Pollution

The ‘Pollution’ chapter meets the disclosure requirements of ESRS E2 and is based on the results of the double materiality analysis. Material topics for the KION Group are managed in the context of the ‘Climate and energy’ action field.

Material impacts, risks, and opportunities and their interaction with strategy and business model in relation to pollution

The double materiality analysis described in the ‘Description of the process to identify and assess material impacts, risks, and opportunities’ chapter identified the following material negative impacts and risks in relation to pollution. These primarily relate to the upstream value chain. In two cases, potentially negative impacts in the KION Group’s own operations were identified.

Resource extraction and processing (negative impact)

Raw materials such as steel, iron, and other metals are contained in parts and products purchased by the KION Group and used in its products. The extraction of these raw materials generally has a relevant environmental impact, primarily air pollution, which is caused by the release of pollutants during the extraction and processing of raw materials in the upstream value chain. Nitrogen oxides, carbon dioxide, and carbon monoxide are some of the pollutants known to result from this process.

As a manufacturer of material handling equipment that relies on these raw materials, the KION Group has identified air pollution caused by the production of these materials and resulting from business relationships as a material impact in the upstream value chain.

Pollution from logistics (negative impact)

Road transportation is a major source of air pollution, with carbon dioxide, particulate matter, and nitrogen oxide being the most relevant pollutants. The largest source of air pollution for the KION Group is the transportation of goods from suppliers to its sites, as well as transportation between its sites, which is primarily operated by third-party logistics providers.

The potential impact of the Company’s vehicle fleet on pollution was also taken into account, but was deemed not material as it was found to be below the relevant thresholds due to the mileage and transported weight. While the transportation of people and goods is essential to the KION Group’s operations, the negative impact is not part of the corporate strategy. The link between the KION Group and the impact is mainly the result of business relationships, with the Group’s own operations contributing to a lesser extent. It is estimated that the bulk of transportation-related air pollution is attributable to third-party freight transportation providers. A smaller proportion can be traced back to the Company’s fleet, which mainly consists of service vehicles.

Substances of very high concern in the upstream value chain (negative impact)

Substances of very high concern (SVHCs) have a negative impact on humans and the environment due to their intrinsic properties, such as carcinogenicity, mutagenicity, reproductive toxicity, persistence, and bioaccumulation. If these substances are released into the environment, humans can be exposed through the ingestion of water and food, or through inhalation, for example. The emission of SVHCs, for example due to a leak, can cause health problems or lead to a loss of biodiversity.

This impact is not directly linked to the KION Group’s business model, as the Group neither produces nor directly uses SVHCs. While SVHCs might be found in parts and products purchased by the KION Group, they are not expected to be released into the environment. Within the context of business relationships in the upstream value chain, these substances could potentially have an impact in the production processes of supplied parts and products.

Supply disruption due to potential ban of per- and polyfluoroalkyl substances (without alternatives) (risk)

A potential complete ban of perfluoroalkyl and polyfluoroalkyl substances (PFAS) by the European Commission under REACH Annex XVII represents a material risk for the KION Group, as it would substantially affect several components in KION Group products. A potential lack of alternatives – from a technical and financial perspective – to PFAS could negatively impact on the Group’s productivity and result in fines and lost sales. The probability of this risk occurring depends on the final decision taken by the European Commission.

A complete ban could lead to the exclusion of certain KION Group products from the Company’s product portfolio. Higher maintenance costs and production halts due to insufficient availability of parts are also possible. Depending on the nature of the restrictions on PFAS, this could have various consequences. These may include disruption to the supply of parts, limited availability of complete products, and reduced access to certain technologies.

Supply disruption due to potential ban of per- and polyfluoroalkyl substances (with some alternatives) (risk)

Disruption to the supply chain following a ban would represent a risk to the Group’s profitability, even if there were alternatives for certain applications. This scenario could lead to disruption or delays to supply, similar to a complete ban, though the consequences would be less severe. In this case, the number of affected components in KION products could be lower, depending on the defined alternatives. The overall impact would mirror that of a ban without alternatives, though to a lesser extent.

