TKH

Report of the Supervisory Board

The Supervisory Board supervises the policies of the Executive Board and the general course of affairs at TKH and its businesses. We also advise the Executive Board. The Supervisory Board performs its duties with integrity and focuses on the interests of the company and its stakeholders, including shareholders, employees, and customers. In the performance of our duties, we are guided by the applicable statutory regulations, the articles of association, our own regulations, the Dutch Corporate Governance Code, and other applicable rules and regulations.

Role of the administrative, management and supervisory bodies

Executive Board The Executive Board manages TKH and is responsible for the strategy, the resulting objectives and results, and the related stakeholder interests. The Executive Board is responsible for compliance with all relevant legislation and regulations, managing the risks associated with business activities, the financing of the company, the corporate strategy and policies arising therefrom.

Supervisory Board The Supervisory Board supervises the Executive Board and provides advice. The Supervisory Board also supervises the general course of affairs at TKH and its businesses. The Supervisory Board is guided by the interests of the company and takes into account the relevant interests of the company's stakeholders. The Supervisory Board is ultimately responsible for the quality of its own performance.

Committees The Supervisory Board has established three committees: the Audit and Risk Committee, the Remuneration Committee, and the Selection, Appointment and Nomination Committee. These committees prepare decision-making by the Supervisory Board within their respective areas of expertise.

Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies

Sustainability continued to be a high priority in our activities. We made good progress against ESG goals, in particular increasing investments to reduce our carbon footprint in relation to scopes 1 and 2. We also further increased the proportion of women in our executive and senior management teams, to 21.6% in 2024. Together with our customers, we create innovative and client-centric technology systems, to provide answers to sustainability challenges. In doing so, we add value to make the world better by creating more efficient and more sustainable systems and contributing to the United Nations' Sustainable Development Goals (SDGs). The percentage of turnover related to the SDGs increased to 71.6%.

Under the CSRD (Corporate Sustainability Reporting Directive of the European Union), companies in scope will be required to report on sustainability issues in their management report for the 2024 financial year and to obtain an assurance conclusion on this report. However, the implementation of CSRD in Dutch law has been delayed. Although there is not yet a formal statutory requirement to report in accordance with the CSRD due to the delayed implementation, TKH prepared its sustainability statements 2024 based on the CSRD on a voluntary basis. At the same time, we obtained a voluntary assurance on the sustainability statements. This confirms our focus on sustainability and further integration of sustainability in our own operations, and value chains.

Supervisory Board oversight

The Supervisory Board regularly receives reports on sustainability matters including ESG progress, climate change initiatives, diversity metrics, and contribution to UN Sustainable Development Goals. During 2024, sustainability was discussed at multiple Supervisory Board meetings, with particular attention to the preparation of CSRD-compliant reporting and the achievement of ESG targets.

Integration of sustainability-related performance in incentive schemes

Long-term incentive plans The long-term incentive schemes include ESG targets as part of the performance criteria. The proportion of women in executive and senior management teams is one of the KPIs included in the long-term incentive plans, with a target of > 25% by 2030. In 2024, we achieved 21.6%.

ESG performance targets Sustainability metrics are integrated into management performance assessment and compensation schemes, including:

• Carbon footprint reduction (target: 100% carbon neutrality in own operations by 2030 - scopes 1 and 2)
• Diversity targets (> 25% female executive and senior management by 2030)
• Safety performance (accident rate LTIFR < 1.0)
• Innovation linked to SDGs (target: at least 70% of turnover linked to SDGs)

Remuneration policy alignment The remuneration policy ensures that sustainability performance is reflected in executive compensation through both short-term and long-term incentive components, aligning management behavior with the company's sustainability objectives and stakeholder interests.

Statement on due diligence

TKH conducts due diligence processes to identify, assess, and mitigate actual and potential negative impacts on people and the environment throughout its operations and value chain.

Supply chain due diligence

• We conduct supplier audits to assess sustainability-related risks, such as raw material extraction impact
• 59.0% of our Tier-1 copper suppliers are certified by The Copper Mark (target > 80%)
• 78.2% of copper suppliers were assessed with our 2024 risk management assessment
• We enter into active dialogue with our strategic suppliers to improve the sustainability of their products and processes

Human rights due diligence

• We assess risks related to child/forced labor and health and safety in our value chain
• Working conditions and other work-related rights in the value chain are regularly evaluated
• We have processes in place to remediate negative impacts and channels for workers to raise concerns

Environmental due diligence

• We consider environmental impact in every business decision we take
• Implementation of energy-saving, emissions and waste reduction programs
• Operation in accordance with ISO 14001 environmental management standards
• Regular assessment of pollution risks related to air, soil, and water

Governance and oversight The Executive Board is responsible for the implementation of due diligence processes, with regular reporting to the Supervisory Board on the effectiveness of these measures and any identified risks or impacts.

Risk management and internal controls over sustainability reporting

Risk management framework TKH has implemented comprehensive risk management and internal control systems that include sustainability-related risks. Our risk management approach covers environmental, social, and governance risks that could impact our business operations and stakeholder value.

Sustainability reporting controls

• We have established internal controls over the collection, measurement, and reporting of sustainability data
• Data quality controls ensure accuracy and completeness of ESG metrics
• Regular internal reviews and assessments of sustainability performance indicators
• External assurance obtained on sustainability statements to verify accuracy and reliability

CSRD preparation and controls Although there is not yet a formal statutory requirement to report in accordance with the CSRD due to the delayed implementation, TKH prepared its sustainability statements 2024 based on the CSRD on a voluntary basis. At the same time, we obtained a voluntary assurance on the sustainability statements. This confirms our focus on sustainability and further integration of sustainability in our own operations, and value chains.

Monitoring and oversight

• The Supervisory Board regularly reviews sustainability risks and the effectiveness of related controls
• The Audit and Risk Committee provides oversight of sustainability reporting processes
• Regular monitoring of key sustainability performance indicators and progress against targets
• Integration of sustainability risks into enterprise risk management framework

Continuous improvement We continuously enhance our risk management and internal control systems for sustainability reporting, incorporating best practices and regulatory developments such as the CSRD requirements.

Strategy, business model and value chain

Business model TKH Group N.V. (TKH) is a leading technology company. We specialize in the creation of innovative, client-centric technology systems that drive success in automation, digitalization, and electrification. By integrating hardware, software, and customer-focused insight, our smart technologies provide unique answers to customers' challenges. In doing so, we work to make the world better by creating ever more efficient and more sustainable systems.

With more than 7,000 employees, TKH pursues sustainable growth in a culture of entrepreneurship, working closely with customers to create one-stop-shop, plug-and-play innovations combined with software and Artificial Intelligence for Smart Vision, Smart Manufacturing, and Smart Connectivity technology.

Mission and Vision Mission: Making the world a better place by unlocking the potential of our differentiated technologies.

Vision: We develop class-leading technologies tailored to the needs of our customers. By making their operations ever more efficient, we aspire to be the strategic partner they trust to deliver long-term value that benefits people, the planet, and future generations.

Strategic approach Our growth strategy is built around our core technologies, creating highly differentiated, customer-centric technologies that drive sustainable long-term value. Through constant innovation, we develop leading positions across our chosen markets in which growth is accelerated by the megatrends automation, digitalization, and electrification.

Technology segments Our Smart Technologies are centered around three segments:

• Smart Vision systems (28% of turnover): Advanced vision systems for machine vision, security, and automation
• Smart Manufacturing systems (35% of turnover): Automated manufacturing systems, primarily tire building systems
• Smart Connectivity systems (37% of turnover): Energy and data connectivity solutions for electrification and digitalization

Value chain Our value creation process involves:

• R&D and engineering: €80.7 million investment in R&D with over 750 people dedicated to R&D and software development
• Manufacturing: Outsourced and in-house manufacturing with focus on operational excellence
• Service and support: Complete lifecycle support including assembly, installation, and maintenance
• Circular economy: Focus on recycling and return of materials, components and products to appropriate value chains

Operating model We work with a decentralized business model, coupled with our entrepreneurial, customer-focused culture. Our short lines of communication enable our operating companies to respond swiftly and effectively to geopolitical and social developments that affect the challenges our customers face.

Interests and views of stakeholders

Our stakeholders are those groups and individuals who directly or indirectly influence the activities of TKH and our operating companies.

TKH recognizes and acknowledges the importance of having a meaningful dialogue with its stakeholders about sustainability and the company's strategy including business model and value chain (stakeholder dialogue). Meaningful stakeholder dialogue is characterized by two-way communication and depends on the good faith of participants on the sides of both TKH and the stakeholders. TKH uses various methods and channels to engage in dialogue with its stakeholders, depending on the nature, purpose, and frequency of the interaction.

Key stakeholder groups:

• Customers: We measure, monitor, and evaluate customer loyalty and appreciation through customer satisfaction surveys. Our average customer satisfaction survey score for 2024 is 8.6 (2023: 8.6), which is above the benchmark score of 7.8.
• Employees: Employee satisfaction rate reached an all-time high at 7.8 in 2024. We provide an inspiring, safe, healthy and rewarding environment for all our employees.
• Shareholders and investors: We maintain transparent communication through regular reporting and investor relations activities.
• Suppliers: We enter into active dialogue with our strategic suppliers to improve the sustainability of their products and processes.
• Communities: We invest in and contribute to the society around us through local engagement and sustainable business practices.

Stakeholder engagement methods:

• Customer satisfaction surveys and regular business dialogue
• Employee engagement surveys and workplace consultation
• Investor meetings and transparent financial reporting
• Supplier audits and sustainability assessments
• Community engagement through local operations

Key engagement topics:

• Innovation and technology development
• Sustainability and environmental impact
• Health and safety
• Economic performance and value creation
• Diversity and inclusion
• Supply chain responsibility

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

Material sustainability topics identified under CSRD:

• Environmental: GHG emissions, energy efficiency and consumption (climate change mitigation), sustainable innovation, pollution of air, soil, and water, water consumption, resource inflows, waste, and waste recycling
• Social: Health and safety, diversity, child/forced labor, working conditions and other work-related rights in the value chain
• Governance: Corporate culture, corruption and bribery, management of relationships with suppliers, privacy (cybersecurity), AI and algorithm ethics

Interaction with strategy and business model:

Climate change and decarbonization

• Opportunity: Electrification megatrend drives demand for our energy connectivity solutions and offshore wind inter-array cables
• Impact on strategy: €200 million strategic investment in expanding offshore wind cable capacity at Eemshaven facility
• Risk management: 70.3% reduction in CO2e footprint (scopes 1 and 2) achieved in 2024, targeting 100% carbon neutrality by 2030

Automation and digitalization

• Opportunity: Industry 4.0 and "hands-off, eyes-off" manufacturing drives demand for our Smart Vision and Smart Manufacturing systems
• Impact on strategy: Focus on automation as core strategic pillar with significant R&D investment (€80.7 million in 2024)
• Value creation: 71.6% of turnover linked to UN Sustainable Development Goals

Supply chain sustainability

• Risk: Dependence on worldwide supply chains for raw materials and components
• Mitigation: 59.0% of Tier-1 copper suppliers certified by The Copper Mark, 78.2% assessed through risk management processes
• Impact on operations: Active dialogue with strategic suppliers to improve sustainability

Talent and workforce

• Opportunity: Diverse, skilled workforce drives innovation and operational excellence
• Challenge: Shortage of qualified staff in challenging labor market
• Response: Focus on diversity (21.6% female executive and senior management), employee satisfaction (7.8), and safety (LTIFR 0.7)

Technology and innovation

• Opportunity: AI and software development create competitive advantage and customer value
• Investment: Over 750 people dedicated to R&D and software development, 17.6% of turnover from innovations
• Strategic focus: Acceleration of innovations that differentiate us from competitors, including AI-powered features like Foreign Object Detection

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

Double materiality assessment process In previous years we conducted stakeholder dialogues based on the GRI to identify material topics. In 2024, we performed a double materiality assessment based on the CSRD (Corporate Sustainability Reporting Directive) through which we identified sustainability-related impacts, risks and opportunities.

