Brembo

Board of Directors

Board Composition

Executive Chairman: Matteo Tiraboschi Chief Executive Officer: Daniele Schillaci

Directors:

• Cristina Bombassei (Executive Director, also holds position of Executive Director in charge of the Internal Control and Risk Management System, as well as of Chief Legacy Officer)
• Giancarlo Dallera (Non-executive and Independent Director)
• Elisabetta Magistretti (Non-executive and Independent Director)
• Umberto Nicodano (Non-executive Director)
• Elizabeth M. Robinson (Non-executive and Independent Director)
• Gianfelice Rocca (Non-executive and Independent Director)
• Michela Schizzi (Non-executive and Independent Director, elected from minority list)
• Manuela Soffientini (Non-executive and Independent Director, also holds position of Lead Independent Director)
• Roberto Vavassori (Executive Director)

Committees

Audit, Risk and Sustainability Committee: Elisabetta Magistretti (Chairwoman), Michela Schizzi, Manuela Soffientini (This Committee also acts as the Related Party Transactions Committee)

Remuneration and Appointment Committee: Giancarlo Dallera (Chairman), Elizabeth M. Robinson, Manuela Soffientini

Supervisory Committee: Giovanni Canavotto (Chairman, Independent Expert), Elisabetta Magistretti, Matteo Tradii (Chief Internal Audit Officer)

Governance System

Upon the entering into effect of the cross-border conversion, Brembo adopted a one-tier board management and control system pursuant to the Dutch Civil Code that does not provide for a Board of Statutory Auditors or any control body separate from the Board of Directors. The control function is carried out by the Non-executive Directors, who, in compliance with the Dutch Corporate Governance Code, make up the majority of the members of the Board of Directors.

Integration of sustainability-related performance in incentive schemes

Roles covered

Sustainability-related performance is integrated into incentive schemes for the following roles:

• Executive Directors: Executive Chairman, Chief Executive Officer (CEO), Chief Legacy Officer, Chief Public Affairs and Institutional Relations Officer
• Top Management: Executives, Managers, and key employees of Brembo N.V., as well as the North America / China President & CEOs, Country General Managers, first-line management in Group countries, and other individuals in significant roles
• Energy Managers, VPs Operations, Plant Directors/Plant Managers, and all plant personnel: Incentivized through specific monetary rewards tied to the development of new energy efficiency projects
• Approximately 60 members of the Group's management team: Included in the 2022-2024 LTIP

Specific sustainability KPIs tied to remuneration

Short-term Incentive Plan (STIP)

The 2024 STIP includes a group sustainability index that constitutes 10% of the overall annual objective for Brembo's Executive Directors. The sustainability index is defined as:

Total amount of CO2 emissions saved in the three years thanks to improvement actions (tonnes CO2e) divided by Base year's Scope 1 and 2 CO2 emissions (tonnes CO2e) x 100

For 2024, the sustainability index target was set at 20% reduction and achieved a value of 25.2%.

The STIP 2024 includes the following metrics:

• Group EBITDA (30%)
• Group EBIT % (20%)
• Group ROI % (25%)
• Group Net Sales (15%)
• Group sustainability index (10%)

Long-term Incentive Plan (LTIP 2022-2024)

The LTIP 2022-2024 includes a group sustainability index (Group's Carbon Footprint) as one of four Group key performance indicators.

For Executive Chairman and CEO:

• Group sustainability index (Group carbon footprint): 20% weighting
• Target value: 30
• Final value achieved: 87.7
• Level of achievement: 30%

For Chief Legacy Officer and Chief Public Affairs and Institutional Relations Officer:

• Group sustainability index (Group carbon footprint): 20% weighting
• Target value: 30
• Final value achieved: 87.7
• Level of achievement: 30%

The base year for the three-year period corresponds to 2021.

Weighting (% of STI / LTI tied to sustainability)

Short-term Incentive (STIP)

• 10% of the overall STIP is tied to the group sustainability index

Long-term Incentive (LTIP 2022-2024)

• 20% of the LTIP is tied to the group sustainability index (Group carbon footprint)

Other LTIP metrics include:

• Group Economic Value Added (EVA): 25% (Executive Chairman/CEO); 15% (other roles)
• Group Free Operating Cash Flow: 25% (Executive Chairman/CEO); 35% (other roles)
• Group Net Financial Position/EBITDA (2022, 2023, 2024): 30% total (10% each year)

Performance period and target structure

STIP

• Performance period: Annual, in compliance with budget objectives
• Target for 2024: 20% reduction in sustainability index
• Actual achievement for 2024: 25.2%

LTIP 2022-2024

• Performance period: Three-year period (2022-2024)
• Target: 30% improvement in Group sustainability index
• Actual achievement: 87.7% improvement
• Vesting period: Three-year period 2022-2024 (closed plan)

Link to STI and LTI

Sustainability KPIs are integrated into both short-term and long-term incentive plans:

• STIP (Short-term): Group sustainability index (10% weighting)
• LTIP (Long-term): Group sustainability index/Group carbon footprint (20% weighting)

Threshold/target/maximum performance structure

STIP 2024 - Executive Directors

Executive Chairman:

• Target: 75% of fixed remuneration
• Maximum (cap): 100% of fixed remuneration
• Entry gate: Group EBITDA in absolute terms (on/off mechanism)

CEO:

• Target: 75% of fixed remuneration
• Maximum (cap): 100% of fixed remuneration
• Entry gate: Group EBITDA in absolute terms (on/off mechanism)

Chief Legacy Officer:

• Target: 40% of fixed remuneration
• Maximum (cap): 60% of gross annual remuneration

Chief Public Affairs and Institutional Relations Officer:

• Target: 40% of fixed remuneration
• Maximum (cap): 60% of gross annual remuneration

The pay-out curve is designed such that for values below the entry point, no payment proportional to the performance objective shall be paid.

LTIP 2022-2024 - Executive Directors

Executive Chairman:

• Annual bonus entry point and target: 100% of fixed remuneration
• Annual bonus cap: 150% of fixed remuneration

CEO:

• Annual bonus entry point and target: 100% of fixed remuneration
• Annual bonus cap: 150% of fixed remuneration

Chief Legacy Officer:

• Annual bonus entry point and target: 33.33% of fixed remuneration
• Annual bonus cap: 50% of fixed remuneration

Chief Public Affairs and Institutional Relations Officer:

• Annual bonus entry point and target: 50% of fixed remuneration
• Annual bonus cap: 75% of fixed remuneration

The LTIP 2022-2024 determined a performance score at 150% (maximum level on the scale) despite exceeding the maximum performance levels set.

Payment method

• STIP: Cash
• LTIP: Cash
• Clawback clauses may be applied to both plans

Disclosure of payout against sustainability KPIs in the reporting period

STIP 2024 Results (to be paid in 2025)

Group sustainability index:

• Target: 20.0
• Final value: 25.2
• Weight: 10%
• Achievement score: 16.00%

Overall STIP performance score: 140.94%

Resulting pay-outs for STIP 2024:

• Executive Chairman: €1,300,000 (100% of annual fixed remuneration)
• CEO: €1,300,000 (100% of annual fixed remuneration)
• Chief Legacy Officer: €102,423 (56% of gross annual remuneration)
• Chief Public Affairs and Institutional Relations Officer: €163,490 (56% of gross annual remuneration)

Note: The amounts are capped at the maximum levels as defined in the Remuneration Policy.

LTIP 2022-2024 Results (to be paid in 2025)

Group sustainability index (Group carbon footprint):

• Target value: 30
• Final value: 87.7
• Weight: 20%
• Level of achievement: 30%

Overall LTIP performance score: 150%

Resulting pay-outs for LTIP 2022-2024 (total for three-year period):

• Executive Chairman: €5,775,000
• CEO: €5,850,000
• Chief Legacy Officer: €257,902
• Chief Public Affairs and Institutional Relations Officer: €619,616

Additional incentives

Energy efficiency incentives: Brembo's energy managers, VPs Operations, Plant Directors/Plant Managers, and plant personnel are incentivized through specific monetary rewards tied to the development of new energy efficiency projects.

Non-monetary rewards: Brembo offers Internal Company Awards including:

• Brembo Excellence Awards
• Brembo Innovation Awards (BIA)
• Brembo Sustainability Awards

These initiatives encourage all Group employees to submit suggestions for improving efficiency and sustainability. Impactful ideas are recognized by an internal jury, with communications between June and July of the following year.

Governance oversight

The Board of Directors, with the support of the Audit, Risk and Sustainability Committee, is yearly informed of and has the responsibility to approve the Double Materiality Analysis and is involved in the target setting of IROs. The Supervisory Committee and Board of Directors oversee Brembo's sustainability strategy and targets embedded in its Sustainability Plan, always considering industry best practices and main global ESG trends.

The Company's capability to ensure an adequate internal control and risk management system is maintained, with suitable administrative and accounting procedures for preparing the Consolidated and Separate Financial Statements and any other financial disclosure.

Audit, Risk and Sustainability Committee functions include oversight of sustainability reporting and risk management, with members:

• Elisabetta Magistretti (Chairwoman)
• Michela Schizzi
• Manuela Soffientini

Supervisory Committee with oversight function includes:

• Giovanni Canavotto (Chairman, Independent Expert)
• Elisabetta Magistretti
• Matteo Tradii (Chief Internal Audit Officer)

The control function is carried out by the Non-executive Directors who make up the majority of the Board of Directors members, in compliance with the Dutch Corporate Governance Code.

Strategy and Business Model

Vision and Mission

Brembo's vision is "Turning Energy into Inspiration", which encourages the Group to extend its sphere of influence to embrace energy management in its broader meaning, not only in terms of components, but also in its role as authoritative systems provider.

Brembo's mission is being a Solution Provider by proactively rising to the challenges posed by the ongoing transformation, focusing on the needs and desires of the new generations, which will be the users of tomorrow.

Strategic Pillars

Brembo implements strategic projects within three Pillars:

DIGITAL

The world has entered the era of artificial intelligence applications focusing on data processing. Brembo has set itself an ambitious goal: becoming a company that, alongside the production of braking systems, is able to develop and offer all-round solutions to its customers through the widespread dissemination of a solid data culture within the Group and an increasingly data-driven approach.

SensifyTM is the tangible outcome of this vision: the first fluid-free intelligent braking system that constantly interacts with the driver with a view to shaping a world without accidents. Its launch on the market, planned for 2026, will truly revolutionize the automotive industry.

In 2024 Brembo signed a global agreement with Michelin to combine their intelligent solutions that leverage algorithms, know-how, and expertise related to brakes and tires. The continuous exchange of real-time data between Michelin's connected solutions software provides tire grip data to Brembo's innovative SensifyTM braking system.

Confirming Brembo's increasingly data-driven focus, in 2024 the Group launched the brand-new Brembo Coding Hub, alongside the Brembo Inspiration Lab.

GLOBAL

Brembo has long ago embarked upon its decentralization path and has now become a Group operating in 18 countries worldwide. The Global Pillar aims to balance the Group's international footprint, not only from a commercial standpoint, but also in terms of technology and innovation, by developing and encouraging excellence at local level for the benefit of a global organization whose mindset is based on multiculturality, valuing of diversity and with inclusion as a shared value.

The opening of a new production plant in Thailand is a crucial step in the global expansion strategy of the Group, as it strengthens its position in the motorcycle segment and consolidates Brembo's role as a solution provider.

COOL BRAND

Brembo does not set limits on creativity and considers it essential to continuously engage in strengthening its brand, anchoring it to new trends that are reconfiguring mobility in line with the values and sensibilities of the new generations, especially Generation Z.

Business Model and Value Chain

Brembo is the world leader and acknowledged innovator in the development of braking solutions for automotive vehicles. It currently operates in 18 countries on 4 continents, through its production and business sites, and employs over 15,000 people worldwide.

