The supervisory board duly performed its duties in accordance with statutory requirements, the articles of association, the supervisory board's rules of procedure and the German Corporate Governance Code.

The plenum of the supervisory board held nine meetings during the financial year 2024. In addition, the audit committee held five meetings, the remuneration committee held four meetings, the nomination committee held two meetings and the D&I and sustainability committee held two meetings during the financial year 2024.

The supervisory board convened regularly without the management board as was necessary to consider items that pertained to the management board or required internal discussion among supervisory board members alone. The plenum of the supervisory board was informed about the discussions and decisions of meetings of the committees at its subsequent plenary meetings.

The audit committee reviewed and examined the annual financial statements and the consolidated financial statements for 2023, the combined management report (including the combined non-financial declaration) for 2023 and the remuneration report for 2023, as well as the quarterly statement for the first quarter, the half-year report and the quarterly statement for the third quarter of 2024. The committee regularly reviewed and discussed the focus and the quality of the audit, the status reports on GRC (governance, risk & compliance) including data privacy, cyber security, litigation and the work of internal audits as well as treasury reports.

The remuneration committee prepared the decision for the supervisory board on the new remuneration system for the members of the management board, which was approved by the annual general meeting in May 2024.

The nomination committee continued to address the succession plan of the supervisory board.

The D&I and sustainability committee had an in-depth discussion on the sustainability strategy shaped by two long-term ambitions: achieving net zero for our own operations and private labels by 2040 and for emissions across the group's entire value chain by 2050, as well as further empowering workers through decent work.

The supervisory board received regular and detailed written and oral reports on the intended business strategy and material issues regarding financial, investment and personnel planning and the progress of business, as well as on risks and opportunities. In particular, the management board consulted the supervisory board on the updated group strategy. Matters requiring approval of the supervisory board were presented by the management board.

In each of its ordinary quarterly meetings, the plenum of the supervisory board reviewed and discussed the management reports on the overall development of the business, including its financial performance, and the company's strategy as well as recent capital market developments. The chairpersons of each of the committees of the supervisory board reported regularly to the full supervisory board on the activities and conclusions of the diverse supervisory board committees.

The supervisory board discussed and approved the adoption of the responsibilities within the management board, and in particular the envisaged change of the co-CEO position from David Schneider to David Schröder to ensure the effective execution of the updated group strategy.

The ordinary meeting of the supervisory board on 16 May 2024 centred on the report of the Chief People Officer on updates in the area of people, organisation and company culture.

The ordinary meeting on 5 September 2024 focused on strategic updates. In particular, the supervisory board dealt with the inspiration and entertainment pillar in the group's B2C strategy as well as the logistics network strategy 2028 updated according to the company's new strategic ambitions. The supervisory board further discussed Zalando's initiatives and potential opportunities around the use of generative artificial intelligence.

At its ordinary meeting on 5 December 2024, the supervisory board discussed the budget and annual plan for the 2025 financial year and approved it after a thorough review.

The supervisory board held three extraordinary meetings on 18 November, 9 December and 11 December 2024 to discuss in depth and approve the intention to submit a voluntary public tender offer to acquire up to 100% of the shares of the e-commerce company ABOUT YOU Holding SE (ABOUT YOU).

The new remuneration system for the management board was approved at the annual general meeting on 17 May 2024 with an approval rate of 92.23%.

Remuneration System 2024 Structure

The Remuneration System 2024 comprises fixed salary, fringe benefits, the Zalando Growth Incentive 2024 (ZGI 2024) as a cash-settled short-term incentive with obligation to invest 50% of the net payout into company shares with a minimum holding period of one year, and the Rolling Long-Term Incentive 2024 (LTI 2024) consisting of virtual options with a fixed ratio of 25% LTI 2024 Shares and 75% LTI 2024 Options.

Performance Metrics

ZGI 2024

• Performance target: Revenue growth (year-over-year)
• Performance period: One financial year
• Payout range: 0–200% of target value
• For 2024: ZGI Target Rate of 160% was achieved based on 4.2% revenue growth

LTI 2024

• Performance period: Three years
• Financial targets:
  • GMV CAGR (60% weighting)
  • Adjusted EBIT as % of revenue (40% weighting)
• ESG modifier: Factor of 0.8–1.2 based on:
  • Sustainability targets (50% weighting): Scope 1 and 2 GHG emissions reduction vs. 2022 (50%), Scope 3 GHG emissions reduction vs. 2022 (50%)
  • Diversity & Inclusion targets (50% weighting): Share of women in Senior Contributor 1, 2 and Executive Contributor 1, 2 roles (25% each)

ESG Performance Targets

Sustainability Targets for LTI 2024 Annual Tranches

Scope 1 and 2 GHG emissions reduction vs. 2022 (50% weighting)

Scope 3 GHG emissions reduction vs. 2022 (50% weighting)

Diversity & Inclusion Targets for LTI 2024

Share of women in: (i) Senior Contributor 1 roles – 25%, (ii) Senior Contributor 2 roles – 25%, (iii) Executive Contributor 1 roles – 25%, (iv) Executive Contributor 2 roles – 25%

Maximum Remuneration

• Annual maximum remuneration for co-CEOs: 15.75 million EUR
• Annual maximum remuneration for other management board members: 10.5 million EUR

Target Total Remuneration Structure

The target total remuneration is composed as follows:

• Fixed remuneration (salary + fringe benefits): 10-30%
• ZGI 2024: 10-30%
• LTI 2024: ~60%

The audit committee regularly reviewed and discussed the status reports on GRC (governance, risk & compliance) including data privacy, cyber security, litigation and the work of internal audits. It also received relevant regulatory updates and regularly discussed the status and development of the financial and non-financial internal control system.

The supervisory board and the management board implemented an internal procedure for complying with approval requirements for related party transactions pursuant to Section 111a et seq. of the AktG (German Stock Corporation Act). No such transactions required approval or disclosure during the reporting year.

In March 2024, we announced our updated strategy to build a pan-European ecosystem for fashion and lifestyle e-commerce around our two growth vectors: business-to-consumer (B2C) and business-to-business (B2B). This will enable us to cover a larger share of the 450bn EUR European fashion and lifestyle market as well as deepen relationships with our customers and partners.

In B2C we are working to differentiate ourselves through quality to offer the best possible shopping experience in fashion and lifestyle, enhance our role in customers' lifestyle journeys by elevating existing categories such as Sports and Kids & Family to distinct propositions, and offer personalised inspiration and entertainment.

In B2B, Zalando is opening up its logistics infrastructure, software and service capabilities to be a key enabler in the e-commerce business of brands and retailers, regardless of whether it takes place on or off the Zalando platform. In the future we see the B2B growth vector developing into a multi-billion-euro business.

Zalando's ambition is to lead the way in European fashion and lifestyle e-commerce and cover a larger share of the 450bn EUR European fashion market in the long term.

Interests and views of stakeholders

Overview

Our key stakeholders are characterised by their interdependence with and proximity to us and our activities and include investors, employees, customers and suppliers, authorities, associations, media, and non-governmental organisations (NGOs), at both the local and global level. In the past three years particular, we have received an increased number of SDI-related questions during our annual general meetings. Our former non-financial declaration and our first annual sustainability statement according to the ESRS offer stakeholders an overview of our ESG activities, results, performance, and targets in ESG areas. These efforts aim to build trust and address the concerns of the people within our ecosystem.

Based on the engagements undertaken and as delineated in our 2024 DMA, we are aware of a multitude of topics of concern. Our customers and suppliers, whether brand partners or direct suppliers, expect ethical behaviour from us at all times. Other key focus areas for our stakeholders include circularity and human rights issues, with particular emphasis on fair wages, prevention of child and forced labour and digital security.

In 2024, we continued our engagement with diverse stakeholders across our industry to discuss and act on complex environmental, human rights and D&I issues. We prioritise listening to stakeholders to shape our sustainability efforts, projects and processes, and ensure transparency in our communications. Concerns are regularly shared with relevant business units and the D&I and sustainability committee.

Integration of stakeholder views into strategy

Stakeholder feedback is crucial for our decisions and strategy setting. For example, during the research for our updated strategy, stakeholder feedback indicated that previous SDI efforts were too broad and not sufficiently in depth. In response, we revised our approach to focus resources on impactful areas. Consequently, our next strategic cycle will concentrate on three key ambitions: 1) net-zero GHG emissions, 2) decent work, and 3) our role as an enabler.

Our progress is bolstered by partnerships with brands and customer input, but the support and insights from industry groups and NGOs are invaluable. Their guidance helps us address current issues, plan for the future and uphold high standards through essential perspectives, inspiration and feedback.

With every new strategic development, the stakeholder engagement approach has been revised to align with the updated established strategic objectives. In addition, legislative changes such as the Corporate Sustainability Due Diligence Directive (CSDDD) mandate deeper connections between Zalando and local stakeholders, potentially altering our current stakeholder list. We engage with policymakers and regulators whose work shapes the frameworks, guidelines and incentives that drive sustainability and transparency. Collaborations have given us key insights into evolving regulations, enabling us to adjust our strategies and operations while contributing our technical and operational expertise. Continued collaboration with all stakeholders is essential for positive, lasting change.

Key stakeholder groups and engagement approach

Stakeholder engagement in double materiality assessment

Since 2023, during the preparation of our DMA, we actively collaborated with stakeholders likely to be affected by our activities and who have significant influence on us achieving our sustainability targets. Stakeholders were categorised into two groups: affected stakeholders and users of sustainability statements. The affected stakeholders primarily include suppliers, employees, local communities, broader society and the environment. Users of sustainability statements typically encompass customers, investors and regulatory authorities. By engaging with diverse stakeholder groups to refine and assess the IROs, we obtained comprehensive insights into their key concerns.

DMA stakeholder engagement

Key concerns raised during the reporting period

The interviews provided a comprehensive understanding of stakeholder perspectives, which are crucial for informing our sustainability strategy and decision-making processes.

Brand partners highlighted key sustainability impacts, including climate change and biodiversity concerns. They emphasised opportunities for us to drive positive change through initiatives like sustainability labelling and circular packaging. Concerns were raised about supply chain risks related to climate impacts and customer demand dynamics.

Suppliers revealed insights into sustainability challenges and opportunities within our supply chain. They emphasised the importance of addressing climate impacts in transportation and returns, as well as promoting product quality and improved working conditions. Suppliers highlighted potential risks such as margin pressures and compliance with evolving regulations.

Investor Relations team emphasised the significance of transparency and performance metrics related to ESG factors for our investors. They highlighted the importance of data disclosure on climate targets, supply chain management and biodiversity conservation to mitigate investment risks.

NGOs underscored social impact considerations, particularly regarding vulnerable worker groups and labour practices. NGOs recommended actions to improve social dialogue, collective bargaining and responsible purchasing practices. They highlighted opportunities for us to enhance our human rights performance through social marketing initiatives.

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

Overview

We evaluated the relevance of sustainability-related IROs from a gross impact perspective. This approach excludes the consideration of our management practices during the assessment. In the following chapters covering the ESG dimensions, we explain our management practices for addressing our material IROs.

The following materiality matrix offers a brief overview of the DMA results, categorised according to both impact materiality and financial materiality dimensions.

Materiality Matrix

The materiality matrix plots topics across two dimensions: impact materiality (horizontal axis) and financial materiality (vertical axis). Topics are categorized into:

• Environmental matters
• Social matters
• Governance matters
• Entity-specific matters

Material topics include:

• ESRS E1 Climate change: mitigation, adaptation and energy
• ESRS E2 Pollution: pollution of air, water and soil, substances of concern, substances of very high concern, microplastics
• ESRS E3 Water resources
• ESRS E5 Resource use & circular economy: resource inflows and outflows, waste
• ESRS S1 Own workforce: working conditions, other work-related rights, health and safety, equal treatment (D&I), development, employee satisfaction and retention
• ESRS S2 Workers in the value chain: working conditions, equal treatment and opportunities for all, other work-related rights
• ESRS S4 Consumers: information-related impacts (including privacy), personal safety, social inclusion
• ESRS G1 Business conduct: animal welfare, political engagement and lobbying activities, management of relationships with suppliers including payment practices, corporate culture, corruption and bribery, protection of whistleblowers
• Innovation and partnerships

Not material topics include:

• ESRS E3 Marine resources
• ESRS E4 Biodiversity & ecosystems (all sub-topics)
• ESRS S3 Affected communities (all sub-topics)
• ESRS S4 Consumers: others

Material IROs List

The detailed DMA results are listed in the table below according to the order of the ESRS. The material sustainability matters are structured in alignment with the ESRS in topics, sub-topics, and sub-sub-topics. The table outlines the level of our responsibility and the associated triggers for each material IRO. For each identified impact, we evaluated whether it leads to risks or opportunities, particularly those arising from dependencies on key resources such as natural, human or financial capital.

Current Financial Effects

For the financial year 2024, we did not identify any financial effects from our material risks and opportunities on our financial position, financial performance or cash flows. Additionally, we did not identify any material risks and opportunities for which there is a significant risk of a material adjustment within the next annual reporting period to the carrying amounts of assets and liabilities reported in our related financial statements.

Zalando's Resilience Assessment

We have assessed the resilience of our strategy and business model in relation to sustainability matters, focusing in particular on our ability to address material risks and leverage opportunities over the short, medium and long term.

Key findings of our resilience assessment include:

• Climate change: Our transition to renewable energy sources and implementation of science-based targets for emission reductions demonstrate our capacity to adapt to climate-related risks. Our investments in logistics infrastructure and energy-efficient technologies position us to manage both physical and transition risks associated with climate change.

• Resource scarcity and circular economy: Our strategy to increase the use of recycled materials and develop circular business models enhances our resilience to resource scarcity. By investing in alternative materials and circular services, we reduce dependency on virgin resources and create new revenue streams.

• Supply chain and decent work: Our participation in multi-stakeholder initiatives and partnerships with organizations like the Fair Wear Foundation and ILO BetterWork strengthens our ability to manage labor-related risks. These collaborations provide us with tools and frameworks to improve working conditions and ensure compliance with international labor standards.

• Consumer trust and data privacy: Our robust data protection measures and commitment to transparent sustainability communication help us maintain consumer trust. By providing reliable product information and addressing privacy concerns, we mitigate reputational risks and capitalize on opportunities to differentiate our brand.

• Regulatory compliance: Our proactive approach to upcoming regulations, including CSRD, CSDDD, and ESPR, positions us to adapt quickly to changing legal requirements. This reduces the risk of non-compliance while creating opportunities to influence industry standards through our lobbying and advocacy efforts.

• Innovation and partnerships: Our ecosystem approach, including the ZEOS Fulfilment B2B model, demonstrates our ability to leverage our infrastructure and capabilities to create new business opportunities while addressing sustainability challenges. This diversification strengthens our business model's resilience to market changes and evolving consumer preferences.

This resilience assessment informs our ongoing strategy development and business model evolution, ensuring we can adapt to and thrive in a rapidly changing sustainability landscape.

How Zalando Addresses the Material IROs

Climate change: Climate change is one of the most material topics for our operations and value chain, as it affects emissions throughout the entire lifecycle of a product — from production to transportation and distribution, all the way to the use phase. Physical climate risks can disrupt logistics and influence raw material availability and prices. Simultaneously, as a major European retailer, we have the opportunity to drive sustainability in the fashion industry by investing in new innovative fibres, low-impact products and packaging innovation. Key risks also include climate-related regulatory changes and emission reduction mandates. For more details, please refer to ESRS E1 Climate change in section 2.8.2 Environmental information.

Pollution: Industry-specific processes may adversely affect water quality. For instance, synthetic fibres shedding microplastics and the application of pesticides and fertilisers in cotton farming can contaminate soil and water sources. To address this issue, we have implemented chemical compliance programmes to minimise harmful discharges. Linked to our circularity goal, we aim to reduce our environmental impact and enhance clothing quality by sourcing alternative chemicals and fibres as well as by recycling clothing. For further information, please refer to ESRS E2 Pollution in section 2.8.2 Environmental information.

Water resources: Our business relies on continuous water availability, with water scarcity and quality issues already evident. Water is crucial throughout our own operations and value chain, from cotton cultivation to garment maintenance and corporate operations. In 2024, we conducted our first water risk assessment, starting with our own operations, and a strategy will be developed based on the findings. For further information, please refer to ESRS E3 Water resources in section 2.8.2 Environmental information.

Resource use and circular economy: As a fashion retailer, our reliance on raw materials such as cotton, polyester and leather makes us susceptible to long-term supply reductions due to climate change. In the short- to medium-term we must adhere to new regulations, such as the Ecodesign for Sustainable Products Regulation, and aim to increase our use of recycled materials while diminishing our reliance on primary resources to enhance resilience. At Zalando, we perceive these challenges as opportunities to develop innovative business and customer types predicated on circularity. For further information, please refer to ESRS E5 Resource use and circular economy in section 2.8.2 Environmental information.

Own workforce and workers in the value chain: Our policies and practices impact our employees and those in our value chains. We include these individuals in our human rights due diligence, risk assessments, and policies on human rights and modern slavery. Our efforts aim to foster a healthy and safe work environment, provide stable employment, establish grievance mechanisms, and prevent child and forced labour in our value chain. We prioritise measures positively impacting our employees and workers in our value chain by building a loyal, diverse and skilled workforce, improving health and safety standards and enhancing supplier employment practices. To address gender equality and disability inclusion, we have implemented several activities and integrated works councils deep into our organisation. Employee Resource Groups (ERGs) allow diverse talents to voice important topics. Additionally, we are members of several organisations that help us adopt best practices. For further information, please refer to ESRS S1 Own workforce and ESRS S2 Workers in the value chain in section 2.8.3 Social information.

Consumers and end-users: Our key impacts on consumers include ensuring product safety and enhancing shopping satisfaction by providing timely, relevant quality information, such as return policies and detailed product descriptions. Our objective is to enable consumers to make informed choices with an assortment and brands that align with their values. This includes serving a diverse and inclusive consumer base by offering a wide range of sizes, cosmetics for various skin tones, as well as Adaptive fashion, while understanding the reputational risks related to "pink-washing". We are committed to inclusivity and strive to create a welcoming platform for all. To achieve this ambition, we offer an assortment for previously excluded groups and focus on accessibility and an inclusive user experience. For further information, please refer to ESRS S4 Consumers and end-users in section 2.8.3. Social information.

Business conduct: We place a high priority on maintaining honest and transparent business conduct, with a particular emphasis on safeguarding customer data privacy and ensuring responsible marketing and lobbying activities. Supplier relationships are established in accordance with our Code of Conduct, and risk-based assessments are conducted to ensure compliance. As a retailer, we are dedicated to upholding ethical standards with respect to animal welfare and lobbying activities.

Interaction with Strategy and Business Model

Our business activities, including production, distribution, transportation and sale of goods, are major contributors to our carbon footprint. Our 2024–2028 corporate strategy showcases our ability to adapt to climate-related risks and opportunities. A key component of this strategy is the introduction of the new B2B business model, ZEOS Fulfilment, which maximises the use of our existing logistics services. Through ZEOS Fulfilment, we aim to create an operating system for fashion and lifestyle in Europe, enabling brands and retailers to manage their multi-channel businesses within one unified platform across the continent via Zalando. We have been doing this by first opening up access to our expansive and well-invested logistics, software and services infrastructure. ZEOS Fulfilment aims to reduce industry overstock, shorten parcel delivery distances and aggregate customer orders placed across multiple platforms. This shift reflects our increasing focus on offering services, thus contributing to long-term efficiency and enhanced carbon management.

Our strategic focus on decent work and D&I is embedded across our business model, from our own workforce policies to our engagement with suppliers and brand partners. This alignment ensures that our social commitments are not separate from our commercial objectives but are integrated into how we operate and create value. By building diverse and skilled teams, we enhance our innovation capacity and market responsiveness, which are critical to maintaining our competitive position in the European fashion e-commerce ecosystem.

The circular economy is increasingly central to our value proposition. Our investments in circular business models, including pre-owned, care and repair services, and reusable packaging, not only address environmental impacts but also create new revenue streams and customer engagement opportunities. These initiatives align with evolving consumer preferences for fashion that contributes positively to environmental and social issues, supporting our long-term market position.

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

Overview

Zalando finalised its first Double Materiality Assessment (DMA) at the beginning of 2024. This comprehensive framework allows the company to evaluate and disclose ESG-related impacts, risks and opportunities (IROs). The DMA approach goes beyond the traditional materiality approach and considers both outward-looking impacts (on the environment, society and the economy) and inward-looking risks and opportunities related to sustainability.

The results of the DMA were used in combination with upstream and downstream stakeholder feedback from civil society organisations, industry, regulators and investors, as well as research conducted to gather feedback on the direction of strategic goals. The DMA is updated periodically to align with changes in business operations and external circumstances.

The previous materiality assessment was conducted in 2019. Following the adoption of the final ESRS, Zalando has been applying the DMA approach since 2023.

Step-by-step methodology

Step 1: Long-list and short-list of topics identification

To establish a foundation for the 2024 DMA, Zalando conducted a comprehensive review encompassing over 150 ESG topics. The compilation of topics was informed by:

• Legal mandates, notably ESRS 1
• External reports, including industry and global risk reports
• Peer and consumer publications
• ESG reporting frameworks
• Prior materiality assessment
• Input from employees

These topics were meticulously categorised and grouped into a condensed list of subjects for deeper examination. Ultimately, a final list of 20 topics for assessment was derived.

Step 2: Detailed IRO identification

Zalando conducted a detailed analysis of its value chain to evaluate the impacts of operations, and the risks, opportunities and dependencies related to the identified sustainability topics. The company assessed the primary activities and impacts within the entire value chain and own operations.

Internal teams collaborated to identify environmental, social, and governance IROs. The analysis specifically examined:

• Key materials sourced
• Production of raw materials
• Manufacturing processes
• Primary regions from which the company sources

The business model was examined to confirm that no significant variations in IRO profiles were observed across segments that would necessitate further steps in the materiality analysis. Additionally, IROs were mapped across the value chain in terms of time horizons and Zalando's role in relation to the impacts or risks and opportunities.

Step 3: IRO assessment

IROs were assessed via categories defined by the ESRS:

• Impact materiality considers the likelihood and severity of impacts
• Financial materiality considers the likelihood and magnitude of potential financial effects

In the case of a potential negative human rights impact, the severity of the impact takes precedence over its likelihood.

Inputs to the assessment

The identification of IROs was informed by:

• Operational processes:
  • Audit processes (internal, customers, suppliers, authorities)
  • Purchasing processes
  • Sales and marketing processes
  • Stakeholder dialogue
  • Human rights risk assessment
  • Climate and nature risk assessment
• ESRS 1 legal mandates
• External reports (industry and global risk reports)
• Peer and consumer publications
• ESG reporting frameworks
• Prior materiality assessment (2019)
• Employee input

Scoring criteria

Impact materiality scoring methodology

Impacts were assessed and rated based on their severity and likelihood. Severity is determined by factors such as scale, scope and irremediable character, as outlined in ESRS 1. The severity and likelihood of impacts were scored on a scale ranging from low (1) to high (5).

Impact materiality | Negative impact rating scales

The methodology for financial materiality and positive impacts is referenced but not fully detailed in the excerpts provided.

Threshold for materiality

An ESG topic is material to Zalando based on:

• Impact materiality: The impact of activities on the environment and people across the value chain
• Financial materiality: If it triggers financial effects on the organisation by potentially generating risks or opportunities that influence or are likely to influence the current situation, future development, financial position, cash flows, access to capital and the cost of capital, and therefore the enterprise value of Zalando in the short-, medium- or long-term but is not included in the financial reporting at the reporting date

Frequency and last review

The first DMA was finalised at the beginning of 2024. The previous materiality assessment was conducted in 2019. Zalando will update the assessment periodically to align with changes in business operations and external circumstances.

Use of value chain mapping

Zalando conducted a detailed analysis of its value chain to evaluate the impacts of operations. The company mapped:

• Primary activities and impacts within the entire value chain and own operations
• Key materials sourced
• Production of raw materials
• Manufacturing processes
• Primary regions from which the company sources
• IROs across the value chain in terms of time horizons and Zalando's role in relation to the impacts or risks and opportunities

The value chain scope covers:

• Upstream: raw material sourcing, manufacturing and production (no owned manufacturing or production facilities), packaging suppliers and brand partners
• Downstream: logistics and transportation, customer use phase, end-of-life and circularity, customer engagement and platform partners

Stakeholder engagement in the DMA

Since 2023, during the preparation of the DMA, Zalando actively collaborated with stakeholders likely to be affected by its activities and who have significant influence on achieving sustainability targets.

Stakeholders were categorised into two groups:

1. Affected stakeholders: suppliers, employees, local communities, broader society and the environment
2. Users of sustainability statements: customers, investors and regulatory authorities

DMA stakeholder engagement summary:

Key outcomes from stakeholder engagement:

• Brand partners: Highlighted key sustainability impacts including climate change and biodiversity concerns. Emphasised opportunities to drive positive change through initiatives like sustainability labelling and circular packaging. Raised concerns about supply chain risks related to climate impacts and customer demand dynamics.

• Suppliers: Revealed insights into sustainability challenges and opportunities within the supply chain. Emphasised the importance of addressing climate impacts in transportation and returns, as well as promoting product quality and improved working conditions. Highlighted potential risks such as margin pressures and compliance with evolving regulations.

• Investor Relations team: Emphasised the significance of transparency and performance metrics related to ESG factors. Highlighted the importance of data disclosure on climate targets, supply chain management and biodiversity conservation to mitigate investment risks.

• NGOs: Underscored social impact considerations, particularly regarding vulnerable worker groups and labour practices. Recommended actions to improve social dialogue, collective bargaining and responsible purchasing practices. Highlighted opportunities to enhance human rights performance through social marketing initiatives.

Integration with risk management

The Governance and Risk team reviewed the material risks from the DMA, selecting key risks for inclusion in the annual risk assessment cycle. The Risk Management System (RMS) estimates the potential impacts of these risks, involving stakeholders from various business units to ensure a thorough evaluation.

Zalando does not prioritise sustainability-related risks above other risks. All risks embedded in the RMS — whether financial, operational, or sustainability-related risks — are assessed using the same framework, focusing on their potential financial or reputational impact.

The IRO assessment was reviewed by the SDI team, which supported the DMA process. Intermediate results were shared with internal stakeholders to validate their reliability.

Material matters identified

Through the DMA, Zalando identified 16 sustainability matters that are material to stakeholder groups. These represent the most material sustainability considerations for business and performance, with potential impacts in the short-term (< 1 reporting year), medium-term (up to 5 years) or long-term (> 5 years).

Material topics identified:

Environmental matters:

• ESRS E1 Climate change: mitigation, adaptation and energy
• ESRS E2 Pollution: pollution of air, water and soil, substances of concern, substances of very high concern, microplastics
• ESRS E3 Water resources
• ESRS E5 Resource use & circular economy: resource inflows and outflows, waste

Social matters:

• ESRS S1 Own workforce: working conditions, other work-related rights, health and safety, equal treatment (D&I), development, employee satisfaction and retention
• ESRS S2 Workers in the value chain: working conditions, equal treatment and opportunities for all, other work-related rights
• ESRS S4 Consumers: information-related impacts (including privacy), personal safety, social inclusion

Governance matters:

• ESRS G1 Business conduct: animal welfare, political engagement and lobbying activities, management of relationships with suppliers including payment practices, corporate culture, corruption and bribery, protection of whistleblowers

Entity-specific matters:

• Innovation and partnerships

Not material:

• ESRS E3 Marine resources
• ESRS E4 Biodiversity & ecosystems (all sub-topics)
• ESRS S3 Affected communities (all sub-topics)
• ESRS S4 Consumers: others

Biodiversity and ecosystems assessment

While biodiversity and ecosystems were not identified as material, to comply with ESRS 1.29 requirements, Zalando disclosed the information required by ESRS E4 related to IRO-1.

The company identified and assessed actual and potential IROs on biodiversity and ecosystems for own operations and across upstream and downstream value chain. The assessment included an evaluation of dependencies on biodiversity and ecosystems and their services, informed by an external report.

Transition risks (reputational, regulatory and market risks related to biodiversity loss), physical risks and opportunities related to biodiversity and ecosystems were assessed. Systemic risks were considered to the extent that negative impacts on biodiversity and ecosystems might jeopardise the availability of relevant ecosystem services.

Direct consultations with affected communities regarding the sustainability assessment of shared biological resources and ecosystems were not conducted.

Sites located in biodiversity-sensitive areas: Based on assessment using the Natura 2000 network of protected areas, UNESCO World Heritage sites and Key Biodiversity Areas (KBAs), no sites located in biodiversity-sensitive areas were identified. Assessment of sites located near biodiversity-sensitive areas is planned for 2025.

Transition plan for climate change mitigation

Scope of the plan

Our climate change policy applies to our own operations and value chain. For policy purposes, the term "climate change mitigation" describes our endeavours to both support the Paris Agreement goals relating to our climate and nature impact and set targets in alignment with the SBTi framework. This applies to our actions across scope 1, 2 and 3 emissions (our own operations and the value chain), including an ambition to enable partners' climate action, and continued work with partners who we see as acting on climate change.

Our business activities, including production, distribution, transportation and sale of goods, are major contributors to our carbon footprint. Our key value chains comprise 11 areas of activity through the product life cycle.

Our own operations comprise the parent company Zalando SE and Zalando's subsidiaries that operate, inter alia, in the areas of logistics services, customer service, payments, product presentation, advertising, marketing, software development, integration services and private labels.

Our upstream and downstream value chain includes brand partners, suppliers, logistics providers, and customers as the main business actors.

Target year(s) for net zero / carbon neutral

We have the ambition to achieve net-zero emissions for our own operations and private labels by 2040 and across our value chain by 2050.

Since the announcement of our net-zero ambition in March 2024, we have developed and submitted our net-zero targets to the Science Based Targets initiative (SBTi) for validation and have started developing a climate transition action plan. Currently we do not have net-zero targets for the 2024 financial year, but in March 2024, we announced our ambition to achieve net-zero GHG emissions aligned with the definition by the Science Based Targets initiative (SBTi). Targets have been submitted to the SBTi for validation. Once net-zero targets have been established (validated by the SBTi), we will communicate the related targets in the first half of 2025.

Scope 1, 2, 3 reduction milestones with baseline years

2025 SBTi-validated targets

By the end of 2025, we aim to achieve our short-term SBTs — validated by the SBTi in 2020:

Scope 1 and 2:

• Target: We are committed to reducing scope 1 and 2 GHG emissions by 80.0% by 2025 against a 2017 base year
• We are also committed to expanding annual sourcing of renewable electricity from 34.0% in 2017 to 100.0% by 2025
• 2024 Progress: At the end of 2024 we are on track to achieve our scope 1 and 2 targets, having achieved an 82.0% reduction compared to 2017

Scope 3:

• Target: We are committed to reducing scope 3 GHG emissions from private label products by 40.0% per million euros gross profit by 2025 from a 2018 base year
• Target: We are also committed to having 90.0% of our suppliers (by emissions, including goods and services sold through our platform, packaging, and last-mile delivery partners) having set SBTs by 2025
• 2024 Progress: Our scope 3 GHG emissions from private label products decreased by 48.2% per million euros gross profit from a 2018 base year, compared to 43.0% in 2023
• 2024 Progress: 70.5% of our suppliers in scope have set SBTs, compared to 64.8% in 2023. In 2024, brand partners with set SBTs accounted for 70.0% of our brand supplier-related emissions, up from 65.2% in 2023. Packaging partners who set SBTs increased to 74.5%, up from 59.7% in 2023. Last-mile delivery partners who set SBTs increased to 76.9%, up from 59.6% in 2023

Alignment with 1.5°C / SBTi validation status

The methodologies and frameworks used in setting our SBTs are based on foundational inputs from the IPCC and International Energy Agency pathways for corporate decarbonisation. In the absence of sector-specific pathways, the global cross-sector pathway of the SBTi was used as a basis. Through the SBTi validation process, SBTi assessed that our scope 1 and 2 targets are aligned with 1.5°C IPCC decarbonisation pathways.

For the near-term 2025 targets related to scope 3 emissions, we have adopted two distinct approaches: an emissions intensity target for our private labels' emissions, and an engagement target for emissions associated with fashion brand products and packaging and last-mile transport services. While these 2025 scope 3 targets are SBTi-validated, they do not align with a 1.5°C decarbonisation pathway.

Targets have been submitted to the SBTi for validation. Once net-zero targets have been established (validated by the SBTi), we will communicate the related targets in the first half of 2025.

Key levers / decarbonization pillars

Our climate change mitigation guiding objectives and management principles are as follows:

• Reducing GHG emissions: We are committed to minimising our GHG emissions by implementing rigorous reduction targets aligned with the latest climate science. This includes adopting best practices in emissions monitoring and reporting, identifying cost-effective technology solutions for pilot and deployment, and engaging with stakeholders to support less carbon-intensive practices
• Enhancing energy efficiency: We prioritise the optimisation of energy use across all our operations through the implementation of energy-efficient technologies and processes. This involves regular energy audits, upgrading equipment to more efficient models, and promoting energy-saving behaviour among employees to reduce overall energy consumption
• Continuing the transition to renewable energy sources: We are working to increase our use of renewable energy sources in energy consumption. This ambition includes procuring renewable energy and supporting our partners to similarly increase their use of renewable energy

Main decarbonization actions

For our scope 1 and 2 GHG targets in particular, our main levers are renewable electricity and heating technology switches. Through these main levers we expect to reach up to 100.0% of our scope 1 and 2 targets. The majority of our scope 3 emissions are associated with the fashion and lifestyle products manufacturing stages and the raw materials used in these stages. The main levers and their estimated maximum emissions reduction potential is:

• Material substitution, with up to 10% reduction potential
• Energy efficiency and renewable energy, with up to 60% reduction potential
• Circular business models and business efficiencies, with up to 5% reduction potential

1. Decarbonisation of our own operations

In 2024, scope 1 and scope 2 contributed less than 1.0% of our total GHG emissions. GHG emissions in these categories are primarily driven by heating in the offices, outlets, and logistic centres that are fully operated by us. Our main actions to decarbonise our operations and achieve our SBTs are:

• Heating: Most heating-related emissions are generated from within our logistics network. While some sites are already fully electrified, we continued in 2024 to work towards electrifying additional sites through the replacement of gas boilers with heat pumps in the office areas of three of our fulfilment centres in Poland, finalising the construction project at the end of 2024. The impact on our own operations was accounted for in the 2024 GHG inventory and will continue to be accounted for in the following periods
• Electricity: Switching to renewables is an important practice that is related to reducing overall electricity and energy consumption. We have been procuring 100.0% of our electricity from renewable sources since 2018 and are a member of the RE100 initiative. This includes continuing to generate electricity from photovoltaic panels at our fulfilment centres in Lahr, Rotterdam and Verona. Purchasing renewable electricity is an ambition we strive to maintain year after year and is a pillar of our scope 1 and 2 decarbonisation strategy for the foreseeable future
• Efficiency: Our energy management system is certified under ISO 50001. Beyond this, we implement various initiatives in specific logistics and non-logistics sites to drive further efficiency gains on an annual basis. This includes:
  • Conversion to LED in administrative areas and social facilities
  • Optimisation of the air handling systems by the landlord or the operator

2. Decarbonisation of value chain: packaging and last-mile delivery

In 2024 we engaged with our packaging and last-mile delivery partners to support them in setting their own emissions reduction targets in line with the SBTi criteria. This initiative will contribute to our 2025 target "suppliers SBT setting" as well as to our net-zero ambition. Partners that contribute significantly to our corporate carbon footprint have been a particular focus of negotiations. In addition, SBTs have already been introduced as a hard criterion in all contractual negotiations with our packaging suppliers. We have implemented SBT setting as a criterion for last-mile delivery partners and have begun more frequent and granular monitoring to inform tailored actions.

3. Decarbonisation of the value chain: Brand engagement SBT

The majority of our emissions fall under scope 3, primarily concentrated in one category: products we buy and sell to customers (70.0%). When our brand partners set and achieve their own emissions reduction targets, they will continue contributing to our scope 3 emissions reduction in the years to come in alignment with our net-zero ambition. In 2024, we deepened our collaboration with brand partners selling on our channels, further expanding the FASHION LEAP FOR CLIMATE learning platform (LEAP), which we launched in 2022 in partnership with ABOUT YOU and YOOX NET-A-PORTER. This platform provides brands with free peer-learning opportunities and step-by-step guidance to measure emissions and set ambitious reductions targets. In 2024, with our LEAP partners we:

• Tested methods, including one-on-one post-LEAP support, to better understand remaining barriers to climate targets setting and support brands to take the next steps
• Recruited 19 additional Zalando brands to join the programme
• Expanded the initiative across the fashion industry by onboarding new retail partners and aligning with wider industry efforts. Notably, ASOS, Selfridges Group, Boozt, and Cascale joined the initiative as partners in 2024

This initiative is a component of our long-term value-chain decarbonisation strategy to support and incentivise our brand partners to take climate action. The engagement of our brand partners in setting and achieving meaningful emissions reduction goals will remain essential to achieving our own net-zero ambition. Through the FASHION LEAP FOR CLIMATE initiative, we are positioning ourselves as an enabler for industry-wide climate action.

4. Decarbonisation of value chain: factory improvement programme

In collaboration with the Apparel Impact Institute (Aii) and RESET Carbon, in 2024 our private labels expanded the factory improvement programme to 18 Tier 1 and Tier 2 suppliers in textile, polyurethane, leather and footwear production across China, Bangladesh, India and Turkey. This follows the successful completion of the programme's first year in 2023 by 12 suppliers. The programme focuses on developing and implementing site-specific action plans to reduce GHG emissions and water consumption, particularly in factories with wet processing plants which are both highly water and energy intensive. In addition to ensuring factories have robust environmental management systems, these plans also include measures to enhance energy efficiency, transition to cleaner fuels, increase renewable energy use and improve water recycling, thereby reducing wastewater discharge. In collaboration with Aii and RESET Carbon, we will provide further support for action plan implementation and build capacity in energy management systems. We will continue to monitor the progress of the 12 facilities' action plans from the first year and we will continue to monitor our strategic carbon emitter suppliers in alignment with our private labels' net-zero ambition.

CapEx / investment commitments

No specific CapEx or investment commitments for climate transition are disclosed.

Locked-in emissions and stranded asset analysis

Our climate scenario analysis used two pathways to assess the potential impacts of physical and transition risks and opportunities: the IPCC's AR5 RCP 2.6 and the AR5 RCP 8.5.

In our assessment of the extent to which our assets and business activities may be exposed and are sensitive to the identified climate-related transition events, we considered the likelihood and magnitude of impacts. The 1.5°C climate scenario analysed in 2022 supported us to assess the compatibility of our business model with a climate-neutral economy. We have not identified any assets or business activities that are inherently incompatible with a climate-neutral economy. The climate scenarios analysed considered both transition and physical risks. We have limited high-emissions assets, considering that transportation and manufacturing processes with higher locked-in GHG emissions are primarily outside our direct operations. While no incompatible activities nor assets were found, significant efforts are being focused on our net-zero ambition to ensure business alignment with a climate-neutral economy. Progressing towards our net-zero ambition will involve improving energy efficiency and increasing the uptake of renewable energy in our operations and value chain, increasing the share of lower carbon materials, and driving business efficiencies while scaling circular business models.

For the preparation of our 2024 financial statements, we also make assumptions in alignment with the scenarios used for identifying climate-related physical and transition risks about the expected climate change developments, conditions and, based on these, the expected impacts on our cash flows. However, we have determined that climate change does not have a significant impact on the financial statements or on the estimates and assumptions made when preparing the annual report and consolidated accounts.

Use of carbon credits / removals

No use of carbon credits or removals is disclosed.

Transition plan status

We are actively developing a climate transition action plan, and we are committed to disclosing this plan within the next two years.

Incentive schemes linked to climate targets

Sustainability targets are integrated into executive compensation. The ESG modifier for sustainability targets includes:

Performance period Apr 2025 – Nov 2027 (Robert Gentz co-CEO, David Schneider co-CEO until end of Aug 2024):

(i) Scope 1 and 2 GHG emissions (50% weighting)

(ii) Scope 3 GHG emissions (50% weighting)

Performance period Apr 2025 – Mar 2027 (David Schröder COO until end of Aug 2024, co-CEO since Sep 2024):

(i) Scope 1 and 2 GHG emissions (50% weighting)

(ii) Scope 3 GHG emissions (50% weighting)

Policies related to climate change mitigation and adaptation

Climate Change Policy

Zalando has established a climate change policy addressing the mitigation of and adaptation to the impacts of climate change. The policy is critical to the resilience of the company's business operations and value chain.

Objective: The objective of the climate change policy is to address the identification, assessment, management and remediation of material climate change mitigation and adaptation impacts and risks. By implementing the objectives and management principles of this policy, Zalando aims to enhance the resilience of its business against the impacts of climate change, ensuring long-term sustainability and value creation for stakeholders.

Scope: The climate change policy applies to Zalando's own operations and value chain.

Governance and oversight: The highest level of responsibility with respect to overseeing climate-related issues lies with Robert Gentz (co-CEO) as member of the management board. The co-CEO is the highest decision-making body for climate-related issues.

Key content and principles:

For policy purposes, the term "climate change mitigation" describes Zalando's endeavours to both support the Paris Agreement goals relating to climate and nature impact and set targets in alignment with the SBTi framework. This applies to actions across scope 1, 2 and 3 emissions (own operations and the value chain), including an ambition to enable partners' climate action, and continued work with partners who are acting on climate change.

The climate change mitigation guiding objectives and management principles are:

• Reducing GHG emissions: Commitment to minimising GHG emissions by implementing rigorous reduction targets aligned with the latest climate science. This includes adopting best practices in emissions monitoring and reporting, identifying cost-effective technology solutions for pilot and deployment, and engaging with stakeholders to support less carbon-intensive practices.

• Enhancing energy efficiency: Prioritising the optimisation of energy use across all operations through the implementation of energy-efficient technologies and processes. This involves regular energy audits, upgrading equipment to more efficient models, and promoting energy-saving behaviour among employees to reduce overall energy consumption.

• Continuing the transition to renewable energy sources: Working to increase the use of renewable energy sources in energy consumption. This ambition includes procuring renewable energy and supporting partners to similarly increase their use of renewable energy.

"Climate change adaptation" refers to Zalando's process of adjusting to actual and expected climate change and its impacts, and includes efforts to adjust operations, strategies and practices to minimise the negative impacts of climate change and to take advantage of any potential opportunities. This includes managing physical risks, such as extreme weather events and long-term changes in climate patterns, as well as understanding how these changes may affect the value chain, operations and customers.

The climate change adaptation guiding objectives and management principles are:

• Assessing climate risks: Regular assessment of climate-related risks as part of the annual risk management process for own operations and value chain, developing strategies to manage and mitigate these risks effectively.

• Enhancing sustainable and more climate-resilient practices: Aiming to enhance the resilience of infrastructure and value chain by collaborating with suppliers to address climate risks, ensure continuity and promote sustainable practices and technologies, and by integrating climate adaptation into strategic planning and decision-making processes.

Across climate change mitigation and adaptation efforts, Zalando is committed to enabling sustainable practices within own operations and value chain. This involves sourcing materials responsibly, reducing waste, promoting circular economy principles, and working with suppliers and partners to encourage sustainable practices throughout the value chain.

Actions and resources in relation to climate change policies

Zalando's climate change mitigation and adaptation policies guide actions across own operations (scope 1 and 2) and the value chain (scope 3). The following actions are described:

1. Decarbonisation of our own operations

Scope: Own operations (scope 1 and 2, which contribute <1.0% of total GHG emissions)

Time horizon: Ongoing, targeting 2025 SBT achievement

Actions:

• Heating: Electrification of sites through replacement of gas boilers with heat pumps. In 2024, three fulfilment centres in Poland completed heat pump installations in office areas. Construction project finalised end of 2024, with impact accounted for in 2024 GHG inventory.

• Electricity: Procuring 100% renewable electricity since 2018. Member of RE100 initiative. Continuing to generate electricity from photovoltaic panels at fulfilment centres in Lahr, Rotterdam and Verona. This is a pillar of scope 1 and 2 decarbonisation strategy for the foreseeable future.

• Efficiency: Energy management system certified under ISO 50001. Annual initiatives at specific logistics and non-logistics sites including:

  • Conversion to LED in administrative areas and social facilities
  • Optimisation of air handling systems by landlord or operator

Resources: No specific quantified financial resources disclosed for these actions.

Link to targets: Supports scope 1 and 2 target of 80% reduction by 2025 vs. 2017 baseline. 82% reduction achieved by end of 2024.

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2. Decarbonisation of value chain: packaging and last-mile delivery

Scope: Downstream value chain (scope 3)

Time horizon: Short-term (2025 target for supplier SBT setting)

Actions:

• Engagement with packaging and last-mile delivery partners to set their own Science-Based Targets (SBTs) aligned with SBTi criteria
• Focus on partners that contribute significantly to corporate carbon footprint
• SBTs introduced as hard criterion in all contractual negotiations with packaging suppliers
• SBT setting implemented as criterion for last-mile delivery partners
• More frequent and granular monitoring to inform tailored actions

Resources: No specific quantified financial resources disclosed. Non-financial resources include partnership engagement and contractual negotiations.

Link to targets: Contributes to 2025 target of 90% of suppliers (by emissions) having set SBTs. Progress: 70.5% by end of 2024 (packaging partners 74.5%, last-mile delivery partners 76.9%).

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3. Decarbonisation of the value chain: Brand engagement SBT

Scope: Upstream value chain (scope 3 - products bought and sold, representing 70% of total emissions)

Time horizon: Long-term (supports net-zero ambition)

Action name: FASHION LEAP FOR CLIMATE

Description: Learning platform launched in 2022 in partnership with ABOUT YOU and YOOX NET-A-PORTER. Provides brands with free peer-learning opportunities and step-by-step guidance to measure emissions and set ambitious reduction targets.

2024 activities:

• Tested methods including one-on-one post-LEAP support to understand remaining barriers to climate target setting
• Expanded initiative across fashion industry by onboarding new retail partners: ASOS, Selfridges Group, Boozt, and Cascale joined as partners in 2024
• Aligned with wider industry efforts

Resources: Platform developed in collaboration with Quantis. No specific quantified financial resources disclosed. Partnership resources include ABOUT YOU, YOOX NET-A-PORTER, ASOS, Selfridges Group, Boozt, and Cascale.

Link to targets: Component of long-term value-chain decarbonisation strategy and net-zero ambition. Supports 2025 target of 90% suppliers having set SBTs. In 2024, brand partners with set SBTs accounted for 70.0% of brand supplier-related emissions (up from 65.2% in 2023).

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4. Decarbonisation of value chain: factory improvement programme

Scope: Upstream value chain (Tier 1 and Tier 2 suppliers for private labels)

Time horizon: Ongoing (2023 start, expanded 2024)

Action: Factory improvement programme in collaboration with Apparel Impact Institute (Aii) and RESET Carbon.

2024 activities:

• Expanded to 18 Tier 1 and Tier 2 suppliers (from 12 in 2023)
• Suppliers in textile, polyurethane, leather and footwear production across China, Bangladesh, India and Turkey
• Focus on wet processing plants (highly water and energy intensive)

Planned activities:

• Develop and implement site-specific action plans to reduce GHG emissions and water consumption
• Ensure factories have robust environmental management systems
• Measures include: energy efficiency enhancement, transition to cleaner fuels, increase renewable energy use, improve water recycling, reduce wastewater discharge
• Continued support for action plan implementation and capacity building in energy management systems
• Monitor progress of 12 facilities from first year and strategic carbon emitter suppliers

Resources: Partnership with Apparel Impact Institute (Aii) and RESET Carbon. No specific quantified financial resources disclosed.

Link to targets: Aligned with private labels' net-zero ambition.

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Main decarbonisation levers and estimated reduction potential:

• Scope 1 & 2: Renewable electricity and heating technology switches - expected to reach up to 100% of scope 1 and 2 targets

• Scope 3 (value chain):

  • Material substitution: up to 10% reduction potential
  • Energy efficiency and renewable energy: up to 60% reduction potential
  • Circular business models and business efficiencies: up to 5% reduction potential

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Adaptation actions:

No specific climate adaptation actions are disclosed. The company states it regularly assesses climate-related risks as part of annual risk management process and aims to enhance resilience through:

• Collaborating with suppliers to address climate risks
• Promoting sustainable practices and technologies
• Integrating climate adaptation into strategic planning

However, no concrete adaptation actions or projects are described.

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Transition plan:

The company is actively developing a climate transition action plan and commits to disclosing this plan within the next two years.

Targets related to climate change mitigation and adaptation

1. Zalando 2025 targets (SBTi-validated)

By the end of 2025, Zalando aims to achieve short-term science-based targets validated by the SBTi in 2020.

Scope 1 and 2 GHG emissions targets

Scope: Own operations (scope 1 and 2)

Validation: SBTi-validated, aligned with 1.5°C IPCC decarbonisation pathways

Scope 3 GHG emissions targets – private labels

Scope: Private labels (scope 3 category 1)

Validation: SBTi-validated (not aligned with 1.5°C pathway)

Scope 3 GHG emissions targets – supplier engagement

Scope: Value chain (scope 3: goods sold through platform, packaging, last-mile delivery)

Validation: SBTi-validated engagement target (not aligned with 1.5°C pathway)

2. Zalando net-zero ambition

Long-term ambition announced March 2024:

• Own operations and private labels: Net-zero emissions by 2040
• Remaining company value chain emissions (fashion brand partners, packaging and transportation): Net-zero emissions by 2050

Status: Targets developed and submitted to SBTi for validation as of 2024. Once validated, targets will be communicated in the first half of 2025 and will replace the 2025 SBTs.

Framework: Aligned with SBTi net-zero definition

Scope: Full value chain (scope 1, 2, and 3)

Key points on methodology

• 2025 targets based on operational control approach ("GHGP scope") covering 89.9% of location-based scope 1 and 2 emissions under ESRS E1 scope
• Main decarbonisation levers identified:
  • Renewable electricity and heating technology switches (up to 100% of scope 1 and 2 targets)
  • Material substitution (up to 10% reduction potential for scope 3)
  • Energy efficiency and renewable energy (up to 60% reduction potential for scope 3)
  • Circular business models (up to 5% reduction potential for scope 3)
• Climate transition action plan under development, to be disclosed within two years
• No specific targets for physical and transition risks; focus remains on GHG reduction targets

Energy consumption and mix

Reporting scope: Total energy consumption across Zalando's own operations, including electricity consumption, district heat consumption and fuel consumption in logistics facilities, non-logistics facilities and vehicles. Zalando operates entirely within a "high climate impact sector" (NACE Section G – Retail). Fuel consumption includes natural gas and burning oil for stationary heating, and petrol, diesel, compressed natural gas, liquefied petroleum gas and liquefied natural gas for vehicles. Fuel data converted to MWh using UK BEIS conversion factors. For electricity and district heat, supplier-specific data is used when available; otherwise Association of Issuing Bodies dataset for electricity and location-based data for district heating are used to determine the mix of fossil, renewable, and nuclear sources.

Energy consumption and mix (31 December 2024)

Note on comparability: Zalando does not provide comparative data for the first year of preparing the sustainability statement, except where data has been disclosed in previous years and is comparable in scope and methodology. Since 2023 and 2024 energy consumption data are not directly comparable due to aggregation of 2024 data in accordance with the applicable ESRS E1 scope, 2023 energy consumption data is not disclosed.

Renewable electricity procurement: Zalando has been procuring 100.0% of its electricity from renewable sources since 2018 and is a member of the RE100 initiative. This includes self-generation from photovoltaic panels at fulfilment centres in Lahr, Rotterdam and Verona. For less than 1% of electricity consumption, unbundled guarantees of origin (GoOs) are purchased within two months after the reporting period ends.

Gross Scopes 1, 2, 3 and Total GHG emissions

Zalando discloses its GHG emissions following the GHG Protocol. Scope 3 emissions accounted for 99.9% and scope 1 and 2 emissions accounted for 0.1% of total GHGs. The company uses CO2-equivalent emissions factors to account for the Kyoto Protocol GHGs.

Scope and methodology

Scope 1 emissions are calculated as the sum of emissions from 1) mobile fuel combustion in company vehicles, 2) stationary fuel combustion of natural gas and burning oil for heat in fulfilment centres and office buildings, and 3) refrigerant losses in fulfilment centres and office buildings.

For scope 2 emissions, both market-based and location-based scope 2 emissions are calculated (Zalando uses market-based scope 2 emissions in its official GHG inventory). Zalando procures most of its electricity through green tariffs contracts. Only for less than 1% of electricity consumption, the purchase of unbundled certificates is performed within two months after the reporting period ends. Location-based scope 2 emissions are calculated by multiplying electricity consumption with country-specific electricity grid emission factors and district heating consumption with district heating grid emission factors where available.

For scope 1 and scope 2 emissions, Zalando discloses emissions for the consolidated Zalando group. The company did not identify any facilities or assets under operational control that are not already fully consolidated in financial statements.

For scope 3 emissions, less than 1% of scope 3 emissions are calculated using primary data. The most significant scope 3 category is category 1, purchased goods and services. In Zalando's GHG inventory, the following scope 3 categories are included: 1, 2, 3, 4, 5, 6, 7, 9, 11, 12, 15. The scope 3 categories excluded are: 8 (upstream leased assets - emissions already in scope 1 and 2), 10 (processing of sold products - no intermediate products sold), 13 (downstream leased assets - no assets leased to third parties not already in scope 1 and 2), 14 (franchises - no franchises).

Category 1 – Purchased goods and services covers all upstream emissions from the production of products acquired and delivered to Zalando, including raw material extraction, manufacturing and transportation up to the Tier 1 supplier. For the majority of product emissions, emissions are calculated using physical activity data including product volumes, material types and product weights (kg), mapped to the Higg Materials Sustainability Index (Higg MSI) material emission factors (in kg/CO2eq). For packaging emissions, Zalando tracks packaging volume and materials and applies emission factors from Defra (BEIS) by material type. Non-product procurement emissions are calculated using a spend-based method with EEIO emission factors from EXIOBASE.

GHGP scope vs. ESRS E1 scope: Two columns are presented in the emissions table. The "2024 (GHGP scope)" column traces back to Zalando's historical GHG inventory accounting approach for external annual reporting and progress tracking against near-term 2025 Science Based Targets. The "2024 (ESRS E1 scope)" column shows values according to the ESRS E1 scope (financial plus operational control) and in line with GHGP requirements. The values differ because:

• Scope 3 category 1: Partner business sold products emissions are excluded in the "ESRS E1 scope".
• Scope 3 category 11: Partner business distributed products use-phase emissions are included in the "ESRS E1 scope".
• Scope 3 category 12: Partner business distributed products end-of-life emissions are included in the "ESRS E1 scope".

Six logistics centres — which are part of the consolidated accounting group of Zalando (i.e. scope 1 and 2 under ESRS E1-6) — are accounted for in Zalando's GHGP scope within scope 3 category 4, upstream transportation and distribution. The short-term (2025) emissions reduction targets scope 1 and 2 portion covers 89.9% (location-based) or 42.0% (market-based) of the financial year 2024 GHG emissions inventory ("ESRS E1 scope") disclosed under E1-6.

E1-6 GHG emissions

Note: Deviating from the structure prescribed by the ESRS, the table above does not include disclosures regarding a base year or target milestones, as new long-term targets are planned to be published in 2025.

GHG emission intensities

Biogenic emissions

Contractual instruments linked to scope 2 GHG emissions

Zalando procures most of its electricity through green tariffs contracts that cover both fulfilment centres and the electricity consumption of most office buildings. To cover grey electricity consumption in some locations and for electric vehicles, the company purchases unbundled GoO for the appropriate kWh which also has information about energy-generation attributes.

GHG removals and GHG mitigation projects financed through carbon credits

In 2024, Zalando neither purchased carbon credits nor initiated any carbon removal projects. The company's primary focus remains on reducing its GHG footprint through energy efficiency, renewable energy adoption and material substitution.

Internal carbon pricing

Zalando does not currently apply internal carbon pricing schemes.

Comparative data

Zalando does not provide comparative data for the first year of preparing the sustainability statement, except in cases where data has been disclosed in previous years and is comparable (aligns in scope and methodology with current year figures). Since the 2023 and 2024 GHG data aggregation differs due to ESRS E1 scope requirements, 2023 GHG emissions data are not disclosed.

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

Phase-in exemption applied

Zalando has applied the phase-in exemption for ESRS E1-9 as allowed under the CSRD regulation for the first three reporting years. The disclosure requirement is assessed as material (phased-in), but no quantitative information on anticipated financial effects is disclosed in the 2024 reporting year.

As indicated in the materiality assessment table:

• ESRS E1-9, para. 66: material (phased-in) - not applicable (phased-in)
• ESRS E1-9, para. 66 (a); ESRS E1-9, para. 66 (c): material (phased-in) - not applicable (phased-in)
• ESRS E1-9, para. 67 (c): material (phased-in) - not applicable (phased-in)
• ESRS E1-9, para. 69: not material - not applicable

Policies related to water and marine resources

Zalando established a Water Management Policy in 2024 to address water challenges in its own operations and value chain.

Water Management Policy

Policy established: 2024

Aim and objectives:

• Minimise water consumption and water pollution
• Comply with regulatory requirements
• Ensure responsible use of water resources across own operations and value chain

Guiding principles:

• Pursuing efficient water use: Measuring water footprint, identifying reduction opportunities especially in areas of limited water availability and higher water stress, enhancing water efficiency, and promoting best practice across the value chain
• Minimising water pollution: Identifying key sources of water pollution, ensuring wastewater is treated to meet or exceed environmental standards before discharge
• Complying with regulations: Pursuing compliance with water-related regulations and standards, monitoring regulatory changes, implementing due diligence procedures
• Managing water-related risks, impacts, dependencies and opportunities: Regularly assessing water-related risks and impacts in own operations and value chain, developing mitigation strategies, identifying dependencies on water resources
• Engaging stakeholders: Engaging with stakeholders to gain insight, build awareness, and collaborate on water-related initiatives
• Enhancing product and service design: Integrating water efficiency and water pollution prevention into product and service design, identifying materials and processes requiring less water and generating minimal wastewater

Scope in 2024:

• Water management and identification of opportunities for reducing water consumption in fulfilment centres and offices
• Minimisation of water use and improved water management, including pollution and water treatment for priority private labels' value chain partners

Governance:

• Oversight responsibility: Co-CEO Robert Gentz (highest level of responsibility for environment-related topics, including water)
• Decision-making: Co-CEO is the highest decision-making body for water-related issues

Alignment with international standards:

• Aligns with principles of the Alliance for Water Stewardship Standard in terms of identifying water stress and water-related risks
• Aligns with principles of the CEO Water Mandate in terms of identifying water stress and water-related risks
• Plans further alignment with these and other internationally recognised standards for water management to guide efforts in sustainable water use, pollution control, and watershed protection

Monitoring:

• Water consumption monitoring will be used to track effectiveness of the water management policy related to water quantity (for own operations)
• Year 2024 will act as the baseline for future evaluations

Public availability: Not explicitly stated

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Marine resources: No policies related to marine resources were disclosed. The company states that "No IROs related to marine resources were identified as our business does not rely on marine resources."

Water consumption

In 2024, Zalando focused on establishing its corporate water footprint and water risk assessment, starting with own operations water metrics calculation.

Water consumption metrics

Methodology notes

Water consumption: For each Zalando logistics and non-logistics site, values are estimated based on measured water withdrawal data from the water supply network:

• For non-logistics facilities (office spaces, showrooms, retail spaces): Water consumption is estimated to be 10% of water withdrawn from the water supply network
• For logistics facilities (fulfilment centres): Water consumption is estimated to be 10% of water withdrawn from the water supply network

Total water consumption is calculated as the sum of all water consumption (in m³) at facilities in own operations.

Total water consumption in areas at water risk: Zalando employs a composite index approach using the World Resources Institute Aqueduct tool, which returns values for total water risk on a scale from "0" (low risk) to "5" (extremely high risk). The assessment covered 63 logistics and non-logistics sites. Among all Zalando sites, only the fulfilment centre in Lodz, Poland is classified as in an area at high overall water risk. Water consumption in areas at water risk is calculated as the sum of all water consumption at facilities located in areas of high and extremely high overall water risk (scores from 3 to 5).

Total water recycled and reused: The total water recycled and reused is the amount of water and wastewater (treated or untreated) that has been used more than once within Zalando before being discharged. No water is recycled and reused at either non-logistics or logistics facilities.

Total water stored: The total water stored is the amount of water held in water storage facilities, calculated as the sum of all water volumes stored at facilities in own operations. The volume of water stored is reported equal to the storing capacity of the water tanks at each site.

Water intensity: The water intensity ratio is calculated by dividing the total water consumption for own operations by the net revenue of Zalando. The water intensity is 2.2 m³/m EUR. This relatively low value reflects the limited water consumption in direct operations.

Context

Within own operations, Zalando does not engage in water-intensive activities as core processes (warehousing, offices, showrooms) have relatively low water usage. The company acknowledges that more significant water impacts lie within the upstream value chain, particularly in raw material extraction, product manufacturing, and downstream activities related to product use.

2024 serves as the baseline year for future evaluations, providing a reference point for ongoing improvement efforts.

Value chain activities

In 2024, Zalando conducted a water risk assessment for private labels for major Tier 2 (wet processing) facilities. The factory improvement programme, in collaboration with the Apparel Impact Institute (Aii) and RESET Carbon, expanded to 18 Tier 1 and Tier 2 suppliers in textile, polyurethane, leather and footwear production across China, Bangladesh, India and Turkey. The programme focuses on developing site-specific action plans to reduce GHG emissions and water consumption, particularly in factories with wet processing plants which are highly water and energy intensive. These plans include measures to enhance energy efficiency, transition to cleaner fuels, increase renewable energy use and improve water recycling, thereby reducing wastewater discharge.

Actions and resources related to circular economy

Zalando discloses several circular economy initiatives but provides limited detail on specific resources allocated to individual actions.

Strategic initiatives

Second-hand business (Pre-owned fashion)

• Scope: Own operations and downstream value chain
• Description: Growing Pre-owned fashion segment that contributes to circular economy goals and helps extend the lifespan of garments
• Linkage: Supports the circular business models pillar of the circularity policy and contributes to net-zero ambition
• Resources: Not quantified

Packaging waste reduction programmes

• Scope: Own operations
• Description: Implementation of comprehensive packaging waste reduction programmes, including alternative packaging initiatives to reduce waste and improve recyclability
• Specific action: Continued expansion of reusable cardboard boxes to additional fulfilment and return centres across the network throughout 2024
• Time horizon: Aim for fully closed-loop system for all intralogistics boxes looking forward (long-term)
• Linkage: Aligns with sustainability strategy and supports net-zero ambition
• Resources: Not quantified

External partnerships and collaborations

The Fashion ReModel

• Partners: Ellen MacArthur Foundation and other leading brands and retailers
• Date: Joined May 2024
• Scope: Value chain collaboration
• Description: Project to overcome barriers to scaling circular business models
• Resources: Partnership/non-financial resource

Circularity Masterclass for fashion design students

• Partners: Graduate Fashion Foundation
• Scope: Upstream value chain (education)
• Description: Free training aimed at fostering knowledge and passion for circularity among fashion design students, introduced at six universities across five European countries
• Objective: Enable wider industry transformation towards a circular economy
• Resources: Partnership/non-financial resource

FASHION LEAP FOR CLIMATE

• Partners: Continued expansion with onboarding of new partners including ASOS, Selfridges Group, Boozt and Cascale
• Scope: Value chain (brand partners)
• Description: Platform providing brands with free peer-learning opportunities and step-by-step guidance to measure emissions and set ambitious reduction targets
• Linkage: Supports net-zero ambition; engagement of brand partners essential for achieving net-zero
• Resources: Not quantified

Strategic investments

Textile-to-textile recyclers

• Scope: Value chain/circular innovation
• Description: Strategic investments to date to support and scale up circular initiatives
• Linkage: Part of end-of-life pillar in circularity policy
• Resources: Not quantified

Circularity policy framework

Zalando's circularity policy provides the overarching strategic framework with three foundational pillars:

1. Circular products: Increasing use of recycled content, focusing primarily on cotton, man-made cellulosics (MMCFs) and polyester, particularly within private labels
2. Circular business models: Including second-hand/pre-owned offerings
3. End-of-life: Exploring landscape to define key support areas for the industry

Governance: VP SDI accountable for policy implementation; SDI team responsible for policy design and content

Scope: Covers both upstream and downstream activities, engaging cross-functional internal and external stakeholders including brand partners, suppliers and third parties

External alignment: Policy developed in collaboration with Ellen MacArthur Foundation (EMF); Zalando aligns circularity strategy with EMF guiding principles

Integration with net-zero ambition

Circularity serves as a complementary component of Zalando's net-zero ambition through three primary decarbonisation levers:

• Material substitution
• Energy
• Circular business models

Time horizon: Net-zero for own operations and private labels by 2040; across value chain by 2050

ESRS E5-4: Resource Inflows

At Zalando, resource inflows include all products and materials that enter our facilities, including packaging. This encompasses items from various businesses: Our B2C segment, Fashion (including retail and partner business), as well as all product categories such as private labels, Lounge by Zalando, Zalando Outlets and recommerce, in addition to our B2B segment with ZEOS Fulfilment (including ZFS and our multi-channel fulfilment offering). Whilst packaging within recommerce is included in the scope of resource inflow calculations, the data related to recommerce products is excluded from the calculations as this information has already been accounted for during the product's first life cycle.

All product categories, such as fashion, footwear, accessories and electronics, are reported in aggregate form. The resource inflow metrics refer to all products and materials used for the production of products and packaging. The reported data reflects the materials in their original state, including product and packaging weight and material composition, as they enter our facilities. The resource inflow metrics were calculated using all available article and packaging data, including weight, material composition and sustainably sourced and recycled materials data. This includes materials adhering to third-party certifications or licensed or trademarked standards, such as the Global Recycle Standard and the Global Organic Textile Standard. Packaging material is considered sustainably sourced if it meets one of the following conditions: i) the supplier provides material that is specifically FSC-certified; ii) the supplier holds an FSC certificate for their company and Zalando includes a contractual requirement that all materials delivered must be FSC-certified; or iii) the packaging is labelled as FSC MIX or FSC RECYCLED, confirming compliance with FSC sustainability standards.

Resource inflows

Data limitations

As a multi-brand retail platform Zalando's ability to acquire product sustainability-related data is partly limited. We know that many of our business partners struggle to significantly increase the use of sustainably sourced materials in their own assortments, due to technological challenges in innovation and price premiums for many of these materials, and customers' willingness to pay more for sustainable products. Even when our partners have successfully integrated these materials into their assortments, the lack of unified data standards, evolving regulatory requirements and difficulty in data sharing processes presents an added challenge to share this information upstream with a multi-brand retailer like Zalando.

We anticipate that the use of such materials throughout the fashion sector will organically increase in coming years, as regulatory eco-design and reporting requirements continue to expand in Europe. However, we aim to continue enabling and encouraging business partners on our platform to adopt sustainably-sourced, recycled materials and design strategies that support the circular economy, through our sustainable sourcing policy and our voluntary sustainability-related claim framework.

Resource outflows

Durability

After conducting an in-depth market analysis and a durability maturity assessment, Zalando found that no established methodology or industry-wide averages exist for their product categories to make comparisons. Therefore, durability is excluded from the 2024 sustainability statement. Further analysis will be conducted to incorporate any future sector-specific requirements for reporting. Zalando recognises the usefulness of such a metric for the industry and especially for customers, but notes that the sector already faces a proliferation of tools and methodologies at a time when standardisation is required. Therefore, they are dedicated to work on an industry-wide solution.

Repairability

Currently, there is no established rating system to evaluate the repairability of fashion products, resulting in an inconsistent approach for assessing the feasibility and ease of repair of garments and accessories. Zalando is actively monitoring upcoming regulatory changes, including the Right to Repair Directive (EU) 2024/1799, which will take effect in 2026. The regulation is expected to influence how repairability is addressed, although it will still vary based on the specific damage and product involved. Zalando expects the sector-specific ESRS being developed by the European Financial Reporting Advisory Group to provide guidance on how to evaluate the repairability of fashion products.

Zalando has developed their first repairability guidelines for private labels, with a focus on promoting design elements and techniques which support product repairability, including:

• Facilitation of future repairs and alterations, such as wider seam allowances and easy replacement of components such as zips with readily available substitutes
• Increasing modularity, allowing worn-out parts such as collars and belts to be replaced
• Enabling adjustments in style, function and size through features such as drawstrings, adjustable side seams and hems, and additional buttons or elastics

Recyclable content in products

Current reporting guidelines do not yet define how to assess the recyclable content of fashion products. After thoroughly analysing existing industry standards and regulations related to recyclability and metric methodologies, Zalando explored the possibility of establishing an internal metric for product recyclability. However, they concluded that the available definitions and methodologies do not meet the qualitative characteristics (QC) of information required by ESRS 1. Specifically, they are unable to ensure faithful representation (QC5-QC9) or provide comparable data over time (QC10-QC12). CSRD aims to standardise sustainability reporting across companies, with sector-specific standards expected to result in reliable and comparable information. In line with this objective, Zalando has excluded the recyclability of products from the sustainability statement, as they believe current methodologies would not deliver the level of transparency and consistency required.

Recyclable content in product packaging

Zalando's current methodology considers product packaging recyclable if the material making up 95–100% of the product packaging meets specific criteria for recycling processes. According to the minimum standard defined by the Central Agency Packaging Register [Zentrale Stelle Verpackungsregister], "mechanically recyclable" means that the packaging can be sorted and processed using available industrial recycling technologies to produce high-quality recyclates. This involves assessing the material composition of the packaging, the presence of appropriate sorting and recycling infrastructure, and ensuring the packaging can substitute virgin material in typical applications after recycling. A material is considered recyclable when they have self declarations from suppliers or when the specifications of the material indicate that it is paper, paperboard or cardboard, and aligns with the definition of "fibrous material" in the standard mentioned above.

The rate of recyclable content in products packaging in 2024 is 95.9%.

Waste

Waste generation and management approach

In the fashion e-commerce sector, waste generation primarily comes from two sources: packaging and textile waste. At Zalando, they are committed to reducing their environmental impact by addressing both of these areas:

Packaging: The majority of waste (92%) is packaging-related, driven by customer returns, as well as internal logistics processes. The approach focuses on reducing excess packaging through optimised design, and reusing boxes within intralogistics operations, thus minimising the need for new packaging materials. Packaging generated waste consists of paper and cardboard (83.7% of total generated waste), plastic (1.5%), wooden (3.5%) and mixed packaging (3.0%).

Textiles: The multi-channel sales strategy contributes positively to waste minimisation by optimising inventory management. Unsold inventory is offloaded across various platforms, including Lounge by Zalando and outlet stores. In addition, they take the opportunity to donate remaining stock to organisations such as humedica or sell it to retail partners, ensuring no goods are destroyed except for health, hygiene or safety reasons. In order to fully comply with their duty of care, they only work with selected aid organisations and retail partners whose headquarters are located within the EU and who are therefore also bound by applicable laws. As a result of the above, textile waste accounts only for 0.26% of total generated waste.

Recovery rates: 96.6% of total generated waste is recycled, while only 3.1% is incinerated and just 0.3% is disposed by landfilling.

Waste categorisation and data collection

Waste is categorised as either hazardous or non-hazardous, with key examples of each as follows:

Non-hazardous waste (99.8% of total waste generated) includes paper, cardboard, metals, plastic packaging, biodegradable kitchen waste, and non-dangerous electronic waste.

Hazardous waste (0.2% of total waste generated) includes certain beauty products, dangerous e-waste, and packaging materials containing chemicals.

Waste data is collected at the site level, where waste quantities and treatment routes are documented by waste service providers. Precise weighing ensures accuracy, and any missing data is estimated based on averages from similar sites or previous time periods.

Zalando does not provide comparative data for the first year of preparing the sustainability statement, except in cases where data has been disclosed in previous years and is comparable, meaning it aligns in terms of scope and methodology with the current year's figures. Since the 2023 and 2024 waste data are not directly comparable — due to the aggregation of the 2024 waste data in accordance with the applicable ESRS scope — they do not disclose the 2023 waste data.

Extended producer responsibility (EPR)

As part of their commitment to responsible waste management, Zalando participates in EPR programmes. They work with multiple producer responsibility organisations (PROs) across their markets to ensure responsible collection, recycling, and disposal of products and packaging. This collaboration ensures compliance with EPR regulations and supports recycling infrastructure. To meet EPR obligations, they submit detailed reports to authorities and PROs, enhancing transparency in waste management processes. Additionally, they contribute financially through EPR fees, helping to support efficient product disposal and recycling.

Resource outflows – Waste (2024)

Policies related to own workforce

Zalando discloses several policies and guidelines relevant to its own workforce, designed to create an inclusive workplace and ensure ethical conduct.

Code of Ethics

• Scope: All employees across Zalando SE and all its subsidiaries
• Key content: Based on fundamental values of honesty, respect, trust and fairness. Sets mandatory standards and clear expectations for professional, ethical and responsible behaviour. Requires employees to follow the law and defines expectations regarding diversity & inclusion, respectful behaviour and avoidance of conflicts of interest. Fosters a speak-up culture for employees to raise concerns or report potential compliance breaches. Protects those who report incidents in good faith from negative consequences. Stipulates obligation for all employees to comply with data protection standards
• Public availability: Communicated to all employees in various languages and available on the corporate website
• Monitoring: Corporate Compliance team manages reported cases qualifying as potential compliance violations. Compliance panel (consisting of senior executives and Chief People Officer) takes over decision-making for serious cases. Information on detected compliance infringements reported to management board and audit committee of supervisory board at least quarterly

Code of Conduct

• Scope: All business partners including suppliers, service providers, platform partners, distributors, consultants and agents of Zalando SE and all its subsidiaries
• Key content: Outlines standards to which Zalando holds business partners accountable. Covers human rights (including supply chain compliance and labour rights), environmental protection, fair and ethical business practices, monitoring and complaints. Zalando expects every business partner to acknowledge these standards and requires appropriate management systems and due diligence processes to be in place
• Public availability: Published on the corporate website
• Monitoring: Business partner due diligence reviews (sanction list screening, compliance database and adverse media checks) conducted for defined groups of business partners and where potential compliance risks are apparent

Hiring policies

• Key content: Ensure inclusive hiring and reduce potential biases to create an inclusive workplace that provides equal opportunities
• Scope: All hiring processes

Policy on promotion and development

• Key content: Based on feedback to regularly assess performance and define individual development paths in a fair and transparent process
• Scope: All employees

Founding mindset

• Key content: Cultural principles that guide day-to-day work decisions
• Scope: All employees

Group policy benefits, gifts, events and expenses

• Key content: Anti-corruption-related policy covering standards for benefits, gifts, events and expenses
• Governance: Covered by Code of Ethics framework, managed within Corporate Governance department
• Monitoring: Included in compliance training (both e-learning and face-to-face sessions). Training mandatory for employees with Zalando email address (except defined roles with low compliance risks in logistics and stores). Refresher courses every other year. In 2024, 30 compliance basics face-to-face training courses were carried out and 4,759 employees completed compliance basics e-learning courses

Group policy authority to sign

• Key content: Policy governing authority to sign on behalf of the company
• Governance: Part of compliance management system within Corporate Governance department
• Monitoring: Included in mandatory compliance training

Group policy internal investigations

• Key content: Describes management of reported actual or suspected compliance violations, from report intake through pre-assessment and investigation stages until completion of remediation. Sets out range of remediation measures including training, monitoring of systems, and coaching
• Governance: Managed by Corporate Compliance team
• Monitoring: Cases reported via whistleblowing tool or other channels. Reports acknowledged within seven days. Quarterly review of incoming complaints presented to management board and audit committee of supervisory board

Data protection policies, principles and guidelines

• Key content: Standards for collecting, processing and using personal data in accordance with law. Covers employee and partner-related data as well as customer data. Includes actionable privacy principles for privacy-compliant business design and conduct. Dedicated online resource with guidance on how Zalando handles employee data and sets out employee rights
• Scope: All employees. Specialized privacy roles trained to support all business divisions
• Links to standards: Regulated under European and national data protection regulations (GDPR)
• Monitoring: Regular employee privacy training. Zalando closely monitors changes in legislation to properly adopt regulatory requirements

Visual content and post-production guidelines

• Key content: Guidelines for those involved in content production and post-production processes (photography and retouching) to ensure platforms are representative of and accessible to Disabled communities
• Governance: Overseen at SVP level

Content creation guidelines for Adaptive fashion

• Key content: Standards for creating content related to adaptive fashion (apparel made for people with permanent or temporary disabilities)
• Governance: Overseen at SVP level

Content creation guidelines for Modest fashion

• Key content: Standards for creating content related to modest fashion (clothing following principles of modesty in dress, usually in accordance with religious or cultural beliefs)
• Governance: Overseen at SVP level

Zalando states that "when creating our policies, we consider our legal obligations, established industry standards and the expectations of investors, customers and other stakeholders" and that "relevant policies are publicly available on our corporate website."

Taking action on material impacts on own workforce

The excerpts provided primarily contain cross-references and governance structures rather than detailed disclosure of specific actions under S1-4. The document references S1-4 on page 245 but the substantive content is not included in the excerpts.

References to actions mentioned elsewhere

The excerpts reference that Zalando has:

• Working time management systems and disability inclusion initiatives (mentioned in table of contents but details not provided in excerpts)
• Actions described as addressing impacts in own workforce, with reference to page 245

Employee programmes identified

Zalando share plan (established 2020)

• Replaces former Share Bonus and Share Invest programmes
• Offers self-financed acquisition of shares by participants (investment shares) with subsequent issue of matching shares
• Includes procedures for granting bonus shares without cash consideration
• Scope: Own workforce
• Resources: Not quantified in excerpts

Top performance plan (company-wide, established 2020)

• Purpose: Reward employees who delivered excellent performance during the performance year
• Participants receive shares equivalent to bonus amount granted
• Scope: Own workforce
• Resources: Not quantified in excerpts

Share-based compensation activity (2024)

Training and development

Compliance training (2024)

• 3,561 employees completed compliance courses
• Functions-at-risk coverage: 72.4% (basic programme), 78.3% (lead programme)
• New employees complete basic training programme; refresher courses after two years
• Employees with leadership responsibilities attend face-to-face compliance courses
• Scope: Own workforce
• Resources: Non-financial (training platform, face-to-face sessions)

Note: The excerpts do not contain the main S1-4 disclosure referenced on page 245. Most content relates to governance structures, value chain workers (S2-4), and general employee benefits rather than specific actions addressing material impacts on own workforce.

Targets related to own workforce

Women in leadership target

Target metric: Share of women in each of the five top leadership levels (including the management board)

Target value: 40–60% women in each leadership level

Scope: Own operations (excluding Highsnobiety entities)

Baseline year: 2019

Baseline value: 29.1% women across the five top leadership levels, comprising:

• Management board: 0.0%
• SVP level: 33.3%
• VP level: 22.6%
• Director level: 33.3%
• Head level: 30.0%

Target year:

• 2025 for the four leadership levels below the management board
• 2027 for the management board

Type: Absolute percentage target

Progress as of 31 December 2024:

• Overall average across five top leadership levels: 36.9% (below target)
• Management board: 40.0%
• SVP level: 45.5%
• VP level: 32.6%
• Director level: 33.3%
• Head level: 38.0%

Other targets

Employees with severe disabilities (Germany): Zalando must comply with Social Code IX legislation requiring at least 5% of employees in Germany to comprise employees with severe disabilities. As of 31 December 2024, 2.4% achieved (31 December 2023: 2.5%).

Health and safety (logistics operations): Commitment to continuously reducing health and safety accidents every year, but no specific quantified target currently adopted.

Other workforce topics: The company has not currently adopted targets in line with ESRS specifically addressing freedom of association, collective bargaining, works councils, secure employment, social protection, work-life balance, working time, adequate wages, elimination of discrimination, training and skills development, child labour and forced labour.

Characteristics of the undertaking's employees

Total headcount and FTE

All metrics for employees are reported in terms of headcount (individuals who are in an employment relationship with Zalando according to national law or practice) at the end of the financial year, i.e. 31 December 2024, unless otherwise stated. Part-time work is expressed as a percentage of weekly working hours. Therefore, if required for metrics, part-time work is expressed as the fraction of the full-time equivalent.

Total employees: 15,805 (31 December 2024); 15,382 (31 December 2023)

Average headcount over 2024: 15,309 employees (decreased by 485 employees or 3% from 15,793 in prior year)

Headcount by gender and contract type

Headcount by age group

Headcount by country/region and contract type

The table shows distribution of employees in countries with more than 50 employees. Country-level data is calculated using definitions as per the national laws of the countries where employees are based.

Gender distribution at top leadership levels

Highsnobiety entities were excluded as their inclusion has no visible effect on the gender distribution of the groups.

Employee turnover

Total departures during the reporting period: 2,374 employees

Employee turnover rate: 14.7% (2024); 22.2% (2023)

This metric is calculated as the sum of all categories of attrition including voluntary and involuntary departures.

Additional workforce metrics

Average headcount Zalando SE (on full-time equivalent basis): 6,038 (2024); 6,292 (2023)

Family-related leave:

• Percentage of employees entitled to take family-related leave: 100.0%

Collective bargaining agreements:

• Less than 1% of employees are covered by collective bargaining agreements
• Coverage rate in Germany (EEA): 0-19%
• Workplace representation in Germany (EEA): 80-100%

Methodology notes

The consolidated quantitative ESG data comprises the parent company Zalando SE and subsidiaries controlled by Zalando SE. The number of subsidiaries included in the basis of consolidation is 58 in financial year 2024 (prior year: 58). Associates and joint ventures are not included in the consolidated ESG metrics. Country-level data for contract types is calculated using definitions as per national laws. Headcount excludes working students, interns & apprentices.

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

Disclosure Statement

Zalando acknowledges that non-employees (individuals working at third-party contractors) are part of their own workforce and are materially impacted by their operations.

Reporting Timeline: Disclosures on non-employees will be reported in the next sustainability statement for the financial year 2025.

Scope of Non-Employee Workforce

The company's workforce encompasses:

• Employees in overhead functions (finance, human resources, IT, marketing)
• Non-overhead employees working in logistic centres, outlet stores or customer care centres
• Non-employees (individuals working at third-party contractors) who are materially impacted by own operations

Methodology Note

The company's double materiality assessment included all individuals within the own workforce who could be materially impacted by business activities in the scope of disclosures, covering own operations. This explicitly includes non-employees working at third-party contractors in areas such as logistics and customer care.

No quantitative metrics on non-employee workforce characteristics are disclosed for the reporting period 2024.

Collective bargaining coverage and social dialogue

Freedom of association and collective bargaining

At Zalando, we are committed to upholding the rights of our employees to freely associate, establish works councils and join unions in compliance with the legal frameworks applicable in each of our operating countries across Europe. As a European company with the majority of our employees based in Germany, we recognise the diversity of labour practices across the EU and ensure that our policies align with both national and EU-wide standards on workers' rights.

In Germany, the right to freedom of association is enshrined in the German Constitution [Grundgesetz] under Article 9. Furthermore, representation through works councils is highly regulated by the German Works Constitution Act [Betriebsverfassungsgesetz]. These legal foundations ensure that our employees have the right and the means to organise and represent themselves, and participate in decision-making processes within Zalando.

Zalando Employee Participation (ZEP)

The voluntary Zalando Employee Participation (ZEP) programme provides an additional platform for those employees not represented by a works council, enabling them to engage directly with management and contribute to company decisions. The Strategic Employee Relations team transparently supports employees who wish to establish an informal ZEP, a works council, or who have questions regarding unions and their rights. They work closely with the employees on a daily basis, ensuring that employee participation and co-determination are central to our operations. We have defined own regulations and these have been agreed to by the management board.

Works councils

We are supported by 10 works councils across various locations in Germany. These works councils, which are created, elected and composed of by our employees, play a critical role in our decision-making processes, particularly on matters that directly impact employees, thus enabling employee participation and co-determination to remain central to our operations.

European Works Council

On a group-wide level, and particularly for cross-border matters, employee representation is further strengthened through our European Works Council (EWC, formerly International Employee Board), which operates under the Act on the Participation of Employees in a European Company [SE-Beteiligungsgesetz, SEBG]. This body ensures that employee perspectives from all our operating countries are considered in our European and global strategies. Furthermore, the employee representatives ensure employee participation at the supervisory board level.

Collective bargaining coverage and workplace representation

In the following table, we present the percentage of total employees covered by collective bargaining agreements. Where there are one or more collective bargaining agreements in the European Economic Area (EEA), we present the overall percentage of employees covered by such agreement(s) for each country in which there is significant employment (defined as at least 50 employees by head-count representing at least 10% of the total number), and the coverage in non-EEA of collective bargaining agreements. Additionally, we present the global percentage of employees covered by workers' representatives at the country level for each EEA country in which we have significant employment.

Collective bargaining agreements

Less than 1% of our employees are covered by collective bargaining agreements.

Note: Significant employment is defined as at least 50 employees by head-count representing at least 10% of the total number.

The diversity & inclusion targets for management board remuneration include:

Share of women in leadership roles

For LTI 2024 annual tranches granted in 2024: Sub-targets: Share of women in (i) Senior Contributor 1 roles – 25%, (ii) Senior Contributor 2 roles – 25%, (iii) Executive Contributor 1 roles – 25%, (iv) Executive Contributor 2 roles – 25%

For LTI 2021 (Robert Gentz/David Schneider/David Schröder): Sub-targets: Share of women in (i) Senior Contributor 1 roles – 20%, (ii) Senior Contributor 2 roles – 20%, (iii) Executive Contributor 1 role – 20%, (iv) Executive Contributor 2 roles – 20%, (v) C8 – 20%

For LTI 2021 (Dr Sandra Dembeck/Dr Astrid Arndt): Sub-targets: Share of women in (i) Senior Contributor 1 roles – 25%, (ii) Senior Contributor 2 roles – 25%, (iii) Executive Contributor 1 roles – 25%, (iv) Executive Contributor 2 roles – 25%

Adequate wages

Benchmark used:

For countries within the EEA, Zalando uses the Eurostat database as the applicable benchmark.

For countries outside the EEA, any benchmark that meets the criteria set out by the Sustainable Trade Initiative may be used, including applicable benchmarks aligned with:

• Anker Methodology
• Wage Indicator Foundation
• Fair Wage Network

For specific countries outside the EEA, the following benchmarks are used:

• U.S. Bureau of Labour Statistics (for different sub-national regions in the U.S.)
• China's average yearly wages
• Hong Kong's average monthly wages

Coverage:

Interns and working students are excluded from the calculations.

Result:

None of Zalando's employees are paid below adequate wages.

Value chain workers:

Since 2022, Zalando has been training its Private Label teams on living wages to raise awareness. The training consists of two modules:

1. A basics module with almost 200 employee participants
2. An advanced module for employees directly involved in buying and sourcing

The training content includes basic definitions, different living wage benchmarks, implementation obstacles, and advanced tools like cost calculations and strategies to implement learnings with direct suppliers. The training was conducted by an external service provider with years of experience in trade unions and the fashion industry. After completion with all relevant employees, the training was preliminarily concluded in 2024, with a recording permanently available on the online training platform.

Zalando acknowledges that collective bargaining at the industry level, enabled by freedom of association and responsible purchasing practices, is the most realistic pathway to making an impact on wages, as stated through their participation in Action, Collaboration, Transformation (ACT).

Social protection

Coverage

All Zalando employees are covered by comprehensive social protection aligned with local labour laws, which requires that both employees and employers contribute to public funds for:

• Unemployment insurance
• Sickness benefits
• Work injury compensation
• Disability support
• Parental leave
• Retirement

Coverage: 100% of employees

Type of scheme: Public schemes (statutory contributions as required by local labour laws in respective countries)

Geographic scope: Coverage applies to employees in Germany and all countries where Zalando operates, in full compliance with respective local labour laws.

Additional benefits

Fringe benefits for management board members include:

• Employer's contribution to the statutory pension and unemployment insurance
• Allowance for health insurance
• Company car
• Employee voucher
• D&O insurance
• Reimbursement of expenses

Vacation and special leave entitlements:

• Germany-based employees: 27 to 30 vacation days annually (depending on role and tenure), exceeding the legal minimum of 20 days for a five-day work week
• Employees outside Germany: Vacation days and social benefits aligned with or exceeding national requirements
• Special leave entitlements for major life events: death of a close relative, relocation, marriage, becoming a parent
• Special leave or time off for caretaking needs of relatives

Work-life balance support

Family-related leave: 100% of employees entitled to take family-related leave

Percentage of employees that took family-related leave by gender:

Return-to-work support:

• Job security
• Childcare support
• Return-to-work programmes
• Berlin-based employees: Access to approximately 100 kindergarten places through partnerships and on-campus daycare
• All employees: Access to work-life balance service via Fürstenberg Institute, offering up to 5 days of emergency childcare annually

Persons with disabilities

Metrics

Zalando does not disclose the percentage of employees with disabilities in their workforce.

Policies and actions

Disability inclusion approach: Zalando aims to create an inclusive workplace for employees with disabilities regardless of their official status.

Action plan (2023): Implemented for Berlin-based offices and employees, including:

• Accessibility audits and improvements to physical spaces, particularly in newly constructed Berlin office
• Allyship programmes
• Leadership awareness measures
• Inclusive recruitment processes

Disability Inclusion Officers: Appointed dedicated officers in Berlin and Erfurt who actively advocate for inclusivity. This permanent role promotes disability inclusion and ensures legal obligations towards people with severe disabilities in the workplace are fulfilled.

Disability inclusion toolkit: Focuses on the disability legal framework in Germany and empowers leaders and P&O business partners to create inclusive environments.

Employee Assistance Programme (EAP): Provides specialised support for employees navigating disability-related processes like applying for an official German disability pass.

Mobile work agreement (2022): Employees with disabilities are offered enhanced flexibility, with the option to work from home up to five days per week, depending on the nature of their role (compared to 60% for standard overhead employees).

Customer-facing initiatives

Adaptive fashion assortment: Since 2022, offering Adaptive fashion through all private label brands and partner brands (e.g. Tommy Hilfiger, Nike, Friendly Shoes, BOSS, Adidas, JanSport, Skechers). In 2024, broadened assortment with Adaptive sportswear and Adaptive fashion and footwear for kids.

Partnerships: Working with organisations including All is for All, MovingMood, Ottobock, VORN eG – The Berlin Fashion Hub, Valuable 500 and Making Space to share knowledge and establish best practices for authentic representation.

Platform accessibility: Focus on improving digital accessibility to facilitate seamless shopping experiences for consumers with disabilities, including design approach changes and comprehensive consumer interviews.

Health and safety metrics

Zalando reports health and safety metrics for its own workforce under ESRS S1-14. The following table presents the health and safety management system information for employees.

Coverage and methodology: All employees (100%) are covered by Zalando's health and safety management system. The health and safety policy applies to logistics warehouses and is made available to all employees during onboarding, with annual training provided. For the rate of recordable workplace accidents, an estimate of 38 hours weekly worked hours is used for Highsnobiety entities.

The company does not disclose metrics for number of days lost to work-related injuries or fatalities, nor high-consequence injury rates or recordable work-related ill health cases in this reporting period.

Work-life balance metrics

Entitlement to family-related leave

The percentage of employees entitled to take family-related leave is 100.0%.

Employees who took family-related leave by gender

Work-life balance support measures

Childcare support: Berlin-based employees have access to approximately 100 kindergarten places through partnerships with daycare providers and the on-campus daycare centre. All employees have access to work-life balance services provided by the Fürstenberg Institute, offering up to five days of emergency childcare annually.

Mobile work agreement: Introduced in 2022, allowing overhead employees to work remotely for up to 60% of their time, depending on their role and internal team guidelines. Employees with disabilities are offered enhanced flexibility, with the option to work from home up to five days per week.

Return-to-work programmes: The company offers job security, childcare support and return-to-work programmes to facilitate a smooth return to work after parental leave.

Methodology note

All metrics for employees are reported in terms of headcount (individuals who are in an employment relationship with Zalando according to national law or practice) at the end of the financial year, i.e. 31 December 2024, unless otherwise stated. Prior-year data for 2023 presented in this section is unaudited.

Compensation metrics (ESRS S1-16)

Pay gap

The gender pay gap is calculated as the difference between average gross hourly earnings of male paid employees and of female paid employees expressed as a percentage of average gross hourly earnings of male paid employees. Pay refers to wages and salaries earned by full-time and part-time employees (including working students and apprentices) per hour before any tax and social security deductions, including any overtime pay, shift premiums, allowances, bonuses and commissions. Members of the management board are excluded from these calculations.

Unadjusted gender pay gap:

Pay ratios are largely driven by the employee distribution across lower- and higher-paying jobs, such as in non-overhead roles and tech, for instance, and is thus industry- and company-specific. For the gender pay gap in particular, differences in the prevalence of jobs between men and women matters since it immediately impacts the pay average. Similarly, the relative share of male and female employees in the different countries influences the gender pay gap.

The differences in the above-mentioned pay-related factors between men and women explain around 90% of the unadjusted gender pay gap.

Adjusted gender pay gap:

For Zalando overall, the adjusted gender pay gap amounts to 1.4% (1.2% prior year);

• Among overhead roles, the adjusted gap is 1.9% (1.7% prior year)
• For non-overhead roles it stands at 0.2% (0.2% prior year)

The adjusted pay gap excludes employees in areas with incomplete or non-comparable job grades and families (e.g. Highsnobiety). The calculation of the adjusted gap includes base salary, equity compensation, functional allowances, commuting allowances, boni, and shift and on-call premia. It controls for differences in job grades, job functions, and location. Therefore, it differs from formerly published adjusted gender pay gaps in outcome and controls, i.e. previously focusing only on base salary and equity compensation while additionally controlling for age, tenure, and contract type, and the inclusion of working students and apprentices.

Remuneration ratio

The annual average total remuneration is the ratio of the highest paid individual to the median annual total remuneration for all employees (including working students and apprentices and excluding the highest paid individual and members of the management board).

For this, we take into account all payments made to employees, including the base salary (guaranteed, short-term, non-variable cash compensation) plus any variable cash payments and benefits in kind (e.g. cash allowances, bonuses, commissions, profit-sharing, company cars, insurances) as well as annual long-term incentives (e.g. total fair value of stock options, restricted stock, performance stock, phantom stock, stock appreciation rights, long-term cash awards). Given the inclusion of performance-based incentives, this metric is subject to fluctuations over time.

Annual average total remuneration ratio (2024): 48.5

Methodology

Pay gap scope:

• Full-time and part-time employees (including working students and apprentices)
• Members of the management board are excluded
• For adjusted gap: excludes employees in areas with incomplete or non-comparable job grades and families (e.g. Highsnobiety)

Pay gap calculation:

• Unadjusted: based on average gross hourly earnings before tax and social security deductions
• Adjusted: controls for job grades, job functions, and location; includes base salary, equity compensation, functional allowances, commuting allowances, bonuses, and shift and on-call premia

Remuneration ratio scope:

• All employees including working students and apprentices
• Excludes the highest paid individual and members of the management board
• Includes all payments: base salary, variable cash, benefits in kind, and annual long-term incentives

Incidents, complaints and severe human rights impacts

The following table shows the total number of all incidents of discrimination, including harassment, reported in the financial year. This metric is calculated as the sum of all recorded cases that were categorised as discrimination or (sexual) harassment and assessed as a potential human rights violation, during the reporting period. We also disclose the number of all complaints filed through channels for our employees to raise concerns (including grievance mechanisms) and, where applicable, the National Contact Points for the OECD Guidelines for Multinational Enterprises related to the matters defined, excluding those already reported above. Moreover, we disclose the total amount of fines, penalties and compensation for damages as a result of violations regarding social and human rights aspects.

Incidents, complaints and severe human rights impacts

The 90 complaints received from employees in financial year 2024 mainly related to potential unequal treatment and work culture. During the reporting period, no cases of severe human rights incidents related to employees were identified and addressed. Accordingly, there have been no incidents that may constitute a violation of the UN Guiding Principles on Business and Human Rights, the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational Enterprises. Policies and procedures have been implemented to prevent such incidents.

Business conduct policies and corporate culture

Zalando's group-wide policy landscape is built around two fundamental guidelines: the Code of Ethics and Code of Conduct. These policies are approved through a company-wide process involving a member of the management board, the SVP Corporate Governance/General Counsel, and contributing parties. The policies apply to all entities and employees of the Zalando group, with communication via employee self-service systems and intranet. Mandatory compliance training covers key policies, with new employees enrolled upon employment start and refresher courses provided bi-annually.

Code of Ethics

Scope: All employees, from new joiners to founders, across all entities

Approval and oversight: Approved by management board member and SVP Corporate Governance/General Counsel; communicated via Chief People Officer

Key content/principles:

• Based on fundamental values of honesty, respect, trust and fairness
• Sets mandatory standards and clear expectations for professional, ethical and responsible behaviour
• Requires all employees to follow the law
• Defines expectations regarding diversity & inclusion, respectful behaviour and avoidance of conflicts of interest
• Fosters a speak-up culture for employees to raise concerns or report potential compliance breaches
• Promises protection for those who report incidents in good faith from negative consequences
• Stipulates obligation to comply with data protection standards
• Prohibits discrimination

Public availability: Available on corporate website and communicated to all employees in various languages

Linkage to international standards: Based on fundamental human rights values

Monitoring: Corporate Compliance team monitors, manages, documents and reports on compliance risks. Employees receive mandatory compliance training courses with automatic reminders. Lead training is conducted in person or via video chat. E-learning courses are mandatory for all employees with Zalando email addresses (except defined roles with low compliance risks in logistics and stores). In 2024, 4,759 employees completed compliance basics e-learning courses. Various communication channels available for reporting compliance infringements, including a whistleblowing tool from third-party provider available in various languages and on anonymous basis. Compliance infringements reported to management board and audit committee of supervisory board at least quarterly.

Code of Conduct

Scope: All business partners — including suppliers, service providers, platform partners, distributors, consultants and agents of Zalando SE and all its subsidiaries

Key content/principles:

• Covers human rights (including supply chain compliance and labour rights), environmental protection, fair and ethical business practices, monitoring and complaints
• Every business partner must acknowledge the standards and have appropriate management systems and due diligence processes in place

Public availability: Published on corporate website

Monitoring: Business partner due diligence reviews (sanction list screening, compliance database and adverse media checks, followed by in-depth review by Corporate Compliance team if findings made) for defined groups of business partners and cases where potential compliance risks are apparent. Non-compliance leads to measures including potential termination of business relationship.

Group Policy Internal Investigations

Key content/principles:

• Describes overall management of reported, actual or suspected compliance violations from report intake through pre-assessment and investigation stages until completion of remediation
• Performed by Corporate Compliance team
• Principles include impartiality and timely conduct of investigations
• Includes "Protection of Whistleblowers" section in line with EU Directive 2019/1937

Speak Up Guidance

Key content/principles:

• Provides information on channels, processes and basic rules for established reporting channels for internal and external stakeholders
• References group policy internal investigations protection provisions
• Protects individuals who raise concerns against actions

Public availability: Accessible externally on corporate website and via internal Zalando employee portal

Group Policy Benefits, Gifts, Events and Expenses

Key content/principles:

• Defines consistent rules regarding giving and receiving of gifts, invitations and events
• Prevents violations of national and international anti-corruption regulations
• Management board members adhere to expense guidelines approved by supervisory board
• Embedded in event booking tool

Monitoring: Covered in mandatory compliance training (basic and lead programmes)

Group Policy Authority to Sign

Key content/principles:

• Defines who is permitted to sign contracts on behalf of Zalando
• Includes who may represent Zalando to third parties in context of establishing legal relationships
• Separate regulations subject to prior alignment and approval by Corporate Compliance team

Monitoring: Covered in mandatory compliance training

Policy Statement on Zalando's Human Rights Strategy

Scope: Throughout Zalando entities and for all business activities, including facilities operating on behalf of Zalando. Specifies expectations and requirements for all business partners within the supply chain (suppliers, service providers, platform partners, distributors, consultants, agents and subcontractors)

Approval and oversight: Approved by co-CEO Robert Gentz; implemented by Corporate Governance team under responsibility of SVP Corporate Governance/General Counsel. Human Rights Officer monitors ongoing activities and reports to management board

Key content/principles:

• Sets groundwork for managing human rights due diligence, embedded into operating standards and management practices

Linkage to international standards: Based on ILO Conventions and Universal Declaration of Human Rights

Monitoring: Continuous evaluation of effectiveness, updating practices as required. Uses databases to document risk mitigating measures (audits, business partner checks, investigations) and results to assess appropriateness for risk mitigation. Reviews incoming complaints via reporting channels in quarterly cycles presented to management board and audit committee of supervisory board

Child Labour Prevention and Remediation Policy

Scope: Private label business partners and their subcontractors

Approval and oversight: Implementation by Private Label team, overseen at VP level

Key content/principles:

• Introduced in 2023/2024 to complement Code of Conduct and human rights strategy
• Outlines expectations for partners and subcontractors to prevent, identify and remediate child labour issues
• Business partners must be committed to eliminating child labour, forced labour and other exploitative practices of children
• Must implement written rules, control mechanisms and training programmes
• Covers working hours, health and safety measures, access to child care services and education

Linkage to international standards: Aligned with German and international regulations

Monitoring: Embedded in contracts with private label business partners

Modern Slavery Statement

Key content/principles:

• Sets commitment to preventing modern slavery throughout business operations and supply chain
• Details efforts to prevent and address human rights violations including modern slavery

Public availability: Published on corporate website in accordance with United Kingdom's Modern Slavery Act 2015

Linkage to international standards: Aligned with relevant ILO Conventions

Animal Welfare Policy

Scope: All business partners, including suppliers, agents, trading companies and service providers

Key content/principles:

• Complements Code of Conduct and other sustainability and ethical standards
• Sets baseline for social, environmental and chemical compliance
• Outlines principles business partners must follow when supplying products made from animal-derived materials
• Regularly reviewed to incorporate updates

Public availability: Available on corporate website

Monitoring: Work with expert groups to support research and development of animal welfare standards and value chain transparency

Sustainable Sourcing Policy (Private Labels)

Scope: All business partners of private labels

Key content/principles:

• Complements Code of Conduct and sustainability standards
• Sets social, environmental and chemical compliance baselines
• Part of General Instructions (GIs) which must be signed during supplier selection and included in every contract
• Covers human rights and environment (ethics and sustainability), legal and finance, product labelling and packaging, logistics, product safety and quality management

Monitoring: In 2024, evaluated 149 social audit reports from private labels' Tier 1 suppliers. Turned down onboarding of 0 factories/suppliers for not meeting audit requirements

Procurement Policy and Procedures for Non-Merchandising Goods and Services

Scope: External vendors for non-merchandising goods and services

Approval and oversight: Finance team facilitates process; Legal team involved for oversight and regulatory adherence

Key content/principles:

• Ensures compliance, efficiency and cost-effectiveness
• Includes demand collection, source-to-contract activities and order-to-pay operations
• Approval workflows, four-eyes principle

Monitoring: Risk assessment process classifies vendors by risk level; high-risk vendors required to sign Code of Conduct. Evaluates suppliers on human rights and environmental risks following German Supply Chain Act

Supplier Relationship Management (SRM) Guideline

Key content/principles:

• Provides standardised SRM concept, guideline and toolkit for Sourcing Managers
• Four steps: 1) identifying SRM-relevant suppliers, 2) aligning relevant business units and communication, 3) engaging with SRM relevant suppliers, 4) re-evaluating for continuous adaptation
• Provides tools for data collection, analysis and continuous monitoring of direct suppliers

Incidents of corruption or bribery

Confirmed incidents

Zalando reported zero confirmed incidents of corruption or bribery during the financial year 2024.

Convictions and fines

Disciplinary actions

Contracts terminated

Investigation and speak-up procedures

Zalando maintains a compliance management system that includes whistleblowing management and investigations where required. The company offers multiple reporting channels:

• Whistleblowing tool: Available to employees and third parties in 42 languages, accessible via the corporate website, mobile app, and hotline. Reports can be made anonymously 24/7.
• Direct contact: Employees may contact the Corporate Compliance team directly via email or in person.
• Other channels: Various feedback sessions, surveys, works councils, and department-wide meetings.

The group policy internal investigations describes the comprehensive management of reported, actual or suspected compliance violations, from report intake through investigation until completion of remediation. All reports are acknowledged within seven days of receipt. The Corporate Compliance team manages reported cases, and a compliance panel of senior executives takes over decision-making for serious cases.

Zalando's Code of Ethics and Speak Up guidance protect individuals who raise concerns in good faith from negative consequences. Information on detected compliance infringements and important updates are reported to the management board and the audit committee of the supervisory board at least quarterly.

Since there were no confirmed incidents of corruption or bribery in 2024, the company does not have action plans to prevent corruption or bribery beyond its existing compliance management system.

Political influence and lobbying activities

Political engagement approach

Zalando's Public Affairs team is located within the Corporate Affairs department, which, since September 2024, reports to the Chief People Officer (CPO). The audit committee of the supervisory board is regularly informed about regulatory developments and, where relevant, about related activities.

The team is active at the EU level and conducts public affairs operations in Germany, France and Poland. The main topics covered relate to:

• Technology (e.g. Digital Services Act, Digital Markets Act)
• Tax, customs and payments (e.g. Customs Reform and VAT reform)
• Sustainability (e.g. Eco-design for Sustainable Products Regulation)

Through outreach activities, Zalando advocates for assurance from the EU that European businesses are not unfairly disadvantaged compared to economic operators based in non-European countries, and that EU customers can rely on the same rights regardless of where the company they purchase from is based, ensuring a level playing field between all market participants.

Policy engagement and stakeholder collaboration

Zalando engages with policymakers and regulators whose work shapes the frameworks, guidelines and incentives that drive sustainability and transparency. Collaborations have given the company key insights into evolving regulations, enabling adjustment of strategies and operations while contributing technical and operational expertise.

The company encourages EU policymakers to establish a consistent regulatory framework that will enhance consumer trust and protection and ensure a level playing field against unfair competitive practices.

Political contributions

Zalando does not make any direct or indirect political contributions in terms of donations to political parties or elected officials.

Lobbying expenditure

Lobbying expenses (2024)

EU Transparency Register

Zalando's interest representation is registered in:

• EU transparency register (number 877966419254-70)
• Germany (number R003005)
• France

Policies and oversight

At present, Zalando has not implemented specific policies, actions or targets in line with the ESRS for political influence and lobbying activities.

Key compliance topics are reported to the management board and to the audit committee of the supervisory board on a quarterly basis. The chairperson of the audit committee reports regularly to the full supervisory board on the activities and conclusions of the audit committee in the area of corporate governance and business conduct matters.

Material impacts, risks and opportunities

Positive impact - Value chain (Actual: 0–1 year and potential: 1–5 years) Zalando can contribute to a fashion industry that addresses environmental and social issues by engaging policymakers and industry associations, setting supplier standards and empowering business partners to enhance ethical practices, thereby reducing environmental and societal impacts.

Opportunities - Own operations (0–1 year and 1–5 years) Zalando's proactive lobbying could potentially impact brand differentiation by fostering regulatory awareness and contributing to a progressive industry landscape. Enforcing higher environmental and social standards with suppliers attracts customers and drives sales. Comprehensive climate risk management enhances company value and investor perception, demonstrating Zalando's commitment to sustainability.

Payment practices

Policy and approach

Zalando does not have an overarching policy for payment practices, since all payment terms are agreed in supplier contracts and not all suppliers work on a contractual basis. The company distinguishes between (direct) merchandise- and (indirect) procurement-related suppliers and processes.

Standard payment terms

Standard supplier payment terms can vary between 30–90 days and are negotiated on an individual basis. The most common payment terms specify a minimum of 30 days net for direct and indirect managed suppliers (except landlords, tax authorities, etc. which often have shorter payments terms).

• Indirect procurement: Target of 60-day payment terms for each supplier, with alternative approaches where 60 days is not feasible
• Retail (direct) suppliers: Minimum payment term of 90 days net

Payment due dates after the invoice date for liabilities that are subject to reverse factoring vary between 60 to 180 days. Comparable trade payables with suppliers outside of reverse factoring have payment due dates after the invoice date of typically 45 to 90 days.

Average payment time and compliance

Average number of days to pay an invoice: 50 days

Methodology: The sum of the number of days from baseline date to payment date is divided by the total number of invoices paid

Percentage of payments aligned with standard payment terms: 91.1%

Methodology: The total number of invoices paid that meet standard payment terms is divided by the sum of the invoices paid

Invoice verification process

Zalando has a robust and automated invoice verification process for the majority of invoices to ensure they are verified and paid automatically and on time. The process is based on the terms and conditions linked to the purchase order, and payments are triggered automatically according to their respective due date.

In cases of merchandise discrepancies, tickets are created for the relevant teams to resolve the discrepancy prior to the payment due date. For the procurement process, automatic reminders with an escalation matrix are in place to ensure action, starting nine days after the first approval due date.

Legal proceedings

As of 31 December 2024, one legal proceeding was pending in which an insolvency administrator is demanding payment of contractual consideration allegedly owed. In Zalando's view, these claims are unfounded. The competent court is currently reviewing the matter.

Reverse factoring arrangements

Zalando has supplier finance arrangements containing contracts in which finance providers (factor) purchase claims held by some suppliers against the company for goods delivered (reverse factoring). These arrangements provide suppliers with early payment terms compared to the related invoice payment due dates, and provide Zalando with longer payment terms in comparison to liabilities that are not subject to these reverse factoring arrangements. Zalando does not provide any additional security or guarantees under these arrangements.

Reverse factoring volumes:

These balances are recognised under current liabilities, i.e. trade payables and similar liabilities. Payments made to reverse factoring providers, including interest paid, are presented in the cash flow from operating activities.

Targets

Zalando has not adopted targets in line with the ESRS that specifically address payment practices, as the automated invoice verification process ensures that payment terms are adhered to.