Generation of microplastics during transportation (negative impact)

Microplastics can have a negative impact on humans and the environment. This impact occurs in the Group’s own operations and in the upstream and downstream value chain. The transportation of goods or people on road surfaces such as asphalt causes tire abrasion, particularly during braking, which generates microplastics that accumulate in the environment.

The impacts of transportation-related microplastics were not part of the KION Group’s corporate strategy or business model. Nonetheless, there is a partial link in the downstream value chain to the Group’s products through the tires as purchased parts for vehicles in the Industrial Trucks & Services segment. As manufacturing these tires is not a business activity of the KION Group, most of the negative impact occurs in the downstream value chain when customers use KION industrial trucks.

A smaller proportion of microplastics is generated in the upstream value chain during the transportation of goods between suppliers and the KION Group’s sites, as well as between its sites, and during the internal use of its vehicle fleet (mainly in connection with distribution and service activities).

Policies related to pollution

The following subchapters deal with the KION Group’s material policies related to pollution.

The KION Group addressed the growing relevance of microplastics throughout the value chain as part of its double materiality analysis in 2024 and deemed this negative impact to be material for the first time. As a consequence, no specific policy was in place for the complex sub-topic of ‘Microplastics’ at the end of 2024.

Principles of Supplier Conduct

The KION Group Principles of Supplier Conduct contain specific requirements and rules with regard to pollution in the upstream value chain, and set out environmental, ethical, and social guidelines for the global supplier base. Suppliers are encouraged to manage their emissions responsibly in order to protect the environment for current and future generations.

Further details on the KION Group Principles of Supplier Conduct are available in chapter ‘Policies related to value chain workers’.

KION Group Code of Compliance

The KION Group Code of Compliance (KGCC) sets out general principles for conduct that are binding for all employees and business partners of the KION Group. In the context of pollution, the KION Group strives to develop environmentally friendly products and business processes. The Group is also committed to protecting the environment and society by using eco-friendly manufacturing technologies. Furthermore, the KGCC demands compliance with regulations and the timely securing of required permits, and calls on all KION Group entities and employees to reduce pollution overall. The code also indirectly addresses the substitution and minimization of substances of concern by considering the latest technology standards, the best available and environmentally friendly methods, the use of safe products, and the reduction of pollution.

The scope of the KGCC includes upstream and downstream operations as well as the Group’s own operations. The CEO and Chief Compliance Officer are responsible for overseeing compliance.

Stakeholder groups, including employees and business partners, are involved in the regular review of the KGCC through central functions such as the HR department, with regard to human rights, and the Procurement department, with regard to supplier requirements. To ensure that the KGCC is effectively communicated, the KION Group conducts regular training sessions for employees and all new workers. Business partners are informed about the policy in various ways, depending on the type of relationship.

[[The KGCC is available to the public on the KION Group’s website www.kiongroup.com/en/About-us/Compliance/.]]

Health, Safety, and Environment Statement of Intent

The Health, Safety, and Environment (HSE) Statement of Intent is a policy that outlines the principles governing HSE. The key content of the policy, which applies upstream, downstream, and to the Group’s own operations, covers compliance with legislation and standards, aspects that promote an HSE culture, mandatory training and stakeholder engagement, impact assessments, and reporting and responsibilities.

The HSE Statement of Intent also covers the mitigation of negative impacts linked to the pollution of air, water, and soil, including prevention and control. It states that the KION Group, represented by the Executive Board of KION GROUP AG, is responsible for systematically pursuing efforts to reduce emissions and discharges into air, land, and water. Furthermore, business partners covered by the scope of the policy have to comply with all national HSE legislation, codes of practice, and industry standards relevant to the KION Group’s activities. The Group must provide a safe environment for anyone affected by its operations. This is to be achieved by identifying hazards and eliminating them, or reducing them to an acceptable level, in accordance with or exceeding applicable standards. The HSE Statement also calls for the assessment of the environmental impact of historical, current, and future activities.