Manufacturing plants are located in Italy, Poland (Częstochowa, Dąbrowa Górnicza, Niepołomice), the United Kingdom (Coventry), the Czech Republic (Ostrava-Hrabová), Germany (Meitingen), Denmark (Svendborg), Spain (Barcelona), Mexico (Apodaca, Escobedo), Brazil (Betim), China (Nanjing, Langfang, Jiaxing, Jinan), India (Pune, Chennai), the USA (Homer) and Thailand (Rayong).

Brembo's reference market is represented by the most important manufacturers of cars, motorbikes, commercial vehicles and racing cars and motorbikes. Brembo operates in both the original equipment market and the aftermarket.

Brembo's range of products includes brake discs, brake calipers, the side-wheel module and, increasingly often, the complete braking system, including integrated engineering services. In addition to brake discs and brake calipers, motorbike manufacturers are also offered brake master cylinders, light-alloy wheels, brake hoses and complete braking systems.

Key Performance Indicators

Financial Performance 2024:

• Revenue: €3,840.6 million (stable vs 2023: €3,849.2 million)
• Gross Operating Income: €661.1 million (17.2% of revenue)
• Net Operating Income: €393.3 million (10.2% of revenue)
• Net Result: €262.6 million (6.8% of revenue)
• ROI: 14.4%
• Net Financial Debt: €360.4 million

Revenue Breakdown by Application (2024):

• Passenger car: 74.7%
• Motorbike: 12.0%
• Commercial Vehicle: 8.6%
• Racing: 4.7%

Revenue Breakdown by Geographic Area (2024):

• North America: 26.6%
• Germany: 20.0%
• China: 15.2%
• Other European countries: 12.0%
• Italy: 8.8%
• United Kingdom: 5.4%
• India: 4.0%

Interests and views of stakeholders

Overview

The Company believes that stakeholder engagement is key to its business and that it contributes to sustainable long-term value creation. The Company fosters an effective dialogue with those stakeholders but may decide not to accommodate or accept any requests or invitations to enter into a dialogue with stakeholders, or to accommodate or accept such request or invitation under certain conditions. The form of this dialogue varies based on the topic and the type of stakeholder involved.

Identified stakeholder groups and engagement channels

The following stakeholders have been identified and engaged:

Investors

Customers

End users

Brembo people (Own workforce)

Suppliers (workers in the value chain)

Local communities

Future generations

Industry companies and competitors

Insurance companies

How views are integrated into strategy and business model

The interests and views of Brembo's key stakeholders have been taken into account in relation to the strategy and business model. This was done through the impact materiality assessment process, in which the main stakeholders expressed their opinions regarding the direct and indirect impacts of the Group. Moreover, following the stakeholder engagement on impact materiality, no changes to Brembo's strategy and business model have been identified or are expected.

The administrative, management, and supervisory bodies are informed about the views and interests of affected stakeholders with regard to Brembo's sustainability-related impacts through the presentation of the stakeholder engagement results to the Sustainability Committee and the Board of Directors.

Policy framework

For further information on stakeholder engagement, please refer to the stakeholder engagement policy, which is available on the Company's intranet and website.

Material impacts, risks and opportunities and their interaction with strategy and business model

Material Impacts, Risks and Opportunities (IROs)

Brembo conducted a double materiality analysis in accordance with the European Sustainability Reporting Standards (ESRS) following the Corporate Sustainability Reporting Directive (CSRD). The analysis identified material impacts, risks, and opportunities (IROs) across environmental, social, and governance topics.

The following table provides the full list of material IROs identified by Brembo:

Interaction with Strategy and Business Model

Brembo's business strategy takes into account relevant impacts and risks, as well as opportunities that may arise. The Group has implemented a Risk Assessment process based on the risk evaluation carried out in coordination between the risk management function and the function to which the risk is associated. This process applies to all risks, including those related to sustainability aspects, and is updated annually. This process guarantees the resilience of Brembo's strategy to impacts and risks and enhances its ability to take advantage of material opportunities.

Brembo's double materiality assessment was based on the Group's Enterprise Risk Management (ERM) procedures, including due diligence, and involved active engagement with both internal and external stakeholders.

Time Horizons

Brembo defines time horizons in accordance with those established by the ERM evaluation processes and adopted in the Financial Statement:

• Short-term: less than one year from current reporting period
• Medium-term: from the end of the short-term up to five years
• Long-term: periods exceeding five years

Climate-Related Impacts, Risks and Opportunities

Brembo distinguishes between climate-related physical risks and climate-related transition risks:

Physical Risks:

• Risk related to climate change with increased exposure to natural catastrophes and possible related unavailability of infrastructure (e.g. production stoppages, ICT services breakdown)

Transition Risks:

• Risk related to extra costs following the potential application of GHG certificates mechanism
• Risk related to potential negative outcome from sustainability audits conducted by clients
• Risk related to external factors imposing changes/new Sustainability-related objectives
• Risk related to the relationship with Clients in connection to the achievement of Net Zero objectives
• Risk related to the energy transition of the automotive sector and the evolution of regulations related to climate change

Transition Opportunities:

• Opportunities related to the growing demand for "green" products
• Opportunities to leverage stricter regulations on competitive advantage following the implementation of stricter regulations on product and processes

Climate Change Risk Assessment

Brembo conducted a climate change risk assessment to evaluate the Company's business resilience and the associated financial exposure to both the physical effects of climate change and the transition towards a low-carbon economy. The assessment scope included Brembo and selected key suppliers' sites.

For physical risks, analysis examined potential consequences on Business Interruptions (BI) and/or Property Damages (PD), in the short term (2024) and in the medium/long term (2030/2050). The long-term analysis was performed considering the RCP 8.5 scenario of the IPCC ("Fossil fuelled development").

For transitional opportunities and risks, the assessment took into consideration the RCP 1.9 scenario and the corresponding socio-economic IPCC's SSP1 scenario ("Taking the Green Road"), and the NZE2050 scenario from the IEA.

Resilience

The assessment results on physical risks highlighted that climate exposure of proprietary sites is increasing, with a focus on tornadoes, hail hazards, and water stress. The most economic-relevant exposures are river floods (three sites exposed) and hurricanes/tornadoes/windstorms (two sites exposed), but considering the mitigators in place, the overall potential economic exposure can be considered limited. The Group analyzes exposures to natural catastrophes when building new plants from greenfield or acquiring sites.

Brembo is dedicated to monitoring and managing its impacts, risks, and opportunities related to climate change. The company is actively committed to reducing its emissions and adapting its production activities to align with sustainable practices. The transition to a low-emission economy is particularly relevant for the automotive sector in which Brembo operates.

Stakeholder Views and Interests

The interests and views of Brembo's key stakeholders have been taken into account in relation to the strategy and business model through the impact materiality assessment process, in which the main stakeholders expressed their opinions regarding the direct and indirect impacts of the Group. Following the stakeholder engagement on impact materiality, no changes to Brembo's strategy and business model have been identified or are expected.

Governance

The Board of Directors, with the support of the Audit, Risk and Sustainability Committee, is tasked with defining the general guidelines of the Internal Control and Risk Management System (ICRMS), so that the main impacts, risks and opportunities pertaining to Brembo N.V. and its subsidiaries are properly identified, as well as adequately measured, managed and monitored. The BoD is yearly informed of and has the responsibility to approve the Double Materiality Analysis and is involved in the target setting of IROs.

Description of the process to identify and assess material impacts, risks and opportunities

Overview

To define the material sustainability topics and the contents of this sustainability report, the Brembo Group conducted a double materiality analysis. In accordance with the requirements of the Corporate Sustainability Reporting Directive (CSRD), the Brembo Group conducted a Double Materiality exercise following the European Sustainability Reporting Standards (ESRS). This exercise serves as the starting point for identifying material topics through the identification of impacts, risks, and opportunities (hereinafter referred to as "IROs").

Double materiality analysis encompasses two complementary perspectives:

Impact perspective: A sustainability topic is material when it concerns the actual or potential, positive or negative impacts of the company on people or the environment in the short, medium, and long term. These impacts can arise from activities conducted under the direct control of the company as well as along its value chain.

Financial perspective: A sustainability topic is material if it causes or may cause significant financial effects for the company, whether negative (risks) or positive (opportunities). These risks and opportunities can arise from activities conducted under the direct control of the company as well as along its value chain.

The double materiality assessment is a continuous process that covers all of Brembo's business areas and sectors.

Step-by-step methodology

The double materiality analysis followed these key steps:

1. Scope definition

In defining the Group's material impacts on people and the environment, the following were considered:

• All production activities performed, as detailed in "Disclosure Requirement SBM-1 – Strategy, business model and value chain"
• The most significant business relationships of the Brembo Group, as detailed in "Disclosure Requirement SBM-1 – Strategy, business model and value chain"

2. Identification of actual and potential impacts through stakeholder engagement

Brembo has conducted specific stakeholder engagement activities in order to receive their input on material impacts. The engagement of internal and external stakeholders within the Group has been fundamental to the sustainability approach, allowing management to understand stakeholder perspectives and integrate them into business decisions.

Impact Materiality Assessment

Scoring criteria

In the case of negative impacts, whether potential or actual, that influence or could influence human rights, these were assessed in a manner that prioritizes the severity of the impact over its likelihood. Therefore, if a negative impact has a low probability of occurrence but high severity, the assessment is still considered at the maximum level.

Impacts are assessed based on:

• Scale: indicates how severe an impact is
• Scope: indicates the breadth of the impact in terms of the stages of the value chain in which it occurs
• Irremediability: indicates how difficult it is to remedy a negative impact (for negative impacts)

In general, severity is determined by the combination of Scale, Scope, and Irremediability.

Materiality threshold

The Brembo Group has divided impacts into four levels of relevance (as combination of magnitude and likelihood): not relevant, moderate, high, and very relevant. All the impacts that resulted as moderate or above have been considered material.

Time horizons

Brembo defines the short-term time horizon as less than one year from current reporting period. On the other hand, the medium-term extends from the end of the short-term up to five years, while the long-term encompasses periods exceeding five years.

Financial Materiality Assessment

For Financial Materiality, an outside-in approach was adopted.

Inputs to the assessment

The analysis was conducted using two key documents from Sustainability & Risk GCF:

• The ERM Report
• The Climate Change Risk Assessment (CCRA)

After examining all the risks listed in the documents, including physical and transitional risks that may affect the Group, those relevant to sustainability issues were selected. Similar risks were grouped together, and the aggregated risk was assigned the highest score among those given by Brembo to the individual risks.

The analysis was then integrated with risks and opportunities arising from:

• Brembo's impacts and dependencies (close relationships and interconnections between the Group suppliers, customers, resources, regulations, or other external entities)
• Desk analysis to map and evaluate potentially relevant sustainability-related opportunities, including:
  • Comparative study of the best practices of peers and competitors
  • Analysis of the Group's internal documentation and strategic objectives
  • Recognized national and international sources such as SASB, MSCI and the S&P Global Sustainability Yearbook

Scoring criteria

The evaluation of risks and opportunities was carried out based on the following two parameters:

• Magnitude: the impact of the occurrence of the risk or opportunity on the Group's activities. The rating scale varies from irrelevant to critical
• Likelihood: the probability of the risk occurring. The rating scale varies from remote to high

Materiality threshold

Risks and opportunities have been divided into four levels of magnitude: Irrelevant, moderate, relevant and critical (in accordance with ERM methodology). Only risks and opportunities with Relevant and Critical magnitude have been identified as material regardless of their likelihood.

Integration with Enterprise Risk Management

The process of identifying, assessing, and managing risks is closely integrated into the Group's Enterprise Risk Management (ERM) system, in line with best practices and international standards. The results of the ERM process are regularly reported to Top Management, the Control and Risk Committee, the Sustainability Committee, and the Board of Directors (BoD) on a quarterly basis, ensuring constant oversight and effective strategic alignment.

Brembo's risk assessment methodology for risk management is conducted under the overall ERM framework which follows the guidelines of ISO 31000. For each risk (including Sustainability Reporting risks) several items are reported and identified, i.e. risk context, risk scenario and mitigation measures to prevent, control and transfer risk. Through its top-down risk mapping process, Brembo assesses at least once a year the main risks of the Group on both short-term and medium-term horizons involving all GBUs, GCFs and main Geographies.

The result is the annual ERM report which is reviewed by the key governance and control roles/functions including the Executive Chairman, CEO, Internal Audit, Audit Committee and finally the Company board. The Internal Audit GCF considers the results of the ERM report in the development of the annual audit plan which is defined on a "risk based" approach.

Value chain mapping

The double materiality assessment, which forms the basis for the preparation of this Sustainability Statement, has considered the Group's value chain. This includes both the activities directly carried out by the Brembo Group and those performed upstream and downstream of direct operations.

Brembo's value chain is divided into several key phases:

• Upstream: Procurement of raw materials (aluminium, scrap, coke, graphite, calcium carbonate and other chemical additives) and finished products/services (brake pads, seals, rubber components, packaging, outsourced services)
• Direct operations: Design, development, and production of finished products
• Sales: Products sold to automotive and two-wheeler manufacturers, ITG, distributors, spare parts dealers, mechanics, tuners, and through web channels
• Downstream: Use and end-of-life of the product

Frequency and review

This is the first year of reporting under ESRS (2024 reporting year). The double materiality assessment is described as a continuous process. The Board of Directors is yearly informed of and has the responsibility to approve the Double Materiality Analysis.

Use of exemptions

ESRS 1 allows companies to not yet incorporate the value chain impact for certain metrics. Brembo has made use of this exemption, by not including the impact of non-consolidated joint ventures and associates in the sustainability statements. Brembo does not have control over these entities, and will assess in the coming years how to incorporate these entities in its sustainability statements. The value chain exemption can be applied during the first three reporting years. Only data and information related to Brembo SGL Carbon Ceramic Brakes S.p.A. (Stezzano), over which the Group has operational control, is included in metrics where required by the ESRS standards.

Transition plan for climate change mitigation

Scope and coverage

Brembo's Climate Transition Strategy applies to the entire Group and all businesses in which Brembo operates. The transition plan aims to achieve Net Zero emissions by 2040.

Alignment with Paris Agreement and SBTi

Brembo's objectives are aligned with the Paris Agreement goals to keep the increase in the planet's temperature below 1.5°C. The targets were established in alignment with the Science-Based Targets initiative (SBTi) Net Zero criteria, aimed at limiting the global temperature increase to well below 1.5°C. The company plans to submit its targets for validation to the SBTi.

Brembo is not part of the EU Paris-aligned Benchmarks (ESRS E1-1 datapoint 14).

Targets and timelines

2030 targets

• Scope 1 and 2 (market-based): 42% absolute reduction compared to 2020 baseline
• Scope 2: 100% renewable electricity (achieving total reduction in emissions from purchased electricity)
• Scope 3: 42% absolute reduction compared to 2020 baseline

2040 targets (Net Zero)

• Scope 1 and 2 (market-based): 90% absolute reduction compared to 2020 baseline
• Scope 3: 90% absolute reduction compared to 2020 baseline
• Residual emissions: Up to 10% compared to 2020 levels will be neutralised through offset interventions that certify the permanent removal of CO2 from the atmosphere

Baseline year (2020)

Decarbonisation levers and key actions

Energy and renewable sources

• Self-production of energy: Evaluating installation of facilities for self-production of low-impact energy, including photovoltaic
• Renewable electricity: Purchased renewable electricity to cover 83% of electricity consumption by 2024, aiming to achieve 100% coverage by 2030, effectively eliminating Scope 2 emissions
• Transition away from fossil fuels: Promotion of renewable energy sources and abandonment of fossil resources

Process and operational measures

• Advanced monitoring: Implementation of the Brembo Energy Platform, utilizing smart factory principles to monitor and optimize energy consumption across key factory utilities
• Replacement of obsolete systems: Adoption of advanced technologies offering high energy efficiency
• Energy efficiency projects: Upgrading machinery and utilities in plants to more energy-efficient and less emission-intensive alternatives
• Losses reduction: Targeted initiatives including identifying and mitigating compressed air leaks, implementing automatic shutdowns during non-productive periods, and recovering heat from compressor cooling circuits
• Dedicated budget: Allocation of funds during investment planning specifically aimed at enhancing energy efficiency and reducing emissions

Product and design

• Sustainable design: Establishing sustainability criteria for new plants and machinery from the design phase
• Eco-sustainable products: Emphasis on innovative low-emission solutions and increased use of recycled raw materials to minimize product life cycle impact
• Electrification of processes

Supply chain engagement

• Supplier collaboration: Brembo actively collaborates with suppliers to reduce their Scope 1 and Scope 2 emissions, encouraging them to adopt sustainability strategies aligned with corporate objectives
• Increase in the use of secondary materials

Annual performance metrics

Brembo has established an annual sustainability target defined as a percentage of emissions avoided through improvements compared to the previous year's emission levels.

For 2024:

• Target: 20% reduction in CO2eq emissions through improvement actions compared to previous year
• Achievement: 25.2% reduction (target exceeded)

This success was driven by energy efficiency projects implemented across all Group plants and increased share of renewable energy purchased in Poland, Czech Republic, US, Spain, and China.

Decarbonisation lever compatibility table

Carbon credits and removals

Residual emissions that cannot be reduced (up to a maximum of 10% compared to 2020) will be neutralised through offset interventions that certify the permanent removal of CO2 from the atmosphere, achieved through the purchase of carbon credits.

CapEx and investment commitments

The information related to Brembo's objectives or plans (CapEx, CapEx plans, OpEx) for aligning its economic activities (revenues, CapEx, OpEx) with the criteria established in Commission Delegated Regulation 2021/2139, and an explanation of how the transition plan is embedded in and aligned with the Company's overall business strategy and financial planning, has not been disclosed with regard to the financial year 2024.

However, investments related to climate change mitigation and energy efficiency are reflected in the disclosure related to the European Taxonomy regulation.

Locked-in emissions and stranded assets

In the coming years, Brembo is committed to evaluating its locked-in emissions by conducting a study of the elements that could compromise the achievement of reduction targets.

Governance and monitoring

The progress of Brembo's status towards the roadmap to Net Zero is presented during Board of Directors meetings. A clear overview of current data for Scope 1, 2 and 3 emissions is provided, along with future projections for the coming years.

The Environment and Energy area coordinates a working group that includes all relevant company functions. This Group collaborates to carry out improvement initiatives focused on reducing CO2eq emissions.

The roadmap to achieving the net zero goal is periodically updated and discussed within the Sustainability Committee to assess specific investment needs, evaluate the impact of external events and update the state of progress.

Strategic objectives

Brembo's Climate Transition Strategy pursues the following strategic objectives:

1. Company sustainability: Presentation of Brembo's commitments in terms of environmental sustainability and resilient business evolution in a future low-carbon scenario
2. Regulatory and market context: The transition roadmap is a tool to express Brembo's commitment in accordance with regulatory standards and international frameworks (e.g., Paris Agreement, CSRD, CDP)
3. Concrete commitment to climate neutrality: The objectives of the transition strategy are in line with the reduction of greenhouse gas emissions consistent with achieving Net Zero by 2050, as envisaged by the European Union

Responsible function

The Chief Executive Officer of Brembo is responsible for the implementation of the global procedure for climate change and the environmental and energy policy, while local Plant Directors / Plant Managers are responsible for local procedures.

Policies related to climate change mitigation and adaptation

Brembo has a structured system of policies and procedures aimed at managing the impacts, risks, and opportunities related to the prevention and monitoring of climate change and energy topics. The policies adopted by the Group not only aim to minimise negative environmental impacts but also to identify and exploit potential opportunities to continuously improve its practices.

Environment and Energy Policy

Scope of application: Brembo has decided to apply the environmental and energy policy at the corporate level, including all plants.

Governance and oversight:

• The Chief Executive Officer of Brembo is responsible for the implementation of the global procedure for climate change and the environmental and energy policy
• Local Plant Directors / Plant Managers are responsible for local procedures

Key content and principles: In line with the goals of the Paris Agreement to keep the increase in the planet's temperature below 1.5°C, Brembo aims to constantly reduce the CO2 footprint of its products and processes, as well as those of the supply chain. This is primarily achieved by:

• Promoting the abandonment of fossil resources, favouring renewable ones
• Maximising the energy efficiency of its processes
• Guided by the principles expressed by the Task Force on Climate-related Financial Disclosure (TCFD), Brembo identifies its physical and transitional risks, as well as the opportunities arising from the transition to a low-carbon economy

Brembo's environment and energy policy addresses the company's commitment to mitigating climate change by reducing its GHG emissions, adapting to climate change through the identification of climate risks and the application of innovative solutions, and utilizing renewable energy resources by promoting the abandonment of fossil resources and maximizing energy efficiency.

Alignment with international standards: Brembo's environmental and energy policy is structured to comply with:

• ISO 14001:2015 standard
• ISO 50001:2018 standard
• Paris Agreements
• TCFD principles

Public availability: All those involved in the Group's activities, such as employees, contractors, suppliers, customers, and shareholders, can access Brembo's environmental and energy policy through Company's website and in all production areas of Brembo's plants.

Implementation and monitoring: As part of the Environmental Management System, Brembo has adopted specific procedures aimed at mitigating and preventing the emission of greenhouse gases from production plants, including:

• Brembo procedure "Management and Monitoring of Greenhouse Gases" establishes the requirements for the collection and accounting of greenhouse gases (GHG) emitted by production sites, ensuring relevance, completeness, consistency, transparency, and traceability
• Risk management includes the appointment of a Process Owner (PO) and the definition of basic principles for the construction of the GHG inventory
• Emissions are divided into scope 1, scope 2, and scope 3
• The procedure includes the management of site and group data, the calculation of emissions for each scope, and the periodic verification of data
• Brembo sets objectives for reducing greenhouse gas emissions and a Sustainability Index to reduce the carbon footprint

Sustainable Procurement Policy

Scope of application: The policy is distributed to the main global Brembo suppliers, requiring suppliers to reduce CO2 emissions and adopt sustainable practices throughout the product life cycle.

Governance and oversight: The Purchasing team is responsible for the update of the policy.

Key content and principles: The Brembo Group is committed to promoting a culture of sustainability and ensuring responsible and sustainable procurement. Suppliers are required to:

• Adopt environmental protection policies based on the LifeCycle Assessment (LCA) principle
• Reduce CO2 emissions throughout the product life cycle
• Develop an ISO 14001-compliant environmental management system
• Optimise the use of natural resources
• Reduce the use of fossil energy
• Properly manage waste
• Provide transparency on emissions and implement effective measures to reduce them

Alignment with international standards: The reference standards include:

• ISO 14001 certification for environmental management systems
• OECD guidelines for supply chain due diligence

Public availability: Published on Brembo's website and on the Company's Intranet. In addition, Brembo shares the policy and requirements with suppliers through direct communications and requires transparency and collaboration for monitoring emissions and adopting sustainable measures.

Actions and resources in relation to climate change policies

Overview

Brembo actively prevents negative material impacts and risks and fosters positive material impacts and opportunities concerning climate change through different actions. To ensure the effective implementation of this strategy and alignment with established objectives, the Environment and Energy area coordinates a working group that includes all relevant company functions.

Road Map to Net Zero

Brembo has established a Road Map that is continuously refined in response to technical, technological, and market developments. This Road Map encompasses the following actions:

1. Advanced Monitoring

• Action: Implementation of the Brembo Energy Platform
• Description: Utilizes smart factory principles to monitor and optimise energy consumption across key factory utilities
• Scope: Own operations
• Expected outcome: Real-time monitoring of energy consumption

2. Replacement of Obsolete Systems

• Action: Adoption of advanced technologies
• Description: Adoption of advanced technologies that offer high energy efficiency, thereby reducing the consumption of non-renewable resources
• Scope: Own operations
• Expected outcome: Reduced consumption of non-renewable resources

3. Dedicated Budget

• Action: Allocation of funds for energy efficiency
• Description: Allocation of funds during the investment planning phase specifically aimed at enhancing energy efficiency and reducing emissions
• Scope: Own operations
• Resources: Dedicated budget allocated during investment planning (specific amounts not disclosed for 2024)
• Link to policy/target: Aligned with 2030 and 2040 emission reduction targets

4. Losses Reduction

• Action: Targeted initiatives to reduce energy losses
• Description: Initiatives such as identifying and mitigating compressed air leaks, implementing automatic shutdowns of systems during non-productive periods, and recovering heat from compressor cooling circuits
• Scope: Own operations
• Expected outcome: More efficient and sustainable operation

Decarbonisation Levers

Brembo has implemented key decarbonisation levers to address emission sources directly under its control:

Energy Efficiency and Process Optimisation

• Actions include:
  • Implementation of the Brembo Energy Platform for real-time monitoring of energy consumption
  • Replacement of outdated plants with advanced, energy-efficient technologies
  • Allocation of a dedicated budget for sustainability efforts
  • Reduction of losses by addressing compressed air leaks
  • Automating shutdowns during non-productive periods
  • Recovering heat from cooling circuits
• Scope: Own operations
• Time horizon: Short to medium term (ongoing to 2030)
• Link to target: 42% reduction in Scope 1+2 emissions by 2030

Renewable Energy Transition

• Actions include:
  • Evaluating the installation of facilities for self-production of low-impact energy, including photovoltaic
  • Purchasing renewable electricity certificates
  • Achieved 83% renewable electricity coverage by 2024
  • Target to achieve 100% renewable electricity coverage by 2030
• Scope: Own operations
• Time horizon: Short to medium term (2024-2030)
• Expected outcome: Effectively eliminating Scope 2 emissions by 2030
• Link to target: 100% renewable electricity by 2030; Scope 2 reduction target

Innovation and Environmental Standards

• Actions include:
  • Establishing sustainability criteria for new plants and machinery from the design phase
  • Emphasizing eco-sustainable products through innovative low-emission solutions
  • Increased use of recycled raw materials to minimise product life cycle impact
  • Sustainable Design and Eco-sustainable Products initiatives
• Scope: Own operations and downstream value chain
• Time horizon: Medium to long term
• Link to target: Supports overall emission reduction goals

Supply Chain Engagement

• Action: Supply chain involvement and collaboration
• Description: Brembo actively collaborates with suppliers to reduce their Scope 1 and Scope 2 emissions, fostering sustainability strategies that align with Brembo's corporate objectives
• Scope: Upstream value chain
• Time horizon: Medium to long term (2030-2040)
• Link to target: 42% reduction in Scope 3 emissions by 2030; 90% reduction by 2040
• Note: Binding requirements exist only for Scope 2; for Scope 1, Brembo requests suppliers undertake decarbonization actions in line with sustainable procurement policy

Increased Use of Secondary Materials

• Action: Increase in the use of secondary materials
• Scope: Own operations and value chain
• Time horizon: Medium to long term
• Link to target: Supports Scope 1, 2, and 3 reduction targets

2024 Annual Sustainability Target Performance

• Target: 20% reduction in CO2eq emissions through improvement actions compared to previous year
• Achievement: 25.2% reduction achieved
• Key drivers: Energy efficiency projects implemented across all Group plants; increased share of renewable energy purchased in Poland, Czech Republic, US, Spain, and China
• Link to incentives: Forms part of short-term incentive plan (STIP) and long-term incentive plan (LTIP) for executives and management

Resources Allocated

Financial Resources:

• The information related to Brembo action plan (CapEx, OpEx) has not been disclosed with regard to the financial year 2024
• However, investments related to climate change mitigation and energy efficiency are reflected in the disclosure related to the European Taxonomy regulation
• Dedicated budget allocated during investment planning phase for energy efficiency and emission reduction (specific amounts not quantified for 2024)

Non-financial Resources:

• Environment and Energy area coordinates a working group that includes all relevant company functions
• Energy managers, VPs Operations, Plant Directors/Plant Managers, and plant personnel incentivized through monetary rewards
• Corporate executive team assigned sustainability targets as part of STIP
• Approximately 60 management team members included in LTIP (2022-2024)

Future Commitments

• Brembo is committed to evaluating its locked-in emissions by conducting a study of elements that could compromise the achievement of reduction targets
• Plans to submit targets to Science Based Targets initiative (SBTi) for validation
• Continuous enhancement of supply chain engagement through training activities and establishment of climate-related requirements

Targets related to climate change mitigation and adaptation

Brembo has established measurable, outcome-oriented, and time-bound targets aligned with the UNFCCC Paris Agreement's goal of limiting global temperature rise to below 1.5°C. The Group aims to achieve Net Zero emissions by 2040.

Summary of Climate Targets

*Note: In reduction compared to the 2023 value

Target Details

2030 Targets

By 2030, Brembo aims to:

• Reduce absolute Scope 1 and market-based Scope 2 emissions by 42% compared to 2020 levels (baseline: 371,903 tCO2e)
• Ensure 100% of electricity used comes from renewable sources
• Reduce absolute Scope 3 emissions by 42% compared to 2020 levels (baseline: 1,666,245 tCO2e)

2040 Targets

By 2040, Brembo aims to:

• Reduce absolute Scope 1 and market-based Scope 2 emissions by 90% compared to 2020 levels
• Reduce absolute Scope 3 emissions by 90% compared to 2020 levels
• Neutralise absolute emissions by a maximum of 10% compared to 2020 levels through carbon credits

Decarbonisation Levers

Progress to Date (2024)

Actual emissions (2024):

• Scope 1: 108,135 tCO2e (increase of 34,380 tCO2e from baseline)
• Scope 2 (market-based): 116,268 tCO2e (decrease of 182,468 tCO2e from baseline)
• Scope 3: 2,085,578 tCO2e (increase of 419,333 tCO2e from baseline)
• Total GHG: 2,309,982 tCO2e (increase of 271,247 tCO2e from baseline)

Annual sustainability target (2024): Brembo achieved a 25.2% reduction in CO2eq emissions through improvement actions compared to previous year emissions, exceeding the target of 20%.

Renewable energy (2024): 83% of electricity consumption covered by renewable sources, up from 43% in 2020.

Target Characteristics

• Baseline year: 2020 (chosen as the most recent year with data present and structured)
• Scope: All targets apply at Group level; Scope 1+2 targets cover own operations; Scope 3 targets cover value chain
• Type: All GHG reduction targets are absolute targets measured in tonnes CO2eq
• Science-based validation: Targets established in alignment with Science-Based Targets initiative (SBTi) Net Zero criteria. The Company plans to submit its targets to SBTi for validation.
• Compatibility: All targets are compatible with limiting global warming to 1.5°C
• Stakeholder involvement: Only internal stakeholders involved in target definition
• Changes: Since adoption, no changes have been made to targets

Additional Climate-Related Targets

Suppliers' CO2 Emissions Data Collection:

• Baseline (2023): 41% validation rate of "carbon relevant" suppliers' data
• Target: Achieve and maintain validation rate above 75%
• Status (2024): 75% validation achieved
• Scope: ~300 "carbon relevant" suppliers

Local for Local Index:

• Baseline (2020): 87% local for local index
• Target (2030): Maintain local for local index >85%
• Status (2024): 90.45%

Energy consumption and mix

Scope and methodology

Energy consumption data covers all Brembo Group production sites and is reported in megawatt-hours (MWh). The disaggregated energy mix includes fuel consumption by source, purchased electricity/heat/steam/cooling, and self-generated non-fuel renewable energy. Data is collected according to the Brembo procedure for greenhouse gas management and monitoring.

Energy consumption disaggregated by source

Energy intensity for high climate impact sectors

Note: The net revenue from high climate impact sectors equals the Group's total net revenue, indicating all Brembo activities fall within high climate impact sectors.

Nuclear energy

Energy consumption from nuclear sources: Not disclosed.

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 – Direct GHG emissions

Brembo has not disclosed a further breakdown of Scope 1 emissions by source type (stationary combustion, mobile combustion, process emissions, fugitive emissions) in the extracts provided.

Scope: The 2024 calculation includes Brembo SGL Carbon Ceramic Brakes S.p.A. (BSCCB S.p.A.), a joint venture over which the Group has operational control. The scope of the sustainability statement does not include non-consolidated joint ventures and associates (with the exception of BSCCB S.p.A.), nor the following non-operative entities: Brembo Reinsurance AG, Brembo Poland Manufacturing Sp.zo.o., Brembo Poland Heratech Sp.zo.o., Brembo Thailand Ltd., Brembo Australia Pty Ltd, Brembo France SAS.

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Scope 2 – Indirect GHG emissions from purchased energy

Brembo has not disclosed separate location-based and market-based Scope 2 figures in the extracts provided.

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Scope 3 – Indirect GHG emissions from the value chain

Brembo has not disclosed a detailed breakdown of Scope 3 emissions by GHG Protocol category (1–15) in the extracts provided. The report notes that "Data concerning Scope 3 greenhouse gas emissions face intrinsic limitations due to the limited availability and relative accuracy of the information used to define both quantitative and qualitative aspects related to the value chain."

The report mentions that value chain exemptions allowed under ESRS 1 have been applied during the first reporting year, with the intention to incorporate non-consolidated entities in future years.

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Total GHG emissions and intensity

Notes on intensity metric: The sustainability highlights report a -13.74% reduction in "Emissions of CO₂ per cast tonne" compared to 2023. This metric is defined as Scope 1 and market-based Scope 2 emissions generated by foundries, divided by gross tonnes of molten cast iron and molten aluminium (including BSCCB S.p.A.). The 2023 comparator showed -11.2% (baseline not specified in the extracts).

Brembo has not disclosed a total GHG emissions figure (sum of Scopes 1, 2, and 3) or a GHG intensity metric normalised by net revenue (e.g. tCO₂eq per M€) in the extracts provided.

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Regulated emissions and biogenic CO₂

EU ETS or other regulated emissions: Not disclosed in the extracts provided.

Biogenic CO₂ emissions: Not disclosed separately in the extracts provided.

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Methodology and reporting notes

• Baseline and target years: The sustainability plan references a 2020 baseline for net zero targets (Scopes 1+2: 372,491 tCO₂eq; Scope 3: 1,666,245 tCO₂eq). Target years are 2030 (−42% for Scopes 1+2 and Scope 3) and 2040/2050 (−90% for both).
• Scope boundaries: The 2024 figures include BSCCB S.p.A. for metrics where operational control applies. Non-consolidated joint ventures and associates are excluded from the sustainability statement scope, except for BSCCB S.p.A.
• Data quality: The report acknowledges "intrinsic limitations" in Scope 3 data due to limited availability and accuracy of value chain information. Estimates and causes of uncertainty are noted where relevant.
• Phase-in provisions: Brembo has used phase-in provisions under ESRS 1 Appendix C for certain disclosure requirements, reflecting this as the first year of ESRS reporting.
• Calculation perimeter: The intensity metric (emissions per cast tonne) is specific to foundry operations and includes only Scope 1 + market-based Scope 2 emissions from casting activities.

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Summary: Brembo disclosed Scope 1 (224,404 tCO₂eq in 2024) and total Scope 3 (2,085,578 tCO₂eq in 2024) figures, with year-on-year comparisons. Scope 2 location-based and market-based splits, Scope 3 category-level breakdown, and a total GHG emissions figure (sum of all scopes) were not disclosed in the extracts. An intensity metric (emissions per cast tonne) is provided for foundry operations only. The report notes data limitations for Scope 3 and the application of first-year phase-in provisions under ESRS.

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Phase-in exemption statement

Brembo used the phase-in provision in accordance with the ESRS 1 Appendix C except for S1-7, S1-8, S1-13, S1-14.

According to the content index table, ESRS E1-9 disclosure requirements are marked as follows:

• 66: Exposure of the benchmark portfolio to climate-related physical risks - not material - phased-in
• 66 (c): Disaggregation of monetary amounts by acute and chronic physical risk 66 (a) - Location of significant assets at material physical risk - not material - phased-in
• 67 (c): Breakdown of the carrying value of its real estate assets by energy-efficiency classes - not material - phased-in
• 69: Degree of exposure of the portfolio to climate-related opportunities - not material - phased-in

No quantified financial effects (in €), time horizons for financial impacts, methodology for quantification, specific assets/business lines flagged for transition risk, or CapEx/OpEx implications are disclosed in the available excerpts.

For the first time Euro 7 regulation has set standards for emissions of particulate matters from braking systems, with specific limits for different vehicle categories effective as of 2026.

Brembo is developing solutions for reducing particulate emissions from brakes. In 2020, it launched its Greentive® disc, with an innovative coating that reduces wear and tear and particulate emissions. Subsequently, the Company has forged ahead with research on new materials and technologies linked to the brake disc production process.

In parallel, it has also continued the concurrent development of brake pads — an activity essential to create an ideal combination with the brake disc able to ensure low emissions without compromising on performance.

Application developments with the major European market players are underway, and will continue in 2025 as well, with a view to applying these new solutions, which are meeting with interest also among other customers.

Actions and resources related to pollution

Air Emissions Management

Action: Implementation of Environment and Energy Management System for air emissions control

• Scope: All Brembo facilities (direct operations) worldwide
• Description: Establishes common requirements across all Group plants to maintain environmental risks well below emission limits mandated by local legislation. Each emission point is equipped with abatement systems ensuring atmospheric emissions are at least 60% lower than local legislative limits.
• Monitored parameters: Emissions from melting processes (powders, NOx, SOx) and mechanical processing/painting processes (powders and VOCs)
• Target link: Pollutant concentrations in air discharges must be maintained at levels lower than 60% of the limits imposed by local regulations
• Monitoring: Each facility develops appropriate monitoring plans to ensure emissions from production processes, including odorous emissions, are limited to technological thresholds. Annual measurements conducted to ensure compliance.
• Methodology: Emissions calculated based on concentration of harmful substances, mass flow, and operating time using precise measurements at plants subject to regular or ongoing spot checks

Action: Monitoring of coolants (HFC and HCFC) atmospheric releases

• Scope: All Brembo facilities
• Description: Monitoring of quantity of coolants released into the atmosphere, calculating corresponding CO2 equivalent impact

Water Emissions Management

Action: Water Management procedure under Environment and Energy Management System

• Scope: All Brembo facilities (direct operations) worldwide
• Description: Establishes requirements and restrictions to ensure rational use of water resources and protection against potential accidental contamination. In cases of potential contamination due to water discharge, procedure mandates limits up to 60% lower than those set by local regulations.
• Target link: Pollutant concentrations in water discharges must be maintained at levels lower than 60% of the limits imposed by local regulations
• Implementation: All sites required to implement appropriate measures to maintain pollutant concentrations in discharges consistently below threshold, utilizing products with lesser environmental impact or employing advanced discharge water treatment technologies
• Risk assessment: Each plant conducts risk and opportunities assessment for processes impacting water resources, leading to mitigation actions for areas identified as high risk or with significant opportunities
• Monitoring: Annual measurements to ensure compliance with pollutant thresholds in water. Continuous monitoring and evaluation to uphold compliance and effectiveness.

Action: Annual company-wide water risk evaluation using WRI ACQUEDUCT methodology

• Scope: All Group sites worldwide
• Description: Assessment of exposure to water quality and availability risks at each Group site
• Time horizon: Annual basis

Soil and Overall Pollution Management

Action: Air Emission, Soil, and Water Management procedure

• Scope: All Group plants worldwide
• Description: Imposes requirements and restrictions across all Group plants to ensure sustainable use and protection against pollution. Supported by robust monitoring system for principal pollutants from production processes and installation of treatment plants in accordance with Best Available Techniques (BAT).
• Target link: Aligned with policy objectives to preserve essential environmental matrices (water, soil, and air)

Chemical Management (Italy)

Action: Chemical management procedure for Italian sites

• Scope: Italian sites only
• Description: Establishes methodology for management of chemicals used within Italian sites, ensuring compliance with national and international chemical regulations
• Time horizon: Completed on annual basis, with ongoing monitoring and assessment

Resources Allocated

Financial resources: Not disclosed. "The information related to Brembo action plan (CapEx, OpEx) has not been disclosed with regard to financial the year 2024."

Non-financial resources: Not explicitly detailed

Expected Outcomes / KPIs

• Target: Pollutant concentrations in air and water discharges maintained at levels lower than 60% of limits imposed by local regulations
• Scope: All Brembo plants (direct operations) worldwide
• Measurement: Absolute percentage (%) indicating specific concentration levels to be achieved
• Performance monitoring: Annual measurements confirm targets are being met as initially planned, with ongoing analysis of trends and significant changes
• Methodology: Based on conclusive scientific evidence, with values derived from precise measurements conducted at plants. Direct measurement through online analysers and calculations based on site-specific data.

Integration with Strategy

Actions are supported by Environment and Energy Management System that addresses emission limits well below legislative requirements. Target is not mandatory and not required by legislation, affirming company's voluntary commitment to monitor pollutants during processes. No stakeholder involvement in target-setting process. No changes to targets, metrics, or measurement methodologies within defined time horizon.

Targets related to pollution

Target: Pollutant concentrations below regulatory limits

Target metric: Pollutant concentrations in air and water discharges maintained at levels lower than local regulatory limits

Target value: Below 60% of the limits imposed by local regulations

Target type: Absolute target, measured in percentage (%)

Target year: Not disclosed

Baseline year and value: Not disclosed

Scope: All Brembo plants (direct operations) worldwide

Science-based / externally validated: Not mandatory, not required by legislation. Internal target based on conclusive scientific evidence, with values derived from precise measurements conducted at plants subject to regular or ongoing spot checks.

Progress to date (2024): Performance against the disclosed targets is monitored through annual measurements to ensure compliance with pollutant thresholds in air and water. The monitoring process confirms that the targets are being met as initially planned, with ongoing analysis of trends and significant changes in performance.

Target alignment

This target is closely aligned with Brembo's policy objectives, reflecting the company's commitment to preserving essential environmental matrices such as water, soil, and air. The target is supported by:

• Air Emission, Soil, and Water Management procedure imposing requirements and restrictions across all Group plants
• Robust monitoring system for principal pollutants resulting from production processes
• Installation of treatment plants in accordance with Best Available Techniques (BAT)

Measurement methodology

Targets are based on conclusive scientific evidence, with values derived from precise measurements conducted at plants. Emissions at each plant are calculated based on:

• Concentration of harmful substances
• Mass flow
• Operating time

Measurement methodologies include direct measurement through online analysers and calculations based on site-specific data.

Pollution of air, water and soil

Overview

Brembo has consolidated emissions data from facilities over which the company exercises operational control. The measurement methodologies include direct measurement through tools such as online analysers, as well as calculations based on site-specific data. Primary data is gathered from factories using the EE Data Collection system, which ensures systematic data acquisition. Emissions are reported by sites that perform chimney monitoring, adhering to legislative requirements. The emission data is reprocessed based on guidelines outlined in the procedure "Atmospheric emission management".

Emissions to air, water and soil (2024)

Table 26 - Pollutant emissions by environmental matrix

Emissions to water in areas at water risk

Table 27 - Water pollutants in water-stressed areas

Regulatory reference

The substances referenced align with Directive 2010/75/EU and Regulation (EC) No. 166/2006 "E-PRTR" (European Pollutant Release and Transfer Register). Substances not included in the table are deemed inapplicable to Brembo's processes and consequently are not subject to monitoring as they are not emitted.

Monitoring approach

Emissions at each plant are calculated based on measurements, taking into account the concentration of harmful substances, mass flow, and operating time. Emissions are influenced by variables such as production mix, which can significantly impact the quantity of substances emitted, making year-on-year comparisons challenging.

Water discharge controls

Brembo maintains pollutant concentrations in air and water discharges at levels lower than 60% of the limits imposed by local regulations. Treatment plants are operated in accordance with Best Available Techniques (BAT).

Substances of concern and substances of very high concern

This disclosure about substances of concern aims at providing an understanding of actual or potential impacts related to such substances, also taking account of possible restrictions on their use and/or distribution and commercialization. These substances may be present in the auxiliaries and in the raw materials used in the production processes, or in the purchased articles which compose the final goods.

For the annual report 2024, Brembo acknowledges the Substances of Concern (SoC) as Substances of Very High Concern (SVHC) listed in the latest 2024 ECHA Candidate List, dated 07th November 2024, in accordance with Article 59 of the REACH Regulation applicable at the European level, Substances with a harmonized classification (Annex. VI. Part 3, CLP - Regulation 2008/1272 and its amendments) that meets the requirements for specific health and environmental hazards, and Persistent Organic Pollutants (according to POPs Regulation - Regulation 2019/1021and its amendments).

Brembo is actively undertaking an analysis to identify a comprehensive list of these substances, especially for the Substances of Very High Concern (SVHC) at the group level, aiming to identify and prevent the possible impacts on environmental matrices and human health.

Data Collection Challenges

Brembo has made every effort to collect the necessary information from its suppliers to disclose the quantities of Substances of Concern (SoC) and Substances of Very High Concern (SVHC). However, as this involves third parties and pertains to 'value chain information,' it has proven to be challenging. This difficulty arises from various factors, including existing contractual arrangements, the level of control exercised over the suppliers and the geographical spread of the manufacturing. In particular, the collection of data has been particularly difficult in extra-European countries because outside of Europe the REACH Regulation is not applicable and entities follows a different legislative framework. Moreover, the adoption of different versions of the Globally Harmonized System (GHS), instead of the EU adaptation, in these countries may lead to a significantly different hazard classification of substances. This approach will require to the Company to classify all the substances at Group level by following the EU criteria, sometime modifying the suppliers' classification.

Since a European standard methodology is missing, neither at Global level, Brembo is developing its method to gather reliable and accurate data from the supply chain. Actually, the preparation of an estimation did not yield reasonable and supportable information, as Brembo is unable to consider all the variables that characterise the semi-finished products used in the finished products. Unfortunately, sector averages or market proxies that could assist in the estimation are not available at this time. Furthermore, as stated in ESRS paragraph ESRS 1 - 5.2, paragraph 72, the incorporation of estimates must not result in information that fails to meet the qualitative characteristics of reliable data.

Transitional Provision Applied

In light of the foregoing it has not been possible to gather complete and reliable information regarding Substances of Concern and Substances of Very High Concern for the Group during this initial year of disclosure. Since this also pertains to information that needs to be collected throughout the value chain, Brembo is utilising the transitional provision outlined in ESRS 1, Article 10-2, paragraph 133(b), which permits reporting on this information starting from subsequent years.

The data collection process is currently being enhanced and will be refined for next year's disclosure, which for year current disclosed is mostly qualitative. Brembo is collaborating with its value chain partners to gather all relevant data concerning Substances of Concern and Substances of Very High Concern.

Policies related to water and marine resources

Brembo has a structured system of policies and procedures aimed at managing the impact related to water management. The policies adopted aim to minimise negative impacts on the environment and to identify and exploit opportunities to continuously improve their practices.

Environment and Energy Policy

• Content/Principles: Designed to manage all the main environmental issues applicable to the Company, including water management. Brembo promotes the sustainable use of water resources along the entire value chain, with particular attention to geographical areas at water risk. The Company is committed to reducing water consumption by increasing reuse and recycling, minimising wastewater leakage and discharge. This goal is achieved through efficient water management practices, the adoption of innovative processes and the promotion of the use of alternative water sources, avoiding subtracting valuable resources from the local area. Brembo recognizes that access to clean water and sanitation is a fundamental human right and ensures that all workers have access to WASH (water, sanitation, and hygiene) services at an appropriate level of standard.