Materiality assessment methodology The materiality assessment followed CSRD requirements and involved:

• Impact materiality: Assessment of actual and potential impacts of TKH's activities on people and the environment
• Financial materiality: Assessment of sustainability risks and opportunities that could influence TKH's financial performance, financial position, cash flows, and access to finance

Stakeholder engagement in materiality assessment We mapped material environmental, social, and governance topics based on input from key stakeholder groups:

• Internal stakeholders: Employees, management, and board members
• External stakeholders: Customers, suppliers, investors, and community representatives
• Expert input: Sustainability consultants and industry experts

Material topics identified While most of the material sustainability topics under the CSRD are in line with the materiality analysis based on the reporting requirements of the GRI from the prior year, we have identified AI and algorithm ethics as an additional sustainability topic that requires attention because of more strategic focus on AI applications in the past year. Furthermore, we have now identified water consumption, pollution of air, soil, and water, and working conditions and other work-related rights in the value chain as distinct topics.

Integration into business processes The material topics identified through this assessment are integrated into:

• Strategic planning and decision-making processes
• Risk management frameworks
• Performance monitoring and target setting
• Sustainability reporting and disclosure

Regular review and updates The materiality assessment is reviewed regularly to ensure it remains current and relevant, taking into account changes in the business environment, stakeholder expectations, and regulatory requirements.

Disclosure requirements in ESRS covered by the undertaking's sustainability statement

Although there is not yet a formal statutory requirement to report in accordance with the CSRD due to the delayed implementation, TKH prepared its sustainability statements 2024 based on the CSRD on a voluntary basis. At the same time, we obtained a voluntary assurance on the sustainability statements.

ESRS topics addressed:

ESRS 2 - General Disclosures

• Strategy, business model and value chain information
• Governance structure and sustainability oversight
• Stakeholder engagement processes
• Materiality assessment and material topics

ESRS E1 - Climate Change

• GHG emissions reporting (Scopes 1, 2, and 3)
• Energy consumption and mix
• Climate change mitigation targets and actions
• Transition planning

ESRS E2 - Pollution

• Pollution of air, water and soil management
• Waste management and circular economy approaches

ESRS E3 - Water and Marine Resources

• Water consumption monitoring and management
• Water-related impacts and risks

ESRS S1 - Own Workforce

• Health and safety performance and management
• Diversity and inclusion metrics and targets
• Employee satisfaction and engagement
• Training and development programs

ESRS S2 - Workers in the Value Chain

• Supply chain labor standards and assessments
• Supplier sustainability requirements
• Child/forced labor prevention measures

ESRS G1 - Business Conduct

• Corporate culture and business ethics
• Corruption and bribery prevention
• Supplier relationship management
• Privacy and cybersecurity measures

Assurance and verification We obtained voluntary external assurance on our sustainability statements to verify the accuracy and completeness of our disclosures, demonstrating our commitment to transparent and reliable sustainability reporting even in advance of formal regulatory requirements.

Transition plan for climate change mitigation

Strategic commitment to decarbonization TKH is committed to achieving 100% carbon neutrality in our own operations by 2030 (scopes 1 and 2), with a reduction of CO2 footprint compared to reference year 2019. In 2024, we achieved a 70.3% reduction in our net CO2e footprint.

Key elements of our transition plan:

1. Sustainable product portfolio

• 71.6% of turnover linked to UN Sustainable Development Goals
• Focus on electrification solutions supporting renewable energy infrastructure
• €200 million strategic investment in offshore wind inter-array cable capacity
• Development of energy-efficient technologies and sustainable manufacturing systems

2. Operational decarbonization

• High-priority investments in energy efficiency and renewable energy
• Implementation of energy-saving programs across all facilities
• Optimization of production processes to reduce emissions
• Operation in accordance with ISO 14001 environmental management standards

3. Value chain engagement

• Active dialogue with strategic suppliers to improve sustainability of their products and processes
• 59.0% of Tier-1 copper suppliers certified by The Copper Mark
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Integration of sustainability requirements in procurement processes

4. Innovation and R&D focus

• €80.7 million investment in R&D activities in 2024
• Development of AI-powered solutions that improve energy efficiency
• Design for recyclability and circular economy principles
• 17.6% of turnover from innovations introduced in prior two years

5. Market positioning for electrification

• Strategic focus on automation and electrification as guiding global trends
• Expansion of capacity for energy transition technologies
• Support for customers' sustainability targets through our technology solutions
• Positioning as leader in offshore wind connectivity solutions

Policies related to climate change mitigation and adaptation

Climate change commitment TKH is committed to addressing climate change through both mitigation and adaptation measures. We have established clear policies and targets for reducing our environmental impact while supporting the global energy transition.

Mitigation policies:

Carbon neutrality target

• Commitment to 100% carbon neutrality in own operations by 2030 (scopes 1 and 2)
• Reduction of CO2 footprint compared to reference year 2019
• 70.3% reduction achieved in 2024

Energy efficiency and renewable energy

• Implementation of energy-saving programs across all operations
• Investment in renewable energy sources and energy-efficient technologies
• Operation in accordance with ISO 14001 environmental management standards
• Regular monitoring and optimization of energy consumption

Sustainable innovation policy

• Integration of sustainability considerations in every business decision
• Focus on developing technologies that support customer sustainability targets
• 71.6% of turnover linked to UN Sustainable Development Goals
• €80.7 million annual investment in R&D for sustainable technologies

Supply chain sustainability

• Requirements for suppliers to meet sustainability standards
• Active dialogue with strategic suppliers to improve sustainability
• Supplier certification programs (59.0% of Tier-1 copper suppliers certified by The Copper Mark)
• Regular sustainability assessments of key suppliers

Adaptation considerations:

Business resilience

• Development of technologies that support climate adaptation for customers
• Diversified geographic presence to reduce climate-related risks
• Robust supply chain management to address climate-related disruptions

Product portfolio alignment

• Strategic focus on electrification technologies supporting renewable energy
• Development of solutions for offshore wind energy infrastructure
• Smart technologies that improve efficiency and reduce environmental impact

Actions and resources in relation to climate change policies

Investments in climate action TKH has made significant investments to support climate change mitigation and our transition to sustainable operations:

Strategic investment program

• Completed €200 million strategic investment program, including significant expansion in offshore wind inter-array cable capacity
• Opening of new subsea cable factory in Eemshaven in September 2024
• State-of-the-art production facilities with unique dry-design cable technology
• Order intake of over €300 million for strategic electrification investments

Operational efficiency investments

• High-priority investments resulted in 70.3% reduction of CO2e footprint (scopes 1 and 2)
• Implementation of energy-saving programs across all facilities
• €15 million cost-saving measures implemented, including operational optimizations
• Consolidation of production to improve energy efficiency

R&D and innovation resources

• €80.7 million invested in R&D activities in 2024 (2023: €77.2 million)
• Over 750 people dedicated to R&D and software development
• Development of AI-powered solutions that improve energy efficiency
• 17.6% of turnover from innovations (target: at least 10%)

Sustainable technology development

• Focus on electrification solutions supporting renewable energy infrastructure
• Development of automation technologies that reduce energy consumption and waste
• Innovation in circular economy approaches and recyclable materials
• Integration of sustainability considerations in product design

Supply chain initiatives

• Investment in supplier sustainability programs
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Active engagement with strategic suppliers to improve their sustainability practices
• Certification programs for key raw material suppliers

Organizational resources

• Dedicated sustainability teams and expertise
• Integration of climate considerations into business decision-making
• Regular monitoring and reporting of climate-related performance
• External assurance on sustainability reporting to ensure accuracy and transparency

Targets related to climate change mitigation and adaptation

Carbon neutrality target

Sustainable innovation targets

Strategic business targets supporting climate goals

Operational efficiency targets

Value chain targets

Timeline for achievement

• 2025: Continue progress toward carbon neutrality target
• 2030: Achieve 100% carbon neutrality in own operations (scopes 1 and 2)
• Ongoing: Maintain > 70% of turnover linked to SDGs
• Ongoing: Support customer sustainability targets through innovative product portfolio

Energy consumption and mix

Scope and methodology

Total energy consumption covers all TKH operations (scope equal to financial consolidation). Energy consumption is calculated using data from meter readings, invoices, and supplier data. Conversion factors from EcoInvent 3.11 database and co2emissiefactoren.nl are used. Renewable energy includes purchased renewable electricity, green certificates, and self-generated renewable energy through solar panels.

Energy consumption by source (MWh)

Key observations

• Total energy consumption decreased by 5.3% despite a 2.1% increase in energy intensity per revenue.
• Fossil energy consumption fell by 19.7%, driven by a 27.3% reduction in natural gas consumption due to energy efficiency measures, mild winters, and continued home working.
• Renewable energy consumption increased by 5.5%, with self-generated renewable energy (solar panels) growing 43.8%.
• The share of renewable energy rose from 55.5% (2023) to 61.9% (2024), reflecting increased renewable electricity purchases, green certificates, and on-site solar generation.
• Natural gas remains the largest single fossil source at 16,710 MWh, down from 20,147 MWh in 2023.
• No fuel consumption from crude oil or other fossil sources was separately reported under the ESRS disaggregation.

Note on base year for reduction targets

The company uses 2019 as the base year for its CMD (Capital Markets Day) carbon neutrality target for scope 1 and 2 by 2030. The SBTi-aligned near-term target uses 2023 as the base year with a 42.0% reduction target by 2030.

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 and 2 emissions performance

In 2024, TKH's net carbon footprint for scopes 1 and 2 decreased by 70.3% compared with the reference year 2019 (2023: reduction of 64.3% compared to 2019). TKH did not purchase any carbon offsets, except for purchased green certificates.

Scope 1 (Direct emissions)
At TKH's sites, scope 1 direct emissions were reduced mainly through energy efficiency measures, the program to replace gas with alternative energy sources, continuation of working from home, and mild winters. New buildings (e.g., the subsea factory in Eemshaven, the Netherlands) are constructed without gas as much as possible. Emissions resulting from gas consumption decreased by 27.3% compared to the previous year.

Emissions from transportation from own and/or controlled vehicles (including lease cars) decreased by 11.2%. This is mainly due to the electrification of TKH's lease car fleet and promoting online collaboration to limit travel. Since 2022, new company cars leased in the Netherlands must be electric, resulting in a share of electric cars of 34.8% of the total lease car fleet. From 2024, all new lease cars within the group must be electric, with only a few exceptions.

Scope 2 (Indirect emissions from purchased energy)
Scope 2 emissions were further reduced as a result of a higher share of renewable energy, resulting from a shift to renewable energy sources and self-generated energy through solar panels installed on TKH's buildings and properties, combined with purchased green certificates which was the main contributor in the reduction of scope 2 emissions. The share of renewable energy consumption in the total energy consumption increased from 55.5% in 2023 to 61.9% in 2024.

Detailed GHG emissions table (Scopes 1 and 2)

Note: The detailed quantitative breakdown by scope 1 source (stationary combustion, mobile combustion, process emissions, fugitive emissions) and by scope 2 (location-based vs. market-based) is not explicitly provided in separate tables in the excerpts. The report confirms scope 1 and 2 reduction of 70.3% vs. 2019 baseline, with narrative explanation of sources (gas consumption, transport, purchased energy). Full disclosure in accordance with ESRS E1-6 / E1-8 may be in the sustainability statements section not fully excerpted.

Scope 3 emissions

Scope 3 emissions data are not disclosed in the excerpted sections of the report. The report mentions that TKH engaged with suppliers and customers on decarbonization in the value chain, obtained supplier and customer specific (carbon) data, and that scope 3 emissions were included in the CSRD double materiality assessment. However, quantitative scope 3 emissions by GHG Protocol category (1–15) are not provided in the excerpts.

Total GHG emissions and intensity

The excerpts do not provide a combined total for scopes 1+2+3 in tCO2eq, nor a GHG intensity metric (e.g., tCO2eq per €M revenue). The report confirms a 70.3% reduction in net carbon footprint (scopes 1 and 2) versus 2019, but absolute figures are not disclosed in the excerpts.

Biogenic CO2 emissions

Biogenic CO2 emissions are not separately disclosed in the excerpts.

Regulated emissions (e.g., EU ETS)

No disclosure of emissions covered under regulatory schemes (e.g., EU ETS) in the excerpts.

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Methodology / Scope notes:

• Baseline year: 2019
• Target: 100% carbon neutrality in own operations by 2030 (scopes 1 and 2)
• Renewable energy share: 61.9% of total energy consumption in 2024
• Green certificates: Purchased green certificates are used; no other carbon offsets purchased
• Reporting standard: The sustainability statements are prepared in accordance with CSRD/ESRS on a voluntary basis for 2024 (ahead of Dutch legal requirement)
• Assurance: Limited assurance obtained on sustainability statements 2024
• Data collection: Some scope 3 data (e.g., certain categories) collected manually; first year of CSRD reporting

Missing quantitative detail:
The excerpts do not contain explicit quantitative tables for:

• Scope 1 sub-breakdown (stationary combustion, mobile combustion, process, fugitive) in tCO2eq
• Scope 2 location-based vs. market-based in tCO2eq
• Scope 3 by GHG Protocol category (1–15) in tCO2eq
• Total GHG emissions (scopes 1+2+3) in tCO2eq
• GHG intensity (tCO2eq per revenue or other metric)

These may be disclosed in full in the sustainability statements section (pages 99–110 referenced) not fully excerpted here.

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

Assessment Status

TKH has not yet conducted a full quantitative assessment of anticipated financial effects from climate-related risks and opportunities. The company states: "We recognize the importance of such an analysis and plan to expand our assessment in the coming years to align with best practices and regulatory expectations."

The company notes in the alignment metrics table that ESRS E1-9 requirements regarding:

• Exposure of the benchmark portfolio to climate-related physical risks (paragraph 66) - not-relevant
• Disaggregation of monetary amounts by acute and chronic physical risk (paragraph 66 (a)) - not-relevant
• Location of significant assets at material physical risk (paragraph 66 (c)) - not-relevant
• Breakdown of the carrying value of real estate assets by energy-efficiency classes (paragraph 67 (c)) - not-relevant
• Degree of exposure of the portfolio to climate-related opportunities (paragraph 69) - not-relevant

Physical Risks

Due to the locations of TKH's (production) facilities, the physical (acute) risk is considered less relevant for TKH. However, physical (acute) climate change risks are part of the assessment when making business decisions, for example when changing locations or expanding facilities or activities.

TKH has assessed the exposure of strategic suppliers (suppliers with an annual purchase volume above €1 million) to any material first-order and second-order physical climate change impacts. This assessment includes impacts indirectly caused by the physical effects of climate change, such as a significant economic crisis due to physical damage to business, or human migration due to flooding.

Transition Risks

TKH's analysis identified four potential climate-related transition risk areas:

Climate-related Opportunities

TKH identified seven key opportunity areas to drive climate adaptation and mitigation:

Mitigation and Adaptation Strategies

While TKH has not yet conducted a full resilience analysis, the company is actively implementing mitigation strategies such as:

• Electrification
• Energy efficiency improvements
• Supplier engagement

Future scenario analyses will help refine adaptation strategies to ensure resilience against climate risks.

EU Paris-aligned Benchmarks

TKH is not excluded from any EU Paris-aligned benchmarks as it does not meet any of the exclusion criteria stated in Article 12.1 (d) to (g) of Commission Delegated Regulation (EU) 2020/1818.

Policies related to pollution

Pollution prevention commitment TKH is committed to minimizing pollution across our operations and value chain. We have implemented comprehensive policies to address air, water, and soil pollution risks.

Environmental management framework

• Operation in accordance with ISO 14001 environmental management standards
• Integration of environmental considerations in every business decision
• Regular assessment of pollution risks and impacts
• Implementation of prevention and mitigation measures

Pollution prevention policies

Air pollution

• Implementation of emission reduction programs across production facilities
• Investment in cleaner production technologies
• Monitoring and control of air emissions from manufacturing processes
• Regular assessment and optimization of emission sources

Water pollution

• Water consumption monitoring and management programs
• Implementation of water treatment and recycling systems where applicable
• Prevention of contamination in manufacturing processes
• Regular monitoring of water quality impacts

Soil pollution

• Assessment of soil impact risks at production facilities
• Implementation of prevention measures for soil contamination
• Proper handling and disposal of potentially harmful materials
• Regular environmental assessments at operational sites

Waste management and circular economy

• Waste reduction and recycling programs
• 75.2% recycling rate achieved in 2024
• Target: < 5% waste of most relevant raw materials (5.4% achieved in 2024)
• Design for recyclability and circular economy principles

Supply chain requirements

• Environmental standards for suppliers
• Assessment of pollution-related risks in supplier operations
• Active dialogue with strategic suppliers to improve environmental performance
• Integration of pollution prevention in procurement processes

Continuous improvement

• Regular review and enhancement of pollution prevention measures
• Investment in cleaner technologies and processes
• Monitoring and reporting of pollution-related performance
• External assurance on environmental reporting

Actions and resources related to pollution

Pollution prevention investments TKH has allocated significant resources to pollution prevention and environmental protection across our operations.

Operational pollution reduction measures

• Implementation of emissions and waste reduction programs
• Investment in cleaner production technologies and processes
• €15 million cost-saving measures including environmental optimization initiatives
• Facility consolidation to improve overall environmental efficiency

Environmental management systems

• Operation in accordance with ISO 14001 environmental management standards
• Regular environmental assessments and monitoring
• Implementation of environmental management systems across facilities
• Continuous improvement in environmental performance

Waste management initiatives

• Comprehensive waste reduction and recycling programs
• Achievement of 75.2% recycling rate in 2024
• Target achievement: 5.4% waste of most relevant raw materials (target < 5%)
• Investment in waste treatment and recycling infrastructure

Water management actions

• Water consumption monitoring: 116,821 m³ in 2024
• Implementation of water conservation measures
• Investment in water treatment and recycling systems
• Regular monitoring of water quality and usage efficiency

Supply chain engagement

• Supplier audits to assess sustainability-related risks, including pollution impacts
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Active dialogue with strategic suppliers to improve environmental practices
• Integration of environmental requirements in supplier selection and management

Technology and innovation investments

• €80.7 million R&D investment focusing on sustainable and cleaner technologies
• Development of environmentally friendly production methods
• Innovation in materials and processes that reduce pollution
• Design for environment principles in product development

Monitoring and reporting resources

• Regular environmental monitoring and assessment programs
• External assurance on environmental performance reporting
• Investment in environmental data collection and management systems
• Continuous improvement in environmental measurement and reporting

Targets related to pollution

Waste reduction targets

Circular economy targets

Environmental management targets

Supply chain pollution reduction targets

Long-term pollution reduction goals

• Continuous reduction in waste generation across operations
• Improvement in recycling rates and circular economy implementation
• Enhancement of pollution prevention measures
• Integration of cleaner technologies in production processes
• Strengthening of supplier environmental requirements and assessments

Monitoring and improvement

• Regular review of pollution-related performance indicators
• Continuous enhancement of environmental management systems
• Investment in cleaner technologies and pollution prevention measures
• External verification of environmental performance and targets

Pollution of air, water and soil

Air pollution management TKH monitors and controls air emissions from our manufacturing operations as part of our comprehensive environmental management approach.

Air quality measures:

• Implementation of emission reduction programs across production facilities
• Regular monitoring of air emissions from manufacturing processes
• Investment in cleaner production technologies to minimize air pollution
• 70.3% reduction in CO2e footprint achieved, contributing to improved air quality
• Operation in accordance with ISO 14001 environmental management standards

Water pollution prevention Water quality protection is integral to our environmental management systems.

Water management initiatives:

• Water consumption monitoring: 116,821 m³ in 2024
• Implementation of water conservation and treatment measures
• Prevention of water contamination in manufacturing processes
• Regular monitoring of water usage efficiency and quality impacts
• Investment in water recycling systems where applicable

Soil protection measures TKH implements measures to prevent soil contamination at our operational sites.

Soil management approach:

• Assessment of soil impact risks at production facilities
• Implementation of prevention measures for soil contamination
• Proper handling and disposal of potentially harmful materials
• Regular environmental assessments at operational sites
• Compliance with local soil protection regulations

Pollution prevention through waste management

• 5.4% waste of most relevant raw materials (target < 5%)
• 75.2% recycling rate achieved in 2024
• Implementation of comprehensive waste reduction programs
• Focus on circular economy principles and design for recyclability

Integrated pollution prevention

• Operation in accordance with ISO 14001 environmental management standards
• Regular environmental monitoring and assessment programs
• Implementation of cleaner production technologies
• Continuous improvement in pollution prevention measures
• External assurance on environmental performance reporting

Substances of concern and substances of very high concern

TKH references hazardous substances in the context of supplier requirements. The Company's Code of Supply states that suppliers are expected to take all necessary actions to ensure consumer safety and that suppliers will ensure their products will not be made of hazardous substances as defined in EU Directive Restriction of Hazardous Substances (RoHS).

No quantitative data on the total amount of substances of concern (SoC) or substances of very high concern (SVHC) generated, used or procured has been disclosed. No breakdown by hazard class or amounts leaving facilities as emissions, products, or services has been provided.

The disclosure focuses on supply chain management and due diligence processes for copper and other materials, but does not include specific monitoring or management approaches for REACH compliance or SVHC tracking at the level required by ESRS E2-5.

Policies related to water and marine resources

Water management commitment TKH recognizes the importance of responsible water use and marine resource protection. We have implemented comprehensive policies to manage water consumption and minimize impacts on aquatic ecosystems.

Water conservation policy

• Implementation of water monitoring and conservation programs across operations
• Regular assessment of water usage efficiency and optimization opportunities
• Investment in water treatment and recycling systems where applicable
• Integration of water considerations in facility planning and operations

Water consumption management

• Water consumption monitoring: 116,821 m³ in 2024
• Implementation of water conservation measures to reduce consumption
• Regular monitoring of water usage patterns and efficiency
• Assessment of water-related risks and impacts

Marine resources protection Given our significant involvement in offshore wind energy infrastructure, TKH is committed to protecting marine environments.

Marine environment considerations:

• Environmental impact assessment for offshore operations and installations
• Implementation of best practices for marine environment protection
• Compliance with marine environmental regulations and standards
• Sustainable design of subsea cable systems to minimize marine impact

Environmental management integration

• Operation in accordance with ISO 14001 environmental management standards
• Integration of water and marine considerations in environmental assessments
• Regular monitoring and reporting of water-related performance
• External assurance on environmental performance including water management

Supply chain water responsibility

• Assessment of water-related risks in supplier operations
• Engagement with suppliers on water conservation and protection measures
• Integration of water stewardship requirements in procurement processes
• Active dialogue with strategic suppliers on environmental practices

Continuous improvement

• Regular review and enhancement of water management practices
• Investment in water-efficient technologies and processes
• Monitoring of water-related performance indicators
• Alignment with industry best practices for water stewardship

Actions and resources related to water and marine resources

Water management actions TKH has implemented comprehensive water management measures across our operations to ensure responsible water use and conservation.

Water conservation initiatives:

• Water consumption monitoring: 116,821 m³ tracked in 2024
• Implementation of water conservation measures across facilities
• Investment in water-efficient production technologies
• Regular assessment and optimization of water usage patterns
• Integration of water considerations in operational excellence programs

Marine resources protection actions As a leading supplier of subsea cables for offshore wind energy, TKH takes marine environmental protection seriously.

Marine environment initiatives:

• €200 million strategic investment in offshore wind inter-array cable capacity with environmental considerations
• Development of unique dry-design cable technology that reduces marine installation impact
• Environmental impact assessment for subsea cable installations
• Implementation of best practices for marine environment protection during cable laying operations
• Compliance with marine environmental regulations and standards

Technology and innovation investments

• €80.7 million R&D investment including development of environmentally friendly marine technologies
• Innovation in subsea cable design to minimize marine ecosystem impact
• Development of installation methods that reduce marine environmental disruption
• Research into sustainable materials for marine applications

Environmental management resources

• Operation in accordance with ISO 14001 environmental management standards
• Regular environmental monitoring and assessment programs
• Investment in environmental data collection and management systems
• External assurance on environmental performance reporting

Supply chain engagement

• Assessment of water-related risks in supplier operations
• Active dialogue with strategic suppliers on water conservation practices
• Integration of water stewardship requirements in supplier management
• 78.2% of copper suppliers assessed with environmental risk management processes

Monitoring and improvement

• Continuous monitoring of water usage efficiency and quality impacts
• Regular review and enhancement of water management practices
• Investment in water treatment and recycling infrastructure where applicable
• Alignment with industry best practices for water and marine resource stewardship

Targets related to water and marine resources

Water consumption targets

Marine environment protection targets

Strategic investment targets

Integrated environmental targets

Long-term goals

• Continuous improvement in water use efficiency
• Enhanced protection of marine environments in offshore operations
• Development of innovative technologies that minimize water and marine resource impacts
• Strengthening of supply chain water stewardship practices
• Integration of water and marine considerations in all strategic decisions

Performance monitoring

• Regular tracking of water consumption and efficiency metrics
• Continuous assessment of marine environmental impacts
• External verification of water and marine resource management performance
• Benchmarking against industry best practices

Water consumption

Water consumption monitoring TKH tracks and manages water consumption across our operations as part of our comprehensive environmental management approach.

2024 Water consumption performance

• Total water consumption: 116,821 m³
• Regular monitoring and reporting of water usage across all facilities
• Implementation of water conservation measures to optimize consumption
• Integration of water management into operational excellence programs

Water management approach

• Systematic monitoring of water consumption patterns
• Assessment of water usage efficiency and optimization opportunities
• Implementation of water conservation measures across facilities
• Regular review of water consumption performance and targets

Water conservation initiatives

• Investment in water-efficient production technologies
• Implementation of water recycling systems where applicable
• Optimization of production processes to reduce water usage
• Employee awareness and training on water conservation

Water source management

• Assessment of water source sustainability and availability
• Implementation of responsible water sourcing practices
• Monitoring of water quality and treatment requirements
• Integration of water considerations in facility planning

Environmental integration

• Water consumption tracking as part of ISO 14001 environmental management
• Integration with overall environmental performance monitoring
• Regular environmental assessments including water impact evaluation
• External assurance on water consumption reporting

Continuous improvement

• Regular review of water consumption patterns and efficiency
• Investment in water-saving technologies and processes
• Benchmarking water performance against industry standards
• Setting targets for water consumption optimization

Supply chain considerations

• Assessment of water-related risks in supplier operations
• Engagement with suppliers on water stewardship practices
• Integration of water considerations in procurement decisions
• Promotion of water conservation throughout the value chain

Policies related to resource use and circular economy

Circular economy commitment TKH is committed to implementing circular economy principles across our operations and product lifecycle. We focus on resource efficiency, waste reduction, and designing for recyclability.

Resource efficiency policy

• Optimization of raw material usage in production processes
• Implementation of waste reduction programs across all operations
• Target: < 5% waste of most relevant raw materials compared to total material consumption
• Regular monitoring and optimization of resource consumption patterns

Circular design principles

• Integration of recyclability considerations in product development
• Design for environment principles in engineering processes
• Development of products that support customer circular economy goals
• Focus on material selection that enables end-of-life recycling

Waste management and recycling policy

• Comprehensive waste reduction and recycling programs
• Achievement of 75.2% recycling rate in 2024
• Implementation of waste sorting and treatment systems
• Focus on converting waste streams into valuable inputs where possible

Raw material stewardship

• Sustainable sourcing policies for key raw materials
• 59.0% of Tier-1 copper suppliers certified by The Copper Mark (target > 80%)
• Active dialogue with strategic suppliers to improve sustainability practices
• Assessment of raw material extraction impacts and sourcing risks

Product lifecycle management

• Integration of circular economy considerations throughout product lifecycle
• Development of take-back and recycling programs where applicable
• Focus on extending product lifespans through quality design
• Support for customer circular economy initiatives through our technologies

Value chain integration

• Engagement with suppliers on circular economy practices
• Customer collaboration on circular design and end-of-life management
• Industry collaboration on circular economy best practices
• Integration of circular principles in procurement processes

Continuous improvement

• Regular review and enhancement of circular economy practices
• Investment in technologies that support resource efficiency
• Monitoring and reporting of circular economy performance
• Alignment with industry circular economy standards and initiatives

Actions and resources related to resource use and circular economy

Resource efficiency initiatives TKH has implemented comprehensive resource management programs to optimize material usage and minimize waste across our operations.

Waste reduction and recycling actions:

• Achievement of 75.2% recycling rate in 2024
• Implementation of comprehensive waste reduction programs
• 5.4% waste of most relevant raw materials (achieving target < 5%)
• Investment in waste treatment and recycling infrastructure
• Waste sorting and processing systems across facilities

Circular design implementation:

• Integration of recyclability considerations in product development processes
• €80.7 million R&D investment including circular economy innovations
• Development of products designed for end-of-life recyclability
• Design for environment principles in engineering and manufacturing
• Focus on material selection that supports circular economy goals

Supply chain resource stewardship:

• 59.0% of Tier-1 copper suppliers certified by The Copper Mark
• 78.2% of copper suppliers assessed with risk management processes
• Active dialogue with strategic suppliers to improve resource efficiency
• Supplier audits to assess sustainability-related risks including resource extraction impact
• Integration of resource stewardship requirements in procurement

Production optimization measures:

• Implementation of LEAN and Six Sigma principles to reduce waste
• Optimization of production processes to minimize resource consumption
• €15 million cost-saving measures including resource efficiency improvements
• Facility consolidation to improve overall resource utilization
• Regular assessment and optimization of material usage patterns

Technology and innovation investments:

• Development of technologies that enable customer circular economy initiatives
• Innovation in materials and processes that support resource efficiency
• Research into alternative materials and sustainable production methods
• Investment in automation technologies that reduce material waste

Monitoring and improvement resources:

• Regular monitoring of resource consumption and waste generation
• Environmental management systems in accordance with ISO 14001
• External assurance on resource use and circular economy reporting
• Continuous improvement programs for resource efficiency
• Benchmarking against industry best practices for circular economy implementation

Targets related to resource use and circular economy

Resource efficiency targets

Circular economy implementation targets

Supply chain circular economy targets

Innovation and technology targets

Long-term circular economy goals

• Achieve > 80% certification of Tier-1 copper suppliers by The Copper Mark
• Continuous improvement in recycling rates beyond 75.2%
• Further reduction of raw material waste below 5%
• Integration of circular economy principles in all product lines
• Development of take-back and recycling programs for key products

Performance monitoring and improvement

• Regular tracking of resource consumption and waste generation metrics
• Continuous assessment of circular economy implementation progress
• External verification of resource use and circular economy performance
• Benchmarking against industry circular economy best practices
• Annual review and updating of circular economy targets and initiatives

Resource inflows

Raw material consumption TKH monitors and manages the inflow of resources across our manufacturing operations, with a focus on sustainable sourcing and efficient utilization.

Key raw materials:

• Steel, aluminum, plastics, and other materials used in manufacturing processes
• Copper as a primary raw material for connectivity solutions
• Specialized materials for vision systems and manufacturing equipment
• Electronic components and semiconductors

Sustainable sourcing initiatives:

• 59.0% of Tier-1 copper suppliers certified by The Copper Mark (target > 80%)
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Active dialogue with strategic suppliers to improve sustainability of their products and processes
• Regular supplier audits to assess sustainability-related risks, such as raw material extraction impact

Resource efficiency measures:

• Optimization of raw material usage in production processes
• Implementation of inventory management systems to minimize material waste
• Regular assessment of material consumption patterns and efficiency
• Integration of resource considerations in procurement decisions

Supply chain management:

• Diversification of supplier base to ensure sustainable resource availability
• Long-term contracts and supplier partnerships to secure resource flows
• Assessment of supply chain risks including resource scarcity and price volatility
• Implementation of responsible sourcing policies and procedures

Material flow optimization:

• Just-in-time logistical services to optimize resource utilization
• Strong inventory management to balance availability with minimal waste
• Integration of resource planning with production scheduling
• Regular review of material requirements and consumption patterns

Innovation in material usage:

• €80.7 million R&D investment including research into alternative materials
• Development of products requiring fewer raw materials
• Innovation in recycling and reuse of materials within production processes
• Focus on materials that support circular economy principles

Monitoring and reporting:

• Regular tracking of resource inflows and consumption patterns
• Environmental management systems monitoring material usage
• Integration of resource metrics into sustainability reporting
• External assurance on resource consumption data

Resource outflows

Waste management performance TKH actively manages resource outflows through comprehensive waste reduction, recycling, and circular economy programs.

