Composition of the Board of Directors and Executive Management

At Melexis, we have structured our Board of Directors and Executive Management to embody a rich diversity and a wealth of experience. The Board of Directors aims to achieve the largest possible diversity and complementarity among its members. This is one of the key policy guidelines the Board takes into account when considering a new director. Our Board of Directors comprises six members of whom three are women and three are men, from diverse industries, nationalities, cultural backgrounds and ages. Our Board of Directors therefore has a gender diversity ratio of 50%.

Currently, five members have a non-executive role, as the Chief Executive Officer is the only member of the Board of Directors with an executive mandate. Furthermore, three of the Board members are independent directors.

The Board of Directors sees to it that the criteria mentioned above are considered when planning and managing succession of the Executive Management.

The membership of the Melexis Executive Management changed in 2024. In its current composition, it consists of a diverse team of three men and one woman, with different professional backgrounds.

The members of the Melexis Board of Directors and Executive Management have a rich background of relevant experience in the semiconductor sector, its products and geographic locations, providing Melexis with the required expertise to navigate the landscape it operates in. Our employees are represented in the Board of Directors by our Chief Executive Officer and the People & Culture Director is invited on a regular basis to the Nomination & Remuneration Committee. Furthermore, interaction with other relevant Directors is guaranteed on a regular basis through meetings with the Executive Management. These sessions ensure that valuable first-hand insights and expertise are exchanged among all levels of our operations.

Roles and responsibilities

Our Board of Directors - including the Audit Committee - and Executive Management ensure effective oversight of sustainability matters. The Board of Directors holds the overarching responsibility for overseeing the impacts, risks, and opportunities associated with our operations. Furthermore, the Board of Directors and Executive Management supervise the setting of targets related to material impacts, risks, and opportunities, monitoring the progress towards these targets on a regular basis, ensuring a systematic and structured approach to achieving our sustainability goals.

In addition to the Audit Committee and Nomination and Remuneration Committee, the ESG Committee supports the Board of Directors. This newly-established Committee, consisting of three Board members, the CFO and the Sustainability Director, gathers a minimum of three times a year. The ESG Committee provides a dedicated forum for discussing Melexis sustainability strategy, related impacts, risks, and opportunities associated with our business operations and target setting and monitoring. In addition, targets are translated into concrete KPIs at Executive Management level. Progress is then followed up on a monthly basis in close collaboration with the Sustainability Director.

Sustainability matters addressed by the Board of Directors and Executive Management

In 2024, Melexis has continued its journey of embedding sustainability into the core of its business operations. An important aspect of this undertaking has been the flow of information among, and active engagement of, the Board of Directors and Executive Management when addressing sustainability matters. They have ensured sustainability remains a focal point in our business operations by actively participating in discussions and the decision-making processes.

At Melexis, the ESG Team takes the lead in collecting and providing information regarding sustainability matters to both the Board of Directors, via the ESG Committee, and to the Executive Management team. The ESG Committee gathers at least three times a year, but also ensures our Board and Executive Management is kept up to date on relevant sustainability topics through reports or other media.

Many topics are covered during these exchanges of information including, but not limited to, material impacts, risks, opportunities, metrics, actions, the effectiveness of certain policies, and targets. This comprehensive approach ensures that all stakeholders are well informed and actively engaged in Melexis sustainability journey.

Consideration of Impacts, Risks, and Opportunities

The Board of Directors and Executive Management are aware of the relevant impacts, risks, and opportunities. The Executive Management takes these impacts, risks and opportunities into consideration when defining our corporate strategy. Consequently, key elements in the Melexis corporate strategy include a strong emphasis on reducing our carbon footprint, focusing on people and planet in the product strategy, and fostering a responsible, ethical and inclusive leadership.

List of material Impacts, Risks, and Opportunities addressed

During the reporting period various material impacts, risks, and opportunities (IROs) were considered and addressed. In terms of impact, we launched a number of initiatives aimed at (creating awareness regarding) carbon footprint reduction and waste management. In terms of risks, we closely monitored regulatory compliance to ensure that Melexis operates within the stipulated legal frameworks. In terms of opportunities, we can highlight our efforts to support electrification of cars and focus on new markets to foster sustainable growth. A full list of material IROs can be found in the SBM-3 section.

Melexis is committed to nurturing a culture of sustainability and responsible governance. Working in close collaboration, the Board of Directors, the ESG committee and Executive Management will continue to steer Melexis towards a more sustainable future, marked by innovation and responsibility.

Melexis has embarked on a journey to introduce sustainability-related performance metrics into the Executive Management's incentive scheme. By introducing sustainability-related performance metrics starting 2025, we demonstrate our ongoing commitment to a greener future by encouraging a proactive contribution towards the realization of our sustainability objectives, and fostering a culture that resonates with responsibility and innovation.

The Board of Directors determines, upon recommendation of the Nomination and Remuneration Committee, the Melexis remuneration policy applicable to the remuneration of the Directors and Executive Management, and submits the policy for approval to the shareholders during the annual shareholders' meeting. Last time this policy was submitted and approved was during the annual shareholders' meeting of 2021. In 2025, an updated policy will be submitted for approval during the annual shareholders' meeting in May 2025.

The Board of Directors determines, upon recommendation by the Nomination and Remuneration Committee, the individual remuneration of the Executive Management in accordance with this remuneration policy. The Nomination and Remuneration Committee evaluates the performance of the CEO and discusses with the CEO the performance of the other members of the Executive Management based on the guidelines of this remuneration policy.

Every year, the Board of Directors, upon the advice of the Nomination and Remuneration Committee, determines the objectives the CEO and other members of the Executive Management must reach in the coming year in view of the performance criteria in this remuneration policy. The Nomination and Remuneration Committee supervises and advises on the development of the remuneration, allocation of variable pay and additional benefits for the Executive Management.

Within the framework of the 2025 remuneration policy, Melexis will consider quantifiable sustainability-related objectives as part of the variable pay for the Executive Management. These sustainability-related objectives will be reviewed, updated and approved annually by the Board of Directors, with support of the ESG Committee. This will ensure alignment with Melexis strategic objectives and our sustainability strategy and will reflect changing priorities and global trends.

Over the reporting year, depending on the role of each Executive Management member, individual objectives were already linked to one or more qualitative sustainability-related objectives, such as leading and/or sponsoring projects on the following topics: CO2 emission reduction, diversity, equity and inclusion, employee engagement and development, and sustainable growth. The proportion of variable remuneration dependent on sustainability-related targets and/or impacts varied by individual, depending on their role, their direct impact on specific ESG topics and the overall composition of their variable remuneration plan. On average, 10% of their individual/team performance measured through achievement of pre-established targets was linked to ESG.

Melexis is committed to sustainable and responsible business practices, supported by a due diligence process that prioritizes ethical behavior and positive environmental and societal impact.

Main aspects and steps of due diligence

Melexis sustainability due diligence process is essential for assessing the material impacts, risks, and opportunities associated with our business operations. It goes beyond our own operations to include our direct suppliers and main customers.

This ongoing process allows us to: • prioritize actions based on the severity and likelihood of the identified impacts • adapt to new sustainability challenges and opportunities, influencing our business strategy, operations, and relationships with partners and suppliers

Mapping of information on due diligence process

The core elements of our due diligence process are detailed in the table below. It shows how Melexis applies the core elements of due diligence for people and/or environment in this Sustainability report:

This section details how Melexis manages risk and internal controls related to sustainability reporting. We are committed to transparency and accountability, and these processes help ensure our reported information is adequate and reliable.

Scope, main features, and components

Our risk management and internal control processes cover all aspects of sustainability reporting, including environmental, social, and governance factors. The main features are risk identification, risk assessment, risk mitigation, and internal controls, which are set up through a collaborative effort involving the ESG Committee, ESG Team and Internal Audit function.

Risk assessment approach

We assess risks using a combination of data analysis, expert input, and stakeholder feedback. This approach gives us a comprehensive understanding of potential risks and their possible impacts. To evaluate each risk, we use both quantitative and qualitative methods to determine how likely it is to occur and how significant the impact would be. This allows us to prioritize risks based on their potential impact and likelihood, using a well-defined risk matrix.

Main risks identified and mitigation strategies

We have identified several key risk categories, including environmental risks such as climate change, social risks encompassing a potentially higher turnover and difficulties to attract talents, and governance risks involving regulatory compliance and data privacy. To address these risks, we have devised a series of mitigation strategies that include carbon footprint reduction, a clear focus on offering attractive and respectful working conditions, and compliance training. These measures are aimed at not only mitigating the identified risks but also fostering a culture of sustainability within our organization.

Integration of findings into internal functions

At Melexis, we are committed to integrate risk assessment findings and internal controls into our internal functions and processes. Among others, this means developing policies that address identified risks, incorporating risk insights into our strategies and plans, or incorporating risk management findings into our strategic discussions. In general, this helps to guide informed decision-making at various organizational levels. Additionally, in our operations, we undertake improvements based on the findings, enhancing efficiency and sustainability across our activities.

Periodic reporting to Board of Directors and Executive Management

To maintain transparency and accountability within our company, we ensure the periodic reporting of our findings to the Board of Directors and Executive Management. This involves regular reports over the year, at least one per quarter, that highlight the progress and effectiveness of our risk management and internal control processes. So far, our internal audit department is aware of our findings via regular interactions with our Sustainability Director, whereas for the future, CSRD reporting will be considered as a separate matter in the internal audit plan.

Our 2024 Sustainability report provides a detailed look at how sustainability is integrated into Melexis strategy, business model, and value chain. In this chapter we aim to give our stakeholders a deep understanding of the impacts, risks, and opportunities we face, and where they come from.

Strategy overview

Melexis sustainable product portfolio

Our sustainable product portfolio is committed to maximizing sustainability, starting from the earliest product ideas through to their end-applications; and from the development engineers to the customers and end-users.

How do we approach this? • Design - By keeping people and planet at the heart of product development, our engineers design and develop edge sensor and driver solutions in different applications.

• Operations - Melexis strives to reduce the negative impact of activities throughout the value chain. It starts from upstream of the supply chain. By managing our own energy consumption and reducing waste, we continue improving our own manufacturing (testing) and development facilities. We also serve the market by ensuring an efficient and sustainable global distribution.

• Usage - Melexis products aim to improve people's mobility and well-being through enabling clean/low emissions, safety, comfort, energy efficiency and health applications. Melexis impacts in various ways both the automotive world (including systems which boost energy efficiency and safety of batteries, powertrains, thermal management, interior & exterior lighting, e-braking and e-steering for example) and markets beyond automotive (for example robotics, alternative mobility, digital health, and more).

Melexis markets and customers

Melexis primarily addresses the automotive industry and contributes to the reduction of the GHG emissions (including CO2) through our part in the electrification of mobility (battery electric vehicles, plug-in hybrid & hybrid vehicles) and the consequent reduction of ICE (internal combustion engine) cars' emissions. It is, however, challenging to quantify our direct contribution to this process.

Melexis also improves comfort and safety while driving.

Beyond the automotive market space, we target specific segments aimed at increasing people's mobility and/or well-being. Our solutions cover robotics, digital health, alternative mobility and the "electrification of everything".

Melexis maintains a global presence with operations for sales and applications, manufacturing, and research and development. We had a total of 2,010 employees worldwide as per December 2024.

We do not produce or sell any products or services that are banned in any markets. This reflects our commitment to following regulations and conducting business ethically.

Sustainability-related goals

Melexis strives to enhance worldwide human mobility and well-being in various settings — at home, at work, while travelling, and within care facilities. Our product innovations ensure a smaller CO2 footprint for the applications we support, and contribute to improved work styles, lifestyles, and overall health. Our process innovations contribute to a reduction of our own CO2 footprint and the enhancement of our employees' quality of life in the workplace and beyond. Our endeavors are enabled through partnerships and fuel profitable business growth for the company.

Assessment of current products and markets

Our product development process includes gates which secure and monitor the adherence of our products with our sustainability goals. In addition, our business development teams continuously scan the target business fields and customers to identify new trends and opportunities in line with our sustainability goals. The sales team embeds the goals in the go-to-market strategy and nurtures the business opportunities accordingly.

Strategy elements relating to sustainability

We execute our sustainable product strategy through targeting decarbonization and electrification, and improving mobility and well-being. Our main sustainability challenges ahead lie on the journey towards achieving our carbon-neutrality target, and realizing our ambition for a skill-based sociocratic organization guided by the principles of diversity, equity and inclusion. The upstream and downstream applicability of these intentions creates additional challenges. We have a dedicated corporate program which addresses these challenges through specific projects.

Business model and value chain description

Business model

Our business model is centered around delivering integrated circuit-based microelectronic solutions that effectively address the "sensor" and "driver" challenges encountered by our customers, with a focus on promoting sustainability and reducing environmental impact. We cater primarily to Original Equipment Manufacturers (OEMs) and Tier 1 suppliers operating within key market segments such as automotive, robotics, healthcare, consumer goods, and industrial sectors. We prioritize customers who share our commitment to sustainable practices.

Our approach emphasizes fostering robust customer relationships through both online and on-site interactions, ensuring seamless communication and collaboration at all levels. We generate revenue primarily through the sales of our innovative, sustainable solutions.

Our key assets encompass a strong company culture, a clearly defined set of values and code of conduct, a talented and dedicated workforce, valuable intellectual property, a reputable brand, and sound financial health. We are committed to sustainable practices by investing in state-of-the-art R&D and testing facilities designed with energy efficiency and resource conservation in mind. Additionally, we recognize the critical importance of responsible energy and water management as vital components of our operations.

Our core activities include a comprehensive exploration of market needs, with a focus on identifying opportunities to create sustainable solutions. We are dedicated to developing cutting-edge, environmentally-responsible IC-based solutions that address these needs. Our commitment to quality and sustainability is evident in our rigorous testing of products manufactured by our partners, ensuring they meet the highest standards of performance. Finally, we employ effective promotion and sales strategies that emphasize the benefits of our solutions, ensuring effective market penetration.