Further details on the HSE Statement of Intent are available in chapter ‘Policies related to climate change mitigation and climate change adaptation’.

Health, Safety, and Environment Standard

The KION Group HSE Standard defines minimum requirements for all KION Group locations and entities with regard to HSE matters, in addition to local regulations and the requirements of relevant ISO standards, such as ISO 14001 Environmental management systems. The HSE Standard applies to all KION employees, workers, and guests across all locations, including factories, sites, sales and service organizations, and individuals at customer sites. The standard applies to contractors, such as companies or individuals, who provide services or products to the KION Group and its local sites on behalf of an external company.

The CPSO function is responsible for implementing and overseeing the standard. The HSE Standard is reviewed regularly, and at least once a year, by the central Sustainability & HSE department and the stakeholder functions. The KION Group’s workers were involved in the review, approval, and development process for the standard through the HSE heads of the Operating Units and the HSE network.

With regard to mitigating negative impacts linked to the pollution of air, water, and soil, including prevention and control, the HSE Standard states that effective environmental management is essential to the KION Group. All local subsidiaries are called upon to control and reduce waste, emissions, and the use of hazardous substances in accordance with applicable national legislation and the ISO 14001 or equivalent standards. This includes water, water discharges, land use, noise, biodiversity, and vibration. Furthermore, as part of the ISO 14001 certification process, all local subsidiaries are required to maintain an environmental impact and aspect register, which is supported by environmental audits and highlights the impacts on the environment. The HSE Standard also requires subsidiaries to complete an environmental risk assessment to minimize or eliminate any environmental risks. The assessment of environmental risks must cover all local subsidiaries and any customer sites where KION employees work. Emergency planning for sites is also included, with the fundamental aim of avoiding accidents and emergency situations.

The KION Group’s HSE Standard is available to the workforce in nine languages.

Actions and resources related to pollution

The following subchapters deal with the KION Group’s material actions related to pollution.

Supplier compliance program

In 2022, the KION Group started to systematically collect data on material compliance information from its supplier base. In 2024, the compliance program focused on the KION ITS EMEA Operating Unit. Its purpose is to collect compliance data on substances of very high concern (SVHCs) in goods according to Article 33 of the EU REACH regulation, as well as information relating to the Restriction of Hazardous Substances Directive (EU-RoHS), to chemicals covered by the Toxic Substance Control Act (US-TSCA), to Article 9 of the EU’s Waste Framework Directive (WFD), and to conflict minerals according to the US Dodd-Frank-Act. Through global supply chain compliance provider Assent, the KION Group called on suppliers to provide part-specific chemical composition information in the context of its compliance program.

By systematically assessing supplier data, the KION Group strives to reduce compliance risks, increase transparency along the upstream value chain, and avoid pollution. This includes the gradual reduction of harmful materials and compounds, and the restoration, regeneration, and transformation of ecosystems where pollution has occurred.

Reporting of substances of concern in products across KION ITS EMEA

Article 9 of the EU’s Waste Framework Directive (WFD) requires suppliers of articles containing substances of very high concern to provide information on these articles. This information is stored in the European database of substances of concern in articles as such or in complex objects (Products) (SCIP), which is managed by the European Chemicals Agency (ECHA). The KION Group began to submit SCIP reports as early as December 2020. Since 2024, these SCIP reports have been automated thanks to a data interface with the EU system. Assent, the KION Group’s global supply chain compliance partner, is currently producing and submitting SCIP dossiers on behalf of 21 consolidated subsidiaries that sell products in the EMEA region. Several hundred simplified SCIP notifications (SSNs) have already been submitted, with the aim of increasing transparency and thus helping to avