Palfinger

PALFINGER states (p48) that the Executive Board and Supervisory Board jointly monitor sustainability impacts, opportunities and risks, with detailed board composition and diversity given in the Corporate Governance Report and Note 59 of the financial statements. The Executive Board comprises Andreas Klauser (CEO), Felix Strohbichler (CFO), Alexander Susanek (COO) and Maria Koller (CHRO). Since Maria Koller joined in January 2024, female representation on the Executive Board is 25 percent. The Supervisory Board had three female members in 2024, or 33 percent, and 78 percent of members were independent, though C-Rules no. 39 and no. 53 of the Corporate Governance Code on independence were not fully met. Hubert Palfinger chairs the Supervisory Board, with Gerhard Rauch and Hannes Palfinger as deputy chairmen; three members are delegated by the works council. Sustainability is the overall responsibility of the Executive Board, with sustainability management assigned to the CEO and reporting to the CFO. An interdisciplinary Sustainability Council steers sustainability across functions and reports directly to the Executive Board, which briefs the Supervisory Board quarterly. The Audit Committee monitors sustainability reporting.

PALFINGER discloses (p50) that the Sustainability Council reports quarterly to the Executive Board on material impacts, risks and opportunities, on the implementation of sustainability due diligence, and on the results and effectiveness of the policies, actions, metrics and targets adopted. The Executive Board in turn reports these same matters to the Supervisory Board on a quarterly basis. For major transactions, Corporate Strategy & Sustainability runs a due diligence review expanded to include sustainability requirements, with impacts discussed with the administrative and management bodies and financial risks assessed through the annual risk management process. During the reporting period the Executive Board mainly addressed material IROs including GHG emissions from captive energy consumption, from fossil energy used to generate electricity and heat for production, and from use of products sold; energy consumption in operations; creation of attractive employment through training, development and diversity; working conditions that may cause physical health problems; workplace health and safety and accident prevention; contribution to corporate culture through the mission statement and code of conduct; and preventive compliance measures to avoid rule violations.

PALFINGER reports (p50) that Executive Board remuneration comprises a fixed basic salary, a short-term variable incentive (STI) and a long-term variable incentive (LTI). The LTI is based on financial and non-financial performance criteria. In 2024 the financial criterion was weighted at 80 percent and the non-financial criterion, a sustainability target, at 20 percent, defined through two indicators: the accident rate and Scope 1 and 2 emissions. PALFINGER has established a GHG emission reduction target for Scope 1 and 2 and linked it to Executive Board pay, with ten percent of the long-term variable bonus tied to climate considerations, evaluated against the GHG targets reported under E1-6. Supervisory Board remuneration consists of a basic fee for board and committee membership plus attendance fees for meetings, and is not tied to non-financial performance criteria. The remuneration policy was approved by the Annual General Meeting.

PALFINGER provides (p51) a statement on due diligence in the form of a mapping table that links the core elements of the due diligence process to the paragraphs of the sustainability statement where each is addressed. Embedding due diligence in governance, strategy and business model is covered by GOV-2, GOV-3 and SBM-3. Engaging with affected stakeholders in all key steps of due diligence is covered by GOV-2, SBM-2, IRO-1 and the MDR-P policy disclosures. Identifying and assessing adverse impacts is covered by IRO-1 and SBM-3. Taking actions to address those adverse impacts is covered by the MDR-A action disclosures. Tracking the effectiveness of these efforts and communicating is covered by the MDR-M metrics and MDR-T target disclosures. The statement does not add narrative beyond this cross-reference table.

PALFINGER discloses (p52) that risks and opportunities from sustainability reporting are integrated into its operations and existing risk management processes, with further detail in the risk report. The internal control system defines risks and controls for six sub-processes: collecting and processing ESG data, validating data for completeness and accuracy, calculating metrics, validating metric calculations, preparing the draft report, and preparing external ESG reporting. Controls apply the dual control principle across these steps. Local data experts supply ESG data, quality assurance runs through the Group KPI Officer at group level, functions validate data and prepare variance analyses, and the Group KPI Officer confirms data is complete and error-free. Identified risks include material topics becoming immaterial, wrong subtopics being identified, ESG concepts not covering the IROs from the materiality analysis, and disclosures not meeting minimum requirements; these are mitigated by annual review of the materiality analysis, approval by the Sustainability Council and Executive Board, and regular reviews. PALFINGER notes the ESG internal control system is being improved, with process documentation and improvement measures planned for the 2024/2025 financial year. Findings are communicated by Group Accounting and Non-Financial Reporting to the head of GRC/Group Accounting and Taxes.