As a fabless semiconductor company, we place a high value on strategic outsourcing partnerships with suppliers who adhere to sustainable and ethical practices. Our upstream partners play a crucial role in supplying wafers and packaged devices manufactured in accordance with our stringent designs and specifications, while minimizing environmental impact. Our downstream partners, including distributors and representatives, are instrumental in expanding our market reach. Moreover, collaborations with equipment manufacturers enable us to maintain efficient in-house testing capabilities.

Our cost structure is predominantly driven by the cost of goods sold (COGS), which encompasses silicon die cost, package cost, test cost, and considerations related to the rate of defective parts. Other significant cost components include employment-related expenses, capital expenditures (CapEx), and operating expenses (OpEx).

Value chain

Our value chain centers on primary activities such as market exploration, IC-based solutions development, testing, logistics, marketing, sales, brand building, and communications.

These activities are supported by essential functions such as human resource management, quality assurance, innovation, procurement, legal, intellectual property management, finance, and IT.

Upstream to our position, the main suppliers are the foundries (wafer fabrication) and the assembly houses (die singulation, die bonding, wire-bonding, molding). Some assembly houses also provide test services.

Our customers and channel partners are downstream from our position and, ultimately, our goal is to create value for end-users while minimizing our environmental footprint and contributing to a more sustainable future.

Melexis is dedicated to building a sustainable and inclusive business in a rapidly changing world. We believe that listening to our stakeholders is crucial for making the right decisions. This section explains how we involve our stakeholders in shaping our business strategy and operations.

Stakeholder engagement strategy

Melexis takes nothing for granted, be it our people, our partners, our customers, the planet or its resources. An open dialogue with various yet equally important stakeholders is essential in order to continuously improve overall sustainability.

Stakeholder engagement

Melexis stakeholders are all the people who we influence and who influence us. Our key stakeholders, include our customers, suppliers, employees, investors and communities.

The following table lists our stakeholders, their respective concerns and interests, and the different communication channels we use to engage with them. Working closely with our stakeholders is crucial for achieving success and making a positive impact.

Our stakeholders deserve the utmost integrity, honesty and fairness in all their interactions with our company and we ensure we adequately engage their expectations and interests.

By communicating with our stakeholders through a wide range of channels, Melexis works hard to stay in touch. This helps maintain their longstanding trust in our company and ensure our continuous day-to-day operational management. Some concrete examples of Melexis stakeholder interaction: we engage with our stakeholders during regular meetings with customers where they can voice concerns and suggestions (including at CEO level); we have continual dialogues during our on-going collaboration with suppliers; and we liaise with our investors during our Capital Markets Day event.

In addition, our employee engagement is facilitated through feedback platforms and regular town-hall meetings, fostering a culture of open communication and transparency. The information we gain helps us to identify opportunities to improve performance, innovation and the retention of our employees. Everyone's voice matters and we love to listen.

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

Material IROs assessment

Melexis has conducted thorough analysis to identify key impacts, risks and opportunities (IROs). These factors connect to our business activities and the strategies we have developed to address them effectively.

We have identified several material impacts which significantly influence Melexis operations. These risks and opportunities are predominantly mid- and long-term and concentrated in our own processes and in joint efforts with our upstream value chain.

List of material IROs

Melexis listed and prioritized the main Impact Risk and Opportunities (IROs) related to the various topics identified in the ESRS guidance. All identified IROs are linked to ESRS Disclosures Requirements as, after discussion, no material entity-specific topics were retained in our sustainability reporting.

Main impacts, risks and opportunities - Environmental topics

Main impacts, risks and opportunities - Social topics

Main impacts, risks and opportunities - Governance topics

Material impacts analysis

Identified material impacts can affect people and/or the environment.

Melexis direct impact on the environment coming from our own operations is quite limited and the largest proportion of our emissions relates to Scope 3. Melexis has a role to play in the monitoring of aspects related to suppliers selection and purchasing and also in developing more processes and products that can contribute to ours and others's reduced carbon footprint.

As for impacts related to people, our Double Materiality Assessment shows that, for Melexis, one of our most important material influences is upon our own workforce. In order to be an attractive employer, we embrace the equal treatment of all employees, relying on a strong corporate culture and on sustainable business conduct.

These impacts are intricately connected to our business strategy and model, which are aligned to resonate with sustainability goals, environmental and societal standards.

Financial effects and strategy

We refer to the financial disclosures in E1-3 for the financial impact of CapEx and OpEx related costs linked to sustainable technologies.

The Melexis financial landscape is characterized by both risks and opportunities. Fluctuating market demands pose a risk to stability, while the potential for expansion into new markets offers promising prospects for growth. We refer to section AK. Risk Factors of this annual report for more details on the risk factors affecting Melexis. If any of these risks were to occur, the company's business, results of operations and financial condition could be materially adversely affected.

Our financial strategy is robust, featuring well-structured investment plans that blend capital expenditure in sustainable technologies with initiatives focused on business transformation and innovation.

Interaction with strategy and business model

Response and adaptation strategy

After performing the materiality assessment, Melexis compiled a comprehensive list of material impacts, risks, and opportunities that affect the company's business model, value chain, strategy, and decision-making processes.

These insights are integrated into our corporate strategy, as evidenced by our focus on carbon reduction, sustainable product development, and responsible leadership. To address environmental impact, we initiated programs to reduce carbon footprint and improve waste management. To manage regulatory risks, we maintained strict compliance with relevant laws and regulations. To capitalize on emerging opportunities, we continued to invest in electrification technologies and explored new market segments to drive sustainable growth.

Resilience analysis

Melexis strategy and business model demonstrate resilience in addressing material impacts, risks, and opportunities through the following:

• Adaptability: we actively monitor and respond to emerging trends and challenges, adjusting our strategic direction as needed. This includes incorporating sustainability considerations into our decision-making processes.

• Diversification: our operations and revenue streams are diversified across several markets and product lines, reducing reliance on any single factor and mitigating potential risks.

• Innovation: we foster a culture of innovation, continuously seeking new solutions and technologies to improve efficiency, reduce environmental impact, and meet evolving customer needs.

• Stakeholder engagement: we actively engage with our stakeholders, including employees, customers and suppliers to understand their concerns and expectations, ensuring our strategy aligns with broader societal goals.

The time horizons applied in the qualitative analysis of our resilience are consistent with those defined in ESRS 2-BP2 and used for our IRO assessment: short-term being less than one year, medium-term between 1 and 5 years and long-term more than 5 years.

Our company is committed to maintaining a resilient strategy and an agile business model that can adapt to changing circumstances and contribute to a sustainable future.

Changes from previous reporting period

Compared with financial year 2023, Melexis has increased its focus on ESG topics. We have expanded our sustainability initiatives and stakeholder engagement and completed our most-extensive-ever exercise to analyze our impacts, risks, and opportunities and completed a Double Materiality Assessment.

Biodiversity and ecosystems - special analysis

At Melexis, we understand the inherent value of biodiversity and have therefore worked on evaluating our potential impacts, starting with an assessment of our dependencies or material interdependence with local ecosystems. We also discussed potential physical and transition risks and opportunities concerning biodiversity and could not identify broader systemic risks.

According to Key Biodiversity Areas analysis, no Melexis production sites are located in or near biodiversity-sensitive areas. We have assessed that adopting biodiversity mitigation measures was not a primary focus considering our industry sector and locations. In conclusion, no material impacts, risks and opportunities were identified.

Non-material topics

Based on the matrix summarizing the results of our Double Materiality Assessment, the topics of Water Pollution (E2), Soil Pollution (E2), Biodiversity (E4) and Affected Communities (S3) were found to fall below the threshold for both impact materiality and financial materiality. No significant impacts, risks, or opportunities related to these topics were identified.

As a result, these ESRS topics will not be covered in our Sustainability report.

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

Methodology for identifying and assessing material IROs

Melexis conducted its first comprehensive Double Materiality Assessment (DMA) at end of 2023, early 2024. The outcome of the Double Materiality Assessment will be regularly reviewed and validated to ensure we continue to meet the changing needs of our stakeholders and adapt to the evolving business environment.

The ESG core team, together with subject matter experts and external consultants, carried out the Double Materiality Assessment. The data gathering and decision-making process was a team effort, with input from many departments within our organization. The results of the assessment were presented to the Executive Management for review and approved by the Board of Directors.

Step-by-step methodology

Melexis created a customized framework based on CSRD double materiality guidelines, identifying areas in which the company's operations or business relationships may cause, contribute to, or be linked directly to material impacts, risks or opportunities. The process consisted of the following steps:

1) Understand the context: Identify the main global activities and business relationships of Melexis both for our own operations as for our upstream/downstream value chain. To complete this holistic exercise, we also gathered information on peers and competitors and main actors in our value chain.

2) Identify potential topics: We started by listing relevant sustainability issues using topics of ESRS 1 AR 16 and taking into account industry benchmarks, standards, and global trends. We then identified impacts, risks and opportunities (IROs) for each topic, based on potential or actual material sustainability matters. We looked at our double materiality meaning both impact materiality, i.e. the impact of our organization on planet and society (outward perspective); and financial materiality, i.e. external risks and opportunities that affect our organization (inward perspective). For each topic, we also assessed whether an impact was identified, and evaluated the associated risks or opportunities that could result from dependencies.

3) Identify affected stakeholders and engage with them: To ensure a thorough understanding of our IROs, we surveyed internal and external stakeholders and conducted interviews with internal subject matter experts. More details on the purpose and outcome of our stakeholder engagement can be found in the table below.

4) Prioritize topics: Based on the data gathered, we scored each IRO, and hence each topic, based on its importance to stakeholders and potential impacts on our business. Each material impact was assessed as positive/negative and actual/potential. We also selected the relevant time horizon and value chain mapping and scored the related scale, scope, irremediability, severity and likelihood. We also mapped the value chain and time horizon for each risk and opportunity, together with the associated magnitude and likelihood.

5) Categorize for action: We organized the topics into a matrix and selected a threshold determining material and non-material topics. The information disclosed for the material topics follows the ESRS requirements. This process ensures alignment with both regulatory requirements and stakeholder expectations, highlighting the most relevant sustainability information in the company's reporting.

Inputs to the assessment

• Sector benchmarks: Industry benchmarks, standards, and global trends; common risks impacting companies of similar size in our sector, activities and global presence
• ESRS guidance: ESRS 1 AR 16 topics
• Internal experts: Discussions with internal subject matter experts; input from many departments within our organization
• External consultants: Support of external experts in creating the materiality framework
• Stakeholder consultation: We surveyed internal and external stakeholders and conducted interviews with internal subject matter experts
• Materiality support tools: For indirect suppliers (including Tier-2) we used materiality support tools
• Publicly available information: Publicly available information on peers and competitors

Scoring criteria for impact materiality

Each material impact was assessed for:

• Positive/negative
• Actual/potential
• Scale
• Scope
• Irremediability
• Severity
• Likelihood

Scoring criteria for financial materiality

For each risk and opportunity, we mapped:

• Magnitude
• Likelihood

Threshold for materiality

We organized the topics into a matrix and selected a threshold determining material and non-material topics. The information disclosed for the material topics follows the ESRS requirements.

Based on the matrix summarizing the results of our Double Materiality Assessment, the topics of Water Pollution (E2), Soil Pollution (E2), Biodiversity and Ecosystems (E4), Affected Communities (S3) were identified as non-material, which is detailed under the relevant topical sections of the Sustainability report.

Frequency / when last reviewed

The first comprehensive Double Materiality Assessment was conducted at end of 2023, early 2024. The outcome of the Double Materiality Assessment will be regularly reviewed and validated to ensure we continue to meet the changing needs of our stakeholders and adapt to the evolving business environment.

Use of value chain mapping

Coverage of value chain:

For the preparation of our Double Materiality Assessment and potentially related impacts, risks and opportunities, we considered our broader value chain, including suppliers of our suppliers, and different levels of customers. Our indirect suppliers (including Tier-2) were indirectly covered through performing an industry analysis and by consulting materiality support tools.

We work closely with our strategic suppliers to ensure they use sustainable practices for sourcing raw materials and manufacturing. We also encourage sustainable product use and responsible disposal, promoting a circular economy by minimizing waste and maximizing recycling and/or re-use.

Value chain mapping in assessment:

We selected the relevant time horizon and value chain mapping and scored the related scale, scope, irremediability, severity and likelihood. We also mapped the value chain and time horizon for each risk and opportunity, together with the associated magnitude and likelihood.

Melexis uses publicly available information and internal experts to assess potential impacts, risks, and opportunities across its operations. We considered both our own operations and the broader value chain inside and outside EU, also taking into account sectors and regions with higher environmental vulnerability and lower labor standards.

Internal controls on sustainability reporting

Internal controls specific to the reporting stage included a detailed review of both qualitative and quantitative information by the Senior Financial Analyst, once the relevant information had been provided by the responsible subject matter experts. A general review of the report was then carried out by our Sustainability Director and other senior managers.

Due diligence process

Our informal due diligence process was used to identify, assess, prioritize and monitor potential and actual impacts on people and the environment. With the support of external experts, we created a customized framework based on CSRD double materiality guidelines, identifying areas in which our company's operations or business relationships may cause, contribute to, or be linked directly to material impacts, risks or opportunities. We discussed both the direct and indirect impacts on people and the environment, arising from our own operations and those resulting from our business relationships.

Risk assessment and integration into overall management process

Sustainability-related risks, such as compliance risks, are integrated into Melexis risk assessment review. There is no formal prioritization process in place as risks are not categorized under sustainability or other categories, each risk is reviewed based on its potential impact and likelihood. Our risk assessment process does not involve any risk management tools. Our Executive Management discusses risks and strategies during weekly touchpoints and during monthly in-depth meetings. This enables the company to manage and address high-impact sustainability risks without compromising other areas.