Waste generation and management:

• 5.4% waste of most relevant raw materials compared to total relevant material consumption (target < 5%)
• 75.2% recycling rate achieved in 2024
• Implementation of comprehensive waste reduction programs across all operations
• Focus on converting waste streams into valuable inputs where possible

Product outputs:

• Innovative, reliable, and sustainable products and services (machines, cables, camera solutions, maintenance services)
• Products contributing to customer efficiency and sustainability targets
• 71.6% of turnover linked to UN Sustainable Development Goals
• Long-term contracts and broad geographic distribution minimizing resource waste

Recycling and circular outputs:

• 75.2% recycling rate demonstrates effective circular economy implementation
• Return of materials, components and products to appropriate value chains
• Waste sorting and processing systems converting waste to valuable inputs
• Focus on design for recyclability in product development

Emission outputs:

• 70.3% reduction in net CO2e footprint (scopes 1 and 2) compared to 2019 baseline
• Implementation of emissions reduction programs across operations
• Investment in cleaner production technologies to minimize harmful outputs
• Regular monitoring and reporting of emission outputs

Water outputs:

• Water consumption: 116,821 m³ in 2024 with conservation measures implemented
• Implementation of water treatment systems where applicable
• Focus on minimizing water pollution and contamination
• Regular monitoring of water quality impacts

By-products and secondary materials:

• Recovery and utilization of by-products from manufacturing processes
• Integration of by-products into circular economy initiatives
• Minimization of waste to landfill through recycling and recovery programs
• Focus on beneficial use of secondary materials

Output optimization initiatives:

• Implementation of LEAN and Six Sigma principles to minimize waste outputs
• Regular assessment and optimization of production processes
• Investment in technologies that reduce harmful outputs
• Continuous improvement in resource efficiency and output management

Policies related to own workforce

Commitment to our people A key component of our strategy is a strong, diverse workforce of talented people, with the passion and drive to make things happen. Working together with talented and qualified people is vital to achieving our mission of creating best-in-class Smart Technologies.

Workplace policy framework:

• We want to ensure that we have an attractive and safe workplace
• Being an attractive and responsible employer is an important commitment that we take seriously
• TKH offers an inspiring, safe, healthy and rewarding environment for all our employees
• We are constantly striving to improve our workplace policies and practices

Health and safety policies:

• Investment in health and safety across all operations
• Implementation of safety management systems and protocols
• Regular safety training and awareness programs
• Target: Accident rate (LTIFR) < 1.0 (achieved 0.7 in 2024)
• Zero tolerance for workplace fatalities (0 fatalities in 2024)
• Illness rate target < 4.0% (achieved 3.97% in 2024)

Diversity and inclusion policies:

• Strong belief that diversity of our workforce will strengthen the success of our strategy
• Priority to promote and safeguard diversity within our organization
• Target: > 25% female executive and senior management by 2030 (21.6% achieved in 2024)
• Focus on creating an inclusive workplace that reflects our society
• Equal opportunities and non-discrimination principles

Employee development and engagement:

• Investment in training and development opportunities for all employees
• Focus on building our strong employer brand to attract the right talents
• Employee satisfaction monitoring: 7.8 achieved in 2024 (target > 7.5)
• Career development and progression opportunities
• Skills development programs aligned with business needs

Working conditions:

• Decent working conditions and fair compensation practices
• Work-life balance support and flexible working arrangements where possible
• Regular employee feedback and consultation processes
• Transparent communication and open dialogue

Governance and compliance:

• Compliance with all applicable labor laws and regulations
• Regular review and updating of workforce policies
• Integration of workforce considerations in business decision-making
• Monitoring and reporting of workforce-related performance indicators

Processes for engaging with own workforce and workers' representatives about impacts

Employee engagement approach TKH maintains comprehensive processes for engaging with our workforce to understand and address impacts on employees and ensure their voices are heard in decision-making processes.

Employee satisfaction monitoring:

• Regular employee satisfaction surveys conducted across all operations
• Employee satisfaction rate achieved all-time high at 7.8 in 2024 (target > 7.5)
• Systematic analysis of survey results to identify areas for improvement
• Action planning based on employee feedback to address concerns and opportunities

Communication and consultation processes:

• Regular employee meetings and consultations
• Open communication channels between management and employees
• Transparent communication about company performance, strategy, and changes
• Employee involvement in operational improvement initiatives

Health and safety engagement:

• Regular safety training and awareness programs
• Employee participation in safety committees and risk assessments
• Incident reporting systems and investigation processes
• Safety performance monitoring with LTIFR of 0.7 in 2024
• Zero workplace fatalities achieved through proactive safety engagement

Training and development participation:

• Employee involvement in skills development and training programs
• Career development discussions and planning
• Feedback collection on training needs and effectiveness
• Investment in employee development opportunities

Diversity and inclusion engagement:

• Regular assessment of diversity metrics and inclusion climate
• Employee resource groups and diversity initiatives where applicable
• Feedback on diversity and inclusion policies and practices
• Promotion of inclusive workplace culture

Work-life balance consultation:

• Employee feedback on working conditions and arrangements
• Consultation on flexible working options where possible
• Support for work-life balance initiatives
• Regular review of working time and conditions

Continuous improvement process:

• Regular review of engagement processes and their effectiveness
• Integration of employee feedback into policy development
• Monitoring of engagement outcomes and employee satisfaction trends
• Adaptation of engagement methods based on employee preferences and needs

Processes to remediate negative impacts and channels for own workforce to raise concerns

Grievance and concern reporting channels TKH has established comprehensive processes for employees to raise concerns and for the company to address and remediate negative impacts on our workforce.

Reporting mechanisms:

• Open door policies enabling direct communication with management
• Formal grievance procedures for workplace concerns
• Anonymous reporting channels where employees prefer confidentiality
• Regular employee meetings providing forums for raising concerns
• Human resources support for employee concerns and conflicts

Health and safety reporting:

• Comprehensive incident reporting systems for workplace safety concerns
• Regular safety assessments and hazard identification processes
• Employee participation in safety committees and risk reporting
• Investigation processes for all safety incidents and near-misses
• Corrective action plans for identified safety risks

Remediation processes:

• Systematic investigation of reported concerns and complaints
• Clear timelines for addressing and resolving employee concerns
• Corrective action plans for identified negative impacts
• Follow-up processes to ensure effectiveness of remediation measures
• Regular review of remediation outcomes and process improvements

Workplace harassment and discrimination:

• Clear policies prohibiting harassment and discrimination
• Confidential reporting channels for harassment or discrimination concerns
• Investigation procedures for reported incidents
• Disciplinary measures for confirmed violations
• Support services for affected employees

Performance and development concerns:

• Regular performance review processes with feedback opportunities
• Clear procedures for addressing performance-related concerns
• Training and development support for capability gaps
• Career development discussions and planning
• Mentoring and support programs where applicable

Work-life balance and conditions:

• Regular assessment of working conditions and employee wellbeing
• Flexible working arrangements where operationally feasible
• Support for employees facing work-life balance challenges
• Regular review of workload and working time arrangements
• Employee assistance programs where available

Non-retaliation policies:

• Clear policies protecting employees from retaliation for raising concerns
• Communication of rights and protections for whistleblowers
• Monitoring for retaliation and protective measures when needed
• Training for managers on appropriate response to employee concerns

Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions

Strategic approach to workforce management TKH takes comprehensive action to address material impacts on our workforce while managing risks and pursuing opportunities related to our people.

Health and safety actions and effectiveness:

• Implementation of comprehensive safety management systems across all operations
• Effectiveness: LTIFR of 0.7 achieved in 2024 (target < 1.0)
• Effectiveness: Zero workplace fatalities recorded in 2024
• Effectiveness: Illness rate of 3.97% achieved (target < 4.0%)
• Regular safety training and awareness programs
• Investment in safety equipment and workplace improvements

Diversity and inclusion initiatives:

• Active programs to promote diversity in executive and senior management
• Effectiveness: 21.6% female representation in executive and senior management (progressing toward 2030 target of > 25%)
• Focus on creating inclusive workplace culture
• Equal opportunity policies and non-discrimination measures
• Recruitment practices designed to attract diverse talent

Employee engagement and satisfaction:

• Comprehensive employee satisfaction monitoring and improvement programs
• Effectiveness: Employee satisfaction rate achieved all-time high at 7.8 in 2024 (exceeding target > 7.5)
• Regular communication and consultation processes
• Investment in employee development and training opportunities
• Focus on building strong employer brand

Skills development and career opportunities:

• Significant investment in training and development programs
• Management development programs and meetings
• Skills development aligned with business technology advancement
• Career progression opportunities within the organization
• Knowledge sharing and development initiatives

Talent attraction and retention:

• Strong focus on building employer brand to attract right talent
• Competitive compensation and benefits packages
• Key employee participation in share-based compensation plans
• Inspiring and rewarding work environment
• Challenge addressed: Shortage of qualified staff in challenging labor market

Workforce optimization and efficiency:

• Total workforce of 6,640 FTEs at year-end 2024 (compared to 6,899 in 2023)
• 351 temporary employees providing operational flexibility
• Organizational optimization to improve efficiency and effectiveness
• Integration of acquired companies and talent

Risk management effectiveness:

• Proactive identification and management of workforce-related risks
• Regular monitoring of key workforce performance indicators
• Integration of workforce considerations in strategic planning
• Continuous improvement in workforce management practices

Continuous improvement approach:

• Regular review of workforce policies and practices
• Benchmarking against industry best practices
• Integration of employee feedback into improvement initiatives
• External verification of workforce performance through sustainability reporting

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Health and safety targets

Diversity and inclusion targets

Employee engagement and satisfaction targets

Workforce development targets

Talent attraction and retention targets

Long-term strategic workforce targets

By 2030:

• Achieve > 25% female representation in executive and senior management teams
• Maintain LTIFR < 1.0 across all operations
• Sustain employee satisfaction scores above 7.5
• Ensure workforce accurately reflects society's diversity and inclusiveness
• Continuous improvement in health and safety performance

Risk mitigation targets

• Address shortage of qualified staff through enhanced employer branding
• Improve talent attraction in challenging labor market conditions
• Maintain workplace safety standards across all operations
• Ensure compliance with all applicable labor laws and regulations

Opportunity pursuit targets

• Leverage diverse workforce to strengthen strategic success
• Enhance innovation through inclusive and engaged workforce
• Build competitive advantage through superior employee satisfaction
• Develop workforce capabilities aligned with technology leadership position

Characteristics of the undertaking's employees

Workforce size and composition At year-end 2024, TKH employed a total of 6,640 FTEs (2023: 6,899), of which 351 were temporary employees (2023: 434 FTEs).

Geographic distribution TKH operates globally with employees across multiple regions:

• Europe (including the Netherlands): Primary operational base with significant manufacturing and R&D capabilities
• North America: Growing presence with acquisitions and market expansion
• Asia: Strong operational presence particularly in manufacturing and customer support
• Other regions: Supporting global customer base and operations

Functional distribution

• R&D and software development: Over 750 employees dedicated to research and development activities
• Manufacturing and operations: Employees across production facilities and operational sites
• Sales and customer support: Global sales organization and customer service teams
• Support functions: Corporate functions including finance, HR, legal, and administration

Employment characteristics

• Mix of permanent and temporary employees providing operational flexibility
• Skilled workforce with technical expertise in advanced technologies
• Engineers and technical specialists representing significant portion of workforce
• Factory workers and operational staff supporting manufacturing operations

Diversity profile

• Female representation in executive and senior management: 21.6% in 2024 (target > 25% by 2030)
• Focus on ensuring workforce reflects diversity of society
• Commitment to diversity and inclusion across all levels of organization
• Ongoing initiatives to improve gender diversity, especially in leadership positions

Employee development and capabilities

• Continuous investment in training and development programs
• Skills development aligned with technology advancement and innovation
• Management development programs for leadership capabilities
• Technical training for advanced manufacturing and R&D roles

Employment conditions

• Inspiring, safe, healthy and rewarding environment for all employees
• Competitive compensation and benefits packages
• Key employee participation in share-based compensation plans
• Focus on work-life balance and employee wellbeing

Organizational culture

• Entrepreneurial culture with empowered decision-making
• Customer-focused approach throughout organization
• Innovation-driven mindset supporting technology leadership
• Decentralized operating model with local autonomy and accountability

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

Definition and scope

TKH defines non-employees as individuals not on the payroll. Non-employees consist of:

• Interns/stagiaires
• Other temporary workers hired for a short duration, mostly from employment agencies (e.g. in Dutch "uitzendkrachten")
• Self-employed people

This contrasts with employees, who are on the payroll based on an employment relationship according to national law or practice, and consists of permanent and temporary hires with a contract for an indeterminate or a limited period for full-time or part-time work, including employees with a non-guaranteed hours contract.

Application of policies

TKH's policies to manage material impacts, risks and opportunities apply to all own workforce, including non-employees. Identified potential material negative impacts on the overall health and wellbeing of own workforce applies to all own workforce and are not related to individual incidents.

Own workforce performing production activities may be at greater risk of harm related to health and safety issues. TKH employs people with a disability and/or disadvantage in the labor market, acknowledging these people to be particularly vulnerable.

Quantitative metrics

No quantitative data on the number, breakdown by type, or headcount/FTE methodology for non-employees was disclosed in the sustainability statements.

Collective bargaining coverage and social dialogue

Collective bargaining agreements

In the Netherlands, 1,938 employees of TKH participate in the multi-employer union plans of 'Pensioenfonds van de Metalektro' ('PME') and 'Pensioenfonds Metaal & Techniek' ('PMT') in accordance with the collective bargaining agreements applicable for the industry in which the TKH companies operate. These collective bargaining agreements have no expiration date.

Works councils and employee representation

The interests of the employees are represented at the level of the operating companies by the local Works Councils, and at the TKH group level by the Central Works Council. These councils ensure ongoing employee representation under the terms of the Works Councils Act (Wet op de Ondernemingsraden).

During the year under review, the Executive Board and the Central Works Council held three informal meetings. Topics discussed included the results and organizational developments, progress on the strategic program including acquisitions and divestments, the budget, and TKH's annual report including the performance on non-financial KPIs compared to the targets. This includes sustainability-related matters such as diversity, and health and safety.

Central Works Council composition

Central Works Council members:

• Olaf Karsten (VMI), chairman
• Gerard Roolvink (TKF), secretary
• Jan Jaap Derksen (VMI)
• Maurice Fliescher (Intronics)
• Onno Verkerk (TKH Security)
• André van Loon (TKF)

Supervisory Board engagement

The Supervisory Board maintains annual contact with the Central Works Council about TKH's strategy and topics of interest to the individual Works Councils. These topics include staff continuity and employability, safety, and cooperation between operating companies. For the Supervisory Board, consultation with the Central Works Council is also an important element in assessing and validating the culture within TKH's organizations.

Social dialogue on worker rights

TKH expects suppliers to respect employee's rights with regard to collective bargaining and freedom of association. Through the Code of Supply, TKH requests tier-1 suppliers to fully recognize the labor standards issued by the International Labor Organization (ILO), taking into due account the applicable laws and regulations in different countries and at different sites.

Stakeholder engagement policy

TKH's Stakeholder Engagement Policy includes the (central) works council of the company as a key stakeholder. If the (central) works council is considered a participant in a stakeholders dialogue, the chair of the works council will be invited to participate in such dialogue in case the stakeholder dialogue will be held in groups. This is also the case when the stakeholder dialogue with the works council has already taken place in regular contacts between the Executive Board and the works council (and the Supervisory Board).

Diversity metrics

Gender diversity performance

Diversity strategy and commitment We strongly believe that the diversity of our workforce will further strengthen the success of our defined strategy. Therefore, one of our priorities is to promote and safeguard diversity within our organization.

Gender diversity progress

• Female representation in executive and senior management increased to 21.6% in 2024
• Progressing toward 2030 target of > 25% female executive and senior management
• Integration of diversity targets in long-term incentive schemes
• Continuous focus on improving gender diversity, especially in leadership positions

Diversity and inclusion initiatives

• Active programs to promote diversity across all organizational levels
• Focus on ensuring workforce accurately reflects diversity of society
• Equal opportunity policies and non-discrimination principles
• Inclusive workplace culture development
• Recruitment practices designed to attract diverse talent

Broader diversity considerations

• Commitment to diversity and inclusiveness beyond gender
• Focus on creating workplace that reflects societal diversity
• Ongoing initiatives to improve representation across different dimensions
• Integration of diversity considerations in talent management processes

Diversity governance and accountability

• Diversity metrics included in executive compensation and performance assessment
• Regular monitoring and reporting of diversity progress
• Integration of diversity objectives in strategic planning
• Commitment to transparency in diversity performance reporting

Future diversity commitments

• Continue progress toward 25% female executive and senior management by 2030
• Expand focus on broader diversity and inclusion initiatives
• Strengthen recruitment and development programs supporting diversity
• Maintain accountability for diversity progress through performance measurement

Challenges and opportunities

• Gender diversity particularly challenging in technical and engineering roles
• Opportunity to leverage diverse perspectives for innovation and performance
• Building employer brand that attracts diverse talent
• Creating inclusive culture that retains diverse workforce

Social protection

Collective bargaining and social protection coverage

TKH discloses qualitative information on social protection arrangements but does not provide quantitative coverage metrics.

Coverage approach:

• For Dutch employees, TKH adheres to social conditions of employment as set out in collective labor agreements (depending on the sector)
• For operating companies without a collective labor agreement, agreement-related rules are implemented
• For foreign operating companies, TKH applies a similar policy in line with local laws and regulations

TKH ensures that such agreements are correctly drafted and observed, particularly regarding periods of notice, restraint-of-trade and non-compete clauses, and profit-sharing arrangements, and that statutory notice periods and other provisions are observed.

Due diligence: In the case of acquisition opportunities, the salary structure of the target company is examined during the due diligence process.

Coverage metrics

No quantitative data disclosed on the percentage of employees covered by social protection against loss of income from major life events (sickness, unemployment, employment injury, parental leave, retirement), nor breakdown by public vs. private schemes or by country.

Training and skills development metrics

Investment in employee development TKH makes significant investments in training and skills development as part of our commitment to building a talented and capable workforce.

R&D and technical skills development

• Over 750 employees dedicated to R&D and software development
• €80.7 million annual investment in R&D activities (2023: €77.2 million)
• Focus on advancing technical capabilities in AI, software development, and advanced technologies
• Continuous skill development in emerging technologies and innovation

Training program scope

• Training and skills management programs aligned with business needs
• Management development programs for leadership capabilities
• Technical training for manufacturing and operational roles
• Safety training and awareness programs across all operations
• Skills development supporting technology advancement and innovation

Capability development initiatives

• Knowledge sharing and development across the organization
• Transfer of skills and knowledge through centralized expertise pools
• Cross-functional training supporting integrated technology solutions
• Specialized training for advanced manufacturing systems and automation

Development program effectiveness

• Regular assessment of training needs and effectiveness
• Employee feedback on development opportunities and programs
• Career development discussions and planning processes
• Skills gap analysis and targeted development programs

Innovation and technology focus

• AI and software development training supporting technology leadership
• Advanced manufacturing and automation skills development
• Vision technology and machine learning capabilities
• Customer-focused solution development and sales training

Continuous learning culture

• Emphasis on continuous skill development and learning
• Support for professional development and career advancement
• Integration of learning objectives with performance management
• Investment in employee capabilities aligned with strategic objectives

External collaboration

• University partnerships for advanced R&D and skills development
• Industry collaboration for best practice sharing and development
• Professional certification and external training programs
• Knowledge exchange with technology partners and customers

Note: Specific quantitative training metrics (hours, participation rates, completion rates) would typically be included here but were not found in the provided report text.

Health and safety metrics

Coverage by health and safety management system

The percentage of own workers who are covered by health and safety management system based on recognized standards is 51.6%. This is calculated based on the total own workers and includes both production sites and office locations. In 2024, 100% of our own workforce at our production sites was covered by the ISO 45001 standard as health and safety management system.

Health and safety metrics own employees

Illness rate

In 2024, the illness rate was 3.97%, which is slightly above the previous year's level (2023: 3.85%) and slightly below the target of a maximum of 4.0%. Flu-related illnesses had the greatest impact on the small increase of the illness rate.

Methodology notes

TKH defines its Lost Time Injury Frequency Rate (LTIFR) as the number of incidents resulting in at least one day's absence from work without the possibility of any replacement work, per million hours worked. Reportable incidents are based on actual occurrences and are never extrapolated or estimated. The absolute number of serious accidents reported covers all employees on TKH's payroll, excluding employees of third-party contractors. The LTIFR is reported at group level and not specified by region or gender.

Fortunately, we neither had any fatality nor any case of recordable work-related ill health to report on, as in the two previous years (target: 0).

Compensation metrics

Pay gap

Not disclosed.

TKH has phased in the gender pay gap metric under ESRS S1-16 in this first year of CSRD reporting.

Remuneration ratio

The following table shows a five-year comparison of CEO remuneration and company performance, including the CEO pay ratio:

The pay ratio for 2024 is 26.6 and significantly lower compared to 2023, due to the lower value of STI and LTI as part of the remuneration.

Methodology

The internal pay ratio is understood to mean the ratio between the total annual remuneration of the CEO on the one hand, and, on the other hand, the average annual remuneration of the employees of the company and group companies whose financial data are consolidated by the company, where:

• The total annual remuneration of the CEO includes all the remuneration components (such as fixed remuneration, variable cash remuneration (bonus), the share-based part of the remuneration, social contributions, pension, expense allowance, etc.) included in the consolidated annual accounts on an IFRS basis.
• The average annual remuneration of the employees is determined by dividing the total wage costs for the financial year (as included in the consolidated annual accounts on an IFRS basis) by the average number of FTEs during the financial year. The labor mix had an important impact on the average total remuneration of employees in 2024, in addition to inflation effects.
• The value of the share-based component of the remuneration is determined at the grant date in accordance with the applicable rules under IFRS.

The CEO remuneration figures in the pay ratio are based on TRI, STI, and LTI.

Policies related to value chain workers

Supply chain responsibility commitment TKH is committed to ensuring responsible labor practices throughout our value chain. We expect our suppliers to meet high standards for worker welfare, safety, and rights.

Supply chain labor standards

• Assessment of child/forced labor risks in our value chain
• Implementation of policies prohibiting child and forced labor in supplier operations
• Regular evaluation of working conditions and work-related rights in the value chain
• Integration of labor standards requirements in supplier contracts and agreements

Supplier sustainability requirements

• Comprehensive supplier audits to assess sustainability-related risks including labor conditions
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Active dialogue with strategic suppliers to improve labor practices
• Requirements for suppliers to demonstrate compliance with labor standards

Due diligence processes

• Systematic assessment of labor-related risks in supplier operations
• Regular supplier audits focusing on working conditions and worker welfare
• Monitoring of supplier compliance with labor standards and regulations
• Risk-based approach to supplier assessment and management

Worker health and safety in value chain

• Requirements for suppliers to maintain safe working conditions
• Assessment of health and safety practices in supplier operations
• Support for suppliers in improving workplace safety standards
• Integration of health and safety considerations in supplier selection

Value chain worker engagement

• Processes for addressing worker concerns in the supply chain
• Channels for reporting labor-related issues and violations
• Support for suppliers in establishing worker grievance mechanisms
• Collaboration with suppliers on worker engagement best practices

Remediation and improvement

• Corrective action plans for identified labor-related issues in supply chain
• Support for suppliers in addressing labor practice deficiencies
• Continuous improvement programs for value chain labor standards
• Regular monitoring of remediation progress and effectiveness

Industry collaboration

• Participation in industry initiatives for responsible supply chain management
• Collaboration with certification programs like The Copper Mark
• Sharing of best practices for value chain worker welfare
• Support for industry-wide improvements in labor standards

Transparency and reporting

• Regular monitoring and reporting of value chain labor performance
• External verification of supply chain sustainability practices
• Transparency in supplier assessment and improvement activities
• Integration of value chain worker considerations in sustainability reporting

Processes for engaging with value chain workers about impacts

Supplier engagement framework TKH engages with value chain workers through comprehensive supplier management processes and direct collaboration with our supply chain partners.

Supplier assessment and dialogue

• Regular supplier audits to assess working conditions and labor practices
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Active dialogue with strategic suppliers to improve labor practices and worker welfare
• Systematic engagement on sustainability-related risks including worker impacts

Worker welfare monitoring

• Assessment of child/forced labor risks and working conditions in supply chain
• Evaluation of health and safety practices in supplier operations
• Monitoring of worker rights and labor standards compliance
• Regular review of supplier labor practices and worker treatment

Collaborative improvement programs

• Support for suppliers in establishing worker engagement mechanisms
• Collaboration on best practices for worker welfare and safety
• Joint initiatives to improve working conditions in the supply chain
• Knowledge sharing on effective worker engagement approaches

Grievance and feedback mechanisms

• Support for suppliers in establishing worker grievance procedures
• Channels for reporting labor-related concerns in the supply chain
• Processes for addressing worker complaints and issues
• Follow-up on reported concerns and remediation efforts

Certification and standards programs

• Engagement through certification programs like The Copper Mark
• 59.0% of Tier-1 copper suppliers certified by The Copper Mark (target > 80%)
• Support for suppliers in achieving labor standards certifications
• Participation in industry initiatives for worker welfare improvement

Direct engagement activities

• Site visits and inspections to assess worker conditions
• Direct communication with worker representatives where appropriate
• Participation in supplier worker engagement activities
• Support for supplier worker training and development programs

Continuous improvement process

• Regular review of supplier engagement effectiveness
• Enhancement of engagement processes based on outcomes and feedback
• Integration of worker engagement results into supplier management
• Long-term partnership development focused on worker welfare improvement

Transparency and accountability

• Regular reporting on supply chain worker engagement activities
• External verification of engagement processes and outcomes
• Public disclosure of supply chain labor performance and improvements
• Integration of worker engagement in sustainability reporting

Processes to remediate negative impacts and channels for value chain workers to raise concerns

Remediation framework for value chain workers TKH has established comprehensive processes to address negative impacts on value chain workers and provide channels for raising concerns about working conditions and labor practices.

Grievance and reporting mechanisms

• Support for suppliers in establishing worker grievance procedures
• Channels for value chain workers to report labor-related concerns and violations
• Anonymous reporting options where workers prefer confidentiality
• Clear procedures for escalating serious labor violations to TKH management

Supplier audit and investigation processes

• Regular supplier audits to identify potential negative impacts on workers
• 78.2% of copper suppliers assessed with comprehensive risk management processes
• Systematic investigation of reported labor-related concerns
• On-site inspections to verify working conditions and labor practices

Corrective action and remediation

• Development of corrective action plans for identified labor violations
• Support for suppliers in addressing labor practice deficiencies
• Timeline-based remediation requirements for serious violations
• Regular monitoring of remediation progress and effectiveness

Child and forced labor prevention

• Specific assessment and remediation processes for child/forced labor risks
• Immediate action requirements for any identified child or forced labor
• Support for affected workers and families in remediation efforts
• Prevention measures to avoid recurrence of child/forced labor violations

Health and safety remediation

• Immediate action requirements for serious health and safety violations
• Support for suppliers in improving workplace safety conditions
• Worker safety training and awareness programs
• Investment in safety equipment and workplace improvements where needed

Non-retaliation protection

• Clear policies protecting workers from retaliation for raising concerns
• Monitoring for retaliation against workers who report violations
• Support for workers facing retaliation for exercising their rights
• Training for suppliers on appropriate response to worker concerns

Continuous monitoring and improvement

• Regular follow-up assessments to verify effectiveness of remediation
• Ongoing monitoring of previously identified and remediated issues
• Continuous improvement in remediation processes and outcomes
• Integration of lessons learned into supplier management practices

Industry collaboration on remediation

• Participation in industry initiatives for supply chain labor remediation
• Collaboration with certification bodies like The Copper Mark on remediation standards
• Sharing of best practices for effective remediation processes
• Support for industry-wide improvements in worker protection and remediation

Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions

Strategic approach to value chain worker management TKH takes comprehensive action to address material impacts on value chain workers while managing related risks and pursuing opportunities for improvement.

Supply chain assessment and risk management

• Effectiveness: 78.2% of copper suppliers assessed with 2024 risk management assessment
• Progress: 59.0% of Tier-1 copper suppliers certified by The Copper Mark (target > 80%)
• Systematic assessment of child/forced labor risks across the supply chain
• Regular evaluation of working conditions and work-related rights in value chain
• Risk-based approach to supplier selection and ongoing management

Supplier certification and standards implementation

• Active promotion of The Copper Mark certification among copper suppliers
• Support for suppliers in achieving and maintaining labor standards certifications
• Integration of certification requirements in supplier contracts and agreements
• Regular monitoring of certified suppliers to ensure continued compliance

Active supplier engagement and improvement

• Comprehensive supplier audit programs focusing on labor practices
• Active dialogue with strategic suppliers to improve sustainability practices
• Joint initiatives with suppliers to enhance worker welfare and safety
• Technical assistance and support for supplier capability development

Child and forced labor prevention

• Implementation of zero-tolerance policies for child and forced labor
• Specific risk assessment processes for child and forced labor in supply chain
• Immediate remediation requirements for any identified violations
• Prevention programs and supplier training on child and forced labor risks

Health and safety improvement initiatives

• Requirements for suppliers to maintain safe working conditions
• Support for suppliers in implementing health and safety management systems
• Regular assessment of workplace safety practices in supplier operations
• Investment in supplier safety training and capability building

Remediation and corrective action effectiveness

• Systematic corrective action plans for identified labor-related violations
• Regular monitoring of remediation progress and outcomes
• Support for suppliers in addressing labor practice deficiencies
• Continuous improvement in remediation processes and effectiveness

Industry collaboration and leadership

• Participation in industry initiatives for responsible supply chain management
• Collaboration with certification programs and standards organizations
• Sharing of best practices and lessons learned with industry peers
• Advocacy for improved labor standards across industry supply chains

Performance monitoring and continuous improvement

• Regular tracking of supply chain labor performance indicators
• External verification of supply chain sustainability practices
• Continuous enhancement of supplier management and worker protection programs
• Integration of value chain worker considerations in strategic decision-making

Challenges and opportunities

• Challenge: Achieving 80% certification target for Tier-1 copper suppliers
• Opportunity: Leading industry transformation in supply chain labor practices
• Risk management: Proactive identification and mitigation of labor-related risks
• Value creation: Building sustainable and responsible supply chain partnerships

Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

Supply chain worker welfare targets

Child and forced labor prevention targets

Working conditions improvement targets

Supplier engagement and certification targets

Long-term value chain worker targets

By 2030 and ongoing:

• Achieve > 80% of Tier-1 copper suppliers certified by The Copper Mark
• Maintain 100% assessment coverage of high-risk suppliers
• Eliminate child and forced labor from entire supply chain
• Ensure all suppliers meet minimum working condition standards
• Establish effective worker grievance mechanisms across supply chain

Risk management and opportunity targets

• Continuous improvement in supply chain labor risk identification and mitigation
• Enhancement of supplier capability and performance in worker welfare
• Industry leadership in responsible supply chain management practices
• Integration of value chain worker considerations in all supplier decisions

Remediation and improvement targets

• 100% remediation of identified labor-related violations within agreed timelines
• Continuous enhancement of supplier labor practices and worker welfare
• Zero tolerance for serious labor violations with immediate corrective action
• Regular monitoring and verification of remediation effectiveness

Performance monitoring targets

• Annual assessment and reporting of value chain worker performance
• External verification of supply chain labor practices and improvements
• Benchmarking against industry best practices and standards
• Transparency in supply chain labor performance and challenges

Business conduct policies and corporate culture

Corporate values and culture At TKH, we develop our technologies in a sustainable and socially responsible manner, using the expertise of our talented people. We conduct our business with honesty, integrity, accountability, and transparency.

Our core values:

We are aspirational

• The commitment to go beyond the norm
• Focused on driving success, with the vision to open new possibilities and unlock sustainable value for stakeholders

We are empowered

• The freedom to make great things happen
• Encourage entrepreneurial mindset, trusting the talent and passion of our people to take initiative and deliver innovation

We are motivated

• The ambition to deliver sustainable success
• More than an innovator, we are a long-term partner motivated by and committed to the best interests of customers, planet, and future generations

We are customer-focused

• The vision to help our customers thrive
• Close partnerships that help deliver technology that helps customers boost efficiency, achieve ambitions, and maintain success

Corporate culture framework

• Decentralized operating model encouraging entrepreneurship and winning culture
• Strong capitalization on new business opportunities
• High-performance execution with short lines of communication
• Management development programs and inspiring environment
• Diverse workforce promoting innovation and excellence

Ethical business conduct

• Commitment to conducting business with honesty and integrity
• Accountability and transparency in all business operations
• Compliance with all relevant legislation and regulations
• Integration of ethical considerations in decision-making processes

Governance and oversight

• Clear governance structure with defined roles and responsibilities
• Regular monitoring of corporate culture and business conduct
• Integration of values into performance management and compensation systems
• Continuous reinforcement of ethical standards throughout the organization

Stakeholder engagement

• Commitment to creating value for all stakeholders including shareholders, employees, customers, and society
• Transparent communication and open dialogue with stakeholders
• Integration of stakeholder interests in strategic planning and decision-making
• Regular assessment of stakeholder satisfaction and engagement

Continuous improvement

• Regular review and reinforcement of corporate values and culture
• Adaptation of business conduct policies to meet evolving standards
• Integration of feedback and learning into cultural development
• Alignment of corporate culture with strategic objectives and sustainability goals

Management of relationships with suppliers

Strategic supplier relationship management TKH maintains comprehensive supplier management processes focused on sustainability, quality, and long-term partnership development.

Supplier assessment and evaluation

• Comprehensive supplier audits to assess sustainability-related risks, including environmental and social impacts
• 78.2% of copper suppliers assessed with 2024 risk management assessment
• Regular evaluation of supplier performance, compliance, and sustainability practices
• Risk-based approach to supplier selection and ongoing management

Sustainability requirements and certification

• 59.0% of Tier-1 copper suppliers certified by The Copper Mark (target > 80%)
• Requirements for suppliers to meet environmental and social standards
• Support for suppliers in achieving sustainability certifications and compliance
• Integration of sustainability criteria in supplier selection and contracting

Active supplier engagement and development

• Active dialogue with strategic suppliers to improve sustainability of their products and processes
• Collaborative improvement programs and technical assistance
• Long-term partnership development focused on mutual value creation
• Regular communication and feedback on performance and expectations

Supply chain risk management

• Systematic assessment of supply chain risks including environmental, social, and operational factors
• Implementation of risk mitigation strategies and contingency planning
• Diversification of supplier base to ensure security of supply
• Regular monitoring of supplier financial stability and operational capability

Raw material sourcing governance

• Responsible sourcing policies for key raw materials including copper
• Assessment of raw material extraction impacts and sourcing risks
• Support for suppliers in implementing responsible mining and sourcing practices
• Integration of raw material sustainability in procurement decisions

Supplier performance monitoring

• Regular performance reviews and scorecards for key suppliers
• Key performance indicators covering quality, delivery, cost, and sustainability
• Corrective action processes for underperforming suppliers
• Recognition and rewards for exceptional supplier performance

Long-term supplier partnerships

• Strategic partnership agreements with key suppliers
• Joint development programs and innovation collaboration
• Investment in supplier capability development and capacity expansion
• Shared value creation through operational excellence and sustainability improvements

Transparency and compliance

• Clear expectations and requirements communicated to all suppliers
• Regular audit and verification of supplier compliance
• Public reporting on supplier management performance and outcomes
• Integration of supplier management in overall sustainability reporting

Continuous improvement

• Regular review and enhancement of supplier management processes
• Benchmarking against industry best practices
• Integration of lessons learned and feedback into supplier relationship management
• Alignment of supplier management with strategic objectives and sustainability goals

Prevention and detection of corruption and bribery

Anti-corruption commitment TKH is committed to conducting business with the highest standards of integrity and ethical behavior. We have zero tolerance for corruption and bribery in all forms.

Corporate culture and integrity

• Commitment to conducting business with honesty, integrity, accountability, and transparency
• Integration of ethical standards into corporate values and culture
• Clear expectations for all employees regarding ethical business conduct
• Regular reinforcement of anti-corruption principles throughout the organization

Governance and oversight

• Executive Board responsibility for implementing anti-corruption policies and procedures
• Supervisory Board oversight of corruption and bribery prevention measures
• Regular monitoring and assessment of corruption risks across operations
• Integration of anti-corruption considerations in business decision-making processes

Risk assessment and management

• Systematic assessment of corruption and bribery risks in business operations
• Regular review of risk exposure in different markets and business activities
• Implementation of risk mitigation measures and controls
• Monitoring of high-risk transactions and relationships

Training and awareness

• Regular training programs on anti-corruption policies and procedures
• Awareness campaigns promoting ethical business conduct
• Specific training for employees in high-risk positions or locations
• Integration of anti-corruption training in employee onboarding programs

Compliance monitoring and controls

• Implementation of internal controls to prevent and detect corruption
• Regular compliance audits and assessments
• Clear procedures for due diligence on business partners and third parties
• Monitoring of financial transactions and business activities for potential corruption indicators

Reporting and investigation procedures

• Clear channels for reporting suspected corruption or bribery
• Confidential reporting mechanisms protecting whistleblowers
• Professional investigation procedures for reported incidents
• Non-retaliation policies protecting employees who report concerns

Third party management

• Due diligence procedures for business partners, agents, and intermediaries
• Contractual requirements for third parties to comply with anti-corruption standards
• Regular monitoring of third party compliance and performance
• Termination procedures for third parties involved in corrupt practices

Continuous improvement

• Regular review and updating of anti-corruption policies and procedures
• Benchmarking against international anti-corruption best practices and standards
• Integration of lessons learned from incidents or near-misses
• Alignment with evolving regulatory requirements and industry standards

Incidents of corruption or bribery

Confirmed incidents

TKH reported zero confirmed incidents of corruption or bribery in 2024 (annual target: 0). The company states: "In 2024, no confirmed incidents of corruption or bribery were reported as well as by no convictions for violation of such laws (annual target: no incidents or fines)."

Convictions and fines

TKH recorded no convictions or legal decisions (criminal or administrative) related to corruption or bribery violations, and paid no fines for such violations in 2024.

Disciplinary actions

There were no instances of employees being dismissed or disciplined for corrupt practices during the year under review.

Separately, TKH reported three violations of the Code of Conduct through the internal reporting procedure in 2024, though these incidents were explicitly stated as "not related to bribery or corruption." The employees involved were dismissed after various conversations and measures to improve their behavior.

Contracts terminated

Not disclosed.

Investigation procedures and speak-up mechanisms

TKH has established a Whistleblower Procedure enabling employees and third parties to report issues including possible criminal offenses, violations of law, bribery, disclosure of confidential information, and unethical behavior. The procedure is based on the EU Whistleblower Directive 2019/1937.

Key features:

• Reports are reviewed and investigated by the local confidential officer and/or the Group Compliance Officer
• External researchers may be appointed to ensure independence and objectivity
• Disciplinary and corrective measures are taken if deemed necessary
• External parties can report to the Group Compliance Officer
• TKH commits to protecting whistleblowers from retaliation
• Each incident is reported to the Executive and Supervisory Board through the Audit Committee

2024 reporting activity:

The one report received in 2023 was investigated in 2024 by an external researcher. The investigation "shows that there was no indication for a suspicion of wrongdoing as referred to in the TKH whistleblower procedure."

Planned improvements:

TKH plans to implement in 2025:

• An updated whistleblower procedure
• A new online platform for (anonymous) reporting
• A new training program for staff receiving and managing whistleblower reports (confidential officers)

Anti-corruption and anti-bribery framework

TKH has a comprehensive framework including:

• Code of Conduct: Based on OECD Guidelines and UN Global Compact principles, covering anti-bribery and anti-corruption. 98.9% of employees had signed it as of 2024 (target: 100%)
• Code of Supply: Requires strategic suppliers to follow TKH's business ethics, including zero tolerance for corruption and bribery. 89.4% of strategic suppliers had signed it in 2024
• Internal Control Framework (ICF): Used to analyze strategic, operational, financial, and compliance risks including potential corruption and bribery risks
• Global policy on corporate gifts and sponsorships: States that promises, offers, or gifts with intent to improperly influence business decisions are prohibited. Corporate gifts must remain within reasonable limits (not exceeding €100) and never in cash form

Training:

TKH conducted anti-corruption and anti-bribery training in 2024, covering functions at-risk of corruption and bribery including procurement, sales, legal, financial administration and senior/executive management. The training addressed sanctions regulation, fraud definitions, corruption and bribery definitions with examples, and the internal payment framework.

Coverage: 27.5% of headcount at-risk received training in 2024 (target for 2025: >90%). A new comprehensive training program will be launched in 2025.

Risk assessment

Based on internal fraud risk assessments, TKH identified a "potential and inherent corruption/fraud risk in the value chain of our business segment Smart Manufacturing systems due to the use of third-party agents towards part of our end customers." Mitigation measures include:

• Governing working relationships with agents and intermediaries through guidelines and template contracts
• Training third-party agents to ensure compliance with TKH's guidelines
• Company-specific training programs focusing on relevant corruption and bribery risks, such as commission payments to third-party agents

Governance oversight

The Audit Committee of the Supervisory Board regularly discusses fraud risk assessment, including inherent fraud risks, identified significant risks, and other risks including corruption and bribery. Internal Audit performs audit activities to assess possible risks of fraud, non-compliance, corruption, and bribery, and reviews internal control measures related to these risks.

Political influence and lobbying activities

Political engagement approach

TKH and its companies are neither involved in political activities in the respective countries or regions, nor do they try to influence political decision-making by paying financial or in-kind political contributions to any potential beneficiary. The same applies for direct lobbying activities in which neither TKH nor its companies are involved.

Trade association memberships

Some operating companies are members of local industry or trade associations, business coalitions, and other organizations that are dedicated to important industry-related topics, or work on standardization.

Ethical standards and guidelines

TKH has a global policy in place around corporate gifts and sponsorships. It states that we should not promise, offer, give or authorize anything of value, directly or through others, with the intent to improperly influence or reward a business decision. Any corporate gifts that are given or received must therefore remain within reasonable limits but their value must in any case not exceed €100 and may never be accepted in the form of money. All business transactions entered into on behalf of TKH must be properly recorded in accordance with the appropriate procedures and will be available for inspection and verification.

Political contributions

TKH does not make any financial or in-kind political contributions.

Lobbying expenditure

TKH does not engage in direct lobbying activities.

Payment practices

Payment terms and trade payables

Trade receivables are non-interest bearing and generally have a payment term between 14 and 90 days.

Supply chain finance (reverse factoring)

At the end of 2024, a number of suppliers made use of supply chain finance (reversed factoring) for a total of €39.4 million (2023: €44.1 million), which is recognized as trade payables. Of this amount about 93% was already paid by finance providers towards suppliers at the end of 2024. The supply chain finance program enables included suppliers to collect their invoices at an earlier date than based on regular payment terms. The payment terms of TKH under this program are on average in the upper (longest) range of the payment terms TKH has with non-included suppliers.

Non-recourse factoring

At the end of 2024 receivables with an amount of €43.3 million are sold to a factoring company (2023: €40.9 million) and were subsequently derecognized.