Rheinmetall

Supervisory Board

The Supervisory Board carefully and continuously monitored and accompanied the work of the Executive Board in fiscal 2024. This was done in accordance with the statutory provisions, the articles of association and the rules of procedure on the basis of differentiated reports of the Executive Board and other executive officers of the company, which were made in written and oral form.

The Supervisory Board received the documents for the preparation of our meetings in a timely manner and thus always had sufficient space to critically acknowledge the reports, presentations and proposed resolutions in the plenary and in the committees, to specifically question them and to check their plausibility.

The cooperation between the Supervisory Board and the Executive Board was characterised by trust, openness and constructive dialogue. The Supervisory Board has been involved in all decisions of decisive importance for the Rheinmetall Group immediately and early.

The following overview shows the composition of the Supervisory Board and its committees as of the balance sheet date:

Executive Board

In fiscal 2024, the Executive Board consisted of three members: Armin Papperger, as Chairman of the Executive Board of Rheinmetall AG, as well as the Executive Board members Dagmar Steinert (CFO) and Peter S. Krause (HR) and Dr Ursula Biernert-Kloß, to whom Peter Sebastian Krause's official duties were fully transferred on 1 October 2024.

The transformation of the Executive Board of Rheinmetall AG consists of various individual measures that became effective from 1 January 2025. Armin Papperger, who has been the CEO of Rheinmetall since 1 January 2013, was appointed Chairman of the Executive Board for an additional five years from 1 January 2025.

Committee Structure

The Supervisory Board prepares its work on five committees:

• Nomination Committee
• Human Resources and Compensation Committee
• Audit Committee
• Strategy, Technology and ESG Committee
• Mediation Committee

These committees have the primary task of pre-structuring complex and time-intensive topics for the meetings of the plenary and to review proposed resolutions submitted by the Executive Board in advance.

Information provided to the Supervisory Board

During the reporting period, the plenary of the Supervisory Board intensively dealt with the political and economic environment of the company in five regular and five extraordinary Supervisory Board meetings. In addition to the development of the Rheinmetall Group as a whole, the focus of our attention was in particular the development in the divisions and ongoing projects in the Group.

The Supervisory Board received differentiated reports of the Executive Board and other executive officers of the company, which were made in written and oral form. We received the documents for the preparation of our meetings in a timely manner and thus always had sufficient space to critically acknowledge the reports, presentations and proposed resolutions in the plenary and in the committees.

Using this detailed information, we intensively discussed the company's operational, economic and organizational development and its strategic development. At the Supervisory Board and Committee meetings, the Executive Board explained all relevant matters and fully answered our questions.

Committee Activities

The Strategy, Technology and ESG Committee met in March and August during the reporting year. The Committee specifically addressed ESG issues, including, but not limited to, the Corporate Sustainability Reporting Directive (CSRD), the reporting obligations associated therewith, conducting a double materiality analysis to determine the relevant factors and aligning the ESG strategy with the company strategy.

The Audit Committee met in March, May, August, November and December. The Committee was informed about the status of the preparations for the holding of the Annual General Meeting and the dividend proposal. The audit focus of 2024 was explained, including the new requirements by the implementation law on CSRD.

During the year, the members of the Audit Committee were also informed in the meetings by executives of the company on the corporate function Legal, Corporate Sustainability Responsibility (CSR), Compliance and Tax Compliance, Risk Management and Internal Audit in the Rheinmetall Group.

Meeting attendance

At 97%, the participation rate of the members of the Supervisory Board in the consultations in the plenary and in the committees was again at a high level.

Integration of sustainability-related performance in incentive schemes

Remuneration components, which include sustainability targets, serve to further strengthen sustainable positive corporate development. The implementation of measures in the areas of environmental, social and governance have been taken into account for the members of the Executive Board in the LTI and STI with 20% each since fiscal 2022. For managers, this also applies since fiscal 2022 in the STI and since fiscal 2024 in the LTI.

Executive Board Remuneration Structure

The Human Resources and Compensation Committee prepared for the Supervisory Board plenary in the meetings in February, March, April, September, October and November 2024, among other things, topics such as the content and structure of the target agreements, the degree of achievement for fiscal 2023 as well as the setting of the objectives, ranges and calculation basis for the variable remuneration of the Executive Board in 2024.

The extraordinary meeting of the Supervisory Board on 4 March 2024 served to discuss the results of the HR and Remuneration Committee and its adoption of a resolution. The proposed resolution for the achievement of the STI 2023 (Short Term Incentive) target and for the achievement of the EBT and OFCF target were discussed, which were each accepted with abstention. We also discussed 2024 targets by calibrating ESG targets, the 2024 LTI (Long Term Incentive) tranche and the 2023 Compensation Report.

Risk management and internal controls over sustainability reporting

The Audit Committee dealt with the monitoring of the accounting process, the effectiveness and further development of the internal control system (including the sustainability-related internal control system), the risk management system, the internal audit system, the business continuity management and the compliance management system including data protection management.

The audit focus of 2024 was explained. In this context, the new requirements were further addressed by the implementation law on CSRD, the regulations of EU sustainability reporting and the specific aspects of accounting, as well as the audit requirements for the sustainability statement, including the resulting expansion of the task list of the Audit Committee due to CSRD.

As a result, the Audit Committee has not become aware of any circumstances that would contravene the adequacy and effectiveness of these systems in their entirety. The Audit Committee has ensured that the Company continuously reviews the systems and systematically and consistently expands them.

During the year, the members of the Audit Committee were also informed in the meetings by executives of the company on the corporate function Legal, Corporate Sustainability Responsibility (CSR), Compliance and Tax Compliance, Risk Management and Internal Audit in the Rheinmetall Group.

Internal Control Systems

The members of the Audit Committee were able to gain a deeper impression of the existing structures and organizations, processes and regulations, as well as to question and comment on the further developments and planned improvement measures presented in these topics.

Structure of the Rheinmetall Group

Rheinmetall is an international group in various markets with high-tech products and services. The sales focus is on the security technology and mobility. With its product portfolio, Rheinmetall fulfills these basic key needs of modern society.

Divisions:

• Vehicle Systems Europe: Armored tracked vehicles, CBRN protection systems, artillery, turret systems, wheeled logistics vehicles, wheeled tactical vehicles
• Vehicle Systems International: Similar portfolio but focuses on the markets of Australia, the US and Great Britain
• Weapon and Ammunition: Weapons and ammunition, propellants, protection systems, international projects and services
• Electronic Solutions: Air defence systems, radar technology, soldier systems, command/control and reconnaissance systems, fire control systems, sensors, simulation
• Power Systems: Emissions reduction, actuators, solenoid valves, pumps, engine blocks/components, plain bearings, global replacement parts business

Business Model and Value Chain

Vehicle Systems Europe, Vehicle Systems International, Weapon and Ammunition and Electronic Solutions offer system and subsystem solutions in the defence and security industry and a broad service portfolio for mobility, surveillance, management, impact and protection.

Power Systems is a system provider for high-quality and innovative (mobility) solutions, control technologies and digital applications, among other things, for the automotive and energy industry, but also increasingly for industrial applications.

Key Markets and Customers

Defence and Security Technology Markets: The product and capability spectrum of Rheinmetall is tailored to the central defence requirements, which result nationally and internationally from the continued high technical modernization or replacement needs of numerous armed forces.

Key strategic markets include:

• Germany (armed forces modernization)
• Eastern Europe (Hungary, Ukraine, Lithuania)
• UK and Australia (long-term partnerships)
• USA (growing through acquisitions)

Civilian Products and Mobility Applications: The business performance is largely determined by the production trends of international customers in the automotive industry. The business units of Power Systems assume a Tier 1 position within the value chain of automotive production, supplying automotive manufacturers directly.

Strategic Position

Rheinmetall's overarching goal is to be a leading integrated technology group that develops solutions for a secure and livable future. The transformation from a provider of security and mobility applications to a fully integrated technology group was initiated in 2020.

Key strategic growth areas include:

• Artillery systems, rocket artillery and ammunition
• Ground-based Air Defence
• Main Fighting Tank and Infantry Fighting Vehicles
• Aviation (F-35A production, helicopter maintenance)
• Military Unmanned Air Systems
• Digitalization and networking solutions
• Civil sector diversification (hydrogen, electrification)

Technology Transfer and Integration

The technology transfer between the individual areas is firmly integrated into the structure. Power Systems is increasingly integrated integrally into the value chain of the other divisions, representing Rheinmetall's organizational umbrella for key technological competencies in civilian markets.

Interests and views of stakeholders

Key stakeholder groups identified

Our key stakeholders include:

• Customers and business partners
• Shareholders, lenders & investors
• Employees
• Suppliers
• The public
• Government and public administration
• Nature as a silent stakeholder

Each of these stakeholder groups is involved through selected employees who are in regular contact with the respective stakeholders. Nature is taken into account by means of scientific data, studies and analyses.

Engagement formats and channels

Integration of stakeholder views into strategy

Through dialog with our key stakeholders, we identify their needs with regard to sustainability for the Rheinmetall Group in order to align our sustainability activities accordingly.

The results of the exchange with the key stakeholder groups are an integral part of our double materiality analyses. The close contact we maintain with our customers and business partners is aimed at long-term successful partnerships. The exchange with our investors and shareholders can provide important insights for the sustainability positioning of the Rheinmetall Group. In addition, our annual employee surveys serve to identify the needs of our own workforce. Viable solutions are to be developed in consultation with politicians and administrators. The results of the exchange formats described inform the administrative, management and supervisory bodies about the views and interests of the key stakeholder groups.

Distinction between affected stakeholders and users of sustainability information

As part of the consultation, the stakeholders of the Rheinmetall Group were divided into affected groups and users of the Sustainability Statement. In the course of the double materiality analysis, at least one internal contact person was identified for each stakeholder group who is in regular contact with the stakeholders, knows their interests and viewpoints and is reasonably capable of providing information. The relevant topics of the stakeholder groups were then surveyed and collected on the basis of individual interviews. This ensures that the materiality analysis takes into account the potential impact of Rheinmetall's activities on stakeholders as well as the risks and opportunities that may arise for Rheinmetall through its stakeholders.

Social engagement and community involvement

Social acceptance is thereby an important prerequisite for the economic success of companies. Many Rheinmetall companies can look back on a long history. They have been connected with their sites for many years and are strongly rooted in the local community – after all, this is where their employees and business partners live. In some cases, major customers are based there. Rheinmetall is a living, breathing part of society and participates actively in it and not just in a financial sense. We get involved in the areas of education, sport and culture and also provide direct support for local social projects and charitable organizations. By adding value locally, we also contribute to regional development.

In this context, Rheinmetall has a long tradition of social engagement. It has always gone beyond the boundaries of the plant. Since the needs and opportunities in the vicinity of the sites where we operate vary greatly, the decision on which local project to support is incumbent on the respective management teams of the companies, the division heads or the Executive Board of Rheinmetall AG. As an expression of our social commitment and in close solidarity with the capital of North Rhine-Westphalia, we support a number of players in Düsseldorf sports. The cooperation between Rheinmetall and the sports city of Düsseldorf includes sports sponsorship of a handball league team. However, parts of the package also focus on promoting Olympic, youth and amateur sports as well as new trend sports. In addition, Rheinmetall has not only been a "Premium Partner" of the eighth German ice hockey master Dusseldorfer EG since 2024, but also a "Champion Partner" in the sporting and social environment of the German soccer Bundesligist Borussia Dortmund (BVB).

Sustainability management approach

We want to live up to our social responsibility, take advantage of growth opportunities and successively anchor ecological and social aspects even more firmly in our business activities. Sustainability management at Rheinmetall takes account of the precautionary principle. Any possible adverse impact on humans and the environment as a result of the Group's operating activities should be considered at an early stage and be excluded or reduced as far as possible. If we know the interests, positions, attitudes, opinions and concerns of our key stakeholders, we can focus our commercial decisions more effectively in line with their expectations. We have a very prominent presence in our markets and enjoy continual and lively dialog with various stakeholders, which include customers and business partners, private shareholders and institutional investors, employees, suppliers, representatives of the media, representatives of the worlds of science and research, society, politicians and authorities as well as representatives from associations and organizations.

We are committed to progressively reducing our environmental footprint, avoiding negative impacts of our business activities on the environment as far as possible and to implementing transformative changes that help protect our planet for the current society and future generations as well as enabling a more sustainable business for the benefit of our stakeholders.

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

Overview

The following impacts, risks and opportunities were identified in conjunction with the strategy and business model as part of the double materiality analysis. Due to different perspectives on actions already taken, the risks listed here may differ from those in chapter Risks and opportunities.

The following material impacts, risks and opportunities for the Rheinmetall Group were addressed by the administrative, management and supervisory bodies in the fiscal year:

E1 - Climate change

Impacts:

• Scientific studies have shown that greenhouse gas emissions accelerate climate change. Rheinmetall emits greenhouse gases in the categories Scope 1, 2 and 3 as part of its business activities.

Risks:

• The transition to renewable energies poses a challenge for all stakeholders. Potential energy price increases as part of the transition to renewable energy sources can lead to rising costs.
• Physical climate risks can cause possible consequences at Rheinmetall sites, such as damages to buildings, production facilities and infrastructure. The consequences of climate change can also include increasingly difficult access to resources, for example due to the interruption of supply chains.

Physical Climate Risks - Resilience Analysis:

In the fiscal year, Rheinmetall carried out a resilience analysis that went beyond the established risk management system and which considered both physical and transition risks along the entire value chain. Risks resulting from climate change are already beginning to emerge. These can be chronic and acute physical risks such as the rise in average temperature, rising sea levels, extreme weather events, heavily fluctuating water levels, increasing heat waves and droughts affecting property. Potential risks for production sites include production interruptions, delivery delays or delivery failures. These may be exacerbated by increasingly intense and frequent extreme weather events such as tornadoes and severe flooding.

Rheinmetall subjected its production sites to a comprehensive site-specific assessment, including consideration of material assets, by an external provider in the fiscal year in accordance with the parameters of the Task Force on Climate-Related Financial Disclosure (TCFD). The physical climate risks were assessed using an established scenario analysis based on the parameters of the Shared Socioeconomic Pathways (SSP). Specifically, the 2-°C scenario (SSP1-2.6) and the 4-°C scenario (SSP5-8.5) were used for the evaluation. The material risks of temperature changes, flooding, forest fires and tornadoes were identified using the 4°C scenario (SSP5-8.5) at the Rheinmetall sites.

The scenario analysis was carried out using geospatial coordinates with a granularity of 12 km in Europe and 25 km in the rest of the world. For the time horizon under consideration:

• Short-term: up to 2040
• Medium-term: 2041 to 2060
• Long-term: 2081 to 2100
• Reference period: 1971 to 2000

Rheinmetall's climate risk analysis focuses on a short-term observation period due to the increasing uncertainty in long-term climate scenarios.

Physical risks identified:

• In the upstream value chain: raw materials supply disruptions and disruption to the international transportation of goods were identified as a material physical risk in the medium term.
• In the downstream value chain: disruptions to the international transportation of goods and future conditions on the sales markets.

Transition Risks:

Transition risks from climate change arise from a cross-sector structural change due to the transition to a lower-carbon economy. They relate in particular to:

• Changes in the legal framework and stricter regulations at national or transnational level
• Increasing efforts by legislators to introduce carbon pricing via emissions trading systems, to levy additional taxes and to tighten energy legislation
• Increased GHG emissions can lead to a negative perception and limited attractiveness among stakeholder groups such as customers, employees and investors
• Climate protection measures entail potential risks, for example due to increased energy and investment costs, emerging levies for GHG emissions or extended specifications for products

An analysis of the transition risks was conducted internally in cooperation with the individual Rheinmetall divisions, during cross-divisional workshops and interdisciplinary workshops, literature research, peer benchmarks and detailed climate simulations. The 1.5 °C scenario up to 2050 was used to determine the transition risks. The applied period for the risk assessment is short- to medium-term.

Material transition risks identified:

• Volatility in the upstream value chain
• Increasing regulatory complexity
• Pricing of GHG emissions
• Recruitment of new employees and talent
• Technical requirements of a sustainable energy supply

Resilience Assessment:

In accordance with the assessment of the transition and physical climate risks, Rheinmetall currently assumes that the necessary adjustments to business operations can be carried out and that the financial effects can be mitigated by the Group. Strategic acquisitions, joint ventures and strategic cooperations are being examined in order to further expand our leading position in the security business. These established processes promote the development of sustainable technologies and products.

Opportunities:

Rheinmetall's target is to reduce the carbon footprint in production and the supply chain. The approach to climate change mitigation involves several stages, including the reduction of energy consumption, conversion to regenerative energy sources and reduction of GHG emissions in Scope 1, Scope 2 and Scope 3.

Rheinmetall is investing in product developments in the areas of electrification and fuel cells, among other things. New drive systems, powered by synthetic fuels, electricity or hydrogen will also play a major role in military vehicles in the future. With its expertise in the civilian business, Rheinmetall can also generate extensive synergies for developing military vehicles.

E2 - Pollution

Impacts:

Rheinmetall and the upstream and downstream value chain can potentially have a negative impact due to possible leaks and spills of refrigerants, oils and lubricants, solvents and other substances into the soil.

A large amount of land owned by Rheinmetall has been used for industrial purposes for decades. It can therefore not be ruled out that previously unknown contamination was caused during this time, e.g. by production processes. Process-related emissions into the soil represent a potential impact on humans and the environment despite compliance with the duty of care.