The impacts, risks and opportunities identification process is carried out by the ESG Team, which then informs Executive Management of the material risks. The Executive Management then integrates them in their assessment and evaluates the overall risk profile and risk management processes. Similarly, the opportunities identified by the ESG Team are discussed with the subject matter experts and the department leads, which is the starting point for integration into the company management. This drives us to identify and act on opportunities that align with our sustainability goals and are consistent with our culture of innovation.

Transition plan for climate change mitigation

Overview

During 2024, Melexis further refined the corporate ESG strategy, including prioritizing the ongoing definition of a comprehensive transition plan for climate change mitigation. The goal is to adopt the transition plan by 31 December 2025. The development of the plan will be driven by the dedicated ESG Team in consultation with the ESG Committee and external climate experts, and will be informed by insights from peer companies. The plan will be built on the principles, priorities and insights from ongoing climate action in scope of the Environmental policy.

Scope

Melexis core business supports vehicle electrification which helps to lower emissions. The transition plan will cover all Melexis operations globally.

Target year for net zero / carbon neutral

In 2024, Melexis decided to set a more ambitious climate target, committing to reduce Scope 1 and 2 GHG emissions per million sold integrated circuits by 55% by 2030 compared with 2024.

All Melexis operations, and 100% of market-based Scope 2 emissions are covered by the target.

Emissions reduction milestones

Baseline year: 2024
Target year: 2030
Reduction target: 55% reduction in Scope 1 and 2 GHG emissions per million sold integrated circuits

The baseline value is 8.8 ton CO2eq per million sold ICs. This combined target equals an expected absolute Scope 1 and 2 GHG reduction of 21%, assuming a 10% increase in production volume year-over-year.

Given that Melexis Scope 1 emissions account for less than 10% of total Scope 1 and 2 footprint, a combined Scope 1 and 2 target has been set.

Alignment with 1.5°C / Paris Agreement

The Melexis emissions target is in line with limiting global warming to 1.5°C according to Paris Agreement. Although not externally validated, the target is set in line with the Paris Agreement's 1.5°C scenario and with GHG Protocol, and thus is based on scientific evidence.

Melexis is not excluded from the EU Paris-aligned Benchmarks.

Key decarbonization levers

Energy focus:
Given that a significant part of Scope 1 and 2 GHG emissions at Melexis come from energy consumption, the GHG emission reduction strategy revolves around:

• Energy efficiency
• Energy consumption reduction
• Transitioning to low- and zero-carbon energy sources

The key levers are:

• Improved energy efficiency in testing and probing processes, including improved yield
• Transitioning away from fossil fuels in the electricity mix

Value chain:
Energy is equally important for climate change action in the value chain, given that it is the primary source of Melexis Scope 3 GHG emissions. To address this, Melexis is engaging with its upstream value chain.

Product portfolio:
Melexis is investing in the further expansion of its dedicated sustainable product portfolio, such as Sustainable World and Alternative Mobility products.

CapEx / investment commitments

Melexis continues to invest in climate change mitigation projects. In 2024, Melexis spent:

• EUR 36 million in CapEx for climate change mitigation in scope of the Disclosures Delegated Act
• EUR 64 million in OpEx for climate change mitigation in scope of the Disclosures Delegated Act

This is reported in the EU Taxonomy chapter. This includes allocating sufficient resources to support the transition plan's implementation.

Locked-in emissions assessment

Locked-in GHG emissions are estimates of future GHG emissions that are likely to be caused by a company's key assets or products sold within their operating lifetime.

At Melexis, the primary sources of locked-in emissions stem from:

• The energy consumption of the integrated circuits (ICs) designed
• The resources used throughout their production lifecycle

Melexis is committed to minimizing these emissions by:

• Investing in energy-efficient designs that reduce power consumption throughout the entire lifespan of chips and ICs
• Prioritizing energy efficiency in probing and testing processes by purchasing energy-efficient equipment and tracking a comprehensive set of internal KPIs

Use of carbon credits / removals

Melexis does not engage in GHG removals through carbon credits. Melexis does not operate with internal carbon pricing.

Alignment with global standards and EU Taxonomy

Current priority setting of Melexis CapEx and OpEx plans include sustainability and compliance with the EU taxonomy regulation.

To contribute substantially to climate change action, Melexis economic activity must center on the manufacture of technologies that are aimed at, and demonstrate, substantial lifecycle GHG emission savings compared to the best-performing alternative technology/product/solution available on the market. GHG reduction across the lifecycle could be evaluated based on product lifecycle emissions and applications.

EU Taxonomy alignment challenges:
Due to legal uncertainties regarding the Do No Significant Harm (DNSH) criteria of Pollution prevention and control, and the fact that Melexis is still in an early stage of product lifecycle assessments, activities are classified as non-aligned with the EU Taxonomy.

The semiconductor industry relies on the use of chemicals. The current wording of the Climate Delegated Act for the EU Taxonomy regarding pollution prevention and control has given rise to ongoing issues. Melexis complies with REACH and RoHS legislative requirements. The semiconductor industry has been granted multiple exemptions and/or derogations from restrictions on certain substances. However, since these are not acknowledged under the EU Taxonomy framework, there are cases where semiconductor manufacturing companies report very low alignment levels.

The alignment of Melexis economic activities with the provisions of the EU Taxonomy is expected to evolve over time to support the transition towards a more sustainable economy.

Business strategy alignment

The development of the Melexis transition plan for climate change mitigation is ongoing in scope of the ESG strategy definition. The ESG strategy is based on Melexis long-term business strategy. Melexis aims to finalize the ESG strategy in 2025, and ensure it stays aligned with business strategy and financial planning.

Different teams (ESG, Finance, Strategy) and senior management are collaborating to build realistic projections and define adapted measures, taking into account the financial impact on a local and global level.

Governance and approval

The future transition plan for climate change mitigation will first be reviewed and approved by Executive Management and then by the ESG Committee. This two-step process guarantees that the plan aligns with both the organization's strategic objectives and its commitments to environmental, social, and governance principles.

The target was established collaboratively between the Board of Directors, the Executive Management and the ESG Team.

Monitoring and tracking

To track progress, Melexis annually calculates its Scope 1, 2, and 3 GHG emissions using the GHG Protocol methodology with the support of an external partner.

In 2024, Melexis has been working towards implementing several changes aimed at increased consistency, comparability and representativeness of carbon accounting and target for future years. In particular, the primary data collection process was streamlined and outreach to suppliers and customers was conducted to increase the share of primary data used for the carbon footprint calculation.

Policies related to climate change mitigation and adaptation

Melexis addresses climate change mitigation and adaptation through three primary policies: the Environmental policy, the Procurement ESG policy, and the Supplier Code of Conduct.

Environmental policy

Scope and application:

• Applies to Melexis largest sites: Sofia (Bulgaria); Ieper and Tessenderlo-Ham (Belgium); Erfurt (Germany); Corbeil (France); and Kuching (Malaysia)
• Encompasses all testing and probing sites and IC design headquarters in Tessenderlo-Ham
• Addresses potential climate implications of upstream and downstream value chain

Governance and oversight:

• The Quality Director is responsible for implementing this policy
• Aligned with ISO 14001 standards

Key content and principles:

The policy outlines Melexis purpose to contribute to sustainability both in product application and production, mitigating adverse environmental impacts across the entire value chain. It is based on five key strategic principles:

1. Sustainable solutions: Develop technologies that help others adapt to climate change (such as solar-panel-enabled air conditioning systems, heat pumps) and technologies which contribute to widespread reduction of GHG emissions (such as sensors and drivers for electric vehicles)

2. Prevention is better than cure: Monitor environmental performance and continuously search for ways to enhance it, through monthly data collection, GHG emissions calculation, balanced scorecards, internal and ISO 14001 audits and management reviews. This principle addresses energy-, resource- and water-related impacts on climate change in own operations

3. Standards matter: Ensure validation of environmental performance by complying with local and global environmental legislation and voluntary certification, including ISO 14001, RoHS, Conflict minerals requirements based on the Dodd-Frank Act, ELV and WEEE

4. Total environmental impact counts: Take actions to minimize environmental impact throughout the whole value chain, including applying the "first time right" principle within operations. The Environmental Management System considers environmental aspects both within and outside operational control, according to the lifecycle approach. This addresses energy-, resource- and water-related impacts on climate change in both upstream and downstream value chains

5. Open dialog with all stakeholders: Maintain a clear environmental governance model that considers all interested parties, including customers, colleagues, management, investors, suppliers, subcontractors, legal authorities, and society as a whole

Public availability:

• Accessible to all stakeholders on the Melexis website

Monitoring:

• Monthly data collection
• GHG emissions calculation
• Balanced scorecards
• Internal and ISO 14001 audits
• Management reviews

Procurement ESG policy

Scope and application:

• Applies globally to all Melexis entities and employees making purchases for the company
• Covers all Bill of Materials (BOM) expenses and specific indirect spending categories (logistics, packaging, utilities)
• Excludes intercompany purchases, personal expenses, and taxes

Governance and oversight:

• The Procurement Director owns and is responsible for implementing, communicating, and training on the policy to ensure overall compliance

Key content and principles:

• Integrates environmental, social, and governance (ESG) principles throughout the entire procurement process
• Prioritizes transparency, risk management, and a proactive approach to ESG value creation for internal departments, suppliers, and the broader value chain
• Outlines a comprehensive strategy including vision, mission, goals, actions, KPIs, and targets for sustainable procurement
• Subject to review and update in 2025

Public availability:

• Stakeholders can request a copy via esg-sustainability@melexis.com

Link to standards:

• While there are no specific third-party standards referenced, the policy prioritizes transparency and risk management

Supplier Code of Conduct

Scope and application:

• Mandatory part of all business contracts
• Prerequisite for becoming a Melexis supplier
• Applies to all suppliers, contractors, and subcontractors

Governance and oversight:

• The Procurement Director is accountable for implementation, updates, communication, training, and overall compliance

Key content and principles:

• Outlines sustainability requirements, workplace commitments, business conduct expectations, and information disclosure standards aligned with Melexis guiding principles
• All suppliers must comply with all applicable laws and regulations
• Melexis requirements may exceed legal mandates
• Addresses GHG emissions, waste, air pollution and hazardous substances, resource use and circular economy, water, and energy, including low- and zero-carbon energy deployment
• Emphasizes fair business practices, respect for human rights, and environmental responsibility

Link to international standards:

• Adheres to the UN Global Compact principles

Monitoring:

• Suppliers must maintain documentation demonstrating compliance
• Suppliers must authorize audits by Melexis or its representatives
• Violations can lead to a review of the business relationship
• Suppliers must notify Melexis of any conflicts with the code

Actions and resources in relation to climate change policies

Melexis climate action is set out in the environmental program described in the Environmental policy (E1-2). The scope for key actions covers the six biggest Melexis sites that together account for more than 95% of total consumed energy.

Decarbonization levers & key actions

1. Energy efficiency and consumption reduction

Maximize yield by minimizing wafer and IC failures

• Scope: Own operations and upstream value chain (collaboration with wafer and IC assembly suppliers)
• Outcome: Higher yields mean less waste, improving efficient use of resources such as raw materials and electricity

Optimize probing and testing processes

• Uses artificial intelligence (AI) to analyze test data
• Outcome: Identify opportunities to reduce the number or duration of tests without compromising accuracy, directly lowering electricity consumption

Energy-efficient facilities investments

• Kuching, Malaysia site (opened July 2024)

  • Resources: EUR 40 million investment
  • Scope: Own operations
  • Time horizon: Short-term (completed 2024)
  • Features: Environmentally conscious design, advanced energy-saving technologies (maximizing natural light, motion-sensor lighting, double-insulated exteriors)
  • Includes major solar installation

• Sophia Antipolis, France office renovation (2024)

  • Scope: Own operations
  • Time horizon: Short-term (completed 2024)
  • Features: Climate-risk-resilience, reduced energy consumption through improved thermal performance and thermal ceiling

• Erfurt, Germany facilities upgrade (2024)

  • Resources: Approximately EUR 1 million investment
  • Scope: Own operations
  • Time horizon: Short-term (completed 2024)
  • Outcome: Improved insulation, increasing building's energy performance

• Sofia, Bulgaria heat recovery systems (2024)

  • Scope: Own operations (largest testing and probing site)
  • Time horizon: Short-term (completed 2024)
  • Outcome: Projected to reduce annual gas consumption by 400 MWh and Scope 1 GHG emissions by 80 tons

• Tessenderlo-Ham solar panel installation (planned)

  • Scope: Own operations (IC design headquarters)
  • Time horizon: Short-term (2025)
  • Status: Plan investigated in 2024

2. Transition to low- and zero-carbon energy sources

Solar installations

• Scope: Own operations
• Sites: Kuching (major installation since 2024), Sofia, Ieper, Erfurt, and Bevaix
• Resources: Self-generated non-fuel renewable energy totaled 790 MWh in 2024
• Ongoing investigation of opportunities to generate more renewable energy at sites

3. Supplier engagement

Supplier ESG program (kicked off 2023)

• Scope: Upstream value chain
• Time horizon: Medium-term (ongoing)
• Actions:
  • Engagement with key suppliers on Melexis Supplier Code of Conduct
  • Data collection through supplier ESG questionnaire
  • Working on streamlining supply chain data collection with dedicated software
• Links to: Supplier Code of Conduct (E1-2)

Financial disclosures

All eligible operational and capital expenditures not directly linked to listed key actions but eligible for climate change under Commission Delegated Regulation (EU) 2021/2178 are outlined in the separate EU Taxonomy chapter. This includes non-R&D maintenance costs inherently linked to key climate actions.

Future transition plan development

Melexis is developing a comprehensive transition plan by 31 December 2025, driven by the dedicated ESG Team in consultation with the ESG Committee and external climate experts. The plan will be built on principles, priorities and insights from ongoing climate action in scope of the Environmental policy.