PALFINGER describes (p53) its business as an innovative technology company developing, producing and selling lifting and handling solutions, organized into two segments, Sales and Service and Operations, and operating across the regions EMEA, NAM, LATAM, CIS and APAC, with EMEA the most important at 57.8 percent of sales in 2024; the Marine sector serves a global market independently. Product lines include loader cranes (world market leader with more than 100 models), timber and recycling cranes, hooklifts and skiploaders, tail lifts, aerial work platforms, truck-mounted forklifts, railway systems, passenger lifts, and marine products such as marine cranes, offshore cranes, davit systems, boats and wind cranes. Group headcount was 12,358 in 2024, down from 12,728, with EMEA at 6,734 employees. Key inputs are raw materials, primarily steel and aluminum, plus purchased parts. PALFINGER classifies 700 of its roughly 7,000 suppliers as strategic partners and follows a local for local procurement principle, selling through around 200 general importers and dealers in more than 130 countries. The sustainability strategy, articulated as the Lifting Positive Impact program, defines five fields of action: circular value chains, product safety and protection, people, values and culture, climate change mitigation, and governance and compliance. Sustainability targets include reducing Scope 1 and 2 emissions by one percent annually versus a 2022 base year and reducing the Total Recordable Incident Rate to 10.2 by 2030.

PALFINGER explains (p60) that it maintains ongoing dialogue with stakeholders, defined as entities or persons affected by or influencing the company. Employee and management interests are captured through interviews, surveys, performance and development reviews and manager meetings; shareholders and lenders through events and meetings; customers and dealers through dealer conferences, trade fairs, surveys and direct dialogue; suppliers, OEMs and cooperation partners through conferences, site inspections and agreements; and local communities through media, events and plant tours. Beyond ongoing dialogue, stakeholder interests relating to strategy and business model were determined through a stakeholder analysis to identify and prioritize key stakeholders, followed by qualitative interviews and an online survey of the Executive Board, Supervisory Board, top management, employees, shareholders, debt investors, customers, dealers, suppliers and OEMs. The 2023 stakeholder survey identified circular economy and product lifecycle responsibility as additional material topics and increased the importance of social issues and responsible IT use. These findings shaped the new fields of action Circular value chains and People, value and culture, with fair pay and employee engagement added; targets and actions for these are to be defined in 2025. The Sustainability Council reported survey findings to the Executive Board and briefed the Audit Committee.

PALFINGER presents (p62) the material impacts, risks and opportunities identified in its materiality analysis in a table organized by ESRS topic, marking positive and negative impacts, opportunities and risks, and mapping each to the value chain (upstream, own operations, downstream) and to short, medium and long-term horizons. Material topics span E1 Climate change mitigation and energy (GHG emissions from captive consumption, from fossil energy for production, from employee mobility, from land use change, and from use of products sold, plus reputational opportunity and regulatory risk), E5 Circular economy (resource inflows and outflows, circular product design, new circular business models), S1 Own workforce (health and safety, work-life balance, freedom of association, collective bargaining, social dialogue, training and diversity, disability inclusion, harassment, adequate wages, plus a qualified personnel shortage risk), S2 Workers in the value chain (health and safety, product safety for customers, child labor and forced labor human rights violations), and G1 Business conduct (corporate culture, compliance, supplier relationships, plus compliance violation risk). PALFINGER states these IROs influence its business model, value chain, strategy and decision-making, prompting adjustments such as integrating sustainability into all processes, emission reduction initiatives, hybrid drive systems and eco-efficiency scoping. Based on climate risk analysis and the risks of a qualified employee shortage and compliance violations, no significant risks were found that would materially affect financial statement items or strategy resilience. All identified IROs are covered by ESRS disclosure requirements, with company-specific metrics used in S2.

PALFINGER describes (p66) a double materiality assessment conducted group-wide for the first time in 2024 under ESRS, covering all activities and geographies including the upstream and downstream value chain, with special focus on the steel industry. Impacts were identified starting from the ESRS 1 AR 16 topic list and prior GRI analyses, using a driver analysis considering legal requirements, global trends and benchmarks, and drawing on an internal stakeholder survey. Impacts were assessed on severity criteria (scale, scope, remediability, and for potential impacts likelihood), separately for short, medium and long-term horizons, on a scale from 0 to 4 with a materiality threshold set at 2.5. Assessment used workshops with Global Functions and regional management, plus climate risk and water stress analyses, internal data, Integrity Line reports and online research. Risks and opportunities were identified analogously, only where impacts were present, and mapped to the existing risk inventory and the Compliance Risk Assessment; short and medium-term risks were assessed on financial impact and likelihood, long-term risks qualitatively against strategy, reputation, operations and business partners, with those significant in at least three of four criteria defined as material. Results were reviewed and approved by the Sustainability Council, released by the Executive Board and presented to the Audit Committee, with the Supervisory Board receiving the overall risk position four times a year. The materiality analysis is reviewed annually. The report also details climate-specific processes including a scenario analysis using RCP 2.6, 4.5, 6.0 and 8.5 over one, five and thirty year horizons and IEA transition scenarios (STEPS, APS, NZE).

PALFINGER lists (p74) the material disclosure requirements covered by its sustainability statement across ESRS 2 general disclosures and the topical standards. Five topical standards were found material: E1 Climate change (with E1-1 through E1-6), E5 Resource use and circular economy (E5-1 through E5-5), S1 Own workforce (S1-1 through S1-17), S2 Workers in the value chain (S2-1 through S2-5), and G1 Business conduct (G1-1 through G1-6). Five whole topical standards were found not material: E2 Pollution, E3 Water and marine resources, E4 Biodiversity and ecosystems, S3 Affected communities, and S4 Consumers and end-users. The disclosure requirement listing confirms datapoints under E2-4, E3-1, E3-4, the E4 SBM-3 and E4-2 items, and all S3-1, S3-4, S4-1 and S4-4 items are marked not material, while E1, E5, S1, S2 and G1 datapoints are marked material. PALFINGER also notes a phased-in approach for some datapoints and that, after identifying material topics, the material sustainability aspects were aligned with ESRS 1 section 3.2 disclosure requirements through a gap analysis, disclosing company-specific information by policies, actions and targets.

PALFINGER discloses (p88) that it has not yet submitted a transition plan for climate change mitigation. It explains this by the nature of its value chain, where most emissions occur upstream or downstream of the production process rather than in its own operations. The company states it is nonetheless systematically driving the process forward and using insights already gained to exploit identified savings potentials. A dedicated project focusing on transition risks and a transition plan is set to be launched in 2025. Related resilience and transition-risk analyses were initiated in 2024 and will be refined in 2025 across short-term (one year), medium-term (one to five years) and long-term (over five years) horizons. PALFINGER reports that no activities incompatible with the transition to a climate-neutral economy by 2050 have been identified, and that anticipated future financial effects were omitted under a transitional provision.

PALFINGER describes (p89) a single climate policy, Policy 1, which bundles three globally applicable group policies: Energy Management, Environmental Protection and Certification Requirements. The certification policy requires certified energy and environmental management systems under ISO 14001 and ISO 50001; excluding CIS, 59 percent of employees worked at certified locations in 2024 (2023: 53 percent). The energy management and environmental protection policies mandate global HSE action plans with site-specific local targets set in 2024: reduce electricity consumption by at least one percent of the prior year's absolute consumption, reduce heating energy consumption by at least two percent, and reduce CO2e emissions by at least one percent. The policy addresses climate change mitigation directly through these targets and indirectly through ISO certification. CO2e reductions are pursued via energy conservation, integrating renewable energy and procuring green electricity. Climate change adaptation is explicitly not addressed. The policy covers the whole group but not the upstream or downstream value chain. Site managers are responsible for implementation; Corporate HSE monitors; the Executive Board approved it.

PALFINGER details nine actions (p90 onward). Action 1, energy efficiency analyses, now covers 13 EMEA sites and 2 in NAM, feeding further measures. Action 2, PV system expansion, gives PALFINGER around 9.3 MW of peak PV capacity generating just under 7.5 percent of total electricity in 2024; 2024 installations were Cherven Brijag (1,000 kWp) and Delnice (100 kWp). Action 3, electricity, heat and CO2e reduction plans rolled out at 33 sites globally, delivered identified annual potential of a 1,083 MWh cut in electricity, 1,052 MWh in heat and 235 tons of CO2e, via measures such as efficient painting processes, LED lighting, compressor replacement and forklift electrification. Action 4 is product eco-efficiency scoping. Actions 5 to 9 target downstream Scope 3 use-phase emissions: load sensing (about 3 to 4 t CO2e saved per crane per year), hydraulic efficiency (10 to 40 percent), hybrid drives (75 to 100 percent), electric drive concepts (up to 100 percent) and the electric FLx forklift (up to 100 percent). The materiality threshold for CapEx and OpEx was set at EUR 5 million; no action met it.

PALFINGER reports (p97) one emission reduction target, covering Scope 1 and Scope 2 and tied to Executive Board remuneration. The base year is 2022, at 31,578 tCO2e before retroactive error correction and 37,155 tCO2e after correction. The 2030 target is an absolute reduction of 2,668 tCO2e (500 tCO2e in Scope 1 and 2,168 tCO2e in Scope 2) to reach 29,091 tCO2e, equal to 8,136 tCO2e per billion EUR of revenue. PALFINGER states clearly that the target is not compatible with limiting warming to 1.5 degrees Celsius and was not determined on science-based principles, though it is potential-based and takes the SBTi principles into account. It is not SBTi-validated, and no net-zero or climate-neutrality year is set for the company. There is currently no Scope 3 target. The market-based approach was used. Decarbonization levers are increased renewable energy (mainly the Scope 2 reduction) and energy efficiency (mainly the Scope 1 reduction). The target period is 2024 to 2030. In 2024 emissions were already below the target of 31,377 tCO2e.

PALFINGER reports (p98) total energy consumption of about 214,542 MWh in 2024, virtually unchanged from 214,307 MWh in 2023. Total fossil energy consumption fell to 111,562 MWh (52.0 percent of the total) from 132,483 MWh (61.8 percent) in 2023, including natural gas of 61,744 MWh, crude oil and petroleum products of 18,392 MWh, other fossil sources of 7,385 MWh and purchased fossil electricity, heat, steam and cooling of 24,041 MWh; there was no coal use. Nuclear consumption was 5,700 MWh (2.7 percent). Total renewable energy consumption rose to 97,280 MWh, a 45.3 percent share (2023: 81,824 MWh, 38.2 percent), comprising 88,373 MWh of purchased renewable electricity, heat, steam and cooling plus 8,907 MWh of self-generated non-fuel renewable energy. Green electricity made up 80 percent of total electricity consumption in 2024, with PV systems supplying around 7.5 percent. EMEA accounted for 61 percent of consumption. Energy intensity in high climate impact sectors was 91.0 MWh per million EUR of net revenue (2023: 87.6).

PALFINGER reports (p100) 2024 gross Scope 1 emissions of 18,885 tCO2e (down 0.7 percent from 19,019 in 2023; base year 2022: 18,850). Gross market-based Scope 2 emissions were 11,365 tCO2e, down 35.7 percent from 17,676 in 2023 (2022 corrected: 18,305); location-based Scope 2 was 33,978 tCO2e. Total gross Scope 3 emissions were 3,042,731 tCO2e, down 14.3 percent, dominated by use of sold products (2,090,085 tCO2e) and purchased goods and services (762,692 tCO2e), followed by waste (65,246), upstream transportation (60,279) and other categories. Total market-based GHG emissions were 3,072,981 tCO2e (down 14.4 percent); total location-based emissions were 3,095,594 tCO2e. GHG intensity was 1,302 tCO2e per million EUR of net revenue market-based (2023: 1,467) and 1,312 location-based. Market-based Scope 2 for 2022 and 2023 was retrospectively corrected upward (adding 5,397 and 4,782 tCO2e) after one site could not document renewable energy use. About 1.24 percent of Scope 3 is based on primary supplier data. Biogenic emissions are treated as negligible.

PALFINGER discloses (report p102) that responsible resource use and material longevity are embedded in its operating activities in economic terms, but states plainly that no overarching policy on resource use and circular economy is in place at this time. The company reports that it will work on developing such an overarching policy in the coming years. No named policy document, scope, or governance owner is provided. The disclosure is therefore an acknowledgement of a policy gap rather than a description of an existing policy.

PALFINGER reports one action (report p102): extending product service life and increasing use intensity through repair, maintenance and spare parts provision. Measures include preventive maintenance, inspections, repairs and spare parts management, delivered through a worldwide service network and technologies such as the Smart Inspection app. The stated results are longer product lifespan, resource conservation, and promotion of reuse. The action supports circular practices through value retention via maintenance, repair, refurbishment and remanufacturing. PALFINGER explicitly notes the action does not cover use of recycled materials or circular design, since the focus is on extending product life, and that the upstream value chain is not covered. Maintenance, repairs and spare parts are provided by PALFINGER or its business partners. This is described as an ongoing action. No specific budget, financial resources, or quantified targets tied to the action are disclosed.

PALFINGER reports (report p103) that circular economy was identified as a new material topic in the current materiality analysis and was integrated into the sustainability strategy as a separate field of action in 2024. The company states that targets will be established in the next financial year, together with the development of corresponding actions and the implementation of a process for assessing their effectiveness. As a result, no quantified targets, target years, or baseline values related to resource use or circular economy are disclosed for FY2024.

PALFINGER discloses resource inflows for 2024 (report p103). Key inputs are raw materials, primarily steel and aluminum, and purchased parts including cylinders, control systems and mechatronics, electronics and cables, hydraulic components and equipment, motors and pumps, DIN and standard parts, and mechanical parts. The company applies a local for local procurement principle. Reported total weight of products and materials used is 116,546 tons, comprising raw material 114,207 tons, hydraulic components and equipment 1,653 tons, cylinders 4 tons, control systems and mechatronics 117 tons, and DIN and standard parts 565 tons. Weights were based on recorded goods received, with estimates from EUR values where ERP weight data was unavailable. The total weight of secondary, reused or recycled components, intermediate products or materials used was 46,450 (the table labels this EUR thousand while the surrounding text frames it as weight), representing 39.9% secondary, reused or recycled content, determined via supplier inquiries with estimates where values were unavailable.

PALFINGER discloses resource outflows for 2024 (report p104), which relate to manufactured products such as loader cranes, timber and recycling cranes, hooklifts, tail lifts, aerial work platforms, marine and offshore cranes, winches, davit systems and boats. Product durability is estimated at 10 to 15 years for loader cranes up to 25 years for offshore cranes, based on load cycles; no industry comparison is available. Repairability was assessed against EN 45554:2020, with all products rated B or C, indicating good repairability. The recyclable content table reports total weight of products and packaging of 116,546 tons, a recyclable portion of 112,952 tons, and a recyclable share of 96.9%, based on supplier inquiries with estimates. Importantly, total waste generated is NOT quantified. There is no waste tonnage or recycling rate for waste. The datapoint table marks non-recycled waste and hazardous and radioactive waste as not material, so the waste breakdown is effectively absent.

PALFINGER (p107 to p108) describes seven policies covering its own workforce. Most apply only to employees because they require access to PALFINGER's internal systems, though the occupational health and safety policies and the employee Code of Conduct also cover contingent staff. The company aligns with international standards: it has supported the UN Global Compact since 2013 and its ten principles, follows the OECD Guidelines for Multinational Enterprises and ILO principles, and links its work to four priority SDGs (5, 8, 12, 13). Slavery, human trafficking, child labor and forced labor are prohibited. Occupational safety is managed under ISO 45001, with all sites over 100 employees required to implement such a system. The named policies are: the Code of Conduct, Health Management Policy, Group Policy Certification Requirements for PALFINGER Sites and Audit Management, Group Policy Occupational Health & Safety Management, Group Policy Learning, Recruiting Policy, and the Anti-Harassment & Anti-Discrimination Policy. In Austria, PALFINGER must meet a statutory disability employment quota. Policies were approved by the Executive Board.

PALFINGER (p116 to p118) engages its workforce directly and through employee representatives using several formats. At site level there are works meetings. At group level there is dialogue between managers and employees, employee surveys, and employee representation on the Supervisory Board. Direct engagement includes performance and development reviews, which follow a standard operating procedure mandating at least three meetings annually with feedback recorded in the HR system, plus works meetings and anonymous employee surveys. The last employee survey took place in 2024 for Austria and Germany, with a global survey planned. Indirect engagement runs through guaranteed employee representation on the Supervisory Board and regular exchange between the Executive Board and the works council for developing works agreements. The Executive Board holds overall responsibility for engagement and Human Resources manages the process. Feedback is collected, analyzed in meetings or committees, and integrated into decision-making where relevant and feasible, with outcomes communicated back to the originator. An Innovation Challenge lets employees submit proposals to reduce the carbon footprint.

PALFINGER (p118) describes channels for its workforce to raise concerns and processes to remediate negative impacts. The main channel is the Integrity Line, PALFINGER's anonymous whistleblower reporting system, which lets employees voice concerns about working conditions affecting physical and mental health, workplace violence, harassment and discrimination. Other established channels are direct reporting through managers or regional HR officers, contacting Governance, Risk & Compliance (GRC) directly, and works council consultation hours. Reported violations of laws, the Code of Conduct or group policies are continuously evaluated, and substantiated cases are investigated by Corporate Internal Audit, with improvement actions defined together with responsible management. Corrective measures range from discussions and awareness-raising to disciplinary measures up to and including termination. Every PALFINGER employee must complete mandatory Code of Conduct training that points out the reporting channels, ensuring awareness. Protection from retaliation is provided through the option of anonymous reporting via the Integrity Line. Every allegation is investigated through a defined and transparent process, with training and technical support available to help employees use the channels.

PALFINGER (p119 to p126) sets out eight actions addressing workforce impacts, risks and opportunities. Preventive actions include the Mobile Work Group Policy, PALfit Active Moments and a global accident reporting system. Remedy is provided through the Code of Conduct and its complaint procedure. Positive-impact actions include a health and safety initiative, the European works council, performance and development reviews, health and safety trainings, and a learning management system. Specific results: the PALfit Active Moments campaign drew 1,119 employees from 47 nations accumulating 1,153,596 minutes of physical activity, with a EUR 10,000 donation to Doctors Without Borders. The health and safety trainings library holds around 750 online safety videos in 15 languages; in the reporting year 126 global training videos were produced and 422 site-specific trainings uploaded. The global accident reporting system logged 138 accident detail investigations for 203 accidents in 2024. Mobile work allows up to ten days per month. The learning management system, implemented in 2021, offers over 14,000 e-learning courses. These actions support a voluntary staff turnover target of six percent.

PALFINGER (p127 to p129) reports three targets. First, voluntary staff turnover of around six percent on a rolling twelve-month average; the definition was changed in 2024 from a previous 15 percent general-turnover target to focus on voluntary turnover, and in 2024 the figure was 5.0 percent, meeting the target. Second, aligning the proportion of women in top management (the Global Management Team) with the overall proportion of women in the group, which was 14.9 percent in 2024; at the end of 2024 women held 7.8 percent of Global Management Team positions (2023: 6.2 percent), still below the overall share of 14.9 percent (2023: 12.9 percent). Third, reducing the workplace accident rate measured by the Total Recordable Injury Rate (TRIR), accidents per million hours worked; the 2024 target was 11.1 and the 2030 target is 10.2, from a 2018 baseline of 26.7. The 2024 TRIR of 8.43 (2023: 11.56) was well below target. Employees and their representatives were not involved in setting these targets.

PALFINGER (p130) reports 12,358 total employees by headcount at the reporting date, comprising 10,517 men (roughly 85 percent) and 1,841 women (roughly 15 percent), with zero recorded as other or not reported. The largest employee countries are Austria with 2,707 (2023: 2,833), Russia with 1,536 (2023: 1,620) and Bulgaria with 1,414 (2023: 1,591). By contract type, 12,057 employees are permanent (10,289 men, 1,768 women) and 301 are temporary (228 men, 73 women); there are no non-guaranteed-hours employees. PALFINGER states it typically employs staff permanently, with fixed-term contracts being an exception used mainly for limited project work and professional internships. On departures, there were 2,383 total departures in 2024 for an employee turnover rate of 19.0 percent. This turnover metric counts all departures including voluntary exits, dismissals, retirements and deaths as a percentage of the average number of employees during the period, and does not count joiners.

PALFINGER (p131) reports non-employees in its own workforce, consisting of leased personnel. The total number of non-employees fell to 207 in 2024 from 346 in 2023, a decrease of 40.2 percent. All of these are contingent staff; the company reports no independent contractors. PALFINGER explains that at its sites contingent staff (leased personnel) are used primarily in production processes to manage surges in demand. The headcount is stated as of December 31, 2024.

PALFINGER (p131) reports that 61.8 percent of all employees were covered by collective bargaining agreements in 2024, up from 56.7 percent in 2023, an increase of 5.1 percentage points. Interns and contingent staff are excluded from this calculation. For the European Economic Area, among countries with more than 50 employees making up over 10 percent of the total, Austria falls in the 80 to 100 percent band for both collective bargaining coverage and workplace representation, while Bulgaria falls in the 0 to 19 percent band for both. On broader representation, PALFINGER has a European works council that provides representation for 63.9 percent of its employees, covering Romania, Bulgaria, Croatia, Slovenia, Italy, Austria, Germany, Slovakia, the Czech Republic, Poland, Norway, Denmark, Sweden, France, Spain, Portugal and Serbia.

PALFINGER (p132) reports diversity metrics for gender at top management and the age distribution of the workforce. At the top management level, defined as the Global Management Team (Executive Board, heads of global and corporate functions, heads of product lines, heads of purchasing categories and regional function heads), there were 70 people in 2024, of whom 65 were men (92.9 percent) and 5 were women (7.1 percent). This compares with 2023, when 65 people held these roles, 61 men (93.8 percent) and 4 women (6.2 percent). No individuals were recorded as other or not reported. For the age distribution of the total workforce of 12,358 employees, 2,069 (16.7 percent) were under 30 years old, 7,430 (60.1 percent) were between 30 and 50 years, and 2,859 (23.1 percent) were over 50 years.

PALFINGER (p132) states that all employees are paid an adequate wage in line with applicable benchmarks. The basis for calculation is the contractually agreed monthly gross base salary, excluding variable components such as overtime and incentive pay and excluding bonuses. The benchmark used is the lowest wage group, excluding apprentices and interns, of the minimum wage as defined by law or by collective bargaining agreement. For Singapore, Norway and the United Arab Emirates, where no applicable minimum wage is determined by legislation or collective bargaining, wage benchmarks were applied in accordance with ESRS S1-10.

PALFINGER (p133) reports the share of employees socially insured against loss of earnings through public programs or company-provided benefits. Coverage in 2024 was 99.8 percent for sickness, 94.8 percent for unemployment from the time an employee starts working for the company, 98.0 percent for work accidents and disability, 99.2 percent for parental leave, and 100.0 percent for retirement. PALFINGER lists countries where employees lack certain social protection: India (all employees, for sickness, unemployment and parental leave), Serbia (all employees, unemployment), Singapore (all employees, unemployment), UAE (all employees, unemployment), Qatar (direct employees, for unemployment and employment injury) and the USA (all employees, parental leave).

PALFINGER (p133) reports training and skills development metrics. In 2024, 31.7 percent of the group's total workforce took part in the performance and development review (PDR) process, up from 24.3 percent in 2023, broken down as 27.8 percent of men and 54.4 percent of women; the PDR is implemented for indirect employees only. The annual PDR process was completed in full at the end of March 2024, with a completion rate of 86.4 percent (2023: 82.8 percent) of the employees within its scope. On training hours, employees averaged 7.5 hours of training per employee in 2024, with men averaging 7.3 hours and women averaging 8.9 hours.

PALFINGER (p134) reports health and safety metrics for 2024. 34.0 percent of the workforce was covered by the company's health and safety management system. There were no fatalities from work-related injuries or work-related ill health. Recordable work-related accidents fell to 203 from 284 in 2023, a decrease of 28.5 percent. The rate of recordable work-related accidents (TRIR) was 8.4 in 2024 versus 11.6 in 2023, a fall of 27.1 percent. Recordable cases of work-related ill health dropped to 2 from 12 (down 83.3 percent), and days lost to work-related injuries, ill health and fatalities fell to 3,400 from 6,197 (down 45.1 percent). TRIR measures work-related injuries per million hours worked. The reduction is attributed to the actions implemented and lower production capacity utilization. Separately, 39 percent of employees (excluding CIS) worked at ISO 45001 certified locations in 2024 (2023: 36 percent); including CIS the figure was 34 percent.

PALFINGER (p134) reports work-life balance metrics on entitlement to family-related leave. In 2024, 96.0 percent of all employees were entitled to take family-related leave, with the same 96.0 percent share for both men and women; no figures were reported for other or not reported categories. The metric covers all forms of family-related leave, namely maternity leave, paternity leave, parental leave and caregiving leave. Interns and contingent staff are excluded from the scope of this metric. PALFINGER does not disclose an uptake figure for actual leave taken in this section.

PALFINGER (p135) reports remuneration metrics. The unadjusted gender pay gap in 2024 was 13.9 percent, meaning the average gross hourly pay of female employees was 13.9 percent lower than that of male employees. PALFINGER notes it cannot yet make statements on gender-based discrimination in pay for work of equal value, which will become possible once its global job architecture is fully implemented. The metric is calculated per country, broken down by direct and indirect employees, then aggregated globally by headcount-based statistical weighting, excluding external or inactive employees, apprentices and interns. The total remuneration ratio of the highest paid individual to the median annual total remuneration of all employees was 68:1 in 2024. Both metrics include base pay plus other contractually agreed cash or in-kind benefits, and part-time employees are extrapolated to full-time equivalents.

PALFINGER (p135) reports incidents, complaints and severe human rights impacts. In 2024 there were 14 reported incidents of discrimination, including harassment. A total of 10 complaints were filed through all available channels for raising concerns. Material fines, sanctions and compensation for damages arising from these incidents amounted to 66 thousand euros. On severe human rights incidents, PALFINGER reports none: zero total severe human rights incidents, zero incidents of non-compliance with the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work or the OECD Guidelines for Multinational Enterprises, and zero fines, sanctions or compensation for damages relating to such incidents.

On page 138, PALFINGER describes two policies. The Code of Conduct for Business Partners is embedded in contracts with suppliers and dealers and specifically addresses human trafficking, forced and compulsory labor, and child labor. It mandates compliance with the ILO core labor standards and endorsement of the UN Global Compact, both of which follow the International Bill of Human Rights, and it aligns with the guiding principles on human rights of the UN, OECD and ILO. It is published on the corporate website, approved by the Executive Board, and owned by the heads of Procurement and Dealer Network Development. Violations are subject to sanctions and possible criminal prosecution. A second policy on safe work environments focuses on health and safety for business partners and end users through the EU Machinery Directive 2006/42/EC, ISO 9001 certification, and market surveillance, though it applies group-wide to PALFINGER sites and does not cover the upstream or downstream value chain. PALFINGER states that, apart from the Integrity Line, it has no processes for direct collaboration with value chain workers or measures to remedy human rights impacts, because a comprehensive analysis is planned for coming years.

On page 140, PALFINGER states plainly that at this time there are no processes for the direct engagement of workers in the value chain. This is the entirety of the S2-2 disclosure. The report links this gap to statements elsewhere that stakeholder engagement for value chain workers is not yet taken into account and that a comprehensive analysis of value chain workers will be conducted in the coming years. No named engagement mechanisms, perspectives of affected workers, or worker representatives are described for this disclosure requirement.

On page 140, PALFINGER describes the Integrity Line as the main channel through which value chain employees, along with other stakeholders and third parties, can submit reports on the corporate website, either anonymously or with their identity disclosed. The Integrity Line is an external tool implemented and operated by PALFINGER and is referenced in the Code of Conduct, though there is no communication specific to value chain workers. Reports are processed internally, with substantiated suspicious cases investigated by Corporate Internal Audit and improvement measures defined with responsible management. Information is shared only with those who need it, and PALFINGER strictly prohibits retaliation against people who raise concerns in good faith, with acts of retaliation treated as Code of Conduct violations resulting in disciplinary action. Separately, PALFINGER investigates all reported incidents involving its products where persons are injured, regardless of fault. PALFINGER states the effectiveness of these channels cannot yet be evaluated because no reports relating to value chain workers have been received, and that there are currently no measures in place to ensure value chain workers have confidence in these processes.

On pages 141 to 144, PALFINGER describes two actions. Action 1 covers sustainability criteria and guidelines for selected strategic suppliers, combined with the Code of Conduct that suppliers must sign as part of their contract. It aims to minimize two negative upstream impacts: human rights violations and working conditions that may cause mental or physical health problems. This action launched as a pilot project in 2024 and is set to extend to other strategic suppliers, with PALFINGER issuing actionable human rights guidelines and offering implementation support through a phased, cooperative approach based on transparency, opportunities to improve, resource support, and termination only as a last resort. Effectiveness is assessed case by case through self-assessments, on-site supplier visits, desktop research and documentation requests. Action 2 provides safety information and training for business partners and end customers to prevent product accidents. PALFINGER states there are no actions addressing risks and opportunities for value chain employees, and that no severe incidents have been reported to date so no remediation actions have yet been implemented. It aligns remedy with the UN Guiding Principles and allocates resources through sustainability management, procurement, and quality management.

On page 145, PALFINGER states that at this time it has not defined any measurable targets in this area and is currently assessing available possibilities. No time-bound targets related to managing negative impacts or advancing positive impacts on value chain workers are set. The company provides company-specific metrics on accidents involving its products for 2022 to 2024, reporting 8 accidents in 2024 (7 in 2023), 9 injuries of varying severity, and 2 fatalities, recorded irrespective of fault, but these are contextual figures rather than targets against which progress is tracked.

PALFINGER discloses (report page 146 to 148) two central policies: a Code of Conduct for Employees and a Code of Conduct for Business Partners. The employee Code sets out legal and ethical principles and covers anti-corruption, economic crime, conflicts of interest, prohibition of advertising for political parties, sponsorship and donations, anti-money laundering and terrorist financing, data protection, artificial intelligence, protection of confidential information and intellectual property, antitrust and competition law, product compliance, export law and sanctions, protection of company property, and capital market compliance. The Executive Board signed the Code and is responsible for implementation, with Governance, Risk and Compliance (GRC) drafting it and providing training. The stated corporate culture rests on values of entrepreneurship, respect and learning, and the tagline "We value people. People create value." Whistleblowing runs through the "Integrity Line", an anonymous channel open to employees and external stakeholders, alongside GRC, works council consultation, managers and HR. Anonymous reporting and protection against retaliation are guaranteed in line with EU Directive 2019/1937. Substantiated cases are investigated by GRC and Corporate Internal Audit. Compliance training is mandatory and assigned on a risk basis.

PALFINGER describes its management of supplier relationships on report page 150 to 151. The Code of Conduct for Business Partners sets the legal and ethical principles suppliers must comply with, and internal policies define the duties, responsibilities and the "source-to-pay" process for all materials, services and investments. The scope covers direct suppliers in the upstream value chain, and the head of the global Procurement function is responsible, with Executive Board approval. There is regular dialogue with suppliers to keep requirements aligned. On payment context, PALFINGER states it uses standardized payment terms and has introduced a reverse factoring program for suppliers meeting specific annual volume criteria, allowing them to finance their receivables and get paid early under an agreement between PALFINGER and a contractual bank. This program is also open to SMEs and contributes to preventing late payments. Key controls include bidirectional matching of purchase order and invoice before payment, early involvement of Purchasing, documented sourcing decisions, mandatory initial supplier audits before ERP registration, quarterly evaluation of strategic direct material suppliers, and claims management. Supplier audits also review sustainability aspects such as environmental practices, human rights and occupational safety.

On report page 152 to 153, PALFINGER explains its prevention and detection of corruption and bribery. Corruption prevention is addressed in the Code of Conduct and in a dedicated Anti-Corruption Group Policy whose core elements are the prohibition of illegal payments, gifts and kickbacks, and rules on conflicts of interest. PALFINGER notes elevated inherent risk because it exports to many countries and transacts with numerous public sector entities. A multi-stage catalog of actions applies: an internal compliance risk assessment, mandatory training programs, awareness communication campaigns, reporting via the "Integrity Line", ongoing evaluation and investigation of substantiated cases by Corporate Internal Audit, and a corruption prevention metric in quarterly sustainability reporting. Investigators are kept independent from the management chain involved. GRC develops and monitors training, and a report on anti-corruption measures goes to the Supervisory Board annually. Notably, no significant anti-corruption and anti-bribery training took place in the reporting year; a mandatory e-learning program based on the Anti-Corruption Group Policy will be introduced in 2025. The number of trainings completed was not systematically recorded in 2024. There was no training for the Executive Board and Supervisory Board in 2024, planned for 2025.

On report page 154, PALFINGER reports incidents of corruption or bribery for 2024 (with 2023 comparatives). The number of final convictions for violations of anti-corruption and anti-bribery laws was zero, shown as a dash for both 2023 and 2024. The amount of fines for violations of anti-corruption and anti-bribery laws was likewise zero for both years, also shown as a dash. In other words, PALFINGER discloses no confirmed incidents, no final convictions and no fines for the reporting year. The disclosure cross-references the anti-corruption actions described under G1-3.18a for context on the preventive measures in place.

On report page 154, PALFINGER discloses its payment practices for 2024. The average number of days until payment of an invoice, measured from the start of the contractual or statutory payment period, was 56 days. The number of court proceedings currently pending against PALFINGER for late payment was zero. As noted under G1-2, PALFINGER uses standardized payment terms and operates a reverse factoring program, open also to SMEs, that lets qualifying suppliers get paid early and helps prevent late payments.