S1 - Own workforce

Positive Impacts:

• The positive influence of Rheinmetall extends to the topics of secure employment, training and skills development, appropriate remuneration, data protection and the prevention of violence and harassment in the workplace. The positive effects on employees and their working conditions include dialog with employee representatives and trade unions, respect for freedom of association and the conduct of collective bargaining.
• Equal opportunities, anti-discrimination and diversity in the workplace are core topics for the HR department.
• The expected growth in sales and earnings has a positive impact on the job security and remuneration of Rheinmetall's workforce.
• Corporate co-determination has a long-standing tradition at Rheinmetall.
• Work-life balance is a high priority for Rheinmetall.
• The existing skills and knowledge of employees at all Rheinmetall sites worldwide are of great importance for shaping future business, which is why employee qualifications are supported and promoted.
• Diversity is one of Rheinmetall's core values and, in times of transformation, a key factor for innovation and continuous growth.

Negative Impacts and Risks:

• Despite its best efforts, Rheinmetall has only limited insight into the specific needs of people with disabilities, as in many countries it is voluntary to disclose a health restriction. Systematic data collection on persons with disabilities is voluntary or only partially regulated by law in many countries. Without sufficient knowledge of such data at Rheinmetall, targeted inclusion measures are difficult.
• Rheinmetall proactively addresses the potential challenge of shift work necessary for operations by focusing on health and safety, flexible working time models and the reconciliation of work and private life. Necessary shift work at production facilities can have health and social effects and could thus lead to potentially negative impacts on the workforce.
• Transparent remuneration structures and the inclusion of job-specific and individual parameters serve to avoid a pay gap. Measured in terms of the gross hourly earnings of all female and male employees, there is a gender-specific income difference ("unadjusted pay gap") of 17.0%. This corresponds approximately to the statistical wage gap of 18% in 2023 as reported by the Federal Anti-Discrimination Agency.
• On the basis of abstract data analyses and in dialog with those responsible at site level, Rheinmetall has gained an understanding of the hazards of certain activities and sites. Work-related health hazards are typically more relevant to workers at manufacturing sites.
• Rheinmetall does not tolerate child or forced labor. Although there may be a risk of corresponding human rights risks in some countries in which Rheinmetall operates, Rheinmetall is not aware of any cases in its own area of activity. This confirms the effectiveness of the concepts, measures and controls. In countries such as India, South Africa, Brazil and Mexico, where Rheinmetall has sites, there is a theoretical risk of child and forced labor. However, both internal and external reviews show that this risk does not actually exist for employees at Rheinmetall. No activities have been identified at Rheinmetall that display an increased risk of child or forced labour.

Opportunities:

The implementation of Rheinmetall's ambitious growth-oriented corporate strategy, the achievement of its financial targets and its sustained economic success are supported, among other, by highly qualified employees from a wide range of disciplines.

S2 - Workers in the value chain

Impacts:

The purchase of materials for which raw materials are mined in countries with existing human rights risks can have potential negative impacts on workers in the value chain.

Risks:

Potential human rights violations within the deeper supply chain can pose risks. Potential risks lie in the far upstream value chain at Tier N level of the suppliers. Due to the complexity of the supply chain, risks cannot be quantified at present.

S4 - Consumers and end-users

Positive Impacts:

Rheinmetall ensures a high level of safety for end users (e.g. soldiers in the armed forces) with its innovative products in the field of protected vehicles and complementary protection systems for military applications, thus increasing the personal safety of end users overall.

The products of the Rheinmetall Group are intended to ensure the protection of end-users, so that both actual and potential impacts exist in this context. In the defence technology sector, development, production and service activities are geared towards ensuring the best possible protection for soldiers.

G1 - Business conduct

Impacts:

• Rheinmetall does not tolerate any damage to its reputation as a result of illegal or unethical behavior.
• The whistleblower system enables anonymous complaints and thus contributes, for example, to the fight against corruption.
• The Supplier Code of Conduct defines the rules for working with suppliers in order to minimize human rights and environmental risks, among other things.
• Rheinmetall is promoting employee knowledge in various subject areas, such as key aspects of corporate culture, the prevention of corruption and bribery, and the reduction of the risk of cyber attacks, by means of training measures, guidelines and internal information dissemination.

Risks:

Possible risks can arise from corruption, from damage caused by cyber attacks or from the vulnerability of supply chains.

Linkage to Strategy and Business Model

The sustainability-related elements of the corporate strategy can be found in the chapter Strategy of the annual report.

Rheinmetall's target is to reduce the carbon footprint in production and the supply chain. The approach to climate change mitigation involves several stages, including the reduction of energy consumption, conversion to regenerative energy sources and reduction of GHG emissions in Scope 1, Scope 2 and Scope 3.

The energy demand at Rheinmetall sites is increasingly being supplied by renewable energies. Rheinmetall is reshaping its energy supply worldwide and is striving, among other things, for a renewable electrical energy supply in the coming years. Rheinmetall is focusing on the use of renewable energies at newly established sites and is continuously promoting the switch to renewable energy sources at existing sites. The successive expansion of the certified energy management system to new production sites is planned.

In Scope 1 and Scope 2, Rheinmetall is focusing on a constant reduction in GHG emissions with the target of achieving carbon neutrality in 2035. Despite all efforts, Rheinmetall will emit greenhouse gases in Scope 1 and Scope 2 after 2035. Rheinmetall plans to offset these emissions in part by investing in certified carbon sequestration projects.

Rheinmetall has surveyed CO₂ emissions in the supply chain (Scope 3, Cat. 1) and identified potential for reduction. Rheinmetall is in contact with its suppliers regarding this topic. Emissions from the upstream value chain should be an integral part of the procurement strategy in the future. The integration of the Supplier Code of Conduct into supplier contracts should lead to further information regarding emissions in the supply chain for Rheinmetall and enable an expansion of sustainable efforts.

Emissions from the use of the manufactured products (Scope 3 Cat. 11) account for a significant proportion of Rheinmetall's total emissions. Rheinmetall's sphere of influence on the downstream value chain is limited due to the customer relationship with states and governments.

Material IROs Not Assessed

The following were assessed as not material:

• E3 Water and Marine Resources
• E4 Biodiversity
• E5 Circular economy
• S3 Affected communities

E4 Biodiversity: The Rheinmetall Group has sites in the vicinity of biodiversity sensitive areas. During an investigation, it was determined that no corrective measures need to be taken with regard to these areas.

E5 Circular economy: The actual and potential impacts, risks and opportunities in connection with the use of resources and the circular economy were considered as part of the materiality analysis. This includes resource inflows, resource outflows and waste along the entire value chain and within the framework of the Rheinmetall Group's own business activities.

S3 Affected communities: The sustainability information with regard to affected communities is part of this Sustainability Statement on the basis of Section 289c German Commercial Code. We want to live up to our social responsibility, take advantage of growth opportunities and successively anchor ecological and social aspects even more firmly in our business activities.

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

Overview of the process

Based on the material impacts, risks and opportunities, the decisive, central topics for the Rheinmetall Group were defined in various workshops with representatives from all Rheinmetall segments.

In order to identify potential impacts, risks and opportunities in the context of the Rheinmetall Group's own business activities and along its upstream and downstream value chain, water risk analyses were carried out in connection with water and marine resources using the Aqueduct water risk atlas.

Value chain mapping

The assessment considered actual and potential impacts, risks and opportunities along the entire value chain and within the framework of the Rheinmetall Group's own business activities, including resource inflows, resource outflows and waste.

The identification process covered the Rheinmetall Group's own business activities and along its upstream and downstream value chain.

Inputs to the assessment

• Representatives from all Rheinmetall segments participated in workshops
• Aqueduct water risk atlas was used for water risk analyses
• The Group's existing risk management system was utilized
• Consultations with affected communities on sustainability assessments were not carried out

Determination of materiality

The material sustainability matters for the Rheinmetall Group were identified based on the material impacts, risks and opportunities identified by thresholds. The resulting disclosure requirements were determined on the basis of the materiality of the information. To this end, the contents of the material impacts, risks and opportunities were compared with the disclosure requirements of the ESRS at data point level.

Result of double materiality assessment

The following topics have emerged as material for the Rheinmetall Group:

• E1 Climate change
• E2 Pollution
• S1 Own workforce
• S2 Workers in the value chain
• S4 Consumers and end-users
• G1 Business Conduct

The following were assessed as not material:

• E3 Water and Marine Resources

For E3 Water and Marine Resources and E5 Circular economy, it was determined that no corrective measures need to be taken with regard to these areas.

Transition plan for climate change mitigation

Overview

A transition plan to achieve carbon neutrality by 2050 is being drawn up and is expected to be published when the European Corporate Sustainability Due Diligence Directive (CSDDD) comes into force. At Rheinmetall, the careful use of natural resources and the economical use of energy is of great importance. Corresponding goals are already being pursued and comprehensive actions are being taken.

Scope of the plan

Carbon neutrality scope: Carbon neutrality refers to CO2 emissions within the company in a first step (Scope 1) as well as emissions from the generation of purchased energy (Scope 2). The company also plans to further reduce Scope 3 emissions – e.g. in the supply chain and to a certain extent from the use phase – in the medium to long term.

Entities covered: The defined reduction targets include the greenhouse gases regulated in the Kyoto Protocol and refer to Scopes 1 and 2 (market-based) in all companies in which Rheinmetall has operational control.

Target year for net zero / carbon neutral

2035: Carbon neutrality by 2035 for Scope 1 and Scope 2 (market-based)

2050: Carbon neutrality by 2050 (overall transition plan)

Climate alignment and validation

Paris Agreement alignment: As a long-standing company, Rheinmetall supports the 2015 Paris Climate Agreement's goal of limiting global warming to below 2°C, or even better to 1.5°C, by 2100 compared with the pre-industrial era (1850).

SBTi validation status: Rheinmetall's limited sphere of influence on the downstream value chain (Scope 3) does not enable a comprehensive target definition that envisions compliance with the 1.5°C target. As a result of the undefined targets for Scope 3, Rheinmetall is not yet striving for complete carbon neutrality; hence no external validation of the reduction targets has been carried out.

More ambitious than EU timeline: The target of carbon neutrality in Scope 1 and 2 (market-based) by 2035 is more ambitious for these scopes than the European Union's timeline for carbon neutrality by 2050.

Reduction milestones and targets

Base year: 2022 (chosen as it is the most accurate reflection of the status quo)

Scope 1 + 2 reduction targets:

• Average annual reduction in CO₂ emissions of 4.2% combined in Scopes 1 and 2 (market-based) in relation to the base year 2022
• By 2030: emissions expected to fall to 163,893 tons of CO2e (from the 2022 base year, with 4.2% annual reduction)
• Fiscal year 2024 performance: Sum of Scope 1 and Scope 2 emissions (market-based) amounted to 209,699 tons of CO2e
• Average reduction in Scope 1 and Scope 2 emissions (market-based) in the fiscal year is 7.5% in relation to the base year

Energy reduction target:

• Recertification of existing energy management systems requires an annual, measure-oriented reduction in energy consumption of 1.7% in relation to the base year 2022

Renewable energy target:

• Striving to procure electricity from 100% renewable energy sources in the coming years

Scope 3: No specific reduction targets defined for Scope 3. Emissions from the use of the manufactured products (Scope 3 Cat. 11) account for a significant proportion of Rheinmetall's total emissions. The company's sphere of influence on the downstream value chain is limited due to the customer relationship with states and governments.

Key decarbonization levers

The main decarbonization levers for achieving the CO2 reduction targets are:

1. Reduction in energy consumption: Expected reduction of 29,309 tons of CO2e
2. Switch to renewable energy sources in electricity procurement: Expected reduction of 43,475 tons of CO2e
3. Substitution of fossil fuels: Expected reduction of 9,150 tons of CO2e

Total expected reduction: The actions currently being considered are expected to lead to a reduction of Scope 1 and Scope 2 emissions (market-based) by 82,934 tons of CO2e.

Renewable energy procurement strategy

• Strategic Energy Procurement department develops foundations for unified, economical, secure and sustainable energy procurement
• Strategy envisages switching individual countries and regions gradually to renewable energy
• Goal: convert entire electrical energy consumption to renewable sources in the medium term through long-term energy supply contracts with direct connection at sites and expanding in-house generation
• 2024 performance: Purchase of renewable electricity increased from 67,068 MWh in 2023 to 138,221 MWh in 2024
• Gradual conversion to 100% renewable electrical energy planned over the next few years

Energy management

• Energy Management Guideline specifies implementation, monitoring and further development of the energy management system
• Sites of fully consolidated companies with energy consumption > 3,500 MWh per year are obligated to implement energy management system in accordance with ISO 50001 standard
• Production sites certified in accordance with energy management guidelines account for 45.9% of total energy consumption
• Goal: increase the share of certified sites in total consumption to over 80.0% by end of 2025

Product-related initiatives

Vehicle electrification and alternative fuels:

• Investing in product developments in areas of electrification and fuel cells
• New drive systems powered by synthetic fuels, electricity or hydrogen will play a major role in military vehicles in the future
• Expertise in civilian business generates synergies for developing military vehicles

Actions implemented

Fiscal year 2024:

• Photovoltaic system with maximum output of 5 MWp put into operation in South Africa; other installations currently being planned
• Wood chip plant at Unterlüß site enables use of wood from own forest stock for heat supply (defossilization)
• Plan to supply new sites and expansions primarily with carbon neutral renewable energy sources
• Measures implemented led to reduction in GHG emissions by 7,360 tons of CO2e in fiscal year
• Expected reduction in GHG emissions in future due to measures carried out in fiscal year: 9,384 tons of CO2e annually

Supply chain initiatives

• Software solution to be implemented to collect suppliers' GHG emissions in more detail
• Revised Supplier Code of Conduct incorporated into supply contracts to enable compliance with sustainability-related requirements in supply chain
• Suppliers required to mitigate climate change, comply with national environmental laws, use energy management systems and ensure energy efficiency

Investment and resources

• Investments will be covered from ongoing operations budget and necessary resources will be provided
• Threshold for significant investments derived from risk management: €20 million in fiscal year (not exceeded by any individual investment)
• Corporate Social Responsibility department and Energy Management department work on Group-wide monitoring and deriving measures to achieve climate targets
• ESG managers from individual divisions support the process
• Local energy officers appointed at each site with significant energy consumption

Governance and monitoring

• Executive Board of Rheinmetall AG sets the targets for GHG emissions (defined in total for Scope 1 and Scope 2 market-based method)
• Regular reviews regarding progress of renewable energy procurement carried out by Corporate Social Responsibility department
• Department reports directly to Executive Board of Rheinmetall AG
• Progress is continuously tracked and reported to Executive Board
• Energy Management Policy adopted by Executive Board

Physical and transition risk analysis

• Rheinmetall has analyzed physical and transitory climate risks along entire value chain
• Climate change adaptation not yet defined in corresponding guidelines
• Executive Board has decided to examine these risks further and mitigate them if necessary

EU Taxonomy alignment

Rheinmetall supports the general objectives of the EU agenda for financing the transition to a sustainable economy and reports on its business activities classified as taxonomy-eligible or taxonomy-compliant in the categories of sales, CapEx and OpEx.

Policies related to climate change mitigation and adaptation

Rheinmetall addresses climate change mitigation and adaptation through several policies and guidelines, though a comprehensive dedicated climate policy is not yet fully established.

Energy Management Policy

• Approval and oversight: Adopted by the Executive Board of Rheinmetall AG
• Key content: The policy governs the implementation, monitoring and further development of the energy management system across the Group
• Scope: Sites of fully consolidated companies with an energy consumption of more than 3,500 megawatt hours (MWh) per year are obligated to implement an energy management system in accordance with ISO 50001 standard
• Monitoring: Regular reviews regarding the progress of renewable energy procurement are carried out by the Corporate Social Responsibility department as part of its review concerning compliance with GHG reduction targets. The department reports directly to the Executive Board of Rheinmetall AG

Energy Management Guideline

• Key content: Specifies the implementation, monitoring and further development of the energy management system; sites with significant energy consumption must appoint local energy officers for continuous recording of energy data and local implementation of specified actions
• Scope: Production sites with energy consumption above defined thresholds
• Target: By the end of 2025, the goal is to increase the share of certified sites in total consumption to over 80.0%

Supplier Code of Conduct (climate-related provisions)

• Key content: Suppliers are required to mitigate climate change and comply with applicable national environmental laws, regulations and standards; suppliers must ensure effective environmental protection, the use of energy management systems and energy efficiency
• Scope: All suppliers
• Monitoring: The revised Supplier Code of Conduct from the fiscal year is to be incorporated into supply contracts; a software solution is to be implemented to collect suppliers' GHG emissions in more detail

Climate change adaptation

Rheinmetall has not yet defined climate change adaptation in corresponding guidelines. However, the Executive Board of Rheinmetall AG has decided to examine physical and transitory climate risks further and mitigate them if necessary. Physical and transition risks have been analyzed along the entire value chain.

Governance structure

• Oversight: The Executive Board of Rheinmetall AG sets the GHG emission targets for Scope 1 and Scope 2 (market-based method)
• Implementation: The Corporate Social Responsibility department and Energy Management department work on Group-wide monitoring and deriving measures to achieve climate targets, supported by ESG managers from individual divisions
• Reporting: Progress is continuously tracked and reported to the Executive Board of Rheinmetall AG

Transition plan status

A transition plan to achieve carbon neutrality by 2050 is being drawn up and is expected to be published when the European Corporate Sustainability Due Diligence Directive (CSDDD) comes into force.

Targets related to climate change mitigation and adaptation

Rheinmetall's overarching goal concerning climate change mitigation is carbon neutrality by 2035 in Scope 1 and Scope 2 (market-based).

Core Group-wide Targets

Progress to Date (Fiscal Year 2024)

Additional Details

Geographic scope: All companies in which Rheinmetall has operational control

GHGs covered: All greenhouse gases regulated in the Kyoto Protocol

Decarbonization approach: The main decarbonization levers are:

• Reducing energy consumption
• Switching to renewable energy sources in electricity procurement
• Substitution of fossil fuels

Planned actions to achieve targets:

• Reduction of energy consumption: 29,309 tons CO₂e
• Switch to renewable energy: 43,475 tons CO₂e
• Substitution of fossil fuels: 9,150 tons CO₂e
• Total expected reduction from current actions: 82,934 tons CO₂e

Base year adjustment policy: The base year 2022 is continuously adjusted for acquisitions and sales affecting Scope 1 and 2 emissions (location-based) by at least 5%. No climate-related adjustment is made due to production-dependent nature of energy consumption.

Scope 3: Rheinmetall has not defined comprehensive Scope 3 reduction targets due to limited sphere of influence on the downstream value chain. The company does not yet strive for complete carbon neutrality across all scopes.

Energy consumption and mix

Total energy consumption

Total energy consumption (2024): 1,218,419 MWh (continuing operations)

Total energy consumption (2023): 943,479 MWh (continuing operations)

Energy consumption by source

Note: The figures relate to continuing operations only. Nuclear energy consumption is not separately disclosed but may be included within non-renewable electricity purchases. Coal and crude oil derivatives are not separately itemized.

Energy intensity

Energy intensity (continuing operations): 125 MWh per € million revenue (2024)

Energy intensity (continuing operations): 131 MWh per € million revenue (2023)

Methodology note

Scope covers continuing operations of the Rheinmetall Group. Energy consumption is calculated based on fuel consumption records, electricity invoices, and district heating invoices. Renewable electricity represents purchased electricity from certified renewable sources. The increase in total energy consumption reflects business growth and acquisitions (notably Loc Performance in 2024).

Gross Scopes 1, 2, 3 and Total GHG emissions

Not disclosed.

The excerpts provided do not contain ESRS E1-6 (or the former E1-8) disclosure of Scope 1, 2, 3, and Total GHG emissions for Rheinmetall. While the excerpts reference climate change as a material topic and mention greenhouse gas emissions in general terms, no quantitative emissions data (Scope 1, Scope 2 market-based or location-based, Scope 3 by category, or total GHG emissions) are presented in the sections provided. The double materiality analysis identifies E1 Climate Change as material, but the actual emissions inventory tables are not included in the excerpted pages.

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

Assessment of materiality

According to the materiality assessment table, the following E1-9 datapoints are assessed as not material:

• ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks (paragraph 66)
• ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk (paragraph 66 (a))
• ESRS E1-9 Location of significant assets at material physical risk (paragraph 66 c))
• ESRS E1-9 Breakdown of the carrying value of its real estate assets by energy-efficiency classes (paragraph 67 c))
• ESRS E1-9 Degree of exposure of the portfolio to climate-related opportunities (paragraph 69)

Physical risks

Material physical risks identified

In the upstream value chain, the raw materials supply disruptions and the disruption to the international transportation of goods were identified as a material physical risk in the medium term. The material potential physical climate risks in the downstream value chain concern disruptions to the international transportation of goods and future conditions on the sales markets.

Methodology

The risk analysis carried out is based on the results of the external climate risk analysis and, in addition, on publications of the German Federal Environment Agency regarding physical climate risks.

Financial effects

The financial effects of climate risks have not been analyzed yet; a more in-depth analysis is required with regard to the climate risks identified.

Transition risks

Material transition risks identified

The material transition risks identified are:

• Volatility in the upstream value chain
• Increasing regulatory complexity
• The pricing of GHG emissions
• The recruitment of new employees and talent
• The technical requirements of a sustainable energy supply

Methodology

An analysis of the transition risks was conducted internally in cooperation with the individual Rheinmetall divisions, during cross-divisional workshops and interdisciplinary workshops, literature research, peer benchmarks and detailed climate simulations.

Scenario used: The 1.5 °C scenario up to 2050 was used to determine the transition risks.

Time horizon: The applied period for the risk assessment is short- to medium-term in line with the previous definition.

Uncertainties: The analysis carried out corresponds to the current state of scientific knowledge and the assumptions made include the 1.5 °C scenario, which is particularly severe in terms of transition risks, with moderate uncertainties due to the medium-term time horizon.

Assessment of assets and business activities

A detailed assessment of the extent to which the assets and business activities of Rheinmetall may be affected by identified transition risks is still pending.

Financial effects

In accordance with the assessment of the transition and physical climate risks, Rheinmetall currently assumes that the necessary adjustments to business operations can be carried out and that the financial effects can be mitigated by the Group.

Strategic acquisitions, joint ventures and strategic cooperations are being examined in order to further expand our leading position in the security business. These established processes promote the development of sustainable technologies and products. Analyses that are more extensive will be carried out as knowledge increases.

CapEx implications

Energy and emissions reduction investments

Rheinmetall plans to supply new sites and expansions of production sites primarily with carbon neutral renewable energy sources. The investments will be covered from ongoing operations budget and the necessary resources will be provided.

Investment threshold: The threshold for significant investments derived from risk management was €20 million in the fiscal year and was not exceeded by any individual investment.

Recent investments

In the fiscal year, a photovoltaic system with a maximum output of 5 MWp was put into operation in South Africa. Other installations are currently being planned.

GHG reduction achieved

The measures implemented in the fiscal year led to a reduction in GHG emissions by 7,360 tons of CO₂ equivalents (CO₂e) in the fiscal year. The expected reduction in GHG emissions in the future due to the measures carried out in the fiscal year amounts to 9,384 tons of CO₂e annually.

Comprehensive CapEx plan

A comprehensive CapEx plan is not available.

Transition plan

A transition plan to achieve carbon neutrality by 2050 is being drawn up and is expected to be published when the European Corporate Sustainability Due Diligence Directive (CSDDD) comes into force.

Policies related to pollution

The provided excerpts do not contain any substantive content regarding policies related to pollution (ESRS E2-1). While the document structure table indicates that E2-1 'Policies related to pollution' is addressed in the Environment chapter under the Pollution section, and it is referenced in the list of datapoints derived from other EU legislation, the actual policy content is not included in the excerpts provided.

The excerpts primarily contain:

• A table of contents showing that E2-1 is a disclosure requirement
• References to pollution-related disclosure requirements (E2-1, E2-2, E2-3, E2-4)
• General information about EU Taxonomy and sustainable finance

No specific pollution policies, their names, scope, governance structures, content, or implementation mechanisms are disclosed in the provided text.

Pollution of air, water and soil

Pollution of soil

To identify soil pollution in the fiscal year, the environmental management officers at Rheinmetall's production sites assessed the emissions into the soil. The relevant soil emissions and their threshold values are defined in the European Pollutant Release and Transfer Register (E-PRTR regulation, Annex 2 (EC Regulation 166/2006)). Emissions are recorded in accordance with the measurement, calculation and estimation methods permitted under the E-PRTR regulation. If the emissions determined for a site are below the threshold values or no emissions are known, the environmental management officer of the respective site reports no pollutant emissions into the soil and documents this accordingly.

In the fiscal year, no pollutant emissions into the soil were recorded at Rheinmetall's sites that exceeded the threshold values of the E-PRTR Regulation. In accordance with the previously defined recording methodology, this results in a zero report for all pollutant loads into the soil, which is why the pollutant loads into the soil are not presented in tabular form.

Soil remediation activities

As part of construction activities to expand production capacities, as well as acquisition activities, the soil is analyzed in advance in accordance with local regulations and any necessary soil remediation is carried out. During soil remediation, layers of soil containing pollutants such as heavy metals, mineral oil or polycyclic aromatic hydrocarbons (PAHs) are removed and replaced with uncontaminated soil. Soil remediation work was carried out at Rheinmetall sites in the fiscal year. Accounting provisions have been recognized for necessary measures to safeguard against or clean up identified pollution.

Process and methodology

The necessary procedure in the event of a leakage is documented in an operating instruction associated with workplaces, which identifies internal and external reporting points as well as immediate measures. If contamination of the soil due to leaks and spillages cannot be ruled out, the soil is sampled by an external expert in order to assess the extent of possible contamination. On test sites, an estimate of soil pollution is made by experts as part of the regular operation of testing products due to the low level of contamination, which is subject to minor uncertainties.

E-PRTR Regulation compliance

The company reports emissions in accordance with the E-PRTR Regulation (Annex 2, EC Regulation 166/2006). All emissions at Rheinmetall sites remained below the E-PRTR threshold values, resulting in zero reportable emissions to air, water, and soil for the fiscal year.

Policies related to own workforce

Rheinmetall has established multiple policies governing its own workforce, reflecting the company's commitment to responsible employment practices and human rights. The following policies and frameworks apply:

Code of Conduct

• Scope: Applies to all Rheinmetall employees globally
• Key content: Contains binding rules on human rights, anti-corruption, compliance, and adherence to competition and antitrust law. Addresses child labor (strictly prohibited), forced labor, human trafficking, and freedom of association
• Links to standards: Supports compliance with ILO Conventions, UN Global Compact principles
• Implementation monitoring: Mandatory training for all employees; regular surveys conducted by Compliance department using "Ethical" tool covering compliance topics every two months for all operating companies

Global Framework Agreement on Principles of Social Responsibility (FAIR2ALL)

• Scope: Applies to all Rheinmetall companies in Germany and abroad where Rheinmetall exercises industrial management; commitment to apply comparable rules in minority-interest companies
• Governance: Signed on October 12, 2018 by the Executive Board of Rheinmetall AG, European Works Council, and IndustriAll Global Union
• Key content: Regulations for respecting human rights, prohibition of child and forced labor, safe and healthy working conditions, compliance with statutory working time regulations and ILO conventions, granting of public holidays and paid leave
• Links to standards: Based on ILO conventions and fundamental labor rights
• Implementation monitoring: Applied through works councils and employee representative structures; reviewed in regular meetings between Executive Board and European Works Council

Declaration of Principles on Respect for Human Rights and the Environment

• Scope: Applies group-wide
• Key content: Published in December 2023 (Version 1.0) pursuant to Section 6(2) of the German Supply Chain Due Diligence Act (LkSG); covers human rights commitments, working conditions principles, prohibition of child and forced labor, working hours organization
• Governance: Overseen by Group Social Compliance Officer (appointed by Executive Board)
• Links to standards: Complies with German Supply Chain Due Diligence Act requirements, references ILO Convention 138 on minimum employment age
• Implementation monitoring: Risk management system for compliance with due diligence obligations; regular reporting to Executive Board by Group Social Compliance Officer

Diversity Policy

• Scope: Applies throughout Rheinmetall Group
• Key content: Established in 2017; stipulates that no one may be treated unfairly or discriminated against based on nationality, skin color, ethnic or social origin, marital/family status, pregnancy, religion, age, disability, appearance, sexual orientation, ideology, political opinion, gender, or membership in unions/political parties. Key topics include generations, cultures, and gender
• Links to standards: Aligned with Diversity Charter (Charta der Vielfalt e.V.) signed in 2017; supports German General Act on Equal Treatment
• Implementation monitoring: Promotion of open, inclusive corporate culture; oversight by HR department

Inclusion Agreement

• Scope: Applies to Rheinmetall AG and German group companies
• Governance: Concluded on September 26, 2023 between Rheinmetall AG, the Rheinmetall Group Representative Body for Severely Disabled Employees, and the Group Works Council
• Key content: Aims to improve professional inclusion of persons with disabilities and support their integration in the workforce; strives to achieve employment quota for persons with disabilities
• Implementation monitoring: Representation through Group Representative Body for Severely Disabled Employees and Local Representative Bodies

Occupational Health and Safety Policy

• Scope: All Rheinmetall companies with more than 100 employees required to implement certified management system by end of 2024; previously sites with more than 400 employees
• Governance: Decision by Executive Board of Rheinmetall AG in 2022 to extend ISO 45001 certification
• Key content: Ensures occupational safety and health protection, safe and healthy working environment, minimization of risks and hazards, continuous improvements to working environment, provision of ergonomic aids and protective equipment, prevention programs and health promotion measures
• Links to standards: ISO 45001 certification required; based on Luxembourg Declaration on promotion of occupational health
• Implementation monitoring: External certification audits; Framework Agreement on Health Management between Executive Board and European Works Council; Think Healthy Committee coordinates group-wide health management strategy; local health coordinators at sites

Data Protection Policy

• Scope: Applies to all Rheinmetall companies worldwide
• Governance: Defined by Executive Board of Rheinmetall AG; supported by data protection manual
• Key content: Ensures protection of personal data, compatibility of operational requirements with data subject interests, compliance with GDPR as standard across all operations (regardless of geography), rights to information, correction, blocking or deletion of personal data
• Implementation monitoring: Data Protection Management System (DSMS); data protection officers throughout organization; regular training for employees handling personal data (at least every three years)

Remuneration and Adequate Wages Policy

• Scope: All Rheinmetall employees
• Key content: Regular base salary established on market basis considering qualification, experience, and area of responsibility; may be supplemented by additional components per employment regulations; transparent remuneration structures including job-specific and individual parameters to avoid pay gap; where no statutory or collective regulations exist, based on market conditions; written or digital pay slips provided showing wages, benefits, and deductions
• Links to standards: Supports fair wage principles
• Implementation monitoring: Through HR department and works councils; Group works agreements on topics including company pension schemes and profit-sharing

Position Paper on Transformation and Internationalization

• Scope: All Rheinmetall companies and sites in Europe
• Governance: Adopted on July 6, 2022 by Executive Board of Rheinmetall AG and European Works Council
• Key content: Principles for securing sites and employment, use of political framework conditions, impacts of new technologies and alternative products, skills development, demographic change, internationalization impacts; provides for transparent presentation of production and location strategies at annual European Works Council meetings; supports socially responsible approach to structural changes; promotes employee development and qualification for transformation
• Implementation monitoring: Annual review at European Works Council meetings; quarterly meetings between Group Works Council Executive Board and Director for Industrial Relations

Corporate Philosophy

• Scope: Group-wide
• Key content: Defines vision, mission, and corporate values of respect, trust, and openness
• Implementation monitoring: Integrated into all HR policies and practices

Workplace Accident Prevention Policy

• Scope: All production sites and operational facilities
• Key content: Part of certified environmental and occupational health management systems; includes emergency precautions and hazard prevention
• Links to standards: ISO 45001
• Implementation monitoring: Regular audits as part of certification process

Human Trafficking Prevention

• Scope: Group-wide
• Key content: Prohibition against human trafficking explicitly addressed in Code of Conduct; processes and measures defined for preventing trafficking in human beings
• Links to standards: Complies with international human rights frameworks
• Implementation monitoring: Covered in Code of Conduct training; oversight by Compliance department

All policies are overseen by the Executive Board of Rheinmetall AG, with operational responsibility distributed across relevant departments including Human Resources, Compliance, Corporate Social Responsibility, and Corporate Social Integrity. The Director for Industrial Relations bears responsibility for ensuring dialog results with employee representatives are considered in HR strategy. Policies are made accessible to employees through the Group intranet in German and English.

Taking action on material impacts on own workforce

Compliance Management System

Scope: Own operations

Actions and programmes:

Training programmes and consulting

• Compliance awareness training: Annual training for employees at domestic and foreign sites covering:

  • General compliance topics
  • Prevention of corruption and bribery
  • Conflicts of interest
  • Money laundering
  • Forms of fraud by e-mail or telephone through third parties
  • Export control
  • Antitrust and competition law

• Target group: Focus on employees with contact to business partners and those who can directly or indirectly influence selection decisions (indirect area employees at higher risk)

• Anti-corruption and bribery training:

  • Web-based and face-to-face sessions
  • Mandatory training lasting approximately one hour
  • Covers definition, reasons, effects, and procedures for dealing with suspected cases
  • Target: 100% of employees in risk-prone functions within a three-year period
  • 2024 performance: 38.0% of employees in risk-prone functions participated in face-to-face or remote sessions
  • Executive Board participates in general training activity
  • Supervisory Board has access to training opportunities (discretionary)
  • Annual information to Supervisory Board Audit Committee by Chief Compliance Officer

• Data protection training:

  • eLearning for all own workers who regularly work with personal data at least every three years
  • Individual department-specific training for areas subject to specific requirements
  • General data protection training part of onboarding for new employees
  • New e-learning module rolled out in fiscal year 2024
  • Available in numerous languages
  • Ad hoc data protection advice provided at all company levels

Social Compliance (LkSG - German Supply Chain Due Diligence Act)

Governance structure:

• Group Social Compliance Officer (Human Rights Officer) appointed by Executive Board as Group Compliance Officer
• Heads the Social Compliance Office
• Supported by Social Compliance Manager at Group level and Social Compliance Officers in divisions and subsidiaries

Risk management system:

• Maintains risk management system for compliance with due diligence obligations
• Includes risks in supply chain and own business unit
• Defined responsibilities anchored in all relevant areas and business processes
• Defined escalation processes for preventive measures and remedial action
• LkSG Steering Committee meets regularly under Group Social Compliance Officer leadership
• Regular and ad hoc reporting to Executive Board

Topics addressed:

• Prevention of child and forced labor
• Occupational health and safety
• Right to organize and freedom of association
• Enforcing and respecting human rights
• Prohibition of unequal treatment in employment

