Nykredit

The role of the administrative, management and supervisory bodies

Board composition

The Board of Directors of Nykredit A/S counts 15 members, of whom ten are elected by the Annual General Meeting for a term of one year and five are elected by and among the staff for a term of four years.

Following the Annual General Meeting held on 21 March 2024, the Board of Directors includes:

• Merete Eldrup as Chair
• Preben Sunke as Deputy Chair
• John Christiansen, Michael Demsitz, Per W. Hallgren, Jørgen Høholt, Torsten Hagen Jørgensen, Vibeke Krag, Mie Krog and Lasse Nyby (elected by the Annual General Meeting)
• Staff-elected members: Olav Bredgaard Brusen, Rasmus Fossing, Kathrin Helene Hattens, Peter Kofod and Inge Sand

Gender distribution on the Board of Directors

Nykredit A/S: 3 out of 10 women (30%) among members elected by the General Meeting at 31 December 2024.

Nykredit Realkredit A/S: 3 out of 8 women (38%) at 31 December 2024.

Independence

The Board Nomination Committee consists of Merete Eldrup (Chair), Michael Demsitz, Per W. Hallgren and Preben Sunke, who are all members of the Board of Directors elected by the General Meeting.

The Board Audit Committee consists of Jørgen Høholt (Chair), Per W. Hallgren, Michael Demsitz and Preben Sunke, who are all members of the Boards of Directors elected by the Annual General Meeting.

Skills and expertise

The Board of Directors must be composed so that it possesses the right mix of skills required to undertake the executive and strategic management and to take any measures to ensure that the business is operated in a responsible and satisfactory way. The Board reviews its Members' skills profiles on an ongoing basis and has decided that the skills and knowledge should be represented within the following areas:

• Strategic matters
• Sector and real estate expertise
• Economics, finance and accounting
• Capital markets, securities and funding
• Politics, public administration and associations
• Financial regulation and corporate governance
• Digitisation, IT and processes
• Market conditions, customer relations and sales
• Organisation/HR and processes
• Risk management and credit matters

Sustainability expertise: Sustainability is an increasingly important factor in society, including in the financial sector. Board members receive regular training in relevant issues through thematic programmes and regular reporting.

Board committees with sustainability oversight

Board Risk Committee

The function of the Board Risk Committee is to oversee Nykredit's overall risk profile and strategy, including to assess the long-term capital requirement and the capital policy. It also assesses risks related to products, business model, remuneration structure and incentives as well as risk models and methodological basis.

The Board Risk Committee consists of:

• Per W. Hallgren, CEO (Chair)
• Vibeke Krag, former CEO
• Jørgen Høholt, former Banking Executive
• Torsten Hagen Jørgensen, CEO

All are members of the Boards of Directors of Nykredit A/S and Nykredit Realkredit A/S elected by the Annual General Meeting.

The Board Risk Committee held six meetings in 2024.

Board Audit Committee

The principal tasks of the Board Audit Committee are to inform the Board of Directors of the results of the statutory audit, to oversee the financial reporting process and the effectiveness of Nykredit's internal control systems, internal audit and risk management, to oversee the statutory audit of the financial statements etc., to monitor and verify the independence of the auditors, and to be responsible for the procedure for selecting and submitting a recommendation for the appointment of auditors.

The Board Audit Committee consists of:

• Jørgen Høholt, former Banking Executive (Chair)
• Per W. Hallgren, CEO
• Michael Demsitz, former CEO
• Preben Sunke, Chief Executive

All are members of the Boards of Directors of Nykredit A/S and Nykredit Realkredit A/S elected by the Annual General Meeting.

The Board Audit Committee held six meetings in 2024.

Board Nomination Committee

The Board Nomination Committee is tasked with making recommendations to the Board of Directors on the nomination of candidates for the Board of Directors and the Executive Board. The Committee also advises the Board of Directors with respect to targets for the under-represented gender on the Board of Directors and laying down a diversity policy applying to the same. The Board Nomination Committee is ultimately responsible for defining the skills profiles of the Board of Directors and the Executive Board and for the continuous evaluation of their performance and achievement.

The Board Nomination Committee consists of:

• Merete Eldrup, former CEO (Chair)
• Michael Demsitz, former CEO
• Per W. Hallgren, CEO
• Preben Sunke, Chief Executive

All are members of the Board of Directors elected by the General Meeting.

The Board Nomination Committee held three meetings in 2024.

Board Remuneration Committee

The principal tasks of the Board Remuneration Committee are to qualify proposals for remuneration prior to consideration by the Board of Directors and to make recommendations in respect of Nykredit's remuneration policy, including guidelines on incentive pay. The Committee reviews and considers the criteria for and process of appointing risk takers, assesses whether the Group's processes and systems relative to remuneration are sufficient and takes into consideration the Group's risks.

The Board Remuneration Committee consists of:

• Merete Eldrup, former CEO (Chair)
• Preben Sunke, Chief Executive
• Per W. Hallgren, CEO
• Inge Sand (staff-elected member)

The Board Remuneration Committee held three meetings in 2024.

Frequency of sustainability discussions

Board involvement in sustainability: The Board of Directors works continuously with sustainability, including impacts, risks and opportunities. In 2024, the Board of Directors included sustainability in a number of agenda items, including:

• Climate Transition Plan: The Board of Directors approved the Group's Climate Transition Plan, which addresses Nykredit's adverse impacts, risks and opportunities in relation to climate change mitigation.

• Energy and infrastructure: The Board of Directors has discussed various elements of Nykredit's strategy for the business area Energy and Infrastructure, which addresses opportunities and risks in relation to climate change mitigation.

• Internal Climate, Energy and Environmental Policy: The Board of Directors has approved the annual update of the policy. This item relates to Nykredit's adverse impact in connection with climate change mitigation.

• Fossil Fuels Policy: The Board of Directors has approved the annual update of the policy. This item relates to Nykredit's adverse impacts, risks and opportunities in relation to climate change mitigation.

• Sustainability risks and opportunities: Regular discussions on material sustainability matters.

The Board of Directors held 11 meetings in 2024.

Executive Board

Nykredit's Group Executive Board consists of:

• Michael Rasmussen, Group Chief Executive
• David Hellemann, Group Managing Director (CFO/COO)
• Anders Jensen, Group Managing Director (CRO)
• Pernille Sindby, Group Managing Director (Wealth Management)
• Tonny Thierry Andersen, Group Managing Director (Banking)

The Group Executive Board implements the Group strategy as laid down by the Board of Directors and is responsible for the corporate responsibility strategy, including Group-wide targets and the progress of such targets. The Group Executive Board prioritises corporate responsibility themes and initiatives based on analyses of materiality, impact and sustainability-related risks, delegates responsibility for prioritised initiatives and is responsible for the implementation of the UN Principles for Responsible Banking.

Responsibility for climate targets: The Group Executive Board has the overall responsibility for following up on the Group's climate targets, including initiatives aimed at ensuring that the targets are achieved. The climate targets are reviewed annually in connection with the Annual Report and approved by the Group Executive Board.

Board evaluation

In H2/2024, Nykredit's Board of Directors conducted the annual Board evaluation. The Board evaluation comprised a questionnaire survey as well as individual interviews with members of the Board of Directors and the Executive Board.

The evaluation outcomes were presented to the Board at the meeting of the Board of Directors on 10 November 2024 where the Board's performance and collaboration with the Group Executive Board were discussed.

The outcomes of the Board evaluation were generally positive. The main conclusion was that the Board of Directors is effective, has the right skills and works efficiently, that the collaboration between the Board, the board committees and the Group Executive Board is effective and that the organisation of the work and the documentation provided to the Board of Directors are generally of a high quality.

The next Board evaluation is scheduled for H2/2025.

Governance of sustainability matters

Organisation of ESG work: During 2024, the organisation of Nykredit's ESG work changed from a transitory programme to being a permanent part of Nykredit's basic organisation. A central, coordinating ESG unit has been established under the Group's strategy unit. This unit is responsible for preparing the Group's overarching strategy, including coordination of initiatives across the Group. The unit also supports Management and the rest of the organisation with sustainability expertise across E, S and G.

Responsibility for executing ESG initiatives is decentralised across relevant business divisions. The relevant business divisions and specialist functions are represented in a coordinating forum.

Policy governance: Policies in the area of sustainability are discussed at Executive Board level and approved by the Board of Directors in accordance with the Group's climate targets and Climate Transition Plan. All policies are updated at least once a year and approved by the Board of Directors. The Group Executive Board, along with pertinent committees and/or the management of relevant business divisions, approves and implements the policies, receives reports and continuously assesses compliance.

Reporting to the Board: On the lending side, climate-related risks are monitored in connection with industry- and segment-specific portfolio reports, in sector and thematic analyses and in connection with the ongoing reporting to the Boards of Directors. This enables the Boards of Directors to evaluate the Credit Policy and make the required adjustments in relation to lending at single-name level (credit policy guidelines) and portfolio level (portfolio limits and size requirements).

On the investment side, climate risks are monitored as part of the ongoing measurement of transition risks and other sustainability risks included in the ongoing statutory reporting under the EU's Sustainable Finance Disclosure Regulation (SFDR). The Boards of Directors receive regular information about specific sustainability themes, as well as a general account in connection with the presentation of the annual report.

Fit & Proper requirements

Nykredit is subject to the Fit & Proper rules that apply to financial undertakings. The rules are intended to ensure that the Board of Directors and the Executive Board have the skills that the Danish Financial Supervisory Authority deems necessary to be able to function as the Board of Directors and the Executive Board in a satisfactory manner, and include a number of requirements that can also be attributed to good business conduct. The Fit & Proper rules apply to positions on the Board of Directors and Executive Board and to a number of key persons across the organisation.

Integration of sustainability-related performance in incentive schemes

Nykredit's Sustainability Statement references ESRS 2 GOV-3 (Integration of sustainability-related performance in incentive schemes) on page 155 under the section 'Remuneration'. However, the excerpts provided do not contain the actual content from page 155.

The document confirms that GOV-3 disclosure requirements are addressed in the 'Remuneration' section (as indicated in the ESRS disclosure requirements table on page 120), but the substantive content regarding:

• Which roles are covered by sustainability-linked incentives
• Specific sustainability KPIs tied to remuneration
• Weighting of sustainability metrics in STI/LTI
• Performance periods and target structures
• Threshold/target/maximum performance definitions
• Actual payouts against sustainability KPIs in 2024

was not included in the provided excerpts.

Business model and value chain

Nykredit is a Danish financial services group serving personal customers, business customers and institutional customers in Denmark. The Group's business activities are predominantly in Denmark and comprise banking, mortgage lending, estate agency services, administration and management of investment funds, leasing and insurance mediation.

A central part of our business model and value chain is our partnerships through Totalkredit and Sparinvest. Together with the business partners in the Totalkredit partnership, Nykredit arranges mortgage loans across the country.

In Sparinvest, Nykredit collaborates with a large number of banks across Denmark on the distribution of wealth and investment products to personal and business customers.

The Group's upstream value chain includes a number of suppliers of goods and services for the daily operation of Nykredit's offices, such as IT systems. The Nykredit Group strives to have a strong capital structure and wants to be able to maintain its business activities throughout Denmark regardless of fluctuations in economic trends. Nykredit's 3,900 employees are tasked with the development and sale of financial products as well as customer advisory services.

Being customer-owned, Nykredit differs significantly from other Danish SIFIs as the Group pays dividend to its owners, including our main owner, Forenet Kredit.

Forenet Kredit can then make contributions to the Nykredit Group, which Nykredit and Totalkredit can give back to their customers. It is our customer-ownership structure that sets the Nykredit Group apart from other comparable financial institutions by highlighting our unique business model and approach to value creation.

The Nykredit Group's value creation lies in ensuring that homeowners and businesses across Denmark have access to competitive and reliable financing – through the good times and the bad. Through its advisory services, the Nykredit Group helps customers stay on top of their finances and provides financial security. At the same time, the Nykredit Group, as Denmark's largest lender, contributes to economic growth and development in society.

Primary business activities (downstream value chain)

Personal customers:

• Mortgage lending: DKK 921.6 billion
• Bank lending: DKK 21.1 billion
• Wealth management services with assets under management: DKK 498.9 billion

Agricultural sector:

• Mortgage lending: DKK 83.2 billion

Business customers:

• Mortgage lending: DKK 358.7 billion
• Bank lending: DKK 82.2 billion

Public and cooperative housing:

• Mortgage lending to public housing: DKK 84.7 billion
• Mortgage lending to housing cooperatives: DKK 35.6 billion

Other services:

• Investment portfolio administration for institutional clients: DKK 1,127.9 billion assets under administration
• Estate agencies (Nybolig, Estate and &LIVING) arrange sale and purchase of residential and commercial properties
• Non-life insurance through Privatsikring

Stakeholder involvement

Key stakeholders

Politicians, civil servants and authorities

• Formal and informal written enquiries, meetings etc
• Preparation of consultation responses
• Collaboration with authorities and politicians on new initiatives, studies and reports when they request views and knowledge etc from Nykredit

Trade organisations

• Coordination of shared viewpoints and advocacy via Nykredit's representation on boards, committees, working groups etc of trade organisations
• Cooperation on joint initiatives and proposals
• Sectoral collaboration on joint solutions

Purpose of stakeholder involvement

Through interest representation, Nykredit will contribute constructively to the drafting of new regulation (such as acts, technical standards, executive orders, guidelines and supervisory decisions or market standards). For this purpose, Nykredit is in close, ongoing dialogue with policymakers and authorities, ensuring that Nykredit is aware of their expectations and requests for Nykredit's business. Nykredit also ensures that it has the necessary expertise to comply with current regulation.

Nykredit participates in representing shared interests on behalf of the Danish financial sector in areas where, as part of the sector, Nykredit can make a positive contribution to society.

Interest representation of a unified financial sector is particularly relevant in areas where Nykredit's viewpoints do not significantly differ from those of the broader sector but are still aligned with Nykredit's interests.

Coordination across Nykredit

Ongoing coordination takes place across Nykredit's organisation and management in order to provide information on the views and interests of the relevant stakeholders.

Nykredit has clear internal procedures for managing upcoming or new regulation with the aim of ensuring a well-defined division of tasks and responsibilities across the organisation and providing timely, appropriate involvement of Nykredit's various management levels. This is done through established formal coordination forums within the organisation and ongoing collaboration across relevant departments.

Coordination across the organisation ensures that Nykredit can adapt to new political proposals and initiatives, new guidelines and recommendations from authorities, and requests from key partners etc.

Sustainability strategy

It is a natural part of Nykredit's responsibility as a mutual financial provider, the largest lender and one of the largest investors in Denmark to contribute to achieving the goals of society, including the UN's 17 Sustainable Development Goals (SDGs), the Paris Agreement and Denmark's ambitions in the area of the green transition.

That is why sustainability is embedded in the Nykredit's Group strategy, Winning the Double 2.0, with a clear objective regarding Nykredit's corporate responsibility:

"Nykredit wants to be the customer-owned, responsible financial provider for people and businesses all over Denmark."

This objective has been translated into three main themes:

E – A greener and prepared Denmark

As the largest lender in Denmark, Nykredit plays a role in building a greener Denmark. Our largest carbon footprint as a financial provider, or more than 99%, comes from the activities we finance and invest in.

By joining forces with our customers, we can take the greatest leap forward in the green transition. Nykredit was the first Danish financial provider to set emissions targets for real estate and owner-occupied dwellings. These targets are included in our ambition of delivering a net zero Nykredit by 2050.

Material impacts, risks and opportunities related to:

• Climate change mitigation and adaptation
• Owner-occupied dwellings
• Real estate
• Agriculture
• Investments in businesses and energy

S – A customer-owned Nykredit

Being Denmark's largest lender, Nykredit has a special role to play. We will be active in all of Denmark and support growth – in urban and rural districts alike. This is a pledge that places demands on the Nykredit Group's business model, profitability, capital structure and lending practices in the areas of banking and mortgage lending.

Nykredit has a responsibility for ensuring that advice, products and services are responsible relative to the individual customer and in a societal context. The Group is aware of our own direct impact through product terms and the processing of customers' personal data. As a financial provider, Nykredit also holds an advanced responsibility for ensuring that financial infrastructure and products support and promote a more sustainable transition of society.

Material impacts, risks and opportunities related to:

• Development and growth throughout Denmark at all times
• Responsible products, advisory services and processes
• People
• Diversity and inclusion
• Non-discrimination of customers and employees
• Privacy and the right to adequate housing

G – Responsible business practices

As a financial provider, Nykredit makes decisions every day that have long-term impacts on our customers and society.

It is therefore fundamental to Nykredit that our advice, products and services are responsible, both in a societal context and relative to the individual customer. We must be well organised across the Group to act responsibly and appropriately, complying with not only the letter, but also the spirit of the law. This calls for a strong management and corporate culture alongside rigorous due diligence processes and a robust defence against financial crime.

Material impacts, risks and opportunities related to:

• Responsible business conduct
• Initiatives to combat financial crime
• IT security
• Due diligence in lending, investments and suppliers
• Efforts to promote a healthy corporate culture

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

Methodology Overview

The methodology used to perform the double materiality analysis follows the principles and requirements set out in the ESRS as well as available guidance. The analysis takes into account all aspects of Nykredit's business and underlying activities, including own operations and the upstream and downstream value chain. In the value chain, impacts, risks and opportunities are identified and assessed if these relate to a Nykredit-strategic priority, and significant impacts, risks and opportunities are included in the reporting.

Process for Double Materiality Assessment

The process for conducting the double materiality assessment covering both impact and financial materiality is divided into four phases:

1. Preparation and delimitation
2. Identification of impacts, risks and opportunities
3. Assessment of materiality
4. Validation of results

Phase 1: Preparation and Delimitation

The first part of the process involves creating an overview of CSRD requirements as well as identifying and collecting existing data and documentation, including policies and reports relevant to the CSRD reporting. In connection with the preparation of the double materiality assessment, draft analyses have been conducted with expected impacts in the context of impact materiality, as well as expected risks and opportunities in the context of financial materiality. The drafts have been prepared on the basis of Nykredit's existing material. In this phase, the stakeholders to participate in the double materiality assessment are identified.

Phase 2: Identification of Impacts, Risks and Opportunities

Nykredit has conducted workshops to identify material impacts, risks and opportunities. At these workshops, all the subtopics and sub-subtopics described in the ESRS were assigned to groups and subject matter experts to identify potential impacts as well as risks and opportunities. The workshops were based on the analysis drafts, where workshop participants could adjust the provisionally identified impacts, risks and opportunities. The workshop results (impact analyses on social, environmental and financial sustainability as well as risks and opportunities related to social, environmental and financial sustainability) form the basis for the results of the double materiality assessment.

Representatives from across the value chain qualified that the impacts, risks and opportunities identified by Nykredit are consistent with the stakeholders' external perception of Nykredit. The stakeholders' input was collected and used in the assessment.

Phase 3: Assessment of Materiality

The materiality assessment of the identified impacts, risks and opportunities is based on evidence from the previous phases and follows the predefined assessment dimensions. Sources for the assessment include the workshop results and input from interviews with external stakeholders.

Phase 4: Validation of Results

Workshop participants validated the preliminary results for material impacts, risks and opportunities. Further calibration was carried out at management level prior to the final approval of the result.

Inputs to the Assessment

The assessment of impacts, risks and opportunities, Nykredit made use of:

• External advisory: External advisory and internal specialists were particularly crucial in understanding and identifying impacts, risks and opportunities and in scoring the topics of pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy.
• Internal stakeholders: Broad stakeholder involvement from relevant professional profiles across the organisation representing all parts of Nykredit's business model.
• External stakeholders: The results of the double materiality assessment have been validated by selected external stakeholders.
• ESRS guidance: The analysis follows the principles and requirements set out in the ESRS as well as available guidance.

Impact Materiality Assessment Criteria

For impact materiality, each identified impact is assessed qualitatively based on:

1. Scale – How severe or how beneficial the impact is.
2. Scope – How widespread the impact is.
3. Irremediable character – To what extent the negative impacts could be remediated.

Based on these criteria, an overall assessment of severity is conducted to determine whether an impact is material or non-material. Impacts are not assessed in terms of probability, as all material impacts must be addressed. Positive impacts are not assessed in terms of irremediable character.

Financial Materiality Assessment Criteria

For financial materiality, thresholds for assessing the "magnitude of financial effects" and "likelihood of occurrence" are required. Likely risks and opportunities related to sustainability impacts are evaluated on the basis of the magnitude of the financial effect and likelihood of occurrence, both of which follow Nykredit's existing qualitative thresholds for non-financial risks.

Materiality Thresholds

For impact materiality, Nykredit has taken into account both positive and negative impacts as well as potential and actual impacts.

For financial materiality, Nykredit only considers risks and opportunities in relation to sustainability impacts that may trigger a financial effect on the business.

Scope and Value Chain

The double materiality assessment covers the complete breadth of sustainability topics specified in the ESRS 1, including human rights. The analysis takes into account all aspects of Nykredit's business and underlying activities, including own operations and the upstream and downstream value chain.

Stakeholder Involvement

At Nykredit, the double materiality assessment has been prepared together with internal stakeholders representing all parts of Nykredit's business model. Involvement of these stakeholders ensures a broad, contextual understanding of Nykredit's activities, business relationships and sustainability. The process ensures the identification of the right impacts and documentation of the management thereof. The results of the double materiality assessment have also been validated by selected external stakeholders.

Outcome of Assessment

Nykredit's double materiality assessment shows that there are material impacts, risks and opportunities associated with Nykredit's core business. Specifically, material impacts, risks and opportunities have been identified within four topical standards as well as a Nykredit-specific impact (ES1) in relation to the right to adequate housing, which is addressed as part of S4 – Consumers and end-users.

A number of standards were found to be non-material in terms of reporting.

Transition plan for climate change mitigation

Scope and coverage

The Climate Transition Plan outlines Nykredit's carbon reduction targets and other material targets, detailing the actions planned to achieve them and the external dependencies that could impact their success. The plan covers the entire Nykredit Group and extends until 2030. The Climate Transition Plan, along with the climate targets, has been approved by Nykredit's Board of Directors.

The plan is a key element in fulfilling the Nykredit Group's strategy of Winning the Double 2.0 as well as aligning with the principles of the Group's core values of contributing to a greener Denmark.

The targets and actions set out in the Climate Transition Plan are grouped into a series of initiatives:

• Owner-occupied dwellings
• Real estate
• Agriculture
• Businesses and energy
• Investments
• Nykredit (own operations)

These initiatives address Nykredit's impacts, opportunities and risks related to climate change mitigation. The initiatives cover the most important areas of our operations.

Net zero ambition and alignment

Nykredit's ambition is to achieve net zero GHG emissions from our lending, investments and operations by 2050 and to put emissions on a Paris-aligned pathway. This ambition has been formalised by joining three acknowledged, global initiatives:

• The Science Based Targets initiative (SBTi) – joined in October 2022 (covers the entire Nykredit Group)
• The Net Zero Banking Alliance (NZBA) – joined in October 2022 (covers the loan portfolio)
• The Net Zero Asset Managers initiative (NZAM) – joined in March 2021 (covers the investment portfolio)

All of Nykredit's SBTi-validated reduction targets are based on recognised decarbonisation pathways that align with the target of the Paris Agreement of limiting global warming to 1.5°C.

In June 2024, SBTi-validated the climate targets set within the framework of the initiative.

2030 reduction targets

Owner-occupied dwellings

• 70% reduction (kgCO2e/sqm/year) - SBTi-validated
• 85% of owner-occupied dwellings will have another heat source than oil- and gas-fired boilers by 2025
• 50% of all new car loans must be for electric cars by 2023-2025

Real estate

• Residential: 70% reduction (kgCO2e/sqm/year) - SBTi-validated
• Office and retail: 70% reduction (kgCO2e/sqm/year) - SBTi-validated
• Corporate clients are expected to have transition plans

Agriculture

• 45-55% reduction (tCO2e/DKKm) - base year 2021

Businesses and energy

• Electricity and heat production: Emissions from large companies are maintained <10 (kgCO2e/MWh) - SBTi-validated
• Transport and industry: 75% of emissions from large industrial and transport companies must be covered by SBTi-validated targets by 2028 - SBTi-validated

Investments

• 60% reduction (tCO2e/DKKm) - SBTi-validated
• Equities and bonds: By 2028, the temperature rating of equities and corporate bonds must be progressing towards 1.75°C by 2040 - SBTi-validated
• Mortgage covered bonds: Emissions from covered bonds must be reduced by 44% by 2028 relative to 2022 - SBTi-validated

Nykredit (own operations)

• 85% reduction (tCO2e) - SBTi-validated
• Energy consumption: The total MWh consumption must be reduced by 50% by 2025 relative to the level in 2017
• Heating: In 2030, no Nykredit locations should be heated with the direct use of fossil fuels

Baseline years and Scopes

Owner-occupied dwellings, residential and office/retail buildings:

• Base year: 2021
• Scopes 1 and 2
• Method: SBTi Sectoral Decarbonization Approach (SDA) using SBTi's 1.5°C scenario

Agriculture:

• Base year: 2021
• Scopes 1 and 2
• Method: Policy-based target mirroring national reduction targets

Electricity and heat production:

• Base year: 2022
• Scopes 1 and 2
• Method: SBTi 1.5°C scenario

Transport and manufacturing:

• Base year: 2022
• Scopes 1 and 2
• Method: SBTi Portfolio Coverage Approach

Total investment portfolio:

• Base year: 2020
• Scopes 1 and 2
• Method: NZAM guidelines

Mortgage covered bonds:

• Base year: 2022
• Scopes 1 and 2
• Method: SDA using CRREM's 1.5°C scenario

Temperature rating targets (equities and corporate bonds):

• Base year: 2022
• Scopes 1+2 and 1+2+3
• Method: Temperature rating per IPCC WB2DS

Own operations:

• Base year: 2021
• Scopes 1 and 2
• Method: SBTi Absolute Contraction Approach (ACA)

Key decarbonization levers and actions

Actions are divided into four types:

Value propositions:

• Green savings account and home loans
• Green car loans
• "Replace your boiler" loans and cash vouchers for replacement of oil- and gas-fired boilers (Totalkredit)
• Green construction and mortgage loans
• ESG Advisory, Valified tool, Incept Sustainability (learning platform for SMEs)
• Machinery leasing and fee-free withdrawal of land from agricultural use (agriculture)
• ESGreenTool (SEGES' climate tool)
• Selected sustainable funds exempt from trading commission

Policies and terms:

• Transition plans expected of large customers (real estate, agriculture, businesses)
• Climate score in credit assessments
• Price differentiation based on energy labels
• Fossil Fuels Policy and Sustainable Investment Policy
• Integration of sustainability into risk assessments

Involvement:

• Banking advisers include green transition at meetings with customers where relevant
• Active ownership strategy – focus on largest carbon emitters
• Target of Paris alignment among investee companies

Stakeholders and partnerships:

• Collaboration with the financial sector and Danish government on phasing-out of oil- and gas-fired boilers
• Partnership with the Council for Sustainable Construction, Ramboll, PropTech, AlmenKompas, The Danish Property Federation
• SEGES: ESGreenTool and climate learning programme
• Net Zero Asset Managers initiative, Science Based Targets initiative, GFANZ, Climate Action 100+ and Net Zero Engagement Initiative

CapEx and investment commitments

Resources have been allocated in the relevant areas to execute the Climate Transition Plan. The resource need is revisited regularly. Several value propositions are sponsored by Forenet Kredit (Nykredit's majority shareholder).

Specific CapEx commitments are not quantified in the disclosure.

Locked-in emissions and stranded assets

Nykredit provides longer-term loans that cannot be terminated as long as the customers fulfil their obligations. This entails a risk of locked-in emissions, which are not considered to jeopardise the achievement of the climate targets.

Nykredit incorporates physical climate risks into property valuations when their impact on the property value due to climate-related physical conditions can be documented. When evaluating properties in exposed geographical areas, special attention is given to whether the property has been protected against future climate change impacts and to the property's marketability in view of its exposed location.

Carbon credits and removals

No purchases of carbon credits are currently included in the transition plan. No targets rely on carbon credits for their achievement.

From the GHG emissions disclosure: "Nykredit has not purchased any CO2e credits to mitigate our own emissions" and "Nykredit has made no investments in CO2e removal projects funded through carbon credits."

Implementation and governance

The implementation of the Climate Transition Plan is embedded in the relevant business units. The work is coordinated across these units through Nykredit's ESG unit, which ensures central, cross-Group coordination and prioritisation of Nykredit's sustainability efforts.

The targets are monitored by the relevant units, including the need to revise them, for example as a result of significant changes in accounting methods or the data basis. The climate targets are reviewed annually in connection with the Annual Report and approved by the Group Executive Board.

The Group Executive Board has the overall responsibility for following up on the Group's climate targets, including initiatives aimed at ensuring that the targets are achieved.

External dependencies

The achievement of the vast majority of Nykredit's climate targets is dependent on customers funded and invested in by Nykredit reducing their carbon emissions.

Nykredit is in continuous dialogue with these customers and companies and their industry organisations and has applied knowledge from these companies in setting the targets.

2024 progress highlights

Owner-occupied dwellings:

• Since 2020, more than 3,500 customers have opted to finance their home energy renovations with a special home loan (around 500 customers in 2024)
• Since 2023, 3,400 customers have set up a special savings account for green purposes
• Around 420 personal advisors have completed the training programme "Sustainable customer dialogue – personal customers"
• Share of owner-occupied dwellings with another heat source than oil/gas rose from 78% to 81%
• Share of new car loans for electric cars was 84% (target: 50%)

Real estate:

• Integration of several ESG matters, including climate transition plans, into Nykredit's credit assessment
• Dialogue with major real estate customers about expectations for transition plans

Agriculture:

• Dialogue with major agricultural customers on climate action plan and offer of free access to ESGreen Tool
• Customer events on climate measures throughout Denmark in collaboration with SEGES and Forenet Kredit

Businesses and energy:

• Assisted corporate customers in strengthening their ESG profile and rating
• Integration of several ESG matters into Nykredit's credit assessment
• 70% of financed emissions from large companies in transport and manufacturing covered by SBTi-validated targets

Investments:

• Reassessment of exempted fossil fuel companies
• First assessment of alignment with the Net Zero Investment Framework
• Votes cast at 4,898 general meetings
• Temperature rating for credit bonds and listed equities fell significantly in 2024

Own operations:

• Relocation to new headquarters with fewer square metres and improved energy efficiency
• Policy introduced that company cars must be electric cars - emissions from company cars almost halved since 2023
• Emissions decreased to 458 tCO2e in 2024

Policies related to climate change mitigation and adaptation

Nykredit addresses climate change mitigation and adaptation through several integrated policies approved by the Board of Directors. All policies are updated at least once a year and approved by the Board of Directors. The Group Executive Board, along with pertinent committees and/or the management of relevant business divisions, approves and implements the policies, receives reports and continuously assesses compliance.

Climate Transition Plan

Scope: Covers the entire Nykredit Group and extends until 2030.

Governance: The Climate Transition Plan has been approved by Nykredit's Board of Directors. The Group Executive Board has the overall responsibility for following up on the Group's climate targets, including initiatives aimed at ensuring that the targets are achieved. The climate targets are reviewed annually in connection with the Annual Report and approved by the Group Executive Board.

Key content: The plan outlines Nykredit's carbon reduction targets and other material targets, detailing the actions planned to achieve them and the external dependencies that could impact their success. It addresses Nykredit's adverse impacts, risks and opportunities in relation to climate change mitigation. The plan includes the ambition to achieve net zero GHG emissions from lending, investments and operations by 2050 and to put emissions on a Paris-aligned pathway.

Public availability: Published and updated in 2024.

Implementation and monitoring: The implementation of the Climate Transition Plan is embedded in the relevant business units and coordinated across these units through Nykredit's ESG unit. Resources have been allocated in these areas to execute the plan, and the resource need is revisited regularly. The targets are monitored by the relevant units, including the need to revise them.

Internal Climate, Energy and Environmental Policy

Governance: The Board of Directors has approved the annual update of the policy.

Key content: This policy relates to Nykredit's adverse impact in connection with climate change mitigation.

Fossil Fuels Policy

Scope: Covers lending and investment activities.

Governance: The Board of Directors has approved the annual update of the policy.

Key content: The policy states that Nykredit will not provide financing to companies involved in the exploration, extraction or production of fossil fuels – unless it is for separate green activities. This helps to mitigate climate-related risks associated with the fossil fuel sector. Generally, the policy excludes companies that derive more than 5% of their revenue from thermal coal extraction, coal-based energy production, unconventional oil and gas and drilling in the Arctic. The policy follows the International Energy Agency's (IEA) guidelines on transition and generally excludes companies that expand their fossil fuel production in violation of the IEA's Net Zero Emissions 2050 scenario and lack a credible transition plan.

Link to international standards: The policies have been prepared in accordance with applicable conventions and legislation. Nykredit is a signatory to the UN Global Compact, the associated principles on corporate responsibility and human rights, the UN Principles for Responsible Banking and the UN Principles for Responsible Investment. Nykredit supports and adheres to the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Nykredit has joined the Science Based Targets initiative (SBTi), the Net Zero Banking Alliance (NZBA), and the Net Zero Asset Managers initiative (NZAM).

Corporate Responsibility Policy

Key content: Nykredit's overall commitment to international standards is integrated into the Corporate Responsibility Policy, while sub-elements of obligations are integrated into, for example, the Credit Policy and the Sustainable Investment Policy, where relevant.

Credit Policy

Governance: Climate-related risks are monitored on the lending side in connection with industry- and segment-specific portfolio reports, in sector and thematic analyses and in connection with the ongoing reporting to the Boards of Directors. This enables the Boards of Directors to evaluate the Credit Policy and make the required adjustments in relation to lending at single-name level (credit policy guidelines) and portfolio level (portfolio limits and size requirements).

Key content: Integrates sub-elements of Nykredit's obligations related to climate change. Includes climate-related risk considerations in credit assessment of business customers.

Sustainable Investment Policy

Scope: Covers investment activities on own behalf and on behalf of customers.

Key content: The policy has referred to the Paris Agreement since 2018. Includes requirements for climate-related risks. The investment universe undergoes continuous screening for companies that do not comply with the policy. In 2021, Nykredit set a long-term objective of achieving net zero emissions from its overall investment portfolio by 2050 and a target of reducing the emission intensity of the total investment portfolio by 60% from 2020 to 2030. The policy includes exclusions of companies involved in fossil fuels and which do not have the right level of transition plans.

Governance: The Boards of Directors receive regular information about specific sustainability themes.

Public availability: Nykredit's employees can access business-sensitive policies on the Group's intranet. Other policies are publicly available unless otherwise stated.

Implementation and monitoring: The investment universe undergoes continuous screening. Policies are discussed at Executive Board level and approved by the Board of Directors in accordance with the Group's climate targets and Climate Transition Plan.

Actions and resources in relation to climate change policies

Agriculture sector

Scope: Financed emissions (downstream value chain)

Actions taken in 2024:

• Dialogue with major agricultural customers on climate action plan and offer of free access to ESGreen Tool for agricultural customers
• Extension of offer for machinery financing backed by a contribution from Forenet Kredit
• Customer events on climate measures throughout Denmark in collaboration with SEGES and Forenet Kredit
• Upskilling of all agricultural advisers in the area of sustainability through webinars
• Raised expectations in relation to the largest agricultural customers' ability to present climate action plans
• Integration of individual farming business's approach to sustainability matters as an integral part of overall credit assessment

Key partnerships: SEGES, Forenet Kredit

Expected outcomes: Support achievement of agricultural sector's carbon neutrality target by 2050 and political reduction targets for GHG and nitrogen emissions by 2030

Target: Emission intensity reduction to 13.39-10.95 tCO2e/DKKm by 2030 (2024: 23.82 tCO2e/DKKm)

Businesses and energy sector

Scope: Financed emissions (downstream value chain)

Actions:

• Development of mortgage products and advisory services to support customer transition
• Launched initiatives in 2024 to identify how the Group can contribute to the expansion of renewable energy technologies
• Development of value propositions to assist small and medium-sized enterprises in creating transition plans, financing their transition and reporting on progress
• Launched Incept Sustainability in 2024 - a learning platform tailored to SMEs
• Expectations that largest customers in transport and manufacturing measure carbon footprint, set reduction targets and implement reduction initiatives
• Active participation in Climate Action 100+ and engagement with major emitters (A.P. Moller – Maersk, Heidelberg Materials, Shell)

Progress in 2024:

• Assisted a number of corporate customers in strengthening their ESG profile and rating

Target: 75% of financed emissions from large companies in transport and manufacturing covered by SBTi-validated targets by 2028 (2024: 70%)

Investment portfolio

Scope: Own operations / investment activities

Actions:

• Reassessment of exempted fossil fuel companies
• First assessment of alignment with the Net Zero Investment Framework
• Ongoing engagement with the largest emitters
• Votes cast at 4,898 general meetings in 2024
• Exclusion of companies producing controversial weapons and companies continuously failing to comply with international conventions
• Exclusion of companies involved in fossil fuels without appropriate transition plans
• Recurring screenings to assess whether companies should be excluded
• Systematic dialogue with portfolio companies based on data from MSCI and Sustainalytics

Partnerships: Net Zero Asset Managers initiative, Science Based Targets initiative, GFANZ, Climate Action 100+, Net Zero Engagement Initiative

Target:

• Total investment portfolio emission intensity reduction of 60% to 10.0 tCO2e/DKKm by 2030 (2024: 4.8 tCO2e/DKKm)
• Mortgage covered bonds: 44% emission intensity reduction
• Paris alignment among investee companies

Climate change adaptation

Scope: Own operations and customer properties (downstream value chain)

Actions launched in 2024 for personal customers:

• Climate check-up – independent energy consultant performs inspection of customer's home to identify climate-proofing needs
• Climate loan – advantageous loan terms for climate-proofing the home (installation of subsurface drainage systems, groundwater pumps etc)
• Climate savings – savings account for climate adaptation with attractive bonus interest rates on savings

Resources: Contributions from majority shareholder Forenet Kredit

Operations (A greener Nykredit)

Scope: Own operations (Scope 1, 2, 3)

Actions:

• Reducing office space and improving energy efficiency of buildings
• Green power through a PPA on solar energy with Better Energy
• Extended waste sorting
• Phasing out gas-heated offices
• Replacing fossil cars with electric cars
• Developing baseline for Scope 3, category 1
• Developing and implementing due diligence processes
• Strengthened quality of the CO2e calculator
• Sector collaboration on data
• Strengthened follow-up on existing targets
• New climate targets

Partnerships: Better Energy (solar PPA), sector collaboration on data

Cross-cutting initiatives

Learning programmes:

• Targeted learning programmes for banking advisers
• Sustainability learning programmes for all employees

Credit due diligence:

• Extended credit rating to support more accurate assessment of large business customers
• Differentiated expectations for customers' sustainability profile and transition plans

Key sector partnerships:

• Financial sector and Danish government: phasing-out of oil- and gas-fired boilers
• Council for Sustainable Construction
• Ramboll
• PropTech, AlmenKompas, The Danish Property Federation
• Industry associations on transition plans (under development)
• Investor Alliance for Human Rights

Targets related to climate change mitigation and adaptation

Nykredit has set comprehensive climate targets across lending, investments, and operations, aligned with net zero by 2050 and validated by the Science Based Targets initiative (SBTi). The targets are grouped into six initiatives:

Summary of Climate Targets

Lending Portfolio Targets

Investment Portfolio Targets

Operations Targets

Progress to Date (2024)

Overall Climate Ambition

• Net zero GHG emissions by 2050 across lending, investments and operations
• Paris-aligned pathway: All reduction targets aligned with limiting global warming to 1.5°C
• External commitments: Science Based Targets initiative (SBTi) joined October 2022, Net Zero Banking Alliance (NZBA) joined October 2022, Net Zero Asset Managers initiative (NZAM) joined March 2021
• SBTi validation: Climate targets validated by SBTi in June 2024

Energy consumption and mix

Energy consumption by source (2024)

Scope and methodology

Scope 1 (direct emissions):

• Heating: Consumption of natural gas (kWh) at Nykredit buildings. GHG emissions estimated using Danish Energy Agency emission factors.
• Cars: Transport by own or leased vans and company cars. Mileage calculated from total petrol costs (own cars) and litres purchased per car (leased cars). Emissions calculated using Danish Business Authority emission factors.

Scope 2 (indirect emissions from purchased energy):

• Electricity: Market-based method applies. 100% of power consumption covered by physical Power Purchase Agreement (PPA) from 1 January 2024 to 31 December 2024, sourced from newly built solar park in Ådum, Denmark.
• District heating: Calculated from real-time measurements where available; otherwise estimated from recent invoices or average heat consumption per square metre. Emission factors specific to each location's utility company applied. Biomass combustion emissions (1,546 tonnes CO₂e in 2024) excluded from Scope 2.

Energy consumption (operations): Covers operation of office properties and company cars. Total consumption increased from 11,887 MWh (2023) to 12,876 MWh (2024) due to double energy consumption during headquarters relocation. Renewable share rose from 85.9% to 86.2%.

Target: Total MWh consumption to be reduced by 50% by 2025 relative to 2017 baseline (17,408 MWh). Target expected to be met following headquarters relocation.

Exclusions: 36 local employees outside Denmark not included in operational data due to system accessibility limitations.

Energy intensity

Not disclosed for revenue-based intensity metric.

Gross Scopes 1, 2, 3 and Total GHG emissions

Overview of GHG emissions

The following table presents Nykredit Group's total carbon emissions by the relevant categories in Scopes 1, 2 and 3. More than 99.8% of emissions are in Scope 3 Category 15, which includes financed emissions arising from lending and investments.

Notes:

• Percentage of Scope 1 GHG emissions from regulated emission trading schemes: 0%
• Greenhouse gas emissions from the combustion of biomass for district heating not included in Scope 2 are estimated at total carbon emissions of 1,546 tonnes CO2e in 2024.
• 100% of Nykredit's energy consumption from 1 January 2024 to 31 December 2024 comes from a physical PPA from a newly built solar park in Ådum, Denmark.
• Scope 3 Category 1 includes data from the canteen, furniture and office supplies from 2023.

GHG emissions intensity

Carbon emissions as a share of income (tCO2e/net interest and fee income (DKKm)):

Financed emissions from lending

Carbon emissions from the loan portfolio:

Financed emissions from investments

Carbon emissions from the investment portfolio:

Biogenic CO2 emissions

Greenhouse gas emissions from the combustion of biomass for district heating not included in Scope 2: 1,546 tonnes CO2e in 2024.

Carbon credits

Nykredit purchased Gold Standard carbon credits from a reduction project in India that contributed to the financing of solar energy.

Methodology notes

Consolidation scope: Data in the Sustainability Statement has been consolidated in accordance with the same principles as those following from the financial accounting policies. This means that the total amount of quantitative ESG data encompasses not only the parent company Nykredit A/S, but also all subsidiaries directly controlled by Nykredit.

Standards applied: The GHG inventory is based on recognised methodologies, including the Greenhouse Gas Protocol (the GHG Protocol) and Finance Denmark's Framework for Financed Emissions Accounting for the financial industry. The GHG inventory includes both CO2 and other relevant GHG emissions.

Financed emissions: It should be noted that Nykredit's financed emissions related to investments and lending do not include value chain emissions (specifically, Scope 3 emissions from the companies Nykredit provides funding to and invests in), as the data covering companies' value chain emissions is not yet of satisfactory quality to provide a true and fair view of the actual underlying emissions.

Data quality: To indicate the uncertainty of the calculations, Nykredit assigns a data quality score according to Finance Denmark's CO2 model, which is in alignment with the Partnership for Carbon Accounting Financials' (PCAF) standards. Scores range from 1 to 5, with score 1 representing the highest data quality, and score 5 the lowest.

Data delays: Some of the data used in the calculations is inherently delayed. For example, emission factors calculated by various authorities are delayed by one year. Data from Statistics Denmark on the average total assets of the individual companies and the sector-average carbon emissions is delayed by up to two years. Companies usually report their carbon emissions as part of their external financial reporting process, which leads to a delay of one year.

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

Assessment of materiality

The following ESRS E1-9 disclosures are assessed as non-material by Nykredit:

• Exposure of the benchmark portfolio to climate-related physical risks (page 66)
• Disaggregation of monetary amounts by acute and chronic physical risk (page 66 (a); 66 (c))
• Location of significant assets at material physical risk (page 66 (a); 66 (c))
• Breakdown of the carrying value of real estate assets by energy-efficiency classes (page 67 (c))
• Degree of exposure of the portfolio to climate-related opportunities (page 69)

Policies related to own workforce

Nykredit has disclosed policies related to its own workforce, primarily focused on diversity, non-discrimination, and broader conduct principles.

Code of Conduct

Key content/principles:

• Nykredit does not tolerate human trafficking, child labour or any form of forced labour
• Prohibits discrimination, including bullying, sexual harassment, differential treatment due to gender, age, ethnicity, cultural background, religion, sexual orientation, gender identity, gender expression, gender characteristics, political affiliation, disabilities etc.

Links to international standards:

• The policy addresses issues covered by fundamental International Labour Organisation Conventions 1 to 8 (as referenced in the ESRS disclosure requirements table)
• Aligned with UN Guiding Principles on Business and Human Rights (UNGPs) and OECD guidelines (as referenced in the disclosure requirements table)

Diversity and Non-Discrimination Policy

Key content/principles:

• Forms the foundation for how Nykredit handles principal adverse impacts on the Group's employees in terms of diversity and inclusion
• Supports equal opportunities across HR processes, including recruitment, promotions and payroll
• States that the composition of the Board of Directors, in addition to professional and personal competences, must take into account diversity and gender balance
• Nykredit does not tolerate any kind of discrimination, including bullying, sexual harassment, differential treatment due to gender, age, ethnicity, cultural background, religion, sexual orientation, gender identity, gender expression, gender characteristics, political affiliation, disabilities etc.

Governance and oversight:

• The overall responsibility for equal treatment and equal opportunities at Nykredit lies with the Board of Directors and the Executive Board
• Nykredit's Board of Directors has appointed a Board Nomination Committee which, among other things, monitors compliance with the Diversity and Non-Discrimination Policy and related targets
• The Group's HR function participates regularly in the recruitment and promotion processes
• Nykredit's general governance for policies is described in "Governance of Group policies"

Monitoring implementation:

• The Board Nomination Committee monitors compliance with the policy and related targets
• Annual review: diversity and inclusion are one of several elements in the annual review process
• The Group's HR function focuses on reducing any management-related issues during recruitment and promotion processes

Supporting initiatives:

• Long-term ambition of gender balance with a 2030 target of 55% male and 45% female managers
• Guiding principles include: motivating both women and men for management positions; supporting managers in transitions; requiring representatives of both genders in recruitment processes with a principle of reversed burden of proof if recruitment proceeds without both genders represented

Targets related to own workforce

Nykredit has set targets related to gender diversity at Board and senior management levels, which constitute targets related to managing impacts on own workforce.

Board of Directors - Gender diversity targets

2025 targets (proportion of under-represented gender on Boards of Directors):

Baseline: Progress at 31.12.2023 reported (e.g., Nykredit A/S: 3 out of 10 (30%), Nykredit Realkredit A/S: 3 out of 8 (38%), etc.)

Scope: Board of Directors of individual Group companies (staff-elected board members do not count towards the gender target as from 2023)

Target type: Percentage-based (intensity)

Top Management - Gender diversity targets

2030 target: 45% of the under-represented gender at the two top management levels under the Board of Directors in individual Group companies

Progress at 31.12.2024 (proportion of under-represented gender in two top management levels):

Baseline: Progress at 31.12.2023 reported (Nykredit A/S: 0 out of 4 (0%), Nykredit Realkredit A/S: 6 out of 39 (15%))

Scope: Two top management levels below the Board of Directors in individual Group companies

Target type: Percentage-based (intensity)

Long-term ambition: Equal gender balance among all managers

Characteristics of the undertaking's employees

Total headcount and FTE

Headcount by type of contract and gender (as at 31 December 2024)

Breakdown by age (as at 31 December 2024)

Employee turnover

Note: The figure includes both voluntary and involuntary resignations.

Employment contract type definitions

• Non-guaranteed hours employees: office assistants (m/f)
• Temporary employees: student assistants, substitute workers/temps, interns and other employees with temporary contracts
• Permanent employees: all other employees

Gender distribution

All Nykredit employees register their gender themselves as female/male/neutral/other. All employees have stated their gender, and all employees have stated either female or male. Thus, no Nykredit employees are registered with any other gender than male or female at end-2024.

Methodology notes

Redundant managers are not included in the calculation. Three employees (interns) are employed without payment and are not included in payment calculations.

Collective bargaining coverage and social dialogue

Employee representatives

Employee representatives of the Nykredit section of Finansforbundet (Financial Services Union Denmark) are locally based at Nykredit. The Financial Services Union is also represented on the Board of Directors, the Group Works Council and the Group Health and Safety Committee.

All employees may reach out to a health and safety representative if they have concerns about general as well as individual mental and physical problems.

Quantitative metrics

No quantitative data on the percentage of employees covered by collective bargaining agreements or works council arrangements is disclosed in the provided excerpts.

Diversity metrics

Gender distribution of Nykredit Group managers

The chart shows the total proportion of female and male managers in the Nykredit Group. A manager in the Nykredit Group is defined as an employee with a managerial title. The members of the Group Executive Board are also included in the calculation of men and women, respectively in management.

Definition of managers: Director, Managing Director, Executive Vice President, Senior Vice President, First Vice President, Function Manager and Team Manager. Local employees outside Denmark are included in the calculation of the gender distribution of Nykredit managers. Redundant managers are not included in the calculation.

Target: 2030 target of 55% male and 45% female managers in the Nykredit Group.

Age band distribution of total workforce

Gender registration

Nykredit employees register their gender themselves as female/male/neutral/other, respectively. All employees have stated their gender, and all employees have stated either female or male. Thus, no Nykredit employees are registered with any other gender than male or female.

Board of Directors gender distribution

The distribution of gender on the Board of Directors is calculated for Nykredit A/S and Nykredit Realkredit A/S. The distribution of gender on the Board of Directors is calculated as a percentage distribution based on the gender of board members (male/female).

Note: Specific percentage or headcount figures for Board of Directors gender distribution are not provided in the excerpts.

Social protection

Coverage of employees by social protection

The majority of Nykredit's full-time employees are covered by the collective agreement and the Salaried Employees Act. Nykredit's full-time employees who are not covered by the collective agreement are employed under contract and mainly have the same social benefits as full-time employees covered by the collective agreement.

Parental leave

At Nykredit, mothers, fathers and co-parents have a right to 26 weeks of paid parental leave. During the parental leave period, managers at Nykredit can use a dialogue tool that structures the dialogue between manager and employee before, during and after parental leave in order to ensure a good return and open up for any new roles and career opportunities.

Employee composition by contract type and gender

Number of employees by type of contract and gender (as at 31 December 2024):

Training and skills development metrics

Anti-money laundering learning programmes

In 2024, 10 cases were part of the training, including those on politically exposed persons, onboarding of personal customers and suspicious incidents.

Completion rate for all employees: 96% in 2024

The completion rate is lower than 100% due to terminations, resignations, illness, leave etc.

Methodology note

The completion rate is calculated as the number of employees having completed the learning programme, divided by the total number of employees assigned to the learning programme.

Financial Sector Training Centre (FU) – VidenBarometer provides data on employees who have/have not completed mandatory and statutory training.

Health and safety metrics

Nykredit has assessed ESRS S1-14 disclosure requirements 88 (b), (c) and (e) as non-material. The company has marked the following metrics as non-material:

• Number of fatalities and number and rate of work-related accidents (S1-14 88 (b) and (c))
• Number of days lost to injuries, accidents, fatalities or illness (S1-14 88 (e))

No quantitative health and safety metrics for own workforce or value chain workers have been disclosed in the sustainability statement.

Work-life balance metrics

Parental leave entitlement

At Nykredit, mothers, fathers and co-parents have a right to 26 weeks of paid parental leave.

During the parental leave period, managers at Nykredit can use a dialogue tool that structures the dialogue between manager and employee before, during and after parental leave in order to ensure a good return and open up for any new roles and career opportunities.

Percentage of employees entitled to family-related leave

Not disclosed.

Percentage of entitled employees who took family-related leave

Not disclosed (no breakdown by gender provided).

Return-to-work rate after parental leave

Not disclosed (no breakdown by gender provided).

Compensation metrics (ESRS S1-16)

Pay gap

Unadjusted gender pay gap: 19.5% (M) in 2024.

The percentage of unadjusted pay gap is 19.5% (M) in 2024. The notation "(M)" denotes that the pay gap is in favour of men.

Adjusted gender pay gap: 4.2% (M) in 2024.

The pay gap among Nykredit's permanent employees (excluding top management), expressed as a weighted average, amounts to 4.2% (M). The weighted average takes into account equal work or work of equal value, determined based on classification of roles using an objective job evaluation system.

Remuneration ratio

The remuneration ratio for the highest paid employee in Nykredit is 29.7 times higher than the median for all other employees in 2024.

Methodology

Gender pay gap calculation:

• Gross hourly pay is calculated as follows:

  • Salaried employees: Actual full-time pay in December, including all pay elements (base salaries, retirement, holiday allowance, bonus/performance allowance) divided by monthly norm (160.33 hours). Bonus as well as retention payments allocated in 2024 are also included and converted into hourly pay via the annual norm of 1,924 hours.
  • Employees paid by the hour: Actual hourly pay, including pay elements (fixed pay, pensions, holiday allowance, bonus/performance allowance).
  • Three employees (interns) are employed without payment and are not included in the payment calculations.

• Average gross hourly pay for men and women, respectively, is calculated based on the above data.

• The gender pay gap is calculated as the difference between the average gross hourly pay of men and women divided by the average gross hourly pay for men.

• The figure shows the average pay gap between women and men in 2024 expressed as a percentage of the pay level for male employees.

Adjusted gender pay gap calculation:

The gender pay gaps are calculated as a weighted average of the pay gap in the respective IPE job classes. The individual pay differences are weighted in relation to the number of employees in the IPE job classes.

Remuneration ratio calculation:

• The median pay is calculated on the basis of the gross hourly pay of the individual employee multiplied by the annual norm (1,924 hours).

• The median pay is calculated as the median among all employees, including temporary employees, but excluding the three interns as well as the highest paid employee.

• The calculation of the highest paid employee in Nykredit includes the same pay elements as for salaried employees.

• The pay ratio is calculated by dividing the annual total pay of the company's highest paid employee by the median annual total pay of other employees.

Scope: The calculations cover permanent employees. The adjusted pay gap excludes top management.

Incidents, complaints and severe human rights impacts

Nykredit references ESRS S1-17 disclosure on page 78 and 79 of the Annual Report 2024.

Incidents of discrimination

According to the ESRS disclosure requirements table (page 127), Nykredit reports:

• ESRS S1-17 103 (a): Incidents of discrimination - disclosed in "Colleague involvement" section on page 79
• ESRS S1-17 104 (a): Non-respect of UNGPs on Business and Human Rights and OECD guidelines - disclosed in "Colleague involvement" section on page 79

The extracts confirm that S1-17 disclosures are made but do not contain the actual quantitative data from pages 78-79 where the incidents, complaints and human rights impacts are reported.

Policies related to consumers and end-users

The excerpt references ESRS S4-1 disclosure on pages 41 and 69-70 under "Governance of Group policies" and "The Group's customers" sections. However, the provided excerpts do not contain the actual content from these pages.

The index shows that Nykredit addresses:

• ESRS S4-1 (Policies related to consumers and end-users) on pages 41 and 69-70
• Non-respect of UNGPs on Business and Human Rights and OECD guidelines (page 41)

Without access to the actual content of pages 41 and 69-70, the specific policies, their scope, governance, content, monitoring mechanisms, and links to international standards cannot be extracted from the provided excerpts.

The disclosure references indicate that consumer and end-user policies are governed under the Group's general policy governance framework and are connected to the UNGPs on Business and Human Rights and OECD guidelines.

Taking action on material impacts on consumers

The disclosure references pages 69-73 of the report under "The Group's customers" section for ESRS S4-4, which covers taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities.

However, the excerpts provided do not contain the actual content from pages 69-73. The excerpts include:

• Climate-related risk management (credit risk mitigation through "targeted products and services that entice customer action" and "products and financing of solutions to climate-proof real estate")
• Own workforce impacts (S1)
• Cross-reference tables indicating S4-4 content is located on pages 69-73
• Core due diligence elements cross-referencing pages 69-73
• Capital and liquidity information (unrelated to S4-4)

Without access to the actual pages 69-73 referenced for S4-4 disclosures, the specific actions taken on material impacts on consumers cannot be extracted from the provided excerpts.

Business conduct policies and corporate culture

Nykredit has established several policies related to business conduct and corporate culture, reflecting the Group's commitment to responsible business practices, ethical data use, and combating financial crime.

Corporate Culture Policy

• Scope: All parts of the Nykredit organisation
• Governance: Overseen by the Board of Directors, which regularly assesses the policy at least once a year to ensure appropriateness relative to Nykredit's activities, organisation, resources, and market conditions
• Key content: The policy outlines two overarching principles:
  • Responsible business practices
  • A safe and open culture
• These principles are supported by four behavioural competencies: customer centricity, team spirit, empowerment, and responsibility
• Link to international standards: The policy supports responsible business practices and encourages an open environment where employees speak up about concerns, contributing to preventing financial crime exploitation
• Monitoring: Management ensures teams understand Nykredit behaviour and provides feedback through regular performance conversations

Code of Conduct

• Key content: Nykredit does not tolerate any kind of discrimination, including bullying, sexual harassment, differential treatment due to gender, age, ethnicity, cultural background, religion, sexual orientation, gender identity, gender expression, gender characteristics, political affiliation, disabilities, etc. The Code also specifies that Nykredit does not tolerate human trafficking, child labour, or any form of forced labour
• Link to international standards: Nykredit respects the UNGPs on Business and Human Rights

Credit Policy

• Scope: Applies to all lending activities across the Group; implemented through underlying business and working procedures and loan approval instructions
• Governance: All banking advisers authorised to approve loans must be certified in the Credit Policy, with regular recertification required
• Key content: Guides Nykredit's lending to ensure responsible, sustainable, and transparent financial solutions tailored to customers' financial circumstances and risk tolerance. Incorporates consumer protection measures, good practice rules, and guidelines on prudent credit assessment
• Monitoring: Internal controlling conducts independent reviews to ensure banking advisers adhere to the Credit Policy when approving loans

Personal Data Policy

• Scope: All employees; covers processing of personal data of customers, employees, business partners, and others
• Key content: Provides the overall framework for processing personal data to ensure an adequate level of protection for data subjects and reduce risks of regulatory responses, fines, and reputational loss
• Public availability: Privacy Policy provided to customers at the start of customer relationships
• Monitoring: Established processes and control framework to monitor compliance with data protection legislation and internal procedures; includes a Data Protection Officer (DPO) who assesses, monitors, and reports on effectiveness

Data Ethics Policy

• Scope: All employees; covers use of data in own and purchased systems, and in collaboration with external suppliers and partners
• Key content: Sets out four data ethical principles:
  • Transparency
  • Responsibility
  • Equality
  • Security
• The policy aims to provide employees with a clear framework for ethically responsible use of data and build trust with customers, employees, partners, and stakeholders. Includes special guidance for processing personal data on vulnerable persons (e.g., children)
• Public availability: Available on the Group's website

Diversity and Non-Discrimination Policy

• Scope: All HR processes including recruitment, promotions, and payroll
• Governance: Overall responsibility lies with the Board of Directors and Executive Board. The Board Nomination Committee monitors compliance with the policy and related targets
• Key content: Forms the foundation for handling diversity and inclusion, supporting equal opportunities across HR processes. Nykredit has set a 2030 target of 55% male and 45% female managers in the Nykredit Group
• Guiding principles:
  • Motivate both women and men for management positions
  • Support individual managers in their transitions
  • Require representatives of both genders in recruitment processes

Policy for Non-Financial Risks

• Scope: All parts of the Group
• Key content: Promotes a culture of openness and awareness about non-financial risks, including ESG-related conduct risks, as part of day-to-day business activities and long-term planning. Supports the Corporate Culture Policy by creating a framework for healthy risk culture

Whistleblower Policy

• Scope: All employees
• Key content: Provides an online whistleblower scheme where colleagues can anonymously report suspected irregularities and violations of financial regulation, legislation, or Nykredit's policies and guidelines, including sensitive issues such as sexism. Reports are first screened by an external attorney, then shared with the Head of Compliance, Head of Internal Audit, and Chair of the Board Risk Committee
• Monitoring: All disclosures made in good faith are protected from reprisal

Communications and Marketing Policy

• Governance: Adopted by the Board of Directors; reviewed annually (last revised December 2024)
• Key content: States that Nykredit is committed to transparent and credible business conduct in compliance with legislation and the Stock Exchange Code of Ethics

Anti-Money Laundering Framework

• Scope: All group companies; includes policies, guidelines, business and working procedures
• Governance: Organised according to three lines of defence:
  • 1st line: Banking Risk & AML, including Money Laundering Reporting Office (MLRO)
  • 2nd line: Compliance and Risk & Conduct (independent monitoring, control, reporting)
  • 3rd line: Internal Audit (independent assurance)
• Governance oversight: Quarterly reporting to Group Executive Board and relevant company Executive Boards; Board of Directors receives information at least annually; Financial Crime Committee handles special risk cases
• Key content: Processes and procedures to address risk of misuse for financial crime, based on overall risk assessments and underlying policies
• Monitoring: Annual mandatory learning programmes in anti-money laundering for all employees (96% completion rate in 2024); procedures for handling personal data breaches and unusual incidents; investigation and reporting to National Special Crime Unit (NSK) as required

Nykredit's policies on business conduct are embedded in governance structures with clear Board oversight, link to international frameworks including UNGPs, and include defined monitoring mechanisms such as regular training, internal controls, and speak-up channels.

Incidents of corruption or bribery

Nykredit does not explicitly disclose the number of confirmed incidents of corruption or bribery, convictions, fines paid, employees dismissed or disciplined due to corruption/bribery, or contracts terminated with business partners due to such incidents in the reporting period (2024).

Narrative on investigation and speak-up procedures

Nykredit has integrated anti-corruption principles, including rules against bribery and financial exploitation, into its Credit Policy based on the Ten Principles of the UN Global Compact. The Group ensures customers do not engage in activities that violate anti-corruption legislation.

Nykredit operates a whistleblower scheme where colleagues can anonymously report suspected irregularities and violations of financial regulation, legislation, or Nykredit's policies, including business integrity issues. In 2024, Nykredit received 4 reports through the whistleblower scheme (2023: 0 reports). Of these, 1 report related to business integrity and 1 related to fraud/scams. The scheme is overseen by an external attorney who screens reports before sharing them with the Head of Compliance, the Head of Internal Audit, and the Chair of Nykredit's Board Risk Committee. All disclosures made in good faith are protected from reprisal.

Measures taken following reports in 2024 included:

• 1 dismissal
• 1 other disciplinary action
• 2 cases where no action was necessary

Nykredit has processes and procedures to address the risk of misuse for financial crime, including money laundering. The Group conducts annual mandatory anti-money laundering training for all employees with a 96% completion rate in 2024. The Money Laundering Reporting Office (MLRO) investigates unusual incidents and reports suspicious transactions to the National Special Crime Unit (NSK) where necessary.

ESRS G1-1 and G1-4 requirements related to the United Nations Convention against Corruption, protection of whistle-blowers, and fines for violation of anti-corruption and anti-bribery laws are marked as "Non-material" in Nykredit's ESRS disclosure overview.

Reporting on human rights incidents

Nykredit reports that in 2024, the Group "has not received any reports of serious human rights incidents."

Political influence and lobbying activities

Political engagement approach

Nykredit engages with policymakers and authorities through:

• Preparation of consultation responses
• Collaboration with authorities and politicians on new initiatives, studies and reports when they request views and knowledge from Nykredit
• Contributing constructively to the drafting of new regulation (such as acts, technical standards, executive orders, guidelines and supervisory decisions or market standards)

Nykredit is in close, ongoing dialogue with policymakers and authorities, ensuring that Nykredit is aware of their expectations and requests for Nykredit's business. Nykredit also ensures that it has the necessary expertise to comply with current regulation.

Ongoing coordination takes place across Nykredit's organisation and management in order to provide information on the views and interests of the relevant stakeholders.

Internal procedures and coordination

Nykredit has clear internal procedures for managing upcoming or new regulation with the aim of ensuring a well-defined division of tasks and responsibilities across the organisation and providing timely, appropriate involvement of Nykredit's various management levels. This is done through established formal coordination forums within the organisation and ongoing collaboration across relevant departments.

Coordination across the organisation ensures that Nykredit can adapt to new political proposals and initiatives, new guidelines and recommendations from authorities, and requests from key partners.

Trade association memberships

Nykredit participates in representing shared interests on behalf of the Danish financial sector in areas where, as part of the sector, Nykredit can make a positive contribution to society through:

• Coordination of shared viewpoints and advocacy via Nykredit's representation on boards, committees, working groups etc of trade organisations
• Cooperation on joint initiatives and proposals
• Sectoral collaboration on joint solutions

Interest representation of a unified financial sector is particularly relevant in areas where Nykredit's viewpoints do not significantly differ from those of the broader sector but are still aligned with Nykredit's business model.

Other engagement activities

Nykredit supports and contributes to various sustainability initiatives through associations, organisations and civil society in general via:

• Sponsorships and partnerships
• Collaboration on selected initiatives and proposals
• Ongoing dialogue and collaboration on selected topics

Press relations

Nykredit Press Relations is tasked with proactively bringing Nykredit's expertise into play, when and where relevant, and with managing and responding to all press enquiries for the purpose of contributing constructively to the public debate.