• Cross-reference: Full description of contents and interoperability between environmental ESRSs provided in chapter E1-2

Water Cycle Management Operating Procedure

• Scope: All Brembo sites

• Content/Principles: Establishes the methods for managing the water cycle at all Brembo sites. Addresses sustainable management of water resources in all phases of the production and auxiliary cycle, defining a process aimed at identifying water uses and consumption, determining areas of significant use and identifying opportunities for improvement. The procedure also regulates the management of pollutants in water (as reported in chapter E2-1). Requirements include limits up to 60% lower than those established by local regulations, requiring all sites to take measures to ensure that the concentration of pollutants in discharges consistently remains below the limits.

• Implementation: Part of the Environmental Management System which is constantly updated

Strategy for Rational Use of Water

• Content/Principles: Promotes the rational use of water, progressively reducing its use in production processes and promoting supply from alternative sources, such as the recovery from other processes. Solutions that allow resources otherwise destined for waste to be made available again, minimising the use of virgin material.

• Geographic Focus: Particular commitment to improving the management of water resources in areas of high water stress, identified through water risk assessment tools and specific geographical analyses. Currently, Brembo operates fifteen plants located in regions classified as high water stress, all governed by the Company's policies and procedures related to water management.

Policies on Sustainable Oceans and Seas

No policies or practices concerning sustainable oceans and seas have been adopted, since this aspect is not applicable to the Brembo Group's business operations.

Actions and resources related to water

Brembo is committed to managing its material sustainability matters effectively, particularly in relation to water scarcity.

Alternative water sources for plants affected by water scarcity

Description: The Company is currently exploring alternative sources of water for its plants affected by water scarcity. Most of the plants receive water from the public network to ensure continuity of supply throughout all seasons and to prevent any business interruptions due to predictable water rationing.

Scope: Own operations (Brembo plants)

Objective:

• Ensure business continuity
• Avoid depriving the local community of fresh water
• Control water costs to maintain affordability even in emergency situations

Time horizon: Key implementation projects are expected to be completed by 2030.

Resources allocated: The information related to Brembo action plan (CapEx, OpEx) has not been disclosed with regard to financial the year 2024.

Water reuse system at Mexican cast iron foundry

Description: A notable example of Brembo's commitment to sustainable practices can be seen in its Mexican cast iron foundry, where a water reuse system has been built in 2024.

Scope: Own operations (Mexican cast iron foundry)

Objective: Use an alternative source of water, in particular from the municipal wastewater treatment facility in Monterrey.

Time horizon: Completed in 2024.

Resources allocated: Not disclosed.

Water flow measurement and reduction

Description: Brembo aims to identify all locations that reduce the volume of water used per flush.

Scope: Own operations (all Brembo plants)

Link to target: The action translates the policy statement on the "responsible use of natural resources" into concrete actions. The goal is for all Brembo plants to achieve the water consumption reduction target.

Resources allocated: Not disclosed.

Targets related to water

Brembo has established measurable outcome-oriented targets to assess progress in its sustainability efforts. The target established by Brembo centres on the measurement of water flows, aiming to translate the policy statement on the "responsible use of natural resources" into concrete actions.

Water consumption reduction target:

• Target metric: Reduction of water consumption
• Scope: All Brembo plants
• Target type: The target relates to the reduction of water consumption, although it is not mandatory by legislation
• Target year: 2030 (key implementation projects are expected to be completed by 2030)
• Baseline year: Not disclosed
• Target value: Not quantified
• Progress to date: Not disclosed

Note: The target focuses on reducing water consumption across all plants, with implementation projects expected by 2030. However, no quantified reduction percentage or baseline values are provided in the disclosure.

Water consumption

Total water consumption and intensity

Water consumption in water stress areas

The total water consumption in areas at material water risk, including those experiencing high-water stress, amounts to 250,432.38 m³ in 2024.

Brembo operates fifteen plants located in regions classified as high water stress:

• 3 Mexican facilities located in the Rio Bravo river basin, Monterrey area
• 3 Chinese facilities, two along China's East Coast and one in Yongding He river basin, Hebei region
• 2 Indian facilities in India's East Coast and Krishna river basin
• 1 North American facility in North Atlantic Coast river basin, New Jersey
• 1 Italian facility in Po river basin
• 3 Spanish facilities along the South-East Coast
• 1 Polish plant in Oder river basin

Emissions of pollutants to water in areas at water risk

Methodology

The process of water management and monitoring is governed by common requirements outlined in the procedure "Water cycle management". Primary data are collected through meter readings and bills, documented by the plants, and periodically compiled in the EE Data Collection. This data is then automatically transferred to the Non-Financial Reporting (NFR) system.

Areas at water risk are identified through the use of the World Resource Institute's (WRI) AQUEDUCT methodology and WWF Water Risk Filter tools to assess exposure to water quality and availability risks at each Group site.

Regarding recycled and reused water, not all plants are able to provide measurements for the volume of this water.

Policies related to own workforce

Brembo has a structured system of policies, procedures and codes to manage impacts, risks and opportunities related to its workforce. These policies aim to mitigate and minimize potential negative impacts on both employees and non-employees, identify and leverage opportunities to continuously improve practices, and foster positive impacts on people.

Code of Ethics

Scope: The Code applies to the Board of Directors, Company Directors, employees, and third parties who carry out activities with and on behalf of Brembo.

Governance: The Code of Ethics is approved by the Board of Directors of Brembo N.V. and by each Board of Directors of each Subsidiary.

Key content: The Code outlines standards of behaviour to promote sustainable growth and preserve the Company's reputation, addressing child labour, fair wages and benefits, forced labour, employees' right to work and free association, discrimination, safe and healthy working environment, working hours, concern for local populations and communities, corruption and extortion, and conducting business responsibly and with respect for the environment.

Public availability: Published on the Company's intranet and Group's website. Posted on the Company's notice boards. Available in several languages.

Link to international standards: Legislative Decree No. 231/2001 (231 Model), Corporate Governance Code (DCGC).

Implementation monitoring: Regular training courses provided, particularly for the Code of Ethics. The company expects all its employees, collaborators, agents, business partners, and other stakeholders to operate for Brembo in accordance with the Code. Violations are managed through the Internal Audit GCF and the whistleblowing channel.

Code of Basic Working Conditions

Scope: The code applies to all individuals serving Brembo in any capacity.

Governance: The code is approved by the Board of Directors of Brembo N.V.

Key content: Intended as a general framework that can be integrated by local laws and regulations, specific collective bargaining agreements, and other agreements freely stipulated by the workforce and the Group. The code addresses fair wages and benefits, respect for the right to work and freedom of association, diversity and equal opportunities, human rights, elimination of compulsory labour, slavery, child labour and human trafficking, and protection of information and personal data.

Public availability: Published on the Company's intranet and Group's website. Posted on Company's notice boards.

Implementation monitoring: Regular training and dissemination. Regular self-assessment of the code of basic working conditions. Audits performed by Internal Audit GCF, including focus on human rights topics.

Health and Safety Policy

Scope: The policy applies to the entire Group and all businesses in which Brembo operates. It is consistent with the more general Brembo Vision.

Governance: The policy is signed by the Executive Chairman.

Key content: Provides an overall framework to ensure the health and safety of workers. Defines objectives, principles and commitments set by the Group. The formalization of specific and operational aspects, such as emergency plans and specific risks, is entrusted to individual sites. Brembo's primary objective is preventing the occurrence of accidents or work-related illnesses through shared responsibility for the implementation, maintenance and improvement of the Occupational Health and Safety Management System.

Public availability: Published on the Company's intranet and website. Posted on the Company's notice boards.

Link to international standards: ISO 45001 standard.

Implementation monitoring: All sites are certified according to ISO 45001 standard. Product quality and safety are continuously monitored through specific indicators (customer PPM, internal scraps, incidents). Health and safety metrics are regularly tracked, including number of fatalities, work-related accidents, and days lost to injuries.

Policy on Non-Discrimination and Diversity

Scope: The policy applies to the entire Group and all businesses in which Brembo operates.

Governance: The policy is approved by the Board of Directors of Brembo N.V.

Key content: Contains guidelines on how to promote the principles of Diversity, Equity, and Inclusion ("DEI") within the organization and disseminate a solid culture relating to these aspects. The policy outlines the Company's specific targets in the area of diversity and inclusion. Covers all aspects of the employment relationship and requires responsibility and commitment from employer, employees, and all relevant stakeholders. The policy aims to maintain a work environment based on respect and actively commits to combating all forms of discrimination. No form of intimidation, bullying, or harassment are tolerated.

Public availability: Published on the Company's intranet and Group's website. Posted on the Company's notice boards and made accessible to all employees.

Link to international standards: United Nations Universal Declaration of Human Rights, ILO Tripartite Declaration of Principles concerning multinational enterprises and social policy, OECD Guidelines for Multinational Enterprises, United Nations Global Compact Principles, International Bill of Human Rights. The policy has been reviewed pursuant to best practice provision of the DCGC.

Implementation monitoring: Violations must be reported and assessed from a disciplinary perspective in accordance with applicable company rules and regulations. A 2025 audit plan by external auditor for Brembo N.V. according to the Italian Gender Equality Certification system (UNI/PdR 125:2022) is planned.

Modern Slavery Statement

Scope: The statement is applied to Brembo N.V and to Group companies to which the Modern Slavery Act applies.

Governance: The statement is approved by the Board of Directors of Brembo N.V. and by the Board of Directors of subsidiaries to which it applies.

Key content: Brembo annually publishes its modern slavery statement, outlining its commitments to human rights, including the fight against slavery and human trafficking in its direct operations and along the value chain.

Public availability: Published on the Company's intranet and website.

Link to international standards: Modern Slavery Act 2015.

Stakeholder Engagement Policy

Scope: The policy applies to the entire Group and all businesses in which Brembo operates.

Governance: The policy is approved by the Board of Directors of Brembo N.V.

Key content: Provides a general framework for dialogue between the Group and its stakeholders, with particular attention to aspects related to the sustainability of the Group's strategy and its implementation.

Public availability: Published on the Company's intranet and website.

Link to international standards: The policy has been reviewed pursuant to best practice provision of the Dutch Corporate Governance Code (DCGC).

Whistleblowing Procedure

Scope: Applies to all Brembo employees and third parties.

Key content: Establishes and regulates internal channels for reporting misconduct and irregularities. The procedure details the process for handling reports and the protections in place to ensure the safety of the whistleblower, preventing any form of reprisal. Whistleblowers are protected from any form of retaliation by specific legal provisions, including the nullification of retaliatory acts. Protections extend to individuals who facilitate the reporting, the whistleblower's colleagues, and individuals related to the whistleblower.

Public availability: Available on the Company's website and Intranet.

Link to international standards: Compliant with Directive (EU) 2019/1937.

Implementation monitoring: The reporting channel is managed by the Brembo's Internal Audit GCF. The management and resolution of reports received through the channel are regulated by the whistleblowing procedure.

Additional Policies and Systems

Brembo has also implemented:

• Privacy Policy: Approved by the Board of Directors to set out personal data protection principles in light of GDPR. Applies to the Company and subsidiaries based in the European Union.
• Antibribery Code of Conduct: Aims to ensure transparency, outline permitted conduct, and ensure compliance with anti-corruption regulations. Applies to all employees and other individuals or companies performing duties on behalf of Brembo.
• Antitrust Code of Conduct: Raises awareness among corporate functions of compliance with competition rules. Applies to employees of Brembo N.V. and its subsidiaries in the EU.
• Organization, Management and Control Model According to Legislative Decree No. 231/2001 (231 Model): Voluntary document aimed at ensuring legal compliance and preventing offences.
• Occupational Health & Safety Management System: Described in detail in the Health and Safety Policy, implemented through structured prevention activity, hazard identification, risk assessment, and action plans for continuous improvement.

All policies are periodically communicated to employees and non-employees, with regular training courses. The operational responsibility for ensuring effective engagement with the workforce lies with the People & Organization Global Central Function.

Taking action on material impacts on own workforce

Brembo actively prevents negative material impacts and risks and fosters positive material impacts concerning its own workforce through different actions.

Human Rights and Employment Practices

The first set of actions concerns human rights which affects employment practices, health and safety, security and work environment, labour relations and the treatment of vulnerable groups and minorities. Brembo has proactively identified and implemented specific processes to mitigate the impacts and risks of human rights violations in these areas.

Current mitigation actions:

• Adoption of a global code of basic working conditions
• Implementation of anti-slavery and anti-bribery statements and protocols
• Mandatory training for new employees on Code of Ethics
• Conducting Responsible Business Alliance (RBA) audits
• Regular self-assessment of the code of basic working conditions
• Audits performed by Internal Audit GCF, including a focus on human rights topics

Future mitigation plans:

• A 2025 audit plan by external auditor for Brembo N.V., according to the Italian Gender Equality Certification system (UNI/PdR 125:2022)
• A three-year audit plan by the Internal Audit GCF with an emphasis on human rights

Training and Skills Development

Brembo provides several hours of training to ensure adequate human capital development. The current trend in technological innovation entails the use of automation, data analytics, artificial intelligence, software, and electronics across various company processes.

Current mitigation actions:

• Strict and regular performance management system
• Talent Management System and Succession Planning
• Life-Long Learning Hub of promoting Industry 4.0 culture across all company levels
• Campaign-driven skill mapping and assessment for functions/areas to develop and prioritize existing skill gap
• Partnerships in place with local universities, schools, research & development centres to develop specific courses on emerging trends

Employee Wellbeing

Over the years Brembo has adopted remote work for different workforce categories and geographies in accordance with local laws and best practices balancing employees' flexibility and accountability, preserving the Company's culture and fostering a sense of belonging.

Current mitigation actions:

• Monitoring the implementation of the action plans derived from the last Global Engagement Survey (GES)
• Continuously tracking competitors in the labour market to evaluate Brembo's positioning on hybrid work
• Maintaining and updating Brembo's hybrid work policies and procedures to ensure alignment with best practices
• "Brembo for You" and "Brembo for Family" conferences to promote health and wellbeing
• Nutrition education desk
• Psychological support helpdesk
• Breast cancer prevention campaigns for women
• Executive health check-ups
• Managerial training programmes (e.g., training on unconscious bias, wellbeing, DEI)
• "Brembo Kids" programmes
• Brembo sustainability week prioritizing eco-friendly practices and sustainable growth
• Company seniority award
• Scholarships award to deserving employees and children of employees

Future mitigation actions:

• Implementation of DEI initiatives aligned with the strategic plan for gender equality
• Enhance "Brembo for You" conference with topics like financial awareness, inclusive mindset, digital wellbeing
• Organization wider team sport events
• Celebrate environment days (e.g. food and used clothing collection)
• Celebrate culture days

Diversity, Equity and Inclusion

Pursuant to best practice provision of the Dutch Corporate Governance Code (DCGC), Brembo defined its relevant policy that incorporates specific DEI targets published in July 2024.

Current mitigation actions:

• Establishment of a DEI committee to monitor D&I projects and track progress toward gender equality related target achievement
• Development of a DEI management system in accordance with established standards
• Achieving Italian Gender Equality Certification (UNI/PdR 125:2022) for Brembo N.V.

Future mitigation actions:

• Maintain the Italian Gender Equality Certification to further enhance diversity efforts

Health and Safety

Brembo is strongly motivated to protect employee health and safety.

Current mitigation actions:

• Safety Communication Campaign: To stimulate awareness and recognition of the importance of promptly reporting Near Misses and unsafe behaviors. In 2025, the campaign will begin at the Italian facilities and will subsequently extend to foreign sites
• Testing of Innovative Safety Support Systems: In 2024, the system was analyzed and designed, and in the first half of 2025, a Proof of Concept (POC) will be conducted to experiment with the use of artificial intelligence as a preventive tool for accidents and hazardous situations
• Initiatives for Highly Dangerous Activities: Throughout 2024, workshops were held in all regions aimed at regulating and raising awareness among the operational structures of Brembo plants to reduce risks associated with occasional and high-risk work (maintenance activities, hot work, confined spaces, etc.). Additionally, the groundwork was laid for the digitization of permits related to such activities and the standardization of risk assessment
• WCM Safety Pillar: To reinforce the continuous improvement process, the development of the WCM methodology was promoted in all facilities in 2024. In almost all plants, the application has expanded from a few model areas to a broader implementation, which will see further expansion in 2025. WCM is the programme launched in 2022 focused on designing continuous improvement standard methodology for the whole industrial footprint
• Automation: The health and safety department has contributed to the investment process for automation, which significantly impacts the improvement of the risk profile of factories. Each operation has its own five-year investment plan
• Ergonomics: To address ergonomic risks, and thus injuries and potential occupational diseases, innovative initiatives were pursued in 2024 regarding the introduction of ergonomic criteria during the design phase of production lines, which will continue in 2025, along with initiatives to study the feasibility of introducing exoskeletons

All investments made also include a component aimed at improving the safety of new machines and equipment. Each facility conducts an annual risk analysis to identify areas for improvement, with the goal of reducing the likelihood and/or impact of potential events.

Resources allocated:

While the action plan requires significant operational expenditures (Opex) and capital expenditures (Capex), as of today this information is not available with the proper level of accuracy. The information related to Brembo action plan (CapEx, OpEx) has not been disclosed with regard to financial the year 2024.

Human Resources: Each facility allocates specific human resources to safety, with one person dedicated full-time and the entire team working to enhance the safety of machines and equipment.

Financial Resources: All investments made also include a component aimed at improving the safety of new machines and equipment.

Sustainability Audits and Certifications

Brembo adopts and is certified according to international standards in management systems (ISO) on Quality, Environment & Energy, Health & Safety and related audits are carried out by third-party auditors. In addition, Brembo plants carry out periodic self-assessments on Sustainability topics, coordinated by Sustainability&Risk GCF; this process facilitates the monitoring of Sustainability topics at local level, collecting updated information.

All eligible plants have confirmed the ISO 27001 certification to protect sensitive employee data and minimize cyber-attack risks.

Targets related to own workforce

Brembo has established several measurable, outcome-oriented, and time-bound targets to effectively manage negative impacts and risks while promoting positive outcomes.

Diversity, Equity, and Inclusion (DEI) Targets - Gender Representation

Additional DEI Targets

Current Composition (as of 31 December 2024)

• Executive Directors: 25% women, 75% men
• Non-Executive Directors: 57% women, 43% men
• Management: 17.8% women, 82.2% men

Note: Brembo did not engage directly with its workforce or workers' representatives in the process of defining the targets, monitoring performance against them, or identifying improvements resulting from that performance.

Gender references: The targets refer to female/male representation in compliance with both Dutch law and the Dutch Corporate Governance Code.

People at End of Year: 15,461 (including agency workers: 1,113)

• 2023: 15,653 (including agency workers: 1,999)
• 2024: 14,348 employees (excluding agency workers)
• 2023: 13,654 employees (excluding agency workers)

Personnel expenses for 2024 amounted to €729,547 thousand, with a 19.0% ratio to sales, increasing compared to the previous year (17.7%). At 31 December 2024, people numbered 15,461 (15,653 at 31 December 2023), including agency workers amounting to 1,113 (1,999 at 31 December 2023).

Characteristics of non-employees in the undertaking's own workforce

Overview

Brembo defines "non-employee" as a person who is not directly employed by Brembo but can still perform activities on behalf of the company or contribute to its operations. These individuals include temporary workers and interns.

Headcount by type and gender (2024)

Methodology

Temporary workers (agency workers):

• Counted using Full-Time Equivalent (FTE) methodology
• FTE is obtained by dividing the total paid hours by the number of hours worked in the month (number of working days excluding Saturdays and Sundays)
• The number of non-employees is reported at end of reporting period

Interns:

• Counted using headcount methodology
• The number of non-employees (interns) present at 31.12.2024

Year-end totals

• 31 December 2024: 1,113 agency workers
• 31 December 2023: 1,999 agency workers

Additional context

People at end of year (including agency workers):

• 2024: 15,461
• 2023: 15,653
• 2022: 14,966
• 2021: 13,597
• 2020: 12,629

Agency worker costs for 2024 amounted to €55,703 thousand (€63,247 thousand in 2023).

Collective bargaining coverage and social dialogue

Overall Coverage

72.28% of Brembo's employees are covered by collective bargaining agreements.

Coverage by Geography and Social Dialogue

European Works Council

No specific disclosure on the existence of a European Works Council is provided.

Board Representation

Brembo has no representative of the workers in the Board of Directors.

Diversity metrics

Top management gender distribution

Brembo's top management, defined as the number of executives and managers within the Group, consists of 770 individuals:

Age band distribution of employees

Total workforce age distribution across all employees:

Board gender diversity

As noted in the disclosure requirement table on page 54, ESRS 2 GOV-1 datapoint 21(d) on "Board's gender diversity" is disclosed on page 40, with reference to SFDR Indicator number 13 of Table #1 of Annex 1 and Commission Delegated Regulation (EU) 2020/1816, Annex II. However, the specific board composition metrics are not reproduced in the excerpts provided for S1-9.

Note: Top management is defined as executives and managers. The disclosure does not include multi-year comparisons or other gender categories beyond male/female.

Adequate wages

All employees receive a fair wage that aligned with, where applicable:

• Official documents issued by the local government regarding minimum wage standards;
• Benchmarks established through collective bargaining agreements;
• Salary benchmarks supported by consultancy firms.

Benchmark type: Minimum wage and collective bargaining agreements, supplemented by consultancy firm salary benchmarks

Coverage: 100% of employees (implied - disclosure states "all employees receive a fair wage")

Geographic scope: Global (all Brembo Group employees)

Living wage methodology: Not disclosed. The company references alignment with local minimum wage standards, collective bargaining agreements, and salary benchmarks from consultancy firms, but does not explicitly assess wages against a living wage benchmark that covers basic living needs for workers and their families.

Targets: No forward-looking commitments disclosed.

Methodology details: Not disclosed. No information provided on how adequacy is assessed, frequency of reassessment, or whether non-employee workers are included in wage assessments.

Training and skills development metrics

Training hours provided

2024: 339,000 training hours provided
2023: More than 350,000 training hours provided

Average training hours per employee

Overall average (2024): 23.69 hours per employee

By gender (2024):

• Female: 17.55 hours
• Male: 25.06 hours

By employee category (2024):

• Blue-collar workers: 20.60 hours
• White-collar workers: 31.43 hours
• Managers and executives: 25.34 hours

Training content breakdown (2024)

The training delivered across the Group covered various needs across four key development areas:

1. Organizational behavior and skill development
2. Technical skills relevant to Brembo's business
3. Compliance with legislative requirements
4. Group culture

Training subjects included:

• Professional training: 24.86%
• Product/Process quality management/improvement: 14.52%
• Health & Safety training: 11.70%
• Managerial training: 5.75%
• Language training: 1.83%
• Code of Ethics & Compliance 231 training: 1.77%
• Environmental management training: 0.43%
• Other: 39.14%

Performance and career development reviews

Coverage rate (2024): 97.91% of Brembo's employees participated in regular performance and career development reviews

By gender (eligible employees):

• Male: 82%
• Female: 18%

By employee category:

• Blue-collar workers: 64.20%
• White-collar workers: 28.79%
• Executives and managers: 4.93%

Methodology notes

Training needs are gathered annually through the Global Training Needs Campaign and can be integrated throughout the year based on specific requests. Employees have flexibility to select their own training courses through self-enrollment. While the training and development offer is coordinated centrally, implementation is managed by each country. Performance reviews are conducted at least once a year, based on criteria known to both employees and their direct managers, and may include self-evaluation and direct manager evaluation.

