Knorr-Bremse AG

Reference: page 44

As of December 31, 2024, the Executive Board of Knorr-Bremse AG comprised five members (four men, 80%, and one woman, 20%), all of whom are managing board members. Under the German Codetermination Act, the Supervisory Board has twelve members with equal representation: six shareholder representatives elected at the AGM and six employee representatives, with gender diversity of seven male (58%) and five female (42%). Five of the six shareholder representatives are considered independent (83%). The Executive Board manages operations, defines and implements strategy in consultation with the Supervisory Board, and is responsible for an appropriate internal control, risk, and compliance system. The Supervisory Board advises and monitors the Executive Board; its Strategy and Audit Committees address sustainability matters. A Group-wide ESG Board, chaired by functions reporting to the CFO, steers sustainability, supported by divisional ESG boards. Tables 2.04 to 2.06 set out the relevant competences of board members, including sustainability expertise. External training on sustainability and CSRD compliance was provided to both boards in the reporting period.

Reference: page 48

The Executive Board and Supervisory Board are kept informed of relevant sustainability topics at regular intervals. The ESG Board updates the Executive Board on developments and status on a quarterly basis, and heads of the Sustainability department and relevant Group departments provide information on specific topics. In the reporting period this included in-depth information on the CSRD, the LkSG, the climate strategy, the design of risk management, and the result of the double materiality assessment. The CFO and the Executive Board member for Integrity, Legal, IP, Data Protection, and Human Resources take part in regular meetings with the Head of Sustainability and/or the Chief Compliance Officer and the Human Rights Officer. The Sustainability department kept the Supervisory Board informed of issues such as CSRD implementation, the new compensation system, and LkSG implementation. Both boards are notified of sustainability-related risks as part of risk management, including material impacts, risks, and opportunities and the effectiveness of directives, actions, and targets. Through the materiality assessment process, both boards considered all material impacts, opportunities, and risks during the reporting period.

Reference: page 48

By linking compensation with ESG criteria, Knorr-Bremse seeks to anchor sustainability in management and daily actions. The performance-based variable compensation system for administrative and management bodies takes into account sustainability matters, climate-related criteria, and GHG emission reduction targets. The system for management levels 0 to 2 (Executive Board, Management Boards, regional Management Boards, and heads of department) sets incentives for achieving sustainability targets through two elements: a short-term incentive (STI) and a long-term incentive (LTI). For the STI, 20% of variable compensation is tied to ESG targets, which were revised in 2024 and consist of "own contribution to carbon neutrality" (sum of project-based energy efficiency increases and self-generated solar power) at 50% and "work-related accidents per 200,000 contractual working hours" at 50%. For the LTI, from the 2024 fiscal year onward, 20% of target achievement is tied to sustainability targets, comprising "reduction of Scopes 1 + 2 CO2e emissions" weighted at 70% and "employee satisfaction" weighted at 30%. Further detail is in the Compensation Report.

Reference: page 49

Knorr-Bremse provides a statement on due diligence with an overview (Table 2.07) mapping the core elements of due diligence to paragraphs in the Sustainability Statement. Embedding due diligence in governance, strategy, and the business model is covered under ESRS 2 GOV-2, GOV-3, and SBM-3. Engaging with affected stakeholders in all key steps of due diligence is covered under ESRS 2 GOV-2, SBM-2, IRO-1, MDR-P, ESRS E1, S1-2, S2-2, and entity-specific disclosures. Identifying and assessing adverse impacts is covered under ESRS 2 IRO-1 and SBM-3. Taking actions to address those adverse impacts is covered under ESRS 2 MDR-A, E1-1, E1-3, E2-2, E3-2, E5-2, S1-4, S2-4, and entity-specific disclosures. Tracking the effectiveness of these efforts and communicating is covered under ESRS 2 MDR-M, MDR-T, E1-5, E1-6, E2-2, S1-5, S1-9, S1-12, S1-13, S1-15, S1-16, S1-17, S2-5, and entity-specific disclosures.

Reference: page 49

Information on Knorr-Bremse's risk management and the internal control procedures with regard to sustainability reporting can be found in the Report on Risks, Opportunities, and Expected Developments. The overview of referenced information (Table 2.03) confirms that GOV-5 disclosures [paragraph 36 a) to e)] are presented under "Risk Management and Internal Controls over Sustainability Reporting" and cross-referenced to the Report on Risks, Opportunities, and Expected Developments, except for the statement on the adequacy and effectiveness of the risk management system and the internal control system. The text also notes that Knorr-Bremse has integrated sustainability aspects into its Group-wide risk management and internal control system (ICS), for example for human rights due diligence processes, compliance with the Code of Conduct and Supplier Code of Conduct, and product safety. ESG risks and opportunities are reported, discussed, and assessed quarterly as part of an Executive Board meeting.

Reference: page 50

Knorr-Bremse describes itself as a global player in the mobility industry in brakes and other rail and commercial vehicle systems, with developing safe, efficient, and sustainable transportation solutions integral to its corporate identity. Sustainability is integrated into the strategy and business model, anchored as a strategic, cross-cutting topic in the BOOST strategy program through the pillars "products," "processes," and "people." Through its product and service portfolio the company aims to support customers in the transition toward sustainable mobility, with a focus on safety, longevity, conservation of resources, and avoiding emissions. It counters challenges such as decarbonization, regulatory requirements, and resource inefficiency through new customer solutions, renewable energy expansion, energy efficiency, and supplier cooperation. To secure capital market access at moderate costs, Knorr-Bremse has implemented green financial instruments, issuing its first green bond in September 2024 under the Green Financing Framework published in August 2024 (aligned with ICMA Green Bond Principles), with proceeds for clean transport, renewable energies, energy efficiency, and green buildings. Descriptions of markets, products, business model, value chain, and employees are referenced to the About the Group chapter and Employees section.

Reference: page 50

Knorr-Bremse regards trusting collaboration and open exchange with stakeholders as the basis for sustainable business success. It conducts dialog through established communication and event formats such as direct conversations with customers, trade fairs, association work, talks with investors, the Annual General Meeting, and communication with employees. This exchange helps the company understand stakeholders' needs, interests, and viewpoints, inform them of sustainability activities, determine main topics, promote a joint understanding of sustainability, and detect trends and market requirements early. Detailed information on the involvement of the most important stakeholders is set out in Table 2.08, covering financial market players, authorities, associations, employees and management, suppliers and business partners, customers, local communities, the environment, and potential new employees and young talents, with formats, purposes, and actions on results. The company integrates stakeholder interests into its Group-wide sustainability strategy, drawing on internal risk analyses, rating results, customer dialog, investor inquiries, and the Global Employee Survey. In the reporting period, stakeholder consultations and their results did not lead to a need to adjust Knorr-Bremse's strategy and business model.

Reference: page 53

To assess the materiality of sustainability topics, Knorr-Bremse performed a double materiality assessment (DMA) in line with ESRS 1 section 3, producing a detailed overview of material impacts on people and the environment and material financial risks and opportunities across topics and sub-topics under ESRS 1 AR 16 (Table 2.09). Material matters cover climate change (E1), pollution (E2), water and marine resources (E3), resource use and circular economy (E5), own workforce (S1), workers in the value chain (S2), business conduct (G1), and the entity-specific topic of product and system safety; noise is reported under pollution. Results appear in the relevant topic-specific chapters and are mapped to the business model and the upstream and downstream value chains, with expected time horizons specified for potential impacts. In the materiality assessment, no current financial implications of material risks and opportunities on financial position, performance, and cash flows were identified, and no material risks and opportunities were identified for 2025 requiring adjustment to the carrying amounts of assets and liabilities. The resulting sustainability program is designed to manage material negative impacts and risks and seize material opportunities, supporting the resilience of the company.

Reference: page 56

Knorr-Bremse determined its major topics through a double materiality assessment in accordance with CSRD/ESRS requirements, first conducted in 2023. The multi-level process began with an analysis of the segments of the two value chains (RVS and CVS) and identification of relevant internal and external stakeholder categories, using four main formats: online surveys; interviews with (in part external) experts, departments, and decision-makers; workshops with internal specialists; and benchmarking with peer groups (Railsponsible and CLEPA). A preliminary materiality matrix supported validation, and the entire Executive Board and Supervisory Board reviewed and approved the material topics. Impact materiality was based on the sustainability due diligence process; for the upstream value chain a hotspot analysis covered the three most important purchased materials (aluminum, iron/steel, circuit boards). Negative impacts were assessed by severity (scale, scope, irreversibility) and likelihood, with a materiality threshold based on EFRAG implementation guidance. Financial materiality was evaluated separately for each topic using likelihood and size of potential financial implications, with ESG risks and opportunities integrated into the risk assessment tool and reported quarterly. Input parameters included the WWF Biodiversity Risk Filter and Aqueduct Water Risk Atlas.

Reference: page 59

In line with ESRS 1 Annex E, the material sustainability matters of ESRS 1 AR 16 and the associated disclosure requirements were determined on the basis of the identified impacts, risks, and opportunities. Data points on metrics were examined individually in accordance with ESRS 1 Annex E to evaluate their materiality, and the thresholds for the materiality of information were defined on a case-by-case basis. Indexes covering the disclosure requirements and the data points derived from other EU legal provisions are listed in the appendix to the Sustainability Statement. The text notes that, as the EU Taxonomy is a key element in achieving the EU climate and energy targets and the European Green Deal by directing capital flows toward sustainable activities, Knorr-Bremse is required under the EU Taxonomy Regulation 2020/852 (Article 8) to disclose its environmentally sustainable economic activities and the associated taxonomy-eligible and taxonomy-aligned revenue, capital expenditure, and operating expenditure, with that information published in a separate EU Taxonomy chapter.

Reference: page 77

Knorr-Bremse has committed to net-zero emissions across Scopes 1-3 by 2050, with SBTi-validated intermediate 2030 targets for own production and the value chain. For production (Scope 1 and market-based Scope 2) the goal is a 75% reduction by 2030 versus baseline year 2018, aligned with the 1.5C Paris pathway via three levers: CO2e/energy efficiency, self-generation of renewable energy, and purchase of renewable energy. For the upstream and downstream value chain (Scope 3) the target is a 25% reduction by 2030 versus baseline year 2021, aligned with well-below-2C, via three further levers (supply-chain decarbonization, product/use-phase efficiency, decarbonization of countries' electricity mix). Both 2030 and 2050 targets cover the same emission categories and were validated by SBTi as Paris-aligned. The transition plan is linked to the business strategy and was reviewed and approved by the ESG Board in the reporting period. Over 80 reduction initiatives are identified; quantified ones (about one-fourth) imply costs in the low double-digit million range. Taxonomy-aligned CapEx was 17.5% at year-end 2024; a first green bond (EUR 500 million) was issued. No business-model adjustment is deemed necessary, and Knorr-Bremse is not excluded from EU Paris-aligned Benchmarks.

Reference: page 78

Climate change mitigation, climate change adaptation, and energy efficiency/renewable energy use are addressed through several policies. In its Code of Conduct, Knorr-Bremse commits to reducing CO2e emissions and supporting climate change mitigation and environmental protection along the value chain, promoting climate- and environmentally friendly technologies and energy efficiency in product production and use phases. The Group-wide Health, Safety and Environment (HSE) Policy defines principles of environmental and climate protection and energy management, pledging to avoid or minimize harm to people and the environment, promoting renewable energy use, and addressing climate change adaptation through emergency management and an environmental management system. The Supplier Code of Conduct obliges suppliers to minimize negative climate impacts, employ management systems, and promote energy-efficient, environmentally friendly technologies and renewable energies. Internal guidelines anchor sustainability in purchasing and investment decisions, including the 'Environment & energy relevant aspects at purchasing' guideline (applied globally, covering lighting, air conditioning, equipment, materials) and a requirement that investment decisions exceeding EUR 500,000 consider the internal shadow carbon price. Further policy detail appears in the Sustainability Statement appendix (Table 2.53).

Reference: page 80

The 2030 Climate Strategy aims to significantly cut fossil energy consumption and CO2e emissions along the value chain, implemented by experts in sustainability, EcoDesign, purchasing, engineering, HSE, logistics, and supply chain management. Local environmental and energy teams monitor consumption and savings; Knorr-Bremse follows the European Energy Efficiency Directive. Worldwide, 84 locations are ISO 14001 certified (89% employee coverage) and 45 are ISO 50001 certified or have completed an EN 16247 energy audit (44% coverage). Actions are organized under six levers. Lever 1 (CO2e/energy efficiency): in 2024, diesel fleet replaced with electric models in Europe, new energy-efficient compressors, air-duct insulation, HVAC optimization, LED lighting, and low-carbon fuel use. Lever 2 (self-generation): PV systems at 18 locations producing approximately 9.6 GWh (about 3% of electricity consumed), with systems planned at 8 more. Lever 3 (purchased renewables): approximately 99% of electricity from renewable sources via green contracts/certificates. Lever 4 (supply chain): CO2e accounting tool rollout, supplier dialog and surveys. Lever 5 (product/use-phase efficiency): e-compressors, HVAC heat pumps. Lever 6 (decarbonization of use-country electricity mix, a passive lever). Targets are tied to STI and LTI management incentives.

Reference: page 78

Knorr-Bremse set SBTi-validated quantitative GHG reduction targets derived using SBTi methodology and the Paris Agreement framework, decided with HSE, Purchasing, EcoDesign, and Logistics and at the Executive Board meeting. For production emissions (Scope 1 and market-based Scope 2), the target is a 75% reduction by 2030 versus baseline year 2018, consistent with the 1.5C scenario. For the upstream/downstream value chain (Scope 3 categories 3.1, 3.4, 3.11), the target is a 25% reduction by 2030 versus baseline year 2021, aligned with limiting warming to well below 2C. The long-term goal is net-zero (Scopes 1-3) by 2050. Carbon credits are not counted toward these targets. By 2024 the company had already reduced Scope 1 and Scope 2 emissions by approximately 78% and Scope 3 emissions by approximately 9% versus the respective baseline years. Table 2.18 shows the expected lever contributions to the 2030 Scope 1 and 2 target (-75%: lever 1 -3, lever 2 0, lever 3 -1) and the Scope 3 target (-25%: lever 4 -2, lever 5 -7, lever 6 -8, further levers -13). Progress is reviewed by HSE and the ESG Board and reflected in STI and LTI compensation.

Reference: page 82

In 2024, total energy consumption was 479 GWh (2023: 476 GWh), an approximately 1% increase; all of it stems from activities in high-climate-impact sectors. Total energy consumption from fossil sources fell about 13% to 152 GWh (2023: 175 GWh), a 31.6% share (2023: 36.7%). Fossil fuel breakdown: crude oil and petroleum products 29 GWh, natural gas 101 GWh, other fossil sources 2 GWh, and purchased/acquired electricity, heat, steam or cooling from fossil sources 19 GWh. Total energy consumption from renewable sources was 327 GWh (2023: 301 GWh), a 68.4% share (2023: 63.3%), comprising fuel consumption from renewables 1 GWh, purchased/acquired electricity, heat, steam and cooling from renewables 317 GWh, and self-generated non-fuel renewable energy 10 GWh. Energy intensity (high-climate-impact sectors) was 60.7 MWh per EUR million net revenue (2023: 60.1), based on EUR 7,883 million net revenue. Data is consolidated from individual locations per the internal Sustainability Data Reporting Guideline; small sites (under 50 employees) use representative average figures. Reported figures include proportional M&A consumption since acquisition; prior-year figures were not retroactively adjusted.

Reference: page 82

Emissions are calculated per the GHG Protocol on an operational-control basis. For 2024 (thousands of tons CO2e): Scope 1 gross emissions 31 (2023: 33; 2018 baseline: 38), of which 6.6% from regulated emission trading schemes. Scope 2 location-based gross emissions 122 (2023: 119; 2021 baseline reference 145); Scope 2 market-based gross emissions 4 (2023: 11; baseline 119). Total Scope 1 plus location-based Scope 2 was 152 (2023: 152; baseline 183); total Scope 1 plus market-based Scope 2 was 35 (2023: 44; baseline 157). Significant Scope 3 categories: 3.1 purchased goods and services 2,028; 3.4 upstream transportation and distribution 310; 3.11 use of sold products 37,452; total indirect gross emissions 39,791. Total GHG emissions location-based were 39,943 thousand tons CO2e and market-based 39,826 thousand tons CO2e. GHG intensity was 5.1 thousand tons CO2e per EUR million net revenue (both location- and market-based). Biogenic Scope 1 CO2e (not included in Scope 1) was 472 t CO2e. Green electricity is 99% of purchased electricity. No carbon credits were included in reported emissions.

Reference: page 84

Knorr-Bremse aims for net-zero emissions by 2050, intending to reduce Scopes 1-3 GHG emissions by at least 90% and to store or remove the remaining 2050 emissions from the atmosphere through climate change mitigation projects supported via carbon credits. In the reporting period it made its first investment in CO2e storage outside its own value chain to gain early GHG removal and storage experience, expanding existing support for the 'Efficient Wood Gas Stoves' project in India to include biochar-based CO2e storage (biochar combined with compost and limestone for fertilizer, creating a biogenic soil sink). It also supports the Gold Standard-certified 'Clean Drinking Water' project in Kenya, run by atmosfair gGmbH. During the reporting period carbon credits were not counted toward GHG emissions (Table 2.21) or toward achievement of the Scopes 1-3 targets. Per Table 2.23, canceled carbon credits totaled 40,000 t CO2e in 2024 (for 2023, 100% mitigation projects - CDM + Gold Standard) and 3,150 t CO2e in 2025 (for 2024), with 32% removal (biochar) and 68% mitigation; no projects within the EU and 0% qualifying as corresponding adjustments.

Reference: page 85

Knorr-Bremse uses an internal shadow carbon price, introduced in 2023, as a management tool to support CO2e reduction and energy efficiency. It is applied worldwide to investment decisions exceeding EUR 500,000 that could affect Scope 1 and Scope 2 emissions, serving as an additional decision-making basis to ensure that alternative, lower-carbon technologies are considered and promoted. The shadow carbon price is reassessed every two years based on the company's estimate of the future cost of GHG emissions, particularly taking into account forecasts of the EU ETS price trend, as well as the experiences and insights of industry peers. Because it is a shadow price, it is not included in the financial statements and serves only as a reference point to support operational decisions. Per Table 2.24, the internal shadow carbon price covers 100% of Scope 1 and 2 GHG emissions (relevant volume), with a price applied of EUR 100 per ton CO2e, determined based on a benchmark.

Reference: page 57

Knorr-Bremse commits itself and its suppliers to the avoidance and/or mitigation of pollution, setting out this commitment in binding guidelines, with further detail on individual policies in the appendix to the Sustainability Statement. The HSE Policy includes a commitment to protect the environment through the sustainable use of natural resources and the use of renewable resources and recycling methods. The company aims to mitigate and control negative effects on the environment that it causes, and addresses the responsible handling of energy and chemicals, the protection of soil and water resources, and the avoidance of noise, air pollution, and waste. Across the entire product life cycle it takes responsibility through the development of safe, environmentally friendly, and energy-efficient technologies and, where possible, by avoiding substances of concern. The Supplier Code of Conduct requires suppliers to comply with all relevant laws and international environmental standards, to minimize negative environmental effects in their operations, and to reduce emissions to air, water, and soil, including proper handling and labeling of hazardous substances, freight, and waste.

Reference: page 58

Knorr-Bremse develops innovative solutions for rail and commercial vehicles that reduce negative environmental impacts, enabled by its EcoDesign approach which prioritizes sustainability and environmentally friendly product design alongside functional and safety requirements during product development. Material selection plays an important role, and sustainable supplier management seeks to avoid negative environmental impacts upstream. Because no uniform, standardized measurement processes or limits exist for brake pad abrasion (especially particulate matter) in the downstream value chain, the company works to improve existing products and develop innovative solutions. Measures include brake discs made from special aluminum, brake pads with optimized coolant capacity, and coated brake disks. At RVS, particle and particulate matter emissions of train brake friction pairings are measured at upgraded test rigs, informing brake pad and disk design and industry measurement standards. Further technologies include intelligent electro-dynamic traction and brake control, the linear eddy current brake, a newly developed dust extraction application, the copper-free SYNACT disk brake family, e-compressors, and noise solutions such as the eSilencer, whisper brakes, and AirSupply Smart.

Reference: page 58

Knorr-Bremse has not yet determined quantitative targets to avoid pollution, because there are as yet no uniform, standardized measurement methods. The company states that it is, however, evaluating a possible quantitative objective on an ongoing basis as part of the steady development of its sustainability strategy.

Reference: page 59

The Group-wide HSE Policy describes Knorr-Bremse's commitment to the protection of water resources. The company aims to design its production activities, products, and services along the upstream and downstream value chains so that they do not have negative impacts on water as a resource, especially in areas with water stress. It regards appropriate water treatment as a step toward more sustainable water management, with further detail on the HSE Policy contents in the appendix to the Sustainability Statement. The Supplier Code of Conduct commits all suppliers to compliance with all relevant environmental protection laws. The company expects suppliers to comply with international environmental standards, to handle natural resources sparingly and responsibly, to minimize the negative impact of their operations on water resources, and to reduce emissions to water.

Reference: page 59

Water management is part of Knorr-Bremse's environmental management, guided by the ISO 14001 standard, with decentralized operational implementation by local HSE organizations tailored to local circumstances and laws. The company records water consumption and performs environmental aspect analyses during ISO 14001 certification. In 2024, total water sourced globally came to 2,190 thousand m3, of which almost 80% came from groundwater reservoirs used mainly for cooling and heating at the German locations of Munich and Aldersbach and returned to the aquifer chemically unchanged; the remainder is mostly municipal freshwater for production processes such as cleaning, varnishing, and galvanizing. While around 33% of locations are in areas of water stress, water sourcing there was only about 9% of the total. Examples include a water recycling plant near Johannesburg (South Africa), rainwater harvesting at Palwal, India (around 15,000 m3 annually), a system planned for Pune (2025), reused fire-test water in Acuna, Mexico, and treated water for green spaces in Itupeva, Brazil (reducing freshwater use by more than 700 m3 per year). A supplier water risk analysis used the Aqueduct Water Risk Atlas.

Reference: page 60

Knorr-Bremse has not, until now, defined any quantitative targets for its water management. In the reporting period it began work on a valid database using newly implemented measurement infrastructure and is, for the first time, reporting global water management metrics to allow it to derive quantitative medium-term targets. Independently of measurable objectives, and in line with the HSE Policy, the company aims to use water sustainably and efficiently and, where possible, to reuse it multiple times through recirculation, relying on its ISO 14001-guided environmental management and on internal and external audits to check compliance. Local HSE departments implement water management measures and set location-specific targets where required. At present there is no Group-wide tracking of targets and their achievement; the regular water risk analysis supports qualitative tracking and assessment of measures.

Reference: page 60

Knorr-Bremse reports its 2024 water consumption metrics, calculated as water withdrawals less water outflows, recorded Group-wide and relating solely to direct operational activities. Data is based on direct water-meter measurements and invoices from water service providers, with water-risk areas identified using the Aqueduct Water Risk Atlas. For 2024, total water withdrawal was 2,190 thousand m3 and total water consumption was 90 thousand m3. Total water consumption in areas of high-water stress was 33 thousand m3, and total water consumption in areas at water risk was 2 thousand m3. The intensity of water consumption was 11.5 m3 per million euros. The total water recycled and reused metric is classified as not material for Knorr-Bremse.

Reference: page 91

Knorr-Bremse states its commitment to sustainable resource use and strengthening the circular economy in binding directives. The Group-wide HSE Policy describes the commitment to environmental protection through sustainable use of natural resources, increasing use of renewable and secondary resources, and application of recycling methods. In waste management the company commits to extensive waste avoidance, guided by the principles of the circular economy and the waste hierarchy. Environmental matters are integrated into both production processes and product design by developing and promoting safe, environmentally friendly and energy-efficient technologies. An internally developed EcoDesign assessment form supplements requirements and targets for ecological product design across both divisions, alongside internal requirements, regulatory stipulations, standards and customer expectations, and provides assessment tools such as supportive standards and methods for evaluating potential environmental impacts. The Supplier Code of Conduct further requires suppliers to handle natural resources sparingly and responsibly and to minimize negative environmental impacts.

Reference: page 91

A key element of circular economy activity is ecological product design, supporting recycling of materials and remanufacturing of products for further life cycles. Industrial remanufacturing forms a major part of the business model, accounting for a 12.0% share of Group revenues (including labor and spare-part demand) in the reporting period. Under the EcoDesign approach, sustainability aspects are integrated into innovation and development; both divisions apply a binding evaluation process covering criteria across material extraction, use phase (energy efficiency, longevity, emissions), and end-of-life recyclability. In RVS, 69 projects were classified using EcoDesign criteria, with 4 completed and 43 active projects prioritized. LCAs were conducted per ISO 14040 and UNIFE Product Category Rules. Remanufacturing (TruckServices/EconX, offering around 500 products) and overhauling (RailServices, over 50 service centers) extend product life. In 2024, industrial refurbishing saved 3,850 tons CO2e, 1,350 tons of material and around 21 MWh; Bendix in Acuna avoided about 130 tons of material and 680 tons CO2. RailServices refurbished approximately 980,000 products. Waste management measures include the KPS production system and Bendix's Zero Waste Initiative.

Reference: page 93

Through circular value creation, Knorr-Bremse aims to contribute to the conservation of natural resources and a reduction in its environmental footprint. To this end it identifies optimization potential along the value chain and assesses the implementability of best practices in its business model. Measures subsequently implemented are regularly reviewed and subjected to qualitative assessment on a regular basis. Their number and the relevance of their contribution to resource conservation provide findings on the progress made in circular added value. The company states that it currently works on quantitative targets that it wants to report in future as part of its commitment to the circular economy. In waste management, in terms of the waste pyramid, it pursues three key targets: the avoidance of waste through deliberate and optimized use of resources, the substitution of materials with more environmentally friendly alternatives, and the promotion of the circular economy for the reuse or recovery of materials. No measurable, time-bound quantitative targets are yet disclosed.

Reference: page 93

In 2024, Knorr-Bremse mainly procured castings, processed parts, and aluminum, iron, and steel sheets from suppliers for its production processes. Electronic components, friction materials, and plastics in particular were used in the manufacture of products. According to the resource inflows table (2.29), the total weight of products and technical and biological materials used was 402,900 t in 2024. The weight of secondary components, products, and materials used, reused, or recycled in the manufacture of products was 129,300 t, representing a 32% share of the total weight. Aggregate weight data is collected globally in internal data systems and includes all materials purchased directly in both divisions. The data on the shares of primary and secondary raw materials is based on estimates of industry averages, materials, and supplier locations, as the availability of consistent and reliable information from the upstream value chain is currently limited. The company has initiated measures such as closer cooperation with suppliers and requests for primary data to improve data quality.

Reference: page 93

In both divisions Knorr-Bremse offers a portfolio of products aligned with circular economy principles, geared to longevity, easy maintenance, reparability, reusability and overall optimization. Products are designed for long service lives: at RVS up to 30 years depending on product and project, and at CVS an average product life cycle of up to 15 years. The company promotes longevity by making repair options available; most products in both divisions can be repaired, with exceptions for wear parts, consumables and small parts where repair is not economically viable, and repair sets are offered for many products. Reparability information was collected and validated in-house as no established external assessment system exists. Recyclability is analyzed: in 2024, 44 RVS projects were audited per ISO 22628 and/or ISO 21106, with average recyclability above 95%; in CVS, recyclability was calculated as totaling over 80% of the total weight of produced products. In waste management, the company favors recovery of substances and energy over landfill. Waste consists of residual waste, steel and iron (scrap metal), light metals, polymers, consumables, packaging materials and electroplating sludge.

Reference: page 95

The waste table (2.30) reports total waste generated of 65,500 t in 2024 (68,800 t in 2023). Waste transferred from disposal (diverted) was 56,500 t (2023: 55,600 t), comprising hazardous waste 5,600 t (preparation for reuse 1,200 t, recycling 2,000 t, other recovery 2,400 t) and non-hazardous waste 50,900 t (preparation for reuse 300 t, recycling 44,800 t, other recovery 5,800 t). Waste destined for disposal was 9,000 t (2023: 13,200 t), comprising hazardous waste 3,000 t (incineration 1,400 t, landfill 200 t, other disposal 1,400 t) and non-hazardous waste 6,000 t (incineration 3,300 t, landfill 2,400 t, other disposal 300 t). Non-recycled waste totaled 9,000 t, equal to 13.8% (2023: 19.2%). Total hazardous waste was 8,600 t (unchanged from 2023). The calculation basis is usually invoices received from waste recipients; where disposal-type information is unavailable, volumes are allocated to the landfill category.

Reference: page 97

Knorr-Bremse sets out its claim to be a responsible employer in the Group-wide Code of Conduct and in its Human Rights Policy, the latter also serving as a declaration of principles under the German Supply Chain Due Diligence Act (LkSG); both are published on the intranet and Group website. The Code of Conduct is binding on all employees, forms part of the employment contract, and promotes a work environment based on dignity, trust, and respect, free from discrimination. The Human Rights Policy prohibits human trafficking, forced labor, and child labor, and is implemented via a human rights risk management system with annual or as-needed risk analyses. In 2024 a Human Rights Due Diligence Guideline was rolled out, and a Group-wide Diversity, Anti-Discrimination & Anti-Harassment Policy was drafted. Occupational safety is governed by a Group-wide HSE Policy. The policies align with the UN Global Compact, the SDGs, ILO core conventions, and the UN Guiding Principles on Business and Human Rights.

Reference: page 98

Knorr-Bremse states that employee involvement provides important perspectives on social and human rights issues such as health and safety, development, diversity, working conditions, and fair wages. The Global Head of Human Resources holds overall responsibility for direct involvement and reports to the Executive Board member for Integrity, Legal, IP, Data Protection, and Human Resources. Employees are engaged through globally standardized formats: the annual Staff Dialogue (from November 2024 renamed Performance & Growth, delivered via a new IT tool), the obligatory Leadership Feedback initiative for managers, and the Global Employee Survey conducted roughly every two years (with interim pulse checks; the most recent global survey took place in February 2025). The company also supports voluntary Employee Resource Groups, the largest being Women@KB, now in eight international locations. It works with local, central, Group, and European Works Councils, respecting freedom of association and collective bargaining where legally permitted.

Reference: page 99

Knorr-Bremse has implemented a whistleblower and complaints system enabling all employees and external parties to report violations of human rights, laws, and internal guidelines, anonymously on request. Employees can contact the Compliance department, the Works Council, and, at German locations, the complaints office under the General Equal Treatment Act, as well as a publicly accessible whistleblower system. Rules of procedure agreed by the Executive Board govern the process, responsibilities, and rights of whistleblowers and persons concerned. The Compliance department follows up every report or forwards it for investigation, conducting investigations (with external assistance if needed) and drawing up a final report; where rules are violated, causes are remedied and penalties applied by local management. Employees are informed about grievance procedures through onboarding, training, the intranet, guidelines, notices, and mandatory Code of Conduct e-learning. Further detail appears in the Corporate culture and business conduct [G1-1] chapter.

Reference: page 101

Knorr-Bremse describes targeted actions across employment conditions, personnel development, diversity, and occupational health and safety, guided by the global HR strategy under the BOOST strategy. The Group HR department plans, manages, and monitors activities, with the Global Head of HR reporting to the Executive Board and regional/local HR officers implementing measures. Measures include adequate-wage practices, the new "Balance" remuneration system at German locations, additional voluntary benefits, the Heinz Hermann Thiele share program, and broad training and skills development (myLearning platform, LinkedIn Learning, leadership development, apprenticeships, Expert Career). DEI actions follow the Group-wide DEI strategy approved end-2023 and implemented from 2024, overseen by a Diversity Office with six regional and roughly 78 local diversity champions, covering gender diversity, age/generations, and internationality. Occupational health and safety actions are anchored in the HSE Policy and processes (ISO 45001, 14001, 9001), including audits, the safety@work program, occupational health management, and the Health Performance Index.

Reference: page 103

Knorr-Bremse reports several targets. For employer attractiveness it uses an "engagement index" from the global employee survey; the 2024 target value was 71 (same as 2022/2023), and since 2024 the index forms part of the long-term variable remuneration targets for the top two management levels. For diversity, targets set in 2022 aim for 25% women among employees and 20% at management levels 1 to 4 by the end of Q3 2027 (baselines in 2021: 20.3% of employees and 14.1% at management levels 1–4). For occupational health and safety, the Group-wide 2024 target was 0.8 work-related accidents per 200,000 contractual working hours, also a factor in variable management remuneration. Employees and workers' representatives were not involved in setting the engagement index or diversity targets. Beyond these, no other measurable, results-oriented targets were defined for employment conditions and personnel development.

Reference: page 100

Knorr-Bremse employs around 32,549 people including contingent workers across over 100 locations in more than 30 countries. The average number of employees in 2024 was 29,051 (2023: 29,487): 22,604 male, 6,350 female, and 97 unknown. By employment condition (headcount, year-end): 27,139 permanent and 1,912 temporary employees, 156 employees without guaranteed hours, 27,407 full-time and 1,644 part-time. By region: Asia/Australia 6,628; Europe/Africa 16,054; North America 5,675; South America 694. The largest countries by headcount were Germany 5,115, China 3,576, US 3,512, Hungary 3,052, and Mexico 2,043. Employee turnover in 2024 was 3,458 departures, a turnover rate of 11.7% (2023: 13.2%), covering voluntary resignation, dismissal, retirement, and death. All figures are headcount as of December 31, 2024, except turnover which covers the full year.

Reference: page 106

Knorr-Bremse reports diversity metrics. At the top management level (management levels 1 and 2) in 2024 there were 98 men (86.0%) and 16 women (14.0%), with no unknowns (2023: 94 men/88.7% and 12 women/11.3%). By age structure (headcount): 4,213 employees under 30 years, 17,761 aged 30–50, 6,983 over 50, and 94 unknown. The average age in 2024 was 41.8 years (2023: 41.7), expected to rise further due to demographic change in industrialized countries. The company also notes that 83.9% of its workforce was employed at locations outside Germany in 2024, and people of 117 different nationalities work for Knorr-Bremse worldwide.

Reference: page 103

Knorr-Bremse states a commitment to fair and equitable pay worldwide, with salaries based exclusively on qualifications and performance, and strives for internationally comparable remuneration. In a separate survey, all locations confirmed compliance with local minimum wages in accordance with local legal requirements; in all countries the respective minimum level is reached with basic remuneration. Where no local minimum wage is prescribed, employees are remunerated at least in line with the peer group of other industrial-sector companies, ensured through regular market studies. The majority of employees are paid above the applicable minimum wage due to the qualifications required. Job profiles are being evaluated against a globally standardized system and benchmarks, currently implemented for 79.8% of all employees, and a Group-wide minimum wage register is being developed. The company regularly reviews whether its remuneration policy aligns with the current cost of living and market standards in currently 30 countries.

Reference: page 103

Knorr-Bremse reports that, for the most part, employees are insured against loss of income due to sickness, unemployment, employment injury, acquired disability, parental leave, and retirement. In countries where this is regulated by law, cover is provided through state programs; in countries without corresponding statutory regulations, Knorr-Bremse has set up its own company programs. The report identifies countries with limited social protection in 2024: India is listed as having limited coverage for both unemployment and parental leave. No countries are listed as having limited social protection for sickness, employment injury, acquired disability, or retirement.

Reference: page 106

Knorr-Bremse states that employees with disabilities or health restrictions are a relevant part of the workforce. The company has implemented various inclusion measures to provide accommodation and equitable access, and a disabled persons' delegation helps people with disabilities find a suitable workplace equipped to their needs. The share of employees who had a disability during the reporting period was 2.1%, of whom 0.6% were female and 1.5% male. This data was collected and analyzed using a separate manual query, applying the respective country definitions. Australia and Sweden were excluded due to legal restrictions, and disclosure is voluntary in other countries; the coverage rate includes 28 countries.

Reference: page 104

Knorr-Bremse reports a performance review coverage rate of 85.1% in 2024 (female 86.8%, male 84.9%, unknown 8.2%), drawn from the global performance management system as of December 31, 2024; the rate is influenced by acquisitions (delayed system rollout) and new recruits, since reviews are not held in an employee's first year. In the reporting period a new global learning platform, myLearning, was introduced offering around 2,000 courses, supplemented by LinkedIn Learning with more than 20,000 courses. In 2024 around 24,000 employees used the offering, taking around 1,500 learning programs and over 25,000 hours of training. A total of 339 people took part in management training courses, and 291 young people completed an apprenticeship (2023: 294). The Expert Career path was rolled out in Germany in 2024.