Whistleblower System ("Integrity Line")

Features:

• Electronic whistleblower platform implemented throughout the Group
• Multiple reporting channels:
  • Direct contact with compliance organization
  • Email to speakup@rheinmetall.com
  • Telephone contact with specialist compliance officer
  • Contact with ombudsperson by telephone or e-mail
• Available to own workers and external parties

Protection measures:

• Strict confidentiality of personal identities
• Only authorized persons have access to whistleblower data
• Internal ban on disclosure to non-involved persons
• Limited technical access rights
• Presumption of innocence for investigated employees
• Systematic analysis of received information

Process:

• Manual for Rheinmetall whistleblower system ensures independent, transparent and fair handling
• Standardized processing of compliance cases
• Systematic follow-up checks based on internal incident management guideline
• Legal certainty for investigations balancing employee and employer interests

Compliance Due Diligence (CDD)

Scope: Own operations (workforce screening)

Activities:

• Central CDD center of expertise conducts pre-employment checks on applicants for key positions
• Focus on determining legal permissibility and identifying attributable people
• Assessment of conflicts of interest
• Evaluation of general performance and integrity

Regulation Management

Governance:

• Executive Board issues internal regulations for Rheinmetall Group
• Regulation Management based in Central Compliance department
• Regulation Management Manual available for standardized procedures

Accessibility:

• Central list of regulations available on Group intranet
• Available in German and English (Group languages)
• Continuously updated summary for quick overview

Resources Allocated

Non-financial resources:

• Group Social Compliance Officer and Social Compliance Office
• Social Compliance Manager at Group level
• Social Compliance Officers in divisions and subsidiaries
• LkSG Steering Committee with representatives from specialist departments
• Chief Compliance Officer
• Central Compliance Due Diligence (CDD) center of expertise
• Ombudsperson function
• Authorized compliance personnel for whistleblower system

Note: No specific financial resources (capex/opex) quantified for these actions.

Characteristics of the undertaking's employees

Total headcount and FTE

Human Resources (FTE as of December 31)

Annual average number of employees (FTE)

Headcount by division

As of 31 December 2024, the Rheinmetall Group employed well over 34,000 people (FTE 28,539). The report states the Group "currently employ[s] well over 34,000 people" and aims to employ up to 40,000 people worldwide by 2028 at the latest.

Employees in research and development

Personnel indicators

Notes on scope

• The disposal of the small-bore pistons business was completed on April 15, 2024, affecting discontinued operations headcount
• Sensors and Actuators and Materials and Trade divisions were combined to form Power Systems effective January 1, 2024
• The increase in total employees in the Group resulted from the rise in the number of employees in the security technology and defence sectors
• In fiscal 2024, the Group grew significantly in personnel terms as a result of capacity increases

Gender, contract type, and turnover data

No gender breakdown, contract type breakdown (permanent/temporary), employment type breakdown (full-time/part-time), turnover rates, or new hire data are disclosed in the provided excerpts.

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

Definition of own workforce

Rheinmetall's workforce comprises people who are employed by Rheinmetall ("employees") as well as non-employees, such as self-employed persons and contingent workers.

Disclosure

No quantitative data on non-employee workers in Rheinmetall's own workforce has been disclosed. The company acknowledges that non-employees such as self-employed persons and contingent workers form part of the own workforce within the meaning of ESRS, but does not provide:

• Number of non-employee workers
• Breakdown by type (contractor, agency, self-employed)
• Methodology for counting (headcount vs FTE)
• Multi-year comparisons

Collective bargaining coverage and social dialogue

Collective bargaining coverage

The percentage of employees in Germany covered by collective agreements is 58.4%. In addition, all employees in Germany are represented by employee representatives.

Works council and social dialogue arrangements

Rheinmetall has established comprehensive social dialogue structures:

Germany:

• The majority of Rheinmetall companies in Germany have local works councils, several general works councils and a Group works council as well as economic committees
• The formation and participation rights of German works council committees are governed by the German Works Constitution Act
• The meetings of the Group Works Council as a whole take place several times a year
• The Group Works Council currently has specialist committees on: pensions, profit-sharing, performance-related remuneration, HR management, health management (Germany) and information and communication technology
• Quarterly meetings are held between the Group Works Council Executive Board, the Director for Industrial Relations and the relevant central department

European level:

• European Works Council meets annually for a one-week meeting
• A meeting of the Executive Committee of the European Works Council (currently three delegated members from German sites and two members from international sites) is held four times a year
• The European Works Council has project groups that meet twice a year on topics including health management (global) and transformation and internationalization
• The Deputy chairman of the European Works Council is a member of the Supervisory Board

Supervisory Board:

• In the Supervisory Board of Rheinmetall AG, which is based on joint representation, the employees of the German companies are represented by two elected trade union representatives, five elected workers' representatives and one elected representative of the managerial staff
• Workers' representatives are also members of the existing Supervisory Boards of the German group companies

Global framework agreement

On October 12, 2018, the Executive Board of Rheinmetall AG and the European Works Council (EWC) signed a global framework agreement on the principles of social responsibility (FAIR2ALL) together with the international trade union federation "IndustriAll Global Union". The FAIR2ALL applies to all Rheinmetall companies in Germany and abroad in which Rheinmetall exercises industrial management.

Position paper on transformation

On July 6, 2022, the Executive Board of Rheinmetall AG and the European Works Council adopted a position paper on the transformation and internationalization of the Rheinmetall Group, which is directed at all Rheinmetall companies and sites in Europe.

Geographic coverage

No country-by-country breakdown of collective bargaining coverage is provided beyond the Germany-specific figure of 58.4%.

Diversity metrics

Methodology

Management functions across the Rheinmetall Group are classified on a hierarchical basis into eight management levels which correlate to the five management clusters. The top management level of the Rheinmetall Group shown here consists of management levels one to four, which are divided into executives and top management. The Executive Board and the heads of the divisions form the executive level. Top management consists of the heads of the central departments and the members of the business units and divisional management teams.

Gender distribution at top management level

As of December 31, 2024

Age distribution of employees

As of December 31, 2024. Not including trainees, dual students, working students and interns.

Adequate wages

Benchmark used

Rheinmetall does not disclose a living wage benchmark. The company states:

"If there are no statutory or collective regulations, remuneration and benefits are based on market conditions."

"The basis for the adequate wage of employees is a regular base salary. It is established on a market basis and takes into account factors such as qualification, experience and area of responsibility."

The policies refer to:

• FAIR2ALL (Global Framework Agreement on Principles of Social Responsibility)
• Declaration of Principle (on Respect for Human Rights and the Environment)
• Compliance with "the relevant laws and, where applicable, collective bargaining agreements"
• ILO conventions on employment and working hours
• "Publicly holidays and regular paid leave"

Coverage

Rheinmetall reports that:

"All employees receive an adequate wage in accordance with the applicable reference values in the fiscal year 2024."

The total number of employees covered is 29,321 (headcount as of December 31, 2024, excluding trainees, dual students, interns and working students).

No percentage or proportion of workforce assessed against a living wage benchmark is disclosed.

Geographic scope

Global scope implied (references to "all employees" and international operations), but no explicit statement of geographic coverage or exclusions for wage assessment.

Targets and commitments

No forward-looking targets related to living wage disclosed.

Methodology

No living wage calculation methodology is disclosed. The company references:

• Market-based base salary determination
• Consideration of qualification, experience and area of responsibility
• Variable performance/success-related components for certain employee groups
• Profit sharing for collective agreement employees in Germany
• Company pension schemes

The statement does not indicate:

• How "adequate wage" is defined or measured
• Whether contractor/contingent worker wages are assessed
• Frequency of wage adequacy reassessment

Summary statement

Rheinmetall reports 100% of employees receive "adequate wage in accordance with applicable reference values" but does not disclose what those reference values are, whether they constitute a living wage benchmark, or how adequacy is assessed.

Social protection

Pension and retirement coverage

Rheinmetall provides defined benefit pension plans covering employees in multiple countries:

Germany:

• Defined benefit plans covering old-age pensions, invalidity pensions and pensions for surviving dependents
• Previous plan converted to new pension plan in 2022; entitlements from previous plan remain in place
• Pension obligations largely financed internally through Contractual Trust Arrangement (CTA)
• Total of €274 million paid into fund managed by trustee (€254 million for pension obligations, €19 million for partial retirement obligations)
• Pension payments made by respective Group companies

Switzerland:

• Defined benefit plans managed via pension funds (multi-employer plans)
• Cover pensions and risks from invalidity and death for former employees, relatives and surviving dependents
• Financed by employer and employee contributions, primarily at 50% each
• Pension funds are independent foundations not belonging to Rheinmetall Group

United Kingdom:

• Defined benefit plan through BAE Systems Land pension fund
• Rheinmetall makes payments to BAE Group pension fund for acquired employees
• BAE Group obliged to make ongoing pension payments to retirees
• Rheinmetall has full joint liability for BAE Group pension agreements

Other countries:

• Other pension plans exist but specific details not disclosed

Pension obligation values as of December 31, 2024

Coverage details

Benefits covered:

• Old-age pensions/retirement
• Invalidity/disability pensions
• Pensions for surviving dependents (death benefits)
• Maternity/paternity leave: Not disclosed in excerpts
• Sickness: Not disclosed in excerpts
• Unemployment: Not disclosed in excerpts
• Employment injury: Not disclosed in excerpts

Scheme types: Both public and private schemes (statutory pension insurance referenced for retirement age; supplementary employer-financed and employee-financed plans)

Exclusions: Other pension plans exist in Germany but are no longer available to new employees joining the Group.