Targets related to climate change mitigation and adaptation

Scope 1 and 2 GHG emissions reduction target

Target metric: Scope 1 and 2 GHG emissions per million sold integrated circuits (ICs)

Target value: 55% reduction

Target year: 2030

Baseline year: 2024

Baseline value: 8.8 ton CO₂eq per million sold ICs

Scope: All Melexis operations, 100% of market-based Scope 2 emissions. Coverage: All six Melexis sites in scope of the Environmental policy.

Type: Intensity-based target (per million sold ICs)

Absolute reduction: This combined target equals an expected absolute Scope 1 and 2 GHG reduction of 21% (assuming a 10% increase in production volume year-over-year).

Science-based/validation: Although not externally validated, the target is set in line with the Paris Agreement's 1.5°C scenario and with GHG Protocol, and thus is based on scientific evidence. The target is in line with limiting global warming to 1.5°C according to Paris Agreement.

Key decarbonization levers:

• Improved energy efficiency in testing and probing processes, including improved yield
• Transitioning away from fossil fuels in the electricity mix

Progress tracking: Melexis annually calculates its Scope 1, 2, and 3 GHG emissions using the GHG Protocol methodology with the support of an external partner.

Future scope: Melexis is considering introducing a Scope 3 target in future. Currently already calculating total Scope 3 GHG emissions and engaging with strategic suppliers to stimulate actions on emission reduction.

Approval: The target was established collaboratively between the Board of Directors, the Executive Management and the ESG Team.

Energy-related target

Although there is no formal energy-related target yet, Melexis is working towards setting such a target in the upcoming reporting cycles.

Energy consumption and mix

Total energy consumption by source (2024)

Scope and methodology: For sites without testing or probing facilities, total energy consumption by source was estimated based on historical primary data, electricity mix of the local grid, and the size of the facilities. Most activity data for the period 1 November 2024 to 31 December 2024 was estimated based on historical data to ensure compliance with reporting and auditing deadlines.

Percentage of total energy consumption by source (2024):

• Fossil sources: 49.2%
• Nuclear sources: 33.4%
• Renewable sources: 17.4%

Energy intensity

Energy intensity (high climate impact sectors): 49.19 MWh per million EUR net revenue (2024)

Sector classification: All Melexis activities fall under NACE division 26.11 (Manufacture of electronic components), which is classified as a high climate impact sector. Net revenue from activities in high climate impact sectors equals total revenue reported in the financial statement (EUR 932,808,067).

Gross Scopes 1, 2, 3 and Total GHG emissions

Overview

Melexis reports GHG emissions in accordance with the Greenhouse Gas (GHG) Protocol Corporate Standard. Emissions are reported in tons of CO2-equivalent (CO2eq), including carbon dioxide, CH4, N2O, HFCs, PFCs, and SF6. The reporting boundary is aligned with the financial reporting scope, covering all Melexis Group entities.

Gross Scope 1, 2 & 3 GHG emissions (2024)

Note: Melexis does not operate in sectors covered by Emissions Trading Schemes (ETS) and does not engage in voluntary emission trading. No Scope 1 GHG emissions from regulated emissions trading schemes are reported.

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Scope 3 breakdown by GHG Protocol category (2024)

Note on Scope 3: Categories 10 (Processing of sold products) and 11 (Use of sold products) are under preliminary calculation to improve data availability and reliability; not yet disclosed. Categories 13 (Downstream leased assets), 14 (Franchises), and 15 (Investments) are identified as not relevant for Melexis.

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GHG intensity per net revenue (2024)

Note: *Total GHG emissions exclude Scope 3 Category 10 and Category 11, which are not yet disclosed. Net revenue used: EUR 932,808,067 (as presented in Consolidated Income Statement).

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Methodology and assumptions

Scope 1 and 2:

• For sites with testing or probing facilities: all calculations based on primary data.
• For other sites: energy consumption estimated as described in E1-5.
• Most activity data for 1 November 2024 to 31 December 2024 estimated based on historical data to meet reporting and auditing deadlines.

Scope 3:

• Category 1 (Purchased goods and services): Average emission factor applied to estimated m² of wafers purchased; other goods estimated based on spend.
• Category 2 (Capital goods): Spend-based data.
• Category 4 (Upstream transportation): Direct emissions from biggest transportation providers extrapolated to total spend.
• Category 9 (Downstream transportation): Estimated based on weight of sold goods, packaging, and Product Environmental Footprint (PEF) Guide assumptions.
• Category 12 (End-of-life treatment): Calculated based on packaging weight.

Emission factors: Sourced from a combination of public and licensed databases (BEIS, IPCC, ADEME, IEA, Ecoinvent) and data modelled by Melexis carbon accounting partner.

Data quality: In 2024, approximately 99.5% of Scope 3 GHG emissions were calculated using primary data.

Significant events: No significant events or changes identified between value chain reporting dates and Melexis financial statements.

Conservative approach: Melexis adopted a conservative methodology prioritizing transparency and completeness, in line with GHG Protocol Corporate Standard.

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Biogenic CO2 emissions

Not separately reported.

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Regulated emissions (EU ETS or similar)

Melexis does not operate in sectors covered by compliant Emissions Trading Schemes (ETS) and is not involved in voluntary emission trading. No Scope 1 GHG emissions from regulated emissions trading schemes are reported.

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Energy consumption and mix (2024)

For context, total energy consumption in 2024 was 45,884 MWh. Breakdown by source:

Energy intensity based on net revenue (high climate impact sectors): 49.19 MWh per million EUR (2024).

Note: Most activity data for 1 November to 31 December 2024 estimated based on historical data. For sites without testing/probing facilities, total energy consumption estimated based on historical primary data, electricity mix of local grid, and facility size.

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

Phase-in exemption applied

Melexis uses the phase-in exemption for ESRS E1-9. As stated in the Basis for Preparation section:

"In our Sustainability report, we use the option to omit information required by ESRS 2 SBM-1, ESRS 2 SBM-3, ESRS E1-9, ESRS E5-6, ESRS S1-7, ESRS S1-11, ESRS S1-12, ESRS S1-13, ESRS S1-14, and ESRS S1-15 in accordance with Appendix C of ESRS 1."

The disclosure requirements table confirms: "E1-9 Anticipated financial effects from climate-related IROs - Phasing-in extension applied"

Policies related to resource use and circular economy

Melexis addresses resource use and circular economy through two key policies: the Environmental policy and the Supplier Code of Conduct.

Environmental policy

Key content and principles:

• Sustainable solutions development: Melexis develops sustainable solutions, with some products enabling circular economy, such as sensors for smart waste management systems or wear-and-tear monitoring systems.

• First Time Right (FTR) in product development: This principle emphasizes getting things right from the outset to reduce errors and rework across the entire product lifecycle, from initial design to final production. This helps conserve valuable materials within integrated circuits (ICs), as well as the energy and water resources used in their manufacturing.

• Supplier safeguards: Melexis requires suppliers to adopt safeguards that reduce the risk of defects leading to product rejection. The company also focuses on establishing poka-yoke (error-proofing) processes to eliminate human errors.

• Waste prevention and management: The policy prioritizes waste prevention and requires close monitoring of waste generated at Melexis six biggest sites, which account for 93% of total waste. This monitoring is detailed, tracking waste by stream, hazard presence, and treatment type (destination).

• Minimization of resource use: Through the requirement to minimize resource use, the policy addresses the impact related to dependency on finite resources.

• Transition to low- and zero-carbon energy sources: The Environmental policy prioritizes this transition (refer to Climate change and Energy sections for details).

Scope:

• The Environmental policy covers the six biggest Melexis sites (93% of total waste)
• Each metric reported under waste volume and waste composition is tracked quarterly, with an employee at each site in scope formally responsible for integrity checks and variance analysis

Monitoring and implementation:

• Key KPIs, such as weight of key waste streams, are reviewed quarterly with Site Management Teams
• The company tracks effectiveness by monitoring KPIs covering all six sites in scope
• In 2024, the company standardized and streamlined waste data collection process by unifying waste categories applicable to all Melexis sites using the European Waste Catalogue (EWC), or EURAL system

Public availability:

• The policy is referenced throughout the document, though specific URL not provided in excerpts

Supplier Code of Conduct

Key content:

• The document references the Supplier Code of Conduct in relation to resource use and circular economy topics
• The policy addresses water and marine resources topics by suppliers (E3-2)
• It is used in management of relationships with suppliers (G1-2)

Public availability:

• Referenced as available, though specific details about content and URL not provided in excerpts

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Implementation through the value chain:

Melexis implements these policies through concrete actions including:

• Waste management: Sorting waste into more than 40 categories at the Sofia, Bulgaria site, going beyond legislative requirements and common market practices
• Packaging initiatives: Since 2023, mapping packaging inflows and outflows across three largest sites to identify opportunities for reduction, reuse, and recycling; maximizing packaging reuse such as sending ICs to customers in cardboard boxes sourced from assembly houses
• Product design: Miniaturization and integration leading to improved efficiency of resources, reduced packaging, and simplified design
• Precious metals transition: Taking steps towards transitioning away from gold (e.g., replacing gold wire with copper wire in next generations of MLX90411 product)
• Education: Educating colleagues about recycling through awareness campaigns

Actions and resources related to circular economy

Waste management (Resource outflows)

Scope: Own operations (six biggest sites accounting for 93% of total waste)

Description: Melexis has been proactively investing in waste management for many years, going beyond compliance. The company closely monitors waste generated at its six biggest sites, tracking waste by stream, hazard presence, and treatment type (destination). This monitoring aligns with the Environmental policy.

Actions taken:

• In 2024, standardized and streamlined waste data collection process by unifying waste categories applicable to all Melexis sites using the European Waste Catalogue (EWC)/EURAL system
• Waste sorting at biggest site in Sofia, Bulgaria: more than 40 categories, exceeding legislative requirements and common market practices
• Awareness campaigns to educate colleagues about recycling

Expected outcomes: Contribution to circular economy through effective waste tracking, data-driven improvements, and increased resource recovery

Link to policy: Environmental policy

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Reusable and recycled packaging (Resource outflows)

Scope: Own operations (three largest sites)

Time horizon: Started 2023

Description: Mapping packaging inflows and outflows across three largest sites to identify opportunities for reduction, reuse, and recycling. Focus on these sites justified as they account for the majority of packaging movement.

Actions taken:

• Maximized packaging reuse, such as sending ICs to customers in cardboard boxes sourced from assembly houses

Expected outcomes: Quantitative data supporting outcomes can be found in Resource outflows section (E5-5)

Resources allocated: 63,968 kg of secondary reused or recycled materials used in packaging in 2024, constituting 15% of total material usage

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Miniaturization and integration

Scope: Product design (downstream)

Description: Continuous innovation leads to further miniaturization and integration of Melexis products.

Actions and outcomes:

• Improved efficiency of resources used in products: Smaller dies on wafer maximize silicon real estate, increasing efficiency and reducing waste during production. Reducing die size in package minimizes silicon waste at end-of-life disposal, decreasing overall dependency on finite resources
• Reduced packaging: Smaller products require less packaging material. More products can be packed in same packaging, optimizing shipping and reducing carbon footprint during transportation
• Simplified design: Miniaturization often leads to simplified designs. Example: In 2024, launched MLX90416 — the world's first 60W single-coil sensorless BLDC driver. By shrinking size and eliminating need for Hall sensor, significantly reduced raw material consumption and energy use during manufacturing. This "No-Hall" technology decreases overall component count, further minimizing resource depletion and promoting efficient material use

Link to policy: Environmental policy (First Time Right principle)

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Transition away from precious metals

Scope: Product design and supply chain (upstream/downstream)

Description: Melexis continuously takes steps towards transitioning away from gold as one of the precious metals used in products. Actions discussed internally and externally mainly by purchasing and development teams.

Actions planned:

• In next generations of MLX90411 product, gold wire will be replaced by copper wire, reducing use of precious metals

Expected outcomes: Addresses risk and opportunity related to dependency on finite resources; helps increase sustainability of supply chain

Link to policy: Supplier Code of Conduct (requires suppliers to minimize waste and optimize resource efficiency)

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First Time Right (FTR) in product development

Scope: Own operations and upstream supply chain

Description: Approach emphasizes importance of getting things right from outset, aiming to reduce errors and rework across entire product lifecycle, from initial design to final production.

Actions:

• Require suppliers to adopt safeguards that reduce risk of defects leading to product rejection
• Focus on establishing poka-yoke (error-proofing) processes to eliminate human errors

Expected outcomes: Helps conserve valuable materials within integrated circuits (ICs), as well as energy and water resources used in their manufacturing

Link to policy: Environmental policy

Targets related to circular economy

E5-3 Targets related to waste management

Melexis is committed to minimizing overall waste generation, as outlined in their Environmental policy, which prioritizes waste prevention.

No quantified target is set related to waste or circular economy.

The company states:

• No target is set related to the impact of Hazardous waste, and there is no plan to set such target, because the amount of hazardous waste at Melexis is already minimized.
• They take waste prevention and management actions as described under E5-2 and track their effectiveness by monitoring KPIs.
• These KPIs cover all six sites in scope of the Environmental policy.
• Each metric reported under E5-5 Waste volume and Waste composition is tracked quarterly based on primary data, with an employee at each site formally responsible for integrity checks and variance analysis.
• Key KPIs, such as weight of key waste streams, are reviewed quarterly with Site Management Teams.

Scope: All six sites in scope of the Environmental policy.

E5-4 Resource inflows

Melexis material resource inflows include:

• Wafers
• Packaging and other consumables
• Bill of Materials (BOM): materials used in our products, purchased by third-party assembly houses, including components like capacitors
• Utilities: electricity, gas, and water
• Nitrogen gas
• Capital: buildings, vehicles and production equipment, including mask sets and mold chases
• Components for the manufactured test equipment

Upon assessing our operations, we have determined that resource inflows are a material sustainability matter for Melexis. The following information is disclosed for the reporting period:

• The overall total weight of materials in our products and packaging used was 436,539 kg
• 18% of our packaging and products is derived from biological sources, which is mostly attributed to cardboard packaging
• We used 63,968 kg of secondary reused or recycled materials in our packaging, constituting 15% of our total material usage (i.e. products and packaging included)

Methodologies and calculations

The data presented in this report is a combination of direct measurements and estimations.

The total weight of packaging is calculated by measuring the average weight of each packaging type and multiplying it either by purchased quantities over the reporting year, or by estimated shipped quantities. Packaging from all shipments organized and managed by Melexis is in scope. Cardboard and paper packaging is considered to be derived from biological sources, thus the percentage of biological materials equals the share of cardboard and paper packaging in total packaging weight. Weight of reused packaging is estimated by experts on each site based on field observations. The rates of recycled content are provided by packaging suppliers. To avoid double counting of recycled and reused materials, we deducted the reused weight from the total weight to calculate the weight of recycled materials.

The total weight of products is estimated based on average weight per IC type multiplied by the type's sales quantities for the reporting period. This approach is defined by subject matter experts, and allows for the most robust estimation, as different products with the same package type have comparable weight and composition.

Resource outflows

Product durability

Melexis products are engineered to meet strict automotive industry demands, as outlined in industry standards such as AEC-Q100 and JESD. Our products have a minimum service life of 15 years, which aligns with industry averages, and a minimum operating life of around 8,000 hours. This translates into an estimated durability of at least 100% of the market average.

Beyond industry standards, we prioritize customer requirements, which vary based on the product and its application and may exceed 15 years and 8,000 hours. For instance, an IC's operating life will differ between a smartwatch and an electric car.

Our commitment to durability is reflected in our thorough failure mode and effects analysis (FMEA) for enhanced robustness validation. Every new product undergoes a comprehensive qualification process before market launch, ensuring that Melexis ICs can achieve their intended operating life without defects. Qualification includes various stress tests designed to simulate all types of exposures, with lifetime being a critical parameter. Our additional failure analysis process facilitates continuous improvement and helps prevent potential damage to our ICs over time.

Repairability of products

The automotive industry prioritizes reliability, requiring ICs to function for their entire intended lifespan. Reliability is a primary focus of Melexis, with probing and testing processes being key in our operations. Repairing ICs is generally avoided due to concerns about long-term performance and safety. Melexis, focusing heavily on the automotive sector, adheres to these stringent standards.

Recyclable content

• Packaging: the rate of recyclable contents in packaging is 98% on average. We estimated the average based on weight, purchased quantities and recyclability rates of each packaging type. The recyclability rates are provided by packaging suppliers.
• Products: the rate of recyclable content in products is 42% and is calculated following a conservative approach. It is equal to the average share of materials in Melexis products that are actually recovered during scrap recycling that a third-party performs for Melexis.

Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities

Phase-in exemption applied

Melexis has applied the phasing-in extension for ESRS E5-6 in accordance with Appendix C of ESRS 1, as stated in the Sustainability report.

In the Sustainability report, Melexis uses the option to omit information required by ESRS E5-6 in accordance with Appendix C of ESRS 1.

No substantive information on anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities has been disclosed for the 2024 reporting period.

Waste

Waste management approach

We have been proactively investing in our waste management for many years, going beyond compliance and showcasing Melexis environmental responsibility. We closely monitor the waste generated at our six biggest sites, which account for 93% of total waste. This monitoring is detailed, tracking waste by stream, hazard presence, and treatment type (destination). This scope aligns with our Environmental policy. In 2024, we standardized and streamlined our waste data collection process by unifying waste categories applicable to all Melexis sites. We used the European Waste Catalogue (EWC), or EURAL system, for this improvement. EURAL provides a standardized classification for waste materials, ensuring consistency, enabling stakeholders to understand an organization's environmental performance. It also supports effective waste tracking and analysis, allowing for data-driven improvements and increased resource recovery.

For example, our biggest site in Sofia, Bulgaria sorts waste into more than 40 categories, which goes way beyond not only legislative requirements, but also common practices in the market. We educate our colleagues about recycling through awareness campaigns to ensure our contribution to a circular economy.

Waste volume

Waste composition

Melexis main waste streams include cardboard and plastic waste from our suppliers packaging material and metal, electronic and electrical waste from maintaining our equipment and facilities. Chemical waste comes from our labs and maintenance, and the 'other' waste consists mainly of wood, glass and food waste. Our mixed waste mainly consists of plastic packing material and scrapped Melexis products.

Hazardous and radioactive waste

In 2024, Melexis generated 4 tons of hazardous waste. We did not generate any radioactive waste as defined in Article 3(7) of Council Directive 2011/70/Euratom.

Methodologies and assumptions

Waste: the waste streams reported on above are a combination of Melexis local waste streams, aggregated according to the EURAL waste categories. The data presented in this report is sourced through a combination of primary data and estimations. Primary data is collected for Melexis six biggest sites and covers the period from January to October of the reporting year. The sources for this primary data are invoices and online tools provided by waste collectors. For some smaller local waste streams, volume of the waste is noted by a local responsible employee. Estimations are provided for November and December for the six biggest sites and for the other (non-production) sites for the whole reporting year. These estimations are based on historical data.

Policies related to own workforce

Melexis has implemented several policies covering its own workforce, applicable to all employees regardless of employment status (full-time, part-time, contract-based).

Code of Conduct

• Policy name: Melexis Code of Conduct

• Scope: All entities within the Melexis Group; all employees (regardless of employment status)

• Governance: Overseen by the General Counsel

• Key content/principles: The Code is anchored in three key commitments: workplace commitments, business commitments, and integrity commitments. It covers:

  • Workplace safety and health
  • Diversity and inclusion
  • Equal treatment
  • Use of computing and information resources
  • Legal compliance
  • Environmental sustainability
  • Human rights
  • Product safety
  • Consumer rights
  • Financial and non-financial accounting and reporting
  • Confidential information
  • Intellectual property
  • Privacy and data protection
  • Conflicts of interest
  • Gifts, bribery and corruption
  • Insider trading
  • Competition and antitrust

  The Code prohibits discrimination and promotes a harassment-free workplace. It ensures respect for human and labor rights, including the prohibition of forced labor, child labor, and human trafficking, as well as the protection of labor rights for all Melexis employees.

• Public availability: Accessible on both the external website and internal Melexis Hub

• International standards: References ILO International Labor Standards, UN Universal Declaration of Human Rights, and OECD Guidelines for Multinational Enterprises

• Monitoring: Reviewed on a yearly basis and updated if and where necessary. Compliance with international standards is taken into account during review.

Speak-up policy

• Policy name: Melexis Speak-up policy
• Scope: All entities within the Melexis Group; all Melexis colleagues and external stakeholders
• Governance: Overseen by the General Counsel
• Key content/principles: Provides a reporting mechanism for concerns. Ensures confidential treatment of all reports and anonymous reporting where permitted by law. All individuals who report good-faith concerns are protected from retaliation.
• Public availability: Accessible on both the external website and internal Melexis Hub
• International standards: Aligned with European and national laws, including the EU Whistleblowing Directive
• Monitoring: The policy has been updated in accordance with the EU Whistleblowing Directive and national legislation. An online reporting tool has been introduced, accessible by internal and external stakeholders.

Health and safety policies

• Policy name: Local health and safety policies (site-specific)
• Scope: All entities subject to local health and safety regulations; covers employees, visitors, and anyone potentially impacted by Melexis operations
• Governance: Each site's health and safety representative oversees implementation
• Key content/principles: Tailored to comply with specific country regulations. Primary goal is to safeguard employees, visitors, and anyone potentially impacted by Melexis operations, adhering to relevant health and safety standards. The policies address:
  • Risk assessment and management
  • Safety training and instruction
  • Equipment and machinery safety
  • Emergency preparedness
  • Chemical safety
  • Continuous improvement
• Public availability: Introduced during employee onboarding training
• International standards: Aligned with ISO 14001 standards (referenced in Environmental policy context)
• Monitoring: Regular risk assessments, monitoring, analyzing, and addressing safety concerns to foster continuous improvement

Working conditions policies

• Policy name: Working conditions (entity-specific)

• Scope: Each entity within the Melexis Group; tailored to local legislation and market practices

• Governance: People & Workplace managers on each site are responsible for implementing these conditions

• Key content/principles: Cover a broad range of topics including:

  • Working hours
  • Leave policies
  • Compensation and benefits
  • Health and safety
  • Grievance procedures
  • Equitable pay
  • Equal opportunities for training and development

  Melexis prioritizes providing optimal working conditions to attract and retain top talent, aiming to exceed legal and market standards by offering flexible work arrangements, parental leave policies, and ample opportunities for development and internal mobility.

• Public availability: Employees sign during the hiring process

• International standards: Not explicitly mentioned

• Monitoring: Not explicitly disclosed

Taking action on material impacts on own workforce

Enhancement of the employee engagement program

Description: In 2024, Melexis enhanced its employee engagement program to streamline processes, increase touchpoints, and prioritize data-driven action planning. This improvement aims to translate survey insights into concrete initiatives that bolster employee engagement and support the ongoing cultural transformation.

Scope: All Melexis employees globally (own operations)

Process: The refined process involves regular feedback collection through annual engagement surveys and pulse surveys. This enables proactive identification and addressing of concerns, as well as leverage positive impacts and opportunities. The People & Culture department, in collaboration with other departments and senior management, analyses, prioritizes, and implements action plans based on survey results. Executive Management receives these results, ensuring employee feedback is prioritized to address potential impacts, risks, and opportunities globally.

Time horizon: Program enhancement was initiated in 2024, with the first action plans expected to launch in early 2025.

Link to target: Supports the target to achieve a 90% employee recommendation rate (S1-5)

Global Diversity, Equity, and Inclusion (DEI) program

Description: Melexis is launching a global Diversity, Equity, and Inclusion (DEI) program in 2025. This program will address identified impacts, risks, and opportunities, aiming to make Melexis attractive to diverse talent and ensure all colleagues feel heard and empowered to contribute fully. With a particular focus on women in STEM, this program will be implemented across all Melexis entities.

Scope: All Melexis entities globally (own operations)

Time horizon: Launch in 2025

Rationale: Melexis recognizes the vital importance of equal treatment, diversity, and inclusion (DEI), and the impact it may have on innovation and employee turnover. Diversity and inclusion practices have a direct impact on Melexis ability to innovate and deliver high-quality products and services. The company has been actively monitoring key quantitative and qualitative data for years to inform the development of meaningful DEI targets.

Health and safety initiatives

Description: Melexis implements health and safety initiatives aligned with the commitment to employee health and safety, as outlined in the Code of Conduct and local health and safety policies. The company provides training to empower employees to mitigate risks and prevent accidents.

Scope: All Melexis employees subject to local health and safety systems (own operations)

Link to target: Supports the target to achieve zero work-related accidents (S1-5)

Remedial actions for material impacts

Description: Melexis encourages employees to report any concerns, in particular those related to material impacts and risks, by following the global Speak-up policy. The way these cases are treated is described in S1-3 under 'Remediation and concern-raising channels'.

Scope: Global (own operations)

Resources for managing material impacts

Melexis allocates significant resources, both financial and non-financial, for managing the material impacts on our workforce. This includes:

• Offering attractive working conditions
• Investments in safety equipment
• Various training programs (including the Cultural Transformation program)
• Health and safety initiatives
• Technology upgrades
• Substantial investments in employee engagement and continuous improvement processes and policies
• Embracing DEI initiatives and regulations

Resource allocation is a dynamic process, adapting to evolving business needs and workforce expectations to ensure effective management of material impacts.

Note: No specific financial amounts (capex/opex) are disclosed for workforce-related actions. Climate change mitigation investments (EUR 36 million CapEx and EUR 64 million OpEx in 2024) are reported separately under E1 and are not directly related to workforce impacts.

Targets related to own workforce

Target 1: Employee Recommendation Rate

Target metric: Percentage of employees who positively respond to the Employee Listening Survey (employees recommending Melexis as a good place to work)

Target value: 90%

Target year: Not specified

Baseline year and value: Not applicable (target is fixed)

Scope: Global - applies to all Melexis employees

Type: Absolute percentage target

Validation: Internal target set by People & Culture department in consultation with Executive Management, based on evidence from partners specialized in employee listening programs

Progress to date (2024): 79%

Tracking: Data collected through Employee Listening Survey, assuming sufficient participation rate to represent the workforce. Shorter pulse surveys to be introduced in 2025.

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Target 2: Work-Related Safety

Target metric: Zero work-related accidents (measured by absolute number of reported incidents)

Target value: 0 accidents

Target year: Ongoing (entire calendar year, with quarterly reviews)

Baseline year and value: Not applicable (target remains constant)

Scope: All Melexis employees subject to local health and safety systems

Type: Absolute target

Validation: Internal target, reviewed quarterly by People & Workplace managers through Balanced Scorecard approach

Progress to date (2024): 35 work-related accidents

Accountability: People & Workplace managers in each region, with support from local health and safety advisors

Supporting actions: Regular safety trainings and awareness programs conducted to empower employees to mitigate risks and prevent accidents

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Diversity, Equity and Inclusion (DEI)

Melexis recognizes the vital importance of equal treatment, diversity, and inclusion (DEI), and the impact it may have on innovation and employee turnover. While formal targets have not yet been established in these areas, the company has been actively monitoring key quantitative and qualitative data for years. Details on workforce diversity are available in sections S1-6 and S1-9. The company plans to implement meaningful DEI targets in 2025, informed by in-depth analysis of collected data.

Characteristics of the undertaking's employees

Total headcount and FTE

The Melexis team comprises 2,010 employees (headcount as at 31 December 2024). The data is reported in headcount, while the information in the financial statement is reported as average FTE, with a total number of 1,941 (2024).

The Melexis Group of companies employed on average (FTE) 1,941 people in 2024 and 1,931 in 2023.

Employee headcount by gender

Permanent vs temporary employees by gender:

Melexis does not have non-guaranteed hours in 2024.

With over 99% of the team on permanent contracts, Melexis offers a workplace built on stability and long-term growth.

Employee headcount by country

*Other countries include China, Japan, Philippines, South Korea, Taiwan, Ukraine, United States.

The Melexis team collaborates across 14 countries, with major locations in Bulgaria, Belgium, and Germany, and with a presence in diverse regions around the world. This global footprint, combined with the diverse perspectives of 54 nationalities, fuels the innovative spirit.

Employee headcount by employment type (full-time/part-time)

Not disclosed.

Employee turnover

The 2024 turnover rate among permanent employees was 11%, encompassing terminations, resignations, and retirements. The employee turnover ratio is calculated by dividing the number of employees that left the organization during the past year by the average headcount of the same period.

New hires

Not disclosed.

Employee headcount by age group

Melexis is fostering a multi-generational workforce, where diverse perspectives and experiences enrich collaboration.

Methodology notes

Headcount data is consolidated on a global level and managed centrally. No assumptions were taken into account when compiling the data. The data is reported in headcount as at 31 December 2024 for employees only (see description under SBM-2). Data is presented as headcount per 31 December 2024.

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

Disclosure status

Melexis has applied the phasing-in extension for ESRS S1-7 (Characteristics of non-employees in the own workforce) in accordance with the transitional provisions of ESRS 1.

As stated in the sustainability report: "In our Sustainability report, we use the option to omit information required by ESRS 2 SBM-1, ESRS 2 SBM-3, ESRS E1-9, ESRS E5-6, ESRS S1-7, ESRS S1-11, ESRS S1-12, ESRS S1-13, ESRS S1-14, and ESRS S1-15 in accordance with Appendix C of ESRS 1."

The disclosure requirements table confirms: "S1-7 Characteristics of non-employees in the own workforce - Phasing-in extension applied"

Quantitative metrics

No quantitative data on the number, breakdown by type (contractor, agency, self-employed), or methodology for counting non-employee workers in Melexis's own workforce has been disclosed for the 2024 reporting period.

Collective bargaining coverage and social dialogue

As at 31 December 2024, some 44% of Melexis employees were covered by collective bargaining agreements, which are formulated in various ways according to local legislation.

Collective bargaining coverage and social dialogue by geography

This table represents countries with more than 50 employees by headcount representing at least 10% of its total number of employees. The coverage percentage for collective bargaining agreements is calculated by dividing the number of employees covered by such agreements by the total number of employees in the country.

European Works Council

There is no European Works Council (EWC) established at Melexis.

Diversity metrics

Top Management by gender

Definition: Top Management consists of the Executive Management team. This definition will be re-evaluated in 2025 to ensure it remains aligned with the company's organizational structure and governance. Data is presented as headcount per 31 December 2024. During the year, the Executive Management underwent a change to a new leadership structure, reducing the team from seven to five members. Additionally, in the last quarter, one female member of the Executive Management Team left the company, reducing the team to four members and bringing the percentage of female members from 40% to 25%.

Board of Directors gender balance

Melexis has achieved a 50/50 gender balance on the Board, with three women and three men.

Employee headcount by gender

Total employees: 2,010

Gender balance is consistent with the previous year, and is higher than the industry average of 29%.

Employees headcount by age group

Adequate wages

S1-10 Disclosure

Melexis states that its remuneration policy aims to be fair, transparent and consistent. The company analyzes local labor markets to offer competitive salaries, benefits, and variable bonuses while adhering to local regulations. The company believes in rewarding individual performance through merit-based salary increases and performance-based bonuses.

Benchmark applied:

Melexis confirms that it offers "salaries in full compliance with minimum wage regulations in all countries where we operate."

No living wage benchmark is disclosed. The company references only minimum wage compliance and local market competitiveness, without mention of living wage assessments, methodologies, or external benchmarks such as Fair Wage Network, WageIndicator, Anker Methodology, or others.

Coverage:

Not disclosed. No specific percentage of workforce assessed against any living wage benchmark is provided.

Geographic scope:

Global - applies to "all countries where we operate."

Targets and commitments:

No targets or forward-looking commitments related to living wage are disclosed.

Methodology:

No methodology for living wage calculation is disclosed. The company states it analyzes "local labor markets" for competitive positioning but does not describe how adequacy of wages relative to basic living needs is assessed.

Social protection

Melexis has applied the phasing-in extension for ESRS S1-11 (Social protection) as disclosed in the materiality assessment table.

No quantitative metrics on the percentage of employees covered by social protection against loss of income from sickness, maternity, paternity, disability, unemployment, or retirement are disclosed in this report.

Qualitative information

The company indicates that employment practices and policies are in place that encompass working hours, leave policies, compensation and benefits, health and safety, and grievance procedures. The company states its commitment to providing optimal working conditions including flexible work arrangements and parental leave policies.

Retirement benefits

In Belgium, Melexis operates defined contribution plans funded through group insurance contracts that must adhere to Belgian regulations guaranteeing a minimum 1.75% return on contributions. This structure classifies the plans as defined benefit plans under IAS 19. As of 31 December 2024, the net defined benefit obligation for Belgium amounts to EUR 887,054.

Contributions to defined contribution pension schemes amounted to EUR 1,583,088 in 2024 compared to EUR 1,120,544 in 2023.

No breakdown by country, employee group, or coverage percentages is provided for social protection systems.

Persons with disabilities

Melexis has applied the phasing-in extension for ESRS S1-12 (Persons with disabilities). No quantitative metrics on the percentage of employees with disabilities are disclosed in the 2024 sustainability report.

The company states it is using transitional provisions in accordance with ESRS 1 and Appendix C for this disclosure requirement.

Training and skills development metrics

Melexis applies the phasing-in extension for S1-13 as indicated in the ESRS datapoint overview table. No training and skills development metrics are disclosed in the 2024 sustainability statement.

The company states in its specific circumstances section that it has omitted information required by ESRS S1-13 in accordance with Appendix C of ESRS 1.

Health and safety metrics

Coverage of health and safety management system

All employees and non-employees working on Melexis sites are covered by the company's health and safety management system (100%).

Safety performance metrics

Notes on methodology: The health and safety management system is designed to comply with relevant health and safety legislation and emphasizes personal responsibility, risk assessment, and continuous improvement. The coverage extends to all employees and non-employees working on Melexis sites. The recordable work-related accident rate of 8% is reported for own workforce in 2024.

Work-life balance metrics

Not disclosed.

Melexis has applied the phasing-in extension for ESRS S1-15 Work-life balance metrics in accordance with Appendix C of ESRS 1. The company states in its sustainability report that it uses "the option to omit information required by ESRS 2 SBM-1, ESRS 2 SBM-3, ESRS E1-9, ESRS E5-6, ESRS S1-7, ESRS S1-11, ESRS S1-12, ESRS S1-13, ESRS S1-14, and ESRS S1-15 in accordance with Appendix C of ESRS 1."

While the company mentions providing "flexible work arrangements, parental leave policies, and ample opportunities for development and internal mobility" as part of its commitment to optimal working conditions, no quantitative metrics are disclosed regarding:

• Percentage of employees entitled to family-related leave
• Percentage of entitled employees who took family-related leave (by gender)
• Return-to-work rates after parental leave (by gender)

Compensation metrics (ESRS S1-16)

Pay gap

In accordance with the ESRS and our commitment to transparency and equal opportunities, we have conducted a thorough analysis of our gender pay gap. The unadjusted global pay gap — or the difference in average hourly earnings between all men and women in our organization without consideration of location, country, job type, or past performance of incumbents — is 29.2%.

However, it is crucial to understand the factors contributing to this gap. After adjusting for variables such as country and job level, the "like-for-like" pay gap is 2.5%.

Remuneration ratio

The remuneration ratio of our highest paid individual to the median annual total remuneration for all employees (excluding the highest-paid individual) is 11 to 1.

Methodology

The unadjusted pay gap reflects the difference in average hourly earnings between all men and women without consideration of location, country, job type, or past performance. The adjusted "like-for-like" pay gap accounts for variables such as country and job level.

The remuneration ratio compares the highest paid individual to the median annual total remuneration for all employees, excluding the highest-paid individual.

Incidents, complaints and severe human rights impacts

Melexis does not tolerate, engage in, or support the use of forced labor, child labor, and human trafficking. We ensure labor rights for all people working at Melexis, including the right to collective bargaining, the right to rest and reasonable working hours.

Work-related incidents and complaints

Melexis attach great importance to remediating any human rights incidents or incidents of discrimination and harassment that might occur.

In 2024, 2 incidents of discrimination and harassment were reported within Melexis. Given the sensitive nature of such matters, we do not disclose further details about these incidents. Both incidents were thoroughly investigated and appropriate action was taken where needed. By the end of 2024, both incidents were closed and no material fines, penalties or compensation for damages occurred as a result of these incidents.

Severe human rights incidents

In 2024, no severe human rights incidents connected to our workforce were reported. Consequently, Melexis did not incur any fines or penalties, nor did it pay any compensation for damages in this regard.

Status of incidents

• Incidents of discrimination/harassment reported in 2024: 2
• Status: Both incidents closed by end of 2024
• Fines, penalties or compensation: None

Policies related to value chain workers

Melexis manages material impacts on value chain workers through the following policies:

Supplier Code of Conduct

Scope: The Melexis Supplier Code of Conduct applies to all suppliers, contractors, and subcontractors (collectively "Business Partners"), encompassing all upstream value chain workers. It is a mandatory part of all business contracts and serves as a prerequisite for becoming a Melexis supplier. The Code applies globally to all Melexis entities.

Key content and principles:

• Sustainability requirements, workplace commitments, business conduct expectations, and information disclosure standards aligned with Melexis guiding principles
• Business Partners must comply with all applicable laws and regulations, notifying Melexis of any conflicts with the code
• Melexis requirements may exceed legal mandates, and violations can lead to a review of the business relationship
• Respect for human rights as stipulated in the ILO International Labor Standards, UN Universal Declaration of Human Rights, and OECD Guidelines for Multinational Enterprises
• Prohibition of forced and/or child labor, modern slavery, or human trafficking
• Prohibition of discrimination or harassment on the grounds of race, color, gender, religion, origin, civil status, family circumstances, feelings or sexual orientation, disability or age
• Support for equal opportunities, fairness and diversity
• Requirement to maintain relevant documentation demonstrating compliance
• Authorization of audits by Melexis or its representatives
• Topics addressed include: GHG emissions, waste, air pollution and hazardous substances, resource use and circular economy, water, and energy, including low- and zero-carbon energy deployment
• Requirement to minimize waste and optimize resource efficiency
• Requirement to source energy from low- and zero-carbon resources whenever feasible
• Requirement to prevent air pollution
• Requirement to treat hazardous substances, including SVHCs, following applicable laws and regulations
• Requirement to maximize the efficient use of water

Governance and accountability: The Procurement Director is accountable for the code's implementation, updates, communication, training, and overall compliance.

Public availability: The Code reflects Melexis commitment to stakeholders and is publicly available on Melexis website. Stakeholders can request a copy via esg-sustainability@melexis.com.

Alignment with international standards: The Supplier Code of Conduct adheres to the UN Global Compact principles. It aligns with international standards and guidelines, including the UN Global Compact, ILO International Labor Standards, UN Universal Declaration of Human Rights, and OECD Guidelines for Multinational Enterprises. In 2024, no cases stating non-respect of the above mentioned international standards and guidelines have been reported by value chain workers.

Monitoring implementation:

• Target: 85% of annual spend to be with suppliers who have signed the Supplier Code of Conduct by end-2025 (achieved 83% end-2024)
• Suppliers are required to maintain documentation demonstrating compliance
• Suppliers must authorize announced audits by Melexis or its representatives
• All new suppliers must acknowledge the Melexis Supplier Code of Conduct or provide an equivalent alternative as part of the onboarding process
• Performance against the target is monitored and reported regularly
• In 2025, Melexis will implement a supplier control framework to manage strategic relationships, including ESG considerations
• Continuous monitoring mechanisms, such as questionnaires, regular reporting, and corrective actions, enable Melexis to track supplier practices related to value chain workers

Procurement ESG policy

Scope: The Melexis Procurement ESG policy integrates environmental, social, and governance (ESG) principles throughout the entire procurement process. This policy applies globally to all Melexis entities and employees making purchases for the company. It covers all Bill of Materials (BOM) expenses and specific indirect spending categories (logistics, packaging, utilities) but excludes intercompany purchases, personal expenses, and taxes.

Key content and principles:

• Prioritizes transparency, risk management, and a proactive approach to ESG value creation for internal departments, suppliers, and the broader value chain
• Outlines a comprehensive strategy (vision, mission, goals, actions, KPIs, and targets) for sustainable procurement
• Outlines the ESG governance, the purpose of the ESG questionnaire and Code of Conduct, the purpose of ESG clauses in supplier contracts, ESG trainings for the procurement team, Scope 3 upstream carbon footprint monitoring and improvement
• Subject to review and update in 2025

Governance and accountability: The Procurement Director owns, and is responsible for, implementing, communicating, and training on the policy to ensure overall compliance.

Public availability: Stakeholders can request a copy of the policy via esg-sustainability@melexis.com.

Third-party standards: While there are no specific third-party standards mentioned, the policy prioritizes transparency, risk management, and a proactive approach to ESG value creation.

Monitoring implementation:

• All members of the procurement team receive dedicated training on ESG topics
• In 2025, Melexis will implement a supplier control framework with clear guidelines for controlling supplier interactions and mitigating associated risks
• Beyond Supplier Code of Conduct compliance, ESG considerations will be enhanced in the sourcing and selection process and integrated into the supplier control framework
• In 2025, work continues on the supplier management policy which will incorporate periodic monitoring reviews, grievance mechanisms and supplier training

Global Code of Conduct (as referenced for value chain workers)

Key content and principles: The Global Code of Conduct includes provisions that apply to value chain workers through the Speak-up procedure.

Governance and accountability: The CEO and CFO receive assessment reports following investigations of Speak-up reports.

Monitoring implementation:

• The Melexis Global Speak-up procedure is open to all value chain workers
• Value chain workers are encouraged to report issues if they have any concerns
• Melexis designated personnel thoroughly investigates each and every report received
• Following investigations, appropriate measures to remedy any impacts are determined and applied
• The effectiveness of the reporting channel is reviewed periodically and adapted if necessary

Speak-up policy (as referenced for value chain workers)

Scope: The Speak-up policy is open to all value chain workers and protects any stakeholders that report concerns against retaliation.

Public availability: The policy is permanently available on the Melexis website to make sure that all value chain workers are aware of the reporting channel. The Supplier Code of Conduct specifically refers to the Melexis Speak-up policy.

Key content and principles: The policy protects whistleblowers against retaliation and provides a confidential channel for raising concerns.

Governance and accountability: Two confidential advisors are appointed within Melexis own workforce to receive and investigate all Speak-up reports (Melexis General Counsel and Melexis Internal Auditor), ensuring independence from the chain of management involved in the matter.

Monitoring implementation:

• Melexis designated personnel investigate all reported concerns and incidents of possible impacts on the working conditions, equal treatment and human rights of value chain workers
• Based on the findings of investigations, appropriate remedies are determined and applied
• The effectiveness of the reporting channel is reviewed periodically and adapted if necessary
• Currently, Melexis does not have a specific process in place to ensure value chain workers are aware of and trust this process

Taking action on material impacts on value chain workers

Melexis is developing action plans and allocating resources to manage material impacts, risks, and opportunities concerning value chain workers, especially on ensuring fair working conditions and equal treatment of workers in the upstream value chain.

ESG questionnaire

Scope: Upstream value chain (major BOM suppliers)

Description: In 2024, Melexis sent an ESG questionnaire to major BOM suppliers. The questionnaire covers Environment, Social, Governance, Product, and Sourcing, and was reviewed, validated, and scored for maturity. Specific improvement actions will be defined in collaboration with respective suppliers in the next step.

Resources (non-financial): All members of the procurement team receive dedicated training on ESG topics to drive responsible procurement practices throughout the supply chain.

Time horizon: Ongoing from 2024

Scope of application: All Melexis entities and all colleagues worldwide who engage with third-party suppliers on behalf of Melexis.

Expected outcomes/KPIs:

• Target: 91% compliance achieved at end-2024 (measured by percentage of spend with strategic suppliers who completed the ESG questionnaire)
• Target: Stay above 85% by end-2025

Policy link: Aligns with Melexis Supplier Code of Conduct and commitment to responsible sourcing

Supplier control framework

Scope: Upstream value chain (strategic suppliers)

Description: In 2025, Melexis will implement a supplier control framework to manage strategic relationships, supply resilience, performance, value chain ESG, compliance, cost and contractual obligations. This framework establishes clear guidelines for controlling supplier interactions and mitigating associated risks, addressing material impacts on value chain workers.

Key elements include:

• Enhanced ESG considerations in sourcing and selection process
• Integration of ESG into supplier control framework
• Periodic monitoring reviews
• Grievance mechanisms
• Supplier training
• Continuous monitoring mechanisms (questionnaires, regular reporting, corrective actions)

Time horizon: Implementation in 2025

Scope of application: All Melexis entities

Expected outcomes: Enable Melexis to track supplier practices related to value chain workers and foster ongoing partnership improvements. A supplier management policy incorporating these elements will be developed in 2025.

Policy link: Related to Supplier Code of Conduct; supplier management policy under development in 2025

Procurement training

Scope: Upstream value chain (indirect action via procurement capability building)

Description: Regular training sessions on ESG topics are made available to all procurement team members, including new hires as part of their onboarding program. The goal is to enhance social, governance, and environmental knowledge, awareness, and compliance by the procurement team.

Time horizon: From 2023 onwards

Expected outcomes/KPIs:

• Target: 95% attendance rate for procurement-invited members in ESG training sessions from 2023 onwards
• Measured by percentage of invited members who attend training sessions

Policy link: Aligns with Melexis commitment to responsible sourcing, as outlined in Supplier Code of Conduct

Supplier Code of Conduct implementation

Scope: Upstream value chain (all suppliers)

Description: Melexis ensures all suppliers acknowledge and commit to the Supplier Code of Conduct, which covers sustainability, work environment and business conduct. All new suppliers must acknowledge the Code or provide an equivalent alternative as part of the onboarding process.

Time horizon: Ongoing

Expected outcomes/KPIs:

• 83% compliance achieved at end-2024 (suppliers representing 83% of annual spend committed to adhere to the Code)
• Target: 85% by end-2025
• Measured by percentage of spend with suppliers with whom Melexis has an agreement regarding Supplier Code of Conduct, relative to total annual spend

Covered topics: Adequate wages, health and safety, gender equality and equal pay for work of equal value, diversity, child and forced labor, social dialogue, work-life balance, employment and inclusion of persons with disabilities, and measures against violence and harassment in the workplace

Policy link: Directly implements the Supplier Code of Conduct policy (referenced in S2-1)

Oversight: All targets are overseen by the Global Procurement Director.

Targets related to value chain workers

Melexis has established three targets related to value chain workers, primarily focused on supplier engagement and ESG compliance:

1. Supplier Code of Conduct compliance

Target metric: Percentage of spend with suppliers who have an agreement regarding Melexis Supplier Code of Conduct, relative to total annual spend

Progress to date: 83% achieved at end-2024

Target value: 85%

Target year: End-2025

Baseline year: Not applicable (target is fixed and relative to spend)

Baseline value: Not applicable

Scope: Upstream value chain (suppliers)

Type: Intensity-based (relative to spend)

Validation: Internal target

Coverage: This target covers adequate wages, health and safety, gender equality and equal pay for work of equal value, diversity, child and forced labor, social dialogue, work-life balance, employment and inclusion of persons with disabilities, and measures against violence and harassment in the workplace. It also covers air pollution, substances of (very high) concern, and water management topics.

2. Supplier ESG questionnaire completion

Target metric: Percentage of spend with suppliers who have completed the Supplier ESG questionnaire, relative to total annual spend in the previous year

Progress to date: 91% achieved at end-2024 (exceeded original target of 80%)

Target value: Stay above 85%

Target year: End-2025

Baseline year: Not applicable (target is fixed and relative to spend)

Baseline value: Not applicable

Scope: Upstream value chain (strategic BOM suppliers)

Type: Intensity-based (relative to spend)

Validation: Internal target

Coverage: The questionnaire covers adequate wages, health and safety, gender equality and equal pay for work of equal value, diversity, child and forced labor.

3. Procurement team ESG training attendance

Target metric: Percentage of invited procurement team members who attend ESG training sessions

Target value: 95% attendance rate

Target year: From 2023 onwards (ongoing)

Baseline year: Not disclosed

Baseline value: Not disclosed

Scope: Own procurement operations (enabling upstream value chain management)

Type: Absolute percentage

Validation: Internal target

Coverage: Regular training sessions on ESG topics for all procurement team members, including new hires as part of onboarding.

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Additional context: All targets are overseen by the Global Procurement Director. The company notes that adequate housing, secure employment, training and skills development are not considered material topics for the value chain based on current knowledge, and therefore no related targets are set.

Policies related to consumers and end-users

Melexis addresses consumer and end-user matters through its Global Code of Conduct (also referred to as "Melexis Code of Conduct" in the detailed disclosure).

Global Code of Conduct

Key content:

• The Code of Conduct includes a specific section on 'Product safety and consumer rights' that addresses the continuous improvement of product quality, which has been identified as the main material impact in relation to consumers and end-users.
• Access to information in the value chain and responsible marketing practices in the value chain are not considered material topics by Melexis and are therefore not covered by the Code of Conduct.

Governance and oversight:

• The General Counsel oversees the implementation of the Code of Conduct.
• The Quality Director is responsible for product quality matters covered by the Code.

Scope:

• The policy relates to consumers and end-users, with a focus on product quality improvement.

Note: While the company mentions that access to information and responsible marketing practices are not material and therefore not covered by the Code of Conduct, no explicit details on public availability, links to international standards, or monitoring processes specific to consumer and end-user aspects are provided in the S4-1 disclosure.

Taking action on material impacts on consumers

Addressing material impacts

Our products are integral parts of many critical systems in automobiles and industrial or commercial products. We therefore attach particular importance to constantly controlling and improving the quality of our products.

Melexis relies on (1) a strong quality management system supporting the development, the validation & the manufacturing of our products and on (2) a continuous improvement mindset to ensure high quality standards expected by the consumers and the end users.

Actions and initiatives

Quality Management System

• What: Our quality management system fundamentals are built around ISO 9001 (Quality Management System), IATF16949 (Automotive Quality Management System) and ISO 14001 (Environment Management System) standards; and complemented by the adoption of, and compliance to, standards relevant to the markets addressed (for example, Automotive Product Development and Validation: AIAG toolbox, AEC-Q100, ISO 26262, ISO 21434, ASPICE)
• Scope: Own operations and product lifecycle
• Certificates: All Melexis certificates are publicly available on our website

Zero-incident program

• What: We implement a zero-incident program consistent with corporate and functional strategic initiatives, encompassing the entire product lifecycle and associated support processes
• Scope: Entire product lifecycle and associated support processes
• Resources: The above actions are managed by cross-functional teams at Melexis and in close partnership with our suppliers. Improvement projects are managed through the Melexis Project Management Office, to which financial resources are allocated
• Methodology: Incidents, irrespective of their origin or nature, are systematically addressed through a well-established 8D problem-solving methodology. This process encompasses incident definition, immediate containment measures, root cause analysis, risk assessment, and corrective and preventive actions

Expected outcomes / KPIs

• Goal: Zero incidents (Melexis goal and responsibility)
• Current performance: Below 500 parts-per-billion (ppb) benchmark, as determined by customer feedback, encompassing line, zero-kilometer, and field failures, pro-rated by the quantity of units shipped over a defined period
• KPIs: "Cost of Yield" and "Part Per Billion - ppb" are used to monitor Melexis performance from a customer perspective
• Link to target: See S4-5 for target details (250 ppb by 2028-2030)

Human rights issues

No severe human rights issues connected to our consumers or end-users were reported in 2024.

Targets related to consumers

Target 1: Zero incidents

• Target metric: Zero incidents (all incidents, irrespective of origin or nature)
• Target value: 0 incidents
• Target year: Not specified
• Baseline year: Not applicable (absolute target)
• Baseline value: Not applicable (absolute target)
• Scope: All Melexis products
• Type: Absolute target
• Validation: Internal
• Progress to date: Current performance is below 500 parts-per-billion (ppb)

Target 2: Parts-per-billion (ppb)

• Target metric: Parts-per-billion (ppb) as determined by customer feedback, encompassing line, zero-kilometer, and field failures, pro-rated by quantity of units shipped
• Target value: 250 ppb
• Target year: 2028-2030
• Baseline year: Not applicable (absolute target)
• Baseline value: Not applicable (absolute target)
• Scope: All Melexis products
• Type: Absolute target (explicitly stated as "both zero-incident and part-per-billion targets are absolute, and not relative")
• Validation: Internal
• Progress to date: Current performance is below 500 ppb. The 250 ppb target has already been attained by a limited number of product lines, including Latch & Switch and Magnetic Position Sensors.

Business conduct policies and corporate culture

Melexis has established several policies to support its commitment to business ethics, corporate culture, and responsible business conduct. These policies guide the behavior of the company's workforce and stakeholders across all business activities.

Code of Conduct (Melexis Code of Conduct)

• Policy name: Melexis Code of Conduct / Code of Conduct

• Scope: Applies to all entities within the Melexis Group, covering all employees regardless of employment status (full-time, part-time, contract-based). The Code applies globally to the company's workforce, Board of Directors, and Executive Management.

• Governance and oversight: Overseen by the General Counsel. The Code is accessible on both Melexis external website and internal Melexis Hub.

• Key content and principles: The Code is anchored in three key commitments:

  • Workplace commitments: Workplace safety and health, diversity and inclusion, equal treatment, use of computing and information resources, legal compliance, environmental sustainability, and human rights.
  • Business commitments: Product safety, consumer rights, financial and non-financial accounting and reporting, confidential information, intellectual property, privacy and data protection.
  • Integrity commitments: Conflicts of interest, gifts, bribery and corruption, insider trading, competition and antitrust.

  The Code addresses diversity and inclusion by prohibiting discrimination and promoting a harassment-free workplace. It ensures respect for human and labor rights, including prohibition of forced labor, child labor, and human trafficking. The Code also includes a dedicated Social Sustainability chapter highlighting commitment to human rights.

• Links to international standards: References international standards including ILO International Labor Standards, UN Universal Declaration of Human Rights, OECD Guidelines for Multinational Enterprises, and UN Guiding Principles on Business and Human Rights. Aligns with the UN Convention against Corruption (2003) and principles from the International Bill of Human Rights.

• Public availability: Accessible on Melexis external website and internal Melexis Hub.

• Review and monitoring: Reviewed on a yearly basis and updated if and where necessary. Compliance with international standards is taken into account during the review. Annual mandatory training on the Code of Conduct is required for all Melexis employees, including a test. New hires receive Code of Conduct training during onboarding. Sessions are organized for production colleagues.

Speak-up Policy (Melexis Global Speak-up Policy)

• Policy name: Melexis Speak-up Policy / Melexis Global Speak-up Policy
• Scope: Applies to all entities within the Melexis Group. The reporting mechanism is open to all Melexis colleagues and external stakeholders.
• Governance and oversight: Overseen by the General Counsel. Reports are received and investigated by designated personnel: the General Counsel and Internal Auditor, who are separate from the chain of management involved in the matter.
• Key content and principles: Provides a confidential reporting mechanism for concerns about unlawful behavior or behavior contradicting the Code of Conduct, values, or other Melexis policies. Anonymous reporting is available where permitted by law. All individuals reporting good-faith concerns are protected from retaliation. An online reporting tool is accessible to internal and external stakeholders.
• Links to international standards: Updated in accordance with the EU Whistleblowing Directive and national legislation.
• Public availability: Accessible on both Melexis external website and internal Melexis Hub.
• Monitoring and implementation: Training on the Speak-up procedure is part of annual Code of Conduct training, mandatory for the entire workforce. Responsible personnel are trained on receiving and investigating reports. All reports are tracked in a register, along with actions taken. Channels are re-evaluated regularly based on feedback. Effectiveness is assessed through Code of Conduct test questions.

Environmental Policy

• Policy name: Environmental Policy / Melexis Environmental Policy

• Scope: Applies to Melexis largest sites in Sofia (Bulgaria), Ieper and Tessenderlo-Ham (Belgium), Erfurt (Germany), Corbeil (France), and Kuching (Malaysia), encompassing all testing and probing sites and IC design headquarters. Also recognizes broader environmental impact by addressing climate implications of upstream and downstream value chain.

• Governance and oversight: The Quality Director is responsible for implementing this policy.

• Key content and principles: Five key strategic principles:

  1. Sustainable solutions: developing technologies that help others adapt to climate change and reduce GHG emissions
  2. Prevention is better than cure: monitoring environmental performance and continuous improvement
  3. Total environmental impact counts: minimizing environmental impact throughout the whole value chain, applying "first time right" principle
  4. Transition to low- and zero-carbon energy sources
  5. Open dialog with all stakeholders: clear environmental governance model

  Outlines Melexis environmental context, purpose, mission, vision, strategic principles, targets, governance model, and priority actions.

• Links to international standards: Aligned with ISO 14001 standards.

• Public availability: Accessible to all stakeholders on Melexis website.

• Monitoring: Monthly data collection, GHG emissions calculation, balanced scorecards, internal and ISO 14001 audits, and management reviews.

Supplier Code of Conduct

• Policy name: Melexis Supplier Code of Conduct / Supplier Code of Conduct

• Scope: Applies to all Melexis suppliers, contractors, and subcontractors ("Business Partners"). Mandatory part of all business contracts and prerequisite for becoming a Melexis supplier. Applies globally to all Melexis entities.

• Governance and oversight: The Procurement Director is accountable for implementation, updates, communication, training, and overall compliance.

• Key content and principles: Outlines sustainability requirements, workplace commitments, business conduct expectations, and information disclosure standards aligned with Melexis guiding principles. Topics include:

  • GHG emissions, waste, air pollution, hazardous substances
  • Resource use and circular economy, water, energy including low- and zero-carbon energy deployment
  • Respect for human rights (prohibition of forced labor, child labor, human trafficking)
  • Non-discrimination and harassment
  • Fair business practices

  Requires suppliers to comply with all applicable laws and regulations and notify Melexis of any conflicts. Melexis requirements may exceed legal mandates. Violations can lead to review of business relationship.

• Links to international standards: Adheres to UN Global Compact principles, ILO International Labor Standards, UN Universal Declaration of Human Rights, and OECD Guidelines for Multinational Enterprises.

• Public availability: Stakeholders can request a copy via esg-sustainability@melexis.com.

• Monitoring: Suppliers must maintain documentation demonstrating compliance and authorize audits by Melexis or its representatives. Annual supplier ESG questionnaire tracks policies, actions, and targets. Melexis tracks percentage of spend with suppliers who have signed the Code (83% end-2024, target 85% end-2025).

Procurement ESG Policy

• Policy name: Procurement ESG Policy / Melexis Procurement ESG Policy
• Scope: Applies globally to all Melexis entities and employees making purchases for the company. Covers all Bill of Materials (BOM) expenses and specific indirect spending categories (logistics, packaging, utilities). Excludes intercompany purchases, personal expenses, and taxes.
• Governance and oversight: The Procurement Director owns and is responsible for implementing, communicating, and training on the policy to ensure overall compliance.
• Key content and principles: Integrates environmental, social, and governance (ESG) principles throughout the entire procurement process. Outlines comprehensive strategy including vision, mission, goals, actions, KPIs, and targets for sustainable procurement. Prioritizes transparency, risk management, and proactive approach to ESG value creation. Covers ESG governance, purpose of ESG questionnaire and Code of Conduct, ESG clauses in supplier contracts, ESG training for procurement team, and Scope 3 upstream carbon footprint monitoring and improvement.
• Links to international standards: Not explicitly stated; no specific third-party standards mentioned.
• Public availability: Stakeholders can request a copy via esg-sustainability@melexis.com.
• Review and monitoring: Subject to review and update in 2025. Regular procurement team training on ESG topics, with target of 95% attendance rate.

Health and Safety Policies

• Policy name: Local health and safety policies (site-specific)
• Scope: Mandated for all entities subject to local health and safety regulations. Tailored to comply with specific country regulations.
• Governance and oversight: Each site's health and safety representative oversees implementation.
• Key content and principles: Primary goal is to safeguard employees, visitors, and anyone potentially impacted by Melexis operations. Addresses:
  • Risk assessment and management
  • Safety training and instruction
  • Equipment and machinery safety
  • Emergency preparedness
  • Chemical safety
  • Continuous improvement through monitoring, analyzing, and addressing safety concerns
• Public availability: Introduced during employee onboarding training.
• Target: Zero work-related accidents, measured by absolute number of reported incidents. In 2024, 35 work-related accidents were reported. Regular safety trainings and awareness programs are conducted.

Working Conditions Policies

• Policy name: Working conditions (local policies per entity)
• Scope: Tailored to each entity within the Melexis Group, aligning with local legislation and market practices.
• Governance and oversight: People & Workplace managers on each site are responsible for implementation.
• Key content and principles: Employees sign these conditions during hiring. Topics include working hours, leave policies, compensation and benefits, health and safety, grievance procedures, equitable pay, and equal opportunities for training and development. Melexis aims to exceed legal and market standards by offering flexible work arrangements, parental leave policies, and opportunities for development and internal mobility.
• Public availability: Not explicitly stated.

Corporate Culture: The Melexis Way

• Policy name: The Melexis Way (company values framework)

• Scope: Applies to all Melexis employees globally.

• Key principles: Five core values guide everything Melexis does:

  1. We are on the customer's side
  2. We always have a plan
  3. We care
  4. We understand the value of money
  5. We enjoy the journey towards success

  These values support the company's purpose (vision), shape culture, and reflect what Melexis values. The company cultivates a culture of autonomy, entrepreneurship, and fast and effective decision-making based on self-determination theory (autonomy, relatedness, competence) and sociocracy model.

• Monitoring and implementation: Continuous development and evaluation through periodic reviews, employee onboarding and training, stakeholder engagement. Cultural Transformation program launched in 2024 to foster innovation, agility, and employee empowerment, focusing on three key behaviors: autonomy, entrepreneurship, and fast decision-making. Leadership development program launched in 2024. Employee engagement program includes structured communication, annual engagement surveys, pulse surveys, and action planning. Target: 90% employee recommendation rate (79% achieved in 2024).

Summary

Melexis has established a comprehensive framework of business conduct policies covering ethics, human rights, environmental responsibility, supplier management, and corporate culture. All policies emphasize alignment with international standards (UN, ILO, OECD), transparency through public availability or stakeholder access, regular training and awareness programs, and monitoring mechanisms. The company demonstrates commitment to responsible business practices both within its own operations and throughout its value chain.

Prevention and detection of corruption and bribery

Melexis does not engage in, nor condone, bribery and corruption. The company considers these practices to be directly opposed to its values and to have a negative impact on the competitive conditions of the market. Melexis recognizes that failure to prevent bribery and corruption may lead to substantial reputational harm, regulatory sanctions, financial losses, and diminished stakeholder confidence, ultimately affecting the Melexis brand value and competitive standing.

Melexis competes and wins over customers by virtue of product quality and the value of services alone. In line with its commitment to integrity, the company has established policies and procedures to prevent, detect, and respond to allegations or incidents of corruption and bribery.

Melexis Code of Conduct

Key content:

• Zero-tolerance policy towards any form of bribery or corruption
• All Melexis personnel can report any incidents of bribery or corruption through the Speak-up procedure (detailed in G1-1)
• The Speak-up procedure is in line with the requirements of European and applicable national laws

Monitoring and implementation:

• Continual awareness creation via various channels, including the ESG newsletter
• Continually enhanced global business ethics training program to ensure commitment to the Code of Conduct by all employees
• New hires receive a training module during their induction program
• Training material available on the Melexis University platform for all employees to refresh their knowledge at any time
• Sessions organized for all colleagues in production to explain relevant topics of the Code of Conduct

Training programs:

• Anti-bribery and anti-corruption is part of the yearly mandatory training and test on the Melexis Code of Conduct
• 100% of the functions-at-risk have been covered by the yearly training program, as this training is mandatory for all Melexis personnel
• Melexis Executive Management participates in the mandatory yearly training
• The Board of Directors receives a separate yearly training, given by Melexis General Counsel

Detection and investigation:

• Incidents can be reported through the Speak-up procedure or investigated through internal audit procedures
• Melexis has a separate function of internal auditor, who reports to the Board of Directors and the Audit Committee
• Two confidential advisors (Melexis General Counsel and Melexis Internal Auditor) appointed within Melexis own workforce to receive and investigate all Speak-up reports
• Following investigation of a Speak-up report, an assessment is submitted to the CEO and CFO with detailed findings and supporting documents
• The Internal Auditor reports back to the Board of Directors and Audit Committee on findings of conducted investigations

Incidents of corruption or bribery

Confirmed incidents

In 2024, Melexis received two whistleblowing reports through its Speak-up tool. Neither of these reports concerned corruption or bribery.

Convictions and fines

In 2024, there were zero instances where individuals were convicted for violations of anti-corruption and anti-bribery laws, and the total amount in fines imposed related to incidents of corruption or bribery amounted to zero.

Disciplinary actions

Not disclosed.

Contracts terminated

Not disclosed.

Investigation and reporting procedures

Melexis has several procedures in place to prevent, detect, and address allegations or incidents of corruption and bribery. The company maintains a zero-tolerance policy towards any form of bribery or corruption, as stated in the Melexis Code of Conduct.

All Melexis personnel can report any incidents of bribery or corruption through the Speak-up procedure, which is in line with European and applicable national laws. Incidents can also be investigated through internal audit procedures.

Melexis has a separate function of internal auditor who reports to the Board of Directors and the Audit Committee. Under the Speak-up procedure, two confidential advisors (the General Counsel and Internal Auditor) are appointed to receive, investigate and follow up on any reports received independently from the chain of management involved in the matter.

Following investigation of a Speak-up report, an assessment is submitted to the CEO and CFO with detailed findings and supporting documents. The Internal Auditor reports back to the Board of Directors and Audit Committee on findings of conducted investigations.

Given there were no breaches in 2024, Melexis did not have to take any actions in this regard.

Political influence and lobbying activities

Scope declaration

Melexis has explicitly stated that ESRS disclosure requirement G1-5 (Political influence and lobbying activities) is out of scope as the company is not involved in such activities.

As documented in the ESRS disclosure index on page 54 of the sustainability report:

Policy on political engagement

Melexis does not engage in political contributions or lobbying activities. The company maintains a position of political neutrality and does not make financial or in-kind contributions to political parties, candidates, or lobbying organizations.

Stakeholder engagement with authorities

While Melexis does not engage in lobbying, the company does maintain regular dialogue with authorities, policymakers, and regulators through:

• Annual reports
• Industry associations
• Regular press releases
• Direct dialogue with authorities (e.g. FSMA)

These engagements focus on:

• Demonstrating compliance with relevant laws and regulations
• Contributing to the development of policies that promote industry best practices and sustainability
• Engaging in transparent and constructive dialogue on policy issues
• Contributing to a stable and predictable regulatory environment that supports business growth

Trade association memberships

No specific information on trade association memberships, dues, or amounts paid has been disclosed in the context of G1-5 political influence and lobbying activities.

Political contributions

Total political contributions: €0

Melexis does not make political contributions.

Lobbying expenditure

Total lobbying expenditure: €0

Melexis does not engage in lobbying activities.

EU Transparency Register

No information disclosed regarding registration in the EU Transparency Register or equivalent registers.

Payment practices

Melexis values transparency and understands that timely payments are important, especially for smaller businesses. The company carefully reviews payment terms conditions to ensure payment within a reasonable time while taking into account efficient cash-management.

Average time to pay invoices

On average, Melexis takes around 34 days to settle an invoice from the date the contractual or statutory payment term begins. This calculation was derived using all payment transactions carried out over the last fiscal year. Melexis applies an automated bi-weekly payment schedule.

Standard payment terms

Melexis standard payment term is 30 days net, which is applicable for around 69% of all suppliers of all sizes.

On average, 59% of Melexis supplier payments are made within the agreed payment term.

Due to the automated bi-monthly payment schedule, invoices with due dates falling between payment runs will inevitably be paid outside the agreed payment terms. For this reason, Melexis applies a threshold in its calculations for timely payments of 5 days, which leads to the fact that on average, 41% of Melexis supplier payments are paid outside the agreed payment term with an average of only +2 days above the threshold.

As of 2025, Melexis will gradually change the payment term towards 30 days end-of-month which will increase the efficiency of the cash-management process and will ensure more alignment with the agreed payment terms of the suppliers.

Legal proceedings for late payments

As of the reporting period, there were zero material legal proceedings in progress related to late payments.

Prevention of late payments to SMEs

To prevent late payments, particularly to small and medium-sized enterprises (SMEs), Melexis has implemented a standard payment term of 30 days. With a few exceptions, this payment term is included in the supplier contracts.