Reference: page 107

Knorr-Bremse reports that 100% of its own workforce is covered by its health and safety management system based on legal requirements and/or recognized standards (2023: 100%). In 2024 there were zero fatalities as a result of work-related injuries or ill health among Knorr-Bremse's own workforce (2023: 0) and zero fatalities among other workers working at its locations (2023: 0). There were 249 recordable work-related accidents in 2024 (2023: 216). The number of reportable work-related accidents per 200,000 contractually agreed working hours was 0.7 (2023: 0.7), and per 1 million hours was 3.5 (2023: 3.3). In the Rail Vehicle Systems division, 50 production and service locations are certified to ISO 45001, corresponding to about 37% of the workforce. The Group target for the 200,000-hour accident rate in 2024 was 0.8.

Reference: page 104

Knorr-Bremse reports work-life balance metrics on family-related leave. All employees are entitled to family-related leave in certain situations (e.g., maternity, paternity, parental, and care leave). In 2024, 90.9% of employees were entitled to special family-related leave, and 8.0% of eligible employees took special leave for family reasons (female 12.0%, male 6.8%, each as a percentage of the total number of eligible women/men). Australia was excluded due to legal limitations, and the coverage rate includes 29 countries. The company supports work-life balance through its New Work concept (mobile working, flexible hours, online training) and family and health programs. Six out of seven German locations are certified under a berufundfamilie ("job and family") audit recognizing family-friendly working conditions.

Reference: page 106

Knorr-Bremse reports that in 2024 the unadjusted gender pay gap worldwide was 10.3%, meaning average gross hourly earnings of male employees exceeded those of female employees by this percentage; the unadjusted figure does not account for structural factors such as age, job, function family, qualification, grading, or location. As part of a separate fair pay project at German locations, an econometric model produced an adjusted gender pay gap of less than 1% in Germany (a voluntary disclosure calculated according to general standards), validated externally. The ratio of the total annual compensation of the highest-paid person to the median total annual compensation of all employees (excluding the highest-paid person) was 83.6. The company began analyzing the gender pay gap in 2024 to counteract it and establish equal pay between genders. Data was collected using local HR information systems.

Reference: page 100

Knorr-Bremse states that it investigates complaints about potential human rights violations and takes appropriate action where necessary, and that there were no serious human rights violations in connection with its employees during the reporting period. The incidents and complaints table reports, for 2024, 90 reported violations in the areas of social and human rights concerns (2023: 47) and 46 reported cases of discrimination including harassment (2023: 32). There were zero complaints submitted to the OECD National Contact Point for Multinational Enterprises (2023: 0). The total amount of material fines, sanctions, and compensation payments in connection with the incidents and complaints described was €0 (2023: €0).

Reference: page 81

Knorr-Bremse sets out its expectations regarding fair working conditions, equal treatment, equal opportunity and other labor-related rights in a set of binding policies that apply to all employees in the upstream and downstream value chain. The Supplier Code of Conduct defines requirements on working conditions, human rights, environmental protection, safety, business ethics and compliance; suppliers must comply themselves and implement it in their own upstream supply chains. The code also describes how compliance is ensured and which whistleblower and complaints mechanisms suppliers can use. The Human Rights Policy details principles and expectations on respect for human rights, explicitly covering forced labor, modern slavery, human trafficking and child labor. It is supplemented by the Responsible Minerals Sourcing Policy (until 2024 the Conflict Minerals Policy), which governs conflict materials and is binding for all suppliers processing or marketing relevant materials. A table in the Sustainability Statement appendix summarizes the relevant policy details.

Reference: page 81

Knorr-Bremse's processes for minimizing the impact of its business activities take into account the perspectives of value chain workers. Input is gathered through direct communication, regular supplier audits conducted by Knorr-Bremse or external experts, and training programs, with the best engagement approach decided case by case. Engagement can occur during onboarding of new suppliers or in the course of existing relationships, and the supplier risk profile plays a crucial role. Grievance mechanisms record and systematically process worker concerns regarding human rights due diligence. Overall responsibility for direct engagement lies with the global purchasing organization, while the Sustainable Purchasing department implements measures; the Group Human Rights Officer and Compliance department help investigate reported incidents. Effectiveness is evaluated via metrics such as the number of reported incidents, improvements in audit results and direct supplier feedback. On-site visits give direct insight into vulnerable groups, with independent experts interviewing supplier employees during sustainability audits, and Knorr-Bremse auditors trained to identify risks using checklists. Industry initiative membership provides further insight into systemic violations.

Reference: page 81

Knorr-Bremse seeks to ensure suppliers follow the principles in the Supplier Code of Conduct; the Supply Chain Management team screens and rates suppliers on human rights due diligence through audits, media analyses and assessments, and incorporates sustainability risks into supplier selection. Action is taken against reported policy violations, with identified negative impacts minimized or remedied through targeted measures. Expectations on grievance procedures are set out in the Supplier Code of Conduct: suppliers must let employees and stakeholders report concerns or violations without fear of retaliation, and are advised to set up their own or join an industry-wide whistleblower system and to inform employees about the Knorr-Bremse system. The publicly accessible whistleblower system allows anonymous reporting of possible human rights violations, and Code of Conduct violations can be reported to compliance contacts by email. There is no systematic review of whether supplier employees know the system. If a supplier fails to adequately remedy an issue within a reasonable period, Knorr-Bremse will consider terminating the relationship.

Reference: page 82

Knorr-Bremse is systematically expanding its processes for observing and protecting human rights in the supply chain, with the Executive Board and subsidiary management teams sharing responsibility for implementing human rights due diligence and the Human Rights Officer in Compliance monitoring LkSG compliance. Suppliers are required to apply sustainability standards through assessments, audits, training and contractual obligations. During the reporting period, Knorr-Bremse asked 496 suppliers (20%) to sign the updated Supplier Code of Conduct and have their sustainability performance reevaluated, with customized improvement plans for selected high-risk suppliers; in 2024 the average sustainability score of at-risk suppliers rose by 8.2%. Ad hoc risk and media analyses were conducted; in 2024 no reviewed reports revealed Knorr-Bremse involvement in violations, and one alleged downstream link could not be confirmed. A dedicated conflict minerals due diligence process uses the Responsible Minerals Sourcing Policy and supplier questionnaires (CMRT) for 3TG; the latest survey covered over 85% of purchasing volume and identified 38 critical smelters. During the 2024 EMRT campaign, 1,314 suppliers were asked to complete the questionnaire.

Reference: page 83

Knorr-Bremse has defined targets aimed at continuously improving its suppliers' sustainability performance. Specifically, it aims to steadily increase the share of suppliers that hold a sustainability rating and, working with suppliers, to gradually improve their individual assessment results and thus their risk profiles. When setting targets, the company takes into account findings from previous supplier assessments, feedback from industry initiatives and exchanges with relevant stakeholders. To achieve its targets, Knorr-Bremse explains the relevance of a sustainability assessment to suppliers, encourages participation and supports them throughout the process, and uses the resulting findings to continuously optimize and enhance the process. Knorr-Bremse states that it has not defined any further quantitative targets regarding workers in the value chain.

Reference: page 84

Knorr-Bremse focuses on good and sustainable corporate governance, adhering to applicable law and ethical rules and aiming to build trust among employees, customers, business partners, shareholders, the capital market and the public, guided by five corporate values: entrepreneurship, technological excellence, reliability, passion and responsibility. The Group-wide Code of Conduct, based on the UN Global Compact and binding for all employees and forming part of new employment contracts worldwide, defines responsible business conduct and prohibits all forms of corruption; compliance guidelines cover gifts, donations, corruption prevention, conflicts of interest, business partner screening, anti-money laundering, human rights due diligence and fair competition. The Human Rights Policy details respect for human rights. Corporate culture is continuously refined, with a leadership vision and Leadership Principles fostering a speak-up culture; employee perceptions are gathered via Leadership Feedback, performance reviews and global surveys, with employee satisfaction linked to LTI for management levels 0-2. A complaint management and whistleblowing system enables reporting via email, the compliance organization or an anonymous external portal available in 31 countries and 20 languages, with strong whistleblower protections aligned to EU Directive 2019/1937 and the German Whistleblower Protection Act. A Code of Conduct e-learning in 14 languages must be completed every two years; by December 2024 around 90% of the 16,000 employees with e-learning access held a valid certificate, and 75 compliance training courses were held globally in 2024.

Reference: page 87

Knorr-Bremse assumes responsibility along the value chain, with Strategic Purchasing selecting suppliers and materials. It purchases from approximately 30,000 suppliers in 67 countries each year, of which roughly 6,500 manufacturing partners account for 73% of procurement spending. Sustainability requirements are embedded in purchasing processes and specified in the Code of Conduct for Suppliers (binding, available in 16 languages and part of all supplier contracts), the Human Rights Policy, the Conflict Minerals Policy and Quality Guidelines, overseen by a Sustainable Procurement Steering Committee. The three-pillar approach covers setting requirements, evaluating suppliers, and training suppliers and purchasing staff. External providers conduct continuous sustainability assessments, with ESG risk profiles determined via the CSR Risk Check tool; around 3,500 suppliers have a valid assessment, covering 76% of purchasing volume. Suppliers are classified into categories (now A-D), with action plans for category D and the option to relocate volume; this links to the Sustainability-linked Supplier Early Payment Program. Eighteen on-site audits were conducted in 2024 (4 follow-ups). Supplier financing incentives include the Sustainability-linked Supply Chain Finance program.

Reference: page 89

Combating corruption and bribery is a key compliance topic; Knorr-Bremse tolerates no form of corruption or unfair business practice and expects the same of business partners, with conflicts of interest to be avoided. Its compliance management system (CMS) is based on IDW audit standard 980, compiling and assessing relevant compliance risks through a worldwide compliance risk analysis using risk scenarios, with main topics including preventing corruption, ensuring fair competition and avoiding conflicts of interest, fraud and embezzlement. The Chief Compliance Officer implements the CMS, reports to the responsible Executive Board member and sits on the Compliance Committee; the Supervisory Board and Audit Committee are regularly informed. Regional compliance officers and full-time coordinators (Europe, Brazil, China, India, US) advise, train and process cases. Prevention relies on training and communication: a Code of Conduct e-learning (every two years) plus a dedicated anti-corruption course for purchasing, sales and managers, with 3,497 employees identified as being in at-risk functions and roughly 94% (3,296) holding a valid certificate by end of December 2024; the entire Executive Board received anti-corruption training. The Group audit department, internal control system and spot checks support detection. PwC reviewed the CMS's adequacy and effectiveness for corruption prevention under IDW 980, issuing an unqualified certificate on March 7, 2024.

Reference: page 90

Knorr-Bremse reports its incidents of corruption and bribery for 2024 based on figures taken from the internal whistleblowing system, where incoming reports are time-stamped, evaluated and followed up. The total number of confirmed incidents of corruption or bribery was 2. Both of these confirmed incidents (2) resulted in employees being dismissed or disciplined for corruption or bribery. There were 0 convictions for violation of anti-corruption and anti-bribery laws and €0 in related fines. There were 0 confirmed incidents relating to contracts with business partners that were terminated or not renewed due to corruption- or bribery-related violations. During the reporting period, neither Knorr-Bremse nor any of its employees acting in the course of their duties were subject to public legal proceedings or convictions for corruption-related offenses.

Reference: page 88

Knorr-Bremse aims to maintain long-term, trust-based supplier partnerships and to be a reliable payer, recognizing that payment delays can seriously affect SMEs in particular. Payment terms are set out in written agreements, and the company respects local laws that may limit payment periods. On average, Knorr-Bremse settles supplier invoices after 59 days, counted from the start of the contractual or statutory payment period; for example, the standard term for purchases by German companies under its general terms and conditions is 90 days, with case-by-case exceptions such as for smaller suppliers. Of its payments, 88% were made within the agreed payment periods and 12% of invoices were paid later, based on projections from existing internal data, which show no material differences between SMEs and larger corporations. There were no outstanding legal proceedings for late payments in the 2024 reporting period in which Knorr-Bremse was the defendant.