Percentage of employees covered: Not disclosed

Persons with disabilities

Policy and targets

Rheinmetall promotes self-determined and equal participation of persons with disabilities. An Inclusion Agreement was concluded on September 26, 2023 between Rheinmetall AG, the Rheinmetall Group Representative Body for Severely Disabled Employees and the Group Works Council with the goal of improving the professional inclusion of persons with disabilities and supporting their inclusion in the workforce.

Initial principles and goals were formulated in 2002 in a framework integration agreement. In 2017, German Rheinmetall companies developed a guideline for the employment of persons with disabilities. The inclusion agreement describes an employment quota for persons with disabilities: each company strives to achieve an employment rate of at least 5% for persons with disabilities. If the employment rate falls below 3%, the introduction of special measures is discussed.

Challenges and data collection

Systematic data collection on persons with disabilities is voluntary or only partially regulated by law in many countries. Without sufficient knowledge of such data at Rheinmetall, targeted inclusion measures are difficult.

Scope exclusions

The document does not specify particular countries where disability data collection is restricted by law beyond noting that "systematic data collection on persons with disabilities is voluntary or only partially regulated by law in many countries."

Governance

In Germany, the representatives of severely disabled persons ensure that all persons with disabilities have effective representation of their interests. The general representative bodies for employees with disabilities and the Group representative body for employees with disabilities ensure that the interests of persons with disabilities are represented in all German group companies. The inclusion team provides advice on appropriate actions.

The Global Health Management (GHM) takes into account the needs of persons with disabilities or people with special requirements through central management of health-related measures and the creation of responsibility structures, such as local health coordinators.

Metrics

No quantitative data on the percentage of employees with disabilities is disclosed in the reporting period.

The company refers to a target employment rate of at least 5% and discusses measures when rates fall below 3%, but does not report actual achievement against these targets for 2024 or prior years.

Health and safety metrics

Coverage of health and safety management system

The percentage of employees covered by the company's health and safety management system implemented on the basis of legal requirements or recognized standards is 97.7%.

Rheinmetall companies with more than 100 employees were required to implement an externally certified management system in accordance with ISO standard 45001 by the end of 2024. The implementation took place in the operating units, with the exception of one international unit, which applies the relevant provisions under local law.

Fatalities

There were no fatalities among employees as a result of work-related injuries and illnesses.

Recordable work-related accidents

The quota is 6.8 and corresponds to the Lost Time Incident Rate relevant to Rheinmetall's remuneration. The figures are based on the employees' planned working hours.

Days lost

Not disclosed.

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Methodology note: The LTIR is calculated per planned working hours and is integrated into Executive Board remuneration as a key performance indicator since 2022. Coverage figures apply to employees; no separate metrics for contractors are disclosed.

Compensation metrics (ESRS S1-16)

Pay gap

Rheinmetall reports an unadjusted gender pay gap of 17.0% for fiscal year 2024.

The company states: "Measured in terms of the gross hourly earnings of all female and male employees, there is a gender-specific income difference ('unadjusted pay gap') of 17.0%. This corresponds approximately to the statistical wage gap of 18% in 2023 as reported by the Federal Anti-Discrimination Agency."

The calculation excludes trainees, dual students, interns and working students. Rheinmetall emphasizes that this unadjusted figure "does not allow the determination of any actual gender pay gap for work of equal value between female and male employees ('adjusted pay gap'), as further job-specific and individual parameters must be compared."

No adjusted (like-for-like) pay gap is disclosed.

Remuneration ratio

Rheinmetall discloses that the annual total remuneration for the highest-paid person divided by the median of the annual total remuneration of employees (minus the highest-paid person) is 5,977%.

This corresponds to a ratio of approximately 60:1 (5,977% = 59.77 times).

Methodology

Pay gap methodology:

• Based on gross hourly earnings of all female and male employees
• Calculated by subtracting average gross hourly earnings of male employees from female employees, dividing by male earnings
• Excludes: trainees, dual students, interns and working students
• Scope: appears to cover German operations primarily, given reference to Federal Anti-Discrimination Agency statistics

Remuneration ratio methodology:

• Highest-paid individual (CEO Armin Papperger) compared to median employee compensation
• Calculation: total annual remuneration of highest-paid person ÷ median total annual remuneration of employees (excluding highest-paid person)
• No phase-in statement identified

Incidents, complaints and severe human rights impacts

Incidents of discrimination

A total of 9 cases of discrimination, including harassment, were confirmed during the reporting period.

Complaints filed through grievance mechanisms

The number of employee complaints received via the grievance mechanism channels in the fiscal year amounted to 146.

Complaints to OECD National Contact Points

There were no complaints submitted to the OECD National Contact Points for Multinational Enterprises.

Severe human rights impacts

There were no serious incidents relating to human rights in connection with labor. There were no complaints regarding violations of the United Nations Guiding Principles on Business and Human Rights or the OECD Guidelines for Multinational Enterprises.

Fines, sanctions and compensation

There were no significant fines, sanctions or claims for damages in connection with incidents and complaints. The reconciliation of the monetary amounts stated with the most meaningful amount stated in the financial statements is 0 (zero).

There were no fines, sanctions or compensation payments for human rights-related incidents described. The reconciliation of the monetary amounts stated with the most meaningful amount stated in the financial statements is 0 (zero).

Status of complaints

The document does not provide specific information on the status (open/resolved/under investigation) of the 146 complaints received.

Policies related to consumers and end-users

Rheinmetall has not disclosed specific policies related to consumers and end-users in the provided excerpts.

The excerpts indicate that ESRS S4-1 (Policies related to consumers and end-users) is identified as a material disclosure requirement in the sustainability statement structure. The materiality table shows that paragraph 16 and 17 of ESRS S4-1 are material, with references to:

• Policies related to consumers and end-users (paragraph 16)
• Non-respect of UNGPs on Business and Human Rights and OECD guidelines (paragraph 17)

Both datapoints reference the subchapter "Processes for engaging with consumers and end users" under the Social - Consumers and End-Users section.

However, the actual policy content, policy names, scope, governance, approval mechanisms, implementation monitoring, public availability, and linkages to international standards have not been disclosed in the excerpts provided.

Incidents of corruption or bribery

Confirmed incidents

Rheinmetall reported zero confirmed incidents of corruption or bribery in the fiscal year 2024.

Convictions and fines

There were no convictions or fines for breaches of corruption and bribery regulations in the fiscal year 2024.

Disciplinary actions and consequences

Rheinmetall's policy states that should internal investigations lead to confirmed cases, the employees concerned will be subject to disciplinary action independently of court rulings and/or official investigations. However, no such cases occurred in 2024.

Contracts terminated

In the event of violations of corruption or bribery regulations by business partners, these partners will be excluded from all business relationships with companies of the Rheinmetall Group. In the fiscal year 2024, one business partner was affected by such exclusion.

Investigation and speak-up procedures

Rheinmetall maintains a comprehensive whistleblower system supported by the electronic platform "Integrity Line" (whistleblowing platform), which has been implemented throughout the Group. Employees and external parties can report suspected misconduct through multiple channels:

• Direct contact to the compliance organization
• Electronic whistleblower system (online, telephone, email)
• External ombudspersons (independent lawyers)
• Email to speakup@rheinmetall.com
• Specialist compliance officers by telephone

The protection of all whistleblowers against disadvantages is guaranteed by strictly safeguarding the confidentiality of personal identities. Only authorized persons have access to whistleblower data.

The manual for the Rheinmetall whistleblower system ensures that whistleblowing is handled independently, transparently and fairly with standardized processing of compliance cases. Systematic follow-up checks are performed based on the internal incident management guideline. If required, responsible authorities are called in and cooperated with to clarify matters.

In fall 2024, Rheinmetall carried out a poster campaign to raise awareness of the whistleblower system, displaying posters in 16 languages at office buildings and production sites.

Compliance management approach

Rheinmetall's compliance strategy aligns with the United Nations Convention against Corruption. All employees receive annual compliance awareness training covering anti-corruption and bribery topics. In the fiscal year 2024, 38.0% of employees in risk-prone functions participated in face-to-face or remote training sessions on these topics.