexes rank individual aspects rather than providing an overall rating. At CDP (formerly the Carbon Disclosure Project), which still provides an overall rating, thyssenkrupp was included on CDP's global A List in 2017, making it one of the leading companies in the German Stock Index (DAX).

I am writing a degree dissertation on the subject of corporate social responsibility. Does thyssenkrupp take part in studies of this kind?

Like many other major corporations, thyssenkrupp receives numerous requests to take part in studies. As a result we can only take part in a select few. Please check out this website first to see if the information you require is not already provided.