Health and safety metrics

Coverage of health and safety management system

94% of employees and interns are covered by Brembo's health and safety management system. For temporary workers, coverage is 97.65%.

Work-related fatalities and injuries (2024)

The overall rate of recordable work-related accidents is 2.33 (considering total employees and hours worked).

Days lost (2024)

No cases of recordable work-related ill health were detected among former employees.

Methodology note: The rate calculation is based on total employees and hours worked. The estimate for division of hours worked between men and women is based on December data only, which may result in slight deviations from a full monthly analysis.

Compensation metrics

Pay gap

In Brembo, the gender pay gap, defined as the difference in average pay levels between male and female employees expressed as a percentage of the average pay level of male employees, stands at 2.38% at Group level.

This indicates that, on average, male employees earn 2.38% more than their female counterparts at a global level. The final percentage is calculated according to ESRS requirements as follows: (average gross hourly pay level of male employees – average gross hourly pay level of female employees) divided by the average gross hourly pay level of male employees.

Methodology notes:

When addressing the gender pay gap, it is important to consider Brembo's sector, which is highly male-dominant with many job profiles in STEM fields, whose university curricula are still predominantly male-dominant.

The Group's diversity initiatives aim to balance gender representation in leadership and throughout the organization, and to achieve pay equity for equal qualifications and jobs. While Brembo upholds the principle of equal pay for equal work, it is important to note that the overall figures may be influenced by gender characteristics in the sector.

Brembo is dedicated to improving data and analyses to better understand gender pay differences and their root causes. The company is preparing for the EU pay transparency directive and continuously working on identifying and reducing pay gaps within the organization. Brembo is also finalizing a standard job architecture to address inequality and minimize structural differences.

Remuneration ratio

The annual total remuneration ratio is calculated by considering the ratio between the annual total remuneration for the Group's highest paid individual and the median employee annual total remuneration (excluding the highest-paid individual).

Brembo has chosen to present the annual total remuneration ratio based primarily on the number of employees at Brembo N.V., which stands at 104.28.

The value of annual total remuneration ratio calculated according to ESRS standards and taking into consideration the Group employees (median) as of 31 December is equal to 185.52.

Methodology notes:

It differs from the internal pay ratio indicated in the remuneration report section because of the different calculation method.

Brembo is a multinational company operating across three continents and multiple countries, each with varying cost of living standards, remuneration frameworks, and social contribution and taxation implications.

Including all employees within the Brembo Group to represent the annual total remuneration ratio would not accurately reflect, from a methodological perspective, the average pay and working conditions of its workforce. This is due to the fact that it would involve an excessively diverse set of incomparable elements as the denominator.

Phase-in

Brembo used the phase-in provision in accordance with ESRS 1 Appendix C except for S1-7, S1-8, S1-13, S1-14. However, S1-16 is not listed among the exceptions, indicating that full disclosure was provided for this data point in the first reporting year.

Incidents, complaints and severe human rights impacts

In 2024, Brembo did not report any incidents of discrimination, harassment, or severe human rights violations. However, there were 14 complaints submitted through the company's whistleblowing channels for employees to raise concerns, with none reported to the National Contact Points for OECD Multinational Enterprises. As a result, Brembo did not incur any fines, penalties, or compensation for damages.

Summary of incidents and complaints (2024)

Status of complaints

No information is provided on the status of the 14 complaints received (whether open, resolved, or under investigation).

Community Engagement

Brembo is aware that it is an important player in the economic and social fabric of the local areas in which it operates all over the world. This generates a deep sense of responsibility towards people, organizations and institutions, and of course the environment.

For this reason, in 2024 Brembo continued to develop and implement projects and initiatives to engage and support local communities, with the aim of bringing tangible support to the areas of greatest social need.

The Company's work and commitment in this area were recognized by various third parties, including the magazine VITA, which placed Brembo at the top of the ranking of large Italian companies in the four sectors of fashion, food, automotive and furniture precisely because of its social responsibility.

Sustainability Week

In 2024, Brembo wanted to involve all Brembo people in its Sustainability Week, a sharing initiative organized at all Brembo plants and offices around the world. It was an opportunity to encourage people to learn more about and share fundamental topics related to sustainability and saw the active participation of thousands of people, united in the name of sustainability.

Business Conduct and Corporate Culture

Brembo's business conduct is guided by its mission of being a Solution Provider and its vision "Turning Energy into Inspiration". The Group's strategic approach is based on three pillars:

Strategic Pillars and Values

GLOBAL: Brembo's mindset is based on multiculturality, valuing of diversity and with inclusion as a shared value. The Group operates in 18 countries worldwide with a global organization that encourages excellence at local level.

DIGITAL: Brembo aims to become a company that develops and offers all-round solutions through the widespread dissemination of a solid data culture within the Group and an increasingly data-driven approach.

COOL BRAND: Brembo considers it essential to continuously engage in strengthening its brand, anchoring it to new trends that are reconfiguring mobility in line with the values and sensibilities of the new generations.

Commitment to Innovation and Racing

What has not changed is Brembo's passion for and commitment to racing — a fundamental pillar in which the Group continues to invest to remain at the forefront of innovation. Racing embodies the principles of Cool Pillar in engaging the widest and most diverse audience.

Sustainability Approach

At the heart of the Group's strategic vision there is an overarching commitment to sustainability that has becomes a modus operandi within Brembo, permeating all activities, processes and products. This sustainability driven approach is increasingly present also in the relationship with its People, with its supply chain and in the local areas in which the Group operates.

Prevention and detection of corruption and bribery

Brembo has adopted policies and procedures to prevent, detect and address corruption and bribery across its operations.

Antibribery Code of Conduct

Purpose and scope

Brembo has adopted an Antibribery Code of Conduct worldwide to prevent, detect and address allegations of active and passive corruption, in line with the principles set out in the Code of Ethics and according to international best practices. The purpose is to ensure transparency, provide clarity on acceptable behavior and comply with relevant anti-corruption legislation wherever in the world one is conducting business for Brembo. The Code applies to all directors, officers, employees, consultants, agents, representatives, suppliers and business partners.

Key principles

According to the Antibribery Code of Conduct, no one — director, officer or other employee, consultant, agent, representative, supplier or business partner — shall, directly or indirectly, give, offer, request, promise, authorise, solicit or accept bribes or any other perquisite (including gifts or gratuities, with the exception of commercial items universally accepted in an international context of modest economic value, permitted by applicable laws and in compliance with the Code and all applicable practices and procedures) in connection with their work for Brembo at any time or for any reason.

The Code sets out Brembo's policy on the giving and receiving of gifts, hospitality and entertainment, and one's responsibilities, with the aim of ensuring that the highest standards of integrity are maintained.

Integration with governance framework

The Antibribery Code of Conduct is integral to the 231 Model (the organizational, management and control model according to article 6 of the Legislative Decree 231).

Training

Upon their first appointment, directors are trained on the compliance system, and in particular on the Code of Ethics and on the 231 Model, which also includes anti-corruption rules. Subsequently, when various updates are made to the Code of Ethics, the Antibribery Code and the 231 Model, the new applicable regulations, sensitive activities and safeguards implemented by the company are presented to them.

Detection and investigation mechanisms

A key preventive measure for acts of corruption is the separation of Internal Audit GCF from management, whose function is precisely to investigate allegations or episodes of corruption and bribery that could also involve the management itself. The Chief Internal Audit Officer is not responsible for any operational area, has direct access to all the information necessary for the performance of duties and reports on work at each meeting of the Audit, Risk and Sustainability Committee (ARSC) and the Supervisory Committee. The Internal Audit global central function should inform the Board and the Chair of the ARSC without delay if, in the performance of its duties, it discovers or suspects an instance of material misconduct or irregularity.

Entity-level controls

Brembo relies on existing entity-level controls which contribute to mitigate corruption and bribery risk, such as delegation of authorities and power of attorney, segregation of duties, the 231 Model and the related training on 231 compliance; remuneration policy, accounting policies, internal audits on group legal entities, and investigations performed as a result of Whistleblowing.

231 Model

Brembo operates under the Italian "231 Model" which refers to the organizational and management model established under Legislative Decree No. 231/2001. It aims to prevent corporate crimes and administrative offenses within organizations. The model requires companies to implement specific internal controls, procedures, and protocols to promote ethical behavior and compliance with legal standards. The model emphasizes the importance of a corporate culture that prioritizes integrity and accountability.

The Supervisory Committee appointed by the Board of Directors pursuant to Legislative Decree no. 231 of 8 June 2001 monitors that the Company acts in compliance with the organizational, management and control model according to article 6 of the Legislative Decree 231 and proposes any updates required under Italian law.

Adopting the "231 Model" Brembo benefits from reduced liability in the event that a crime is committed by its employees or representatives.

Incidents of corruption or bribery

Confirmed incidents

Brembo currently has no legal proceedings outstanding for corruption or bribery. The number of confirmed incidents of corruption or bribery for Brembo in 2024 is 0.

Convictions and fines

The number of convictions and the amount of fines for violation of anti-corruption and anti-bribery laws for Brembo in 2024 is 0.

As a consequence, no convictions or fines have been registered in 2024. For this reason, no remediation actions were needed.

Narrative on investigation and speak-up mechanisms

Brembo has implemented various channels and procedures to prevent, detect, and address allegations of corruption or bribery:

• Antibribery Code of Conduct: Adopted worldwide to prevent, detect and address allegations of active and passive corruption, in line with the principles set out in the Code of Ethics and international best practices. The code ensures transparency, provides clarity on acceptable behavior, and ensures compliance with relevant anti-corruption legislation wherever Brembo conducts business. It sets out Brembo's policy on the giving and receiving of gifts, hospitality and entertainment.

• Whistleblowing Channel: Brembo has established an official reporting channel through a dedicated platform (Legality Whistleblowing web platform and mobile app) aimed at properly and timely managing reporting of violations related to regulatory provisions, the 231 Model (involving the Supervisory Committee where necessary), and other Brembo corporate codes of conduct, policies and procedures. The platform guarantees confidentiality of the identity of the reporter, persons involved, and content of the report through computer methods and encryption tools. The reporting channel is managed by Brembo's Internal Audit GCF, an autonomous office with staff specifically trained to manage whistleblowing reports.

• Internal Audit Function: The Internal Audit global central function investigates violations of the Code of Ethics and Brembo Corporate and Compliance Tools through periodical or ad hoc audits.

• Preventive Measures: Separation of Internal Audit GCF from management allows investigation of allegations or episodes of corruption and bribery that could involve management itself. The Chief Internal Audit Officer is not responsible for any operational area and has direct access to all necessary information.

In 2024, there were 14 complaints submitted through the company's whistleblowing channels for employees to raise concerns, with none reported to the National Contact Points for OECD Multinational Enterprises. As a result, Brembo did not incur any fines, penalties, or compensation for damages.

Payment practices

Average payment time to suppliers

Brembo group's contractual terms of payment are in line with main regulations (e.g. for EU, n° 2011/7 Directive). At Worldwide level, Brembo's average standard contractual payment terms are around 60 days.

In 2024, the average time taken to pay an invoice from the date when the contractual payment term starts to be calculated was of around 67 days.

This average expresses the Group's average performance across all supplier categories and regions.

Calculation methodology: The calculation considers all invoices paid during year 2024. To calculate the days of payables outstanding, the invoice amounts are weighted for the related payment days (theoretical and actual) in order to obtain the overall weighted average.

Standard contractual payment terms

• Worldwide average standard contractual payment terms: around 60 days
• European markets: A procedure is in force that defines payment terms in accordance with the relevant EU directive
• Other countries: Brembo complies with local payment practices

Legal proceedings for late payments

In 2024, no material legal proceedings started in connection with claims for late payments to suppliers.

Context

Although currently Brembo does not have a specific and formalised policy governing any late payments, a procedure is in force for European markets that defines payment terms in accordance with the relevant EU directive, while in other countries Brembo complies with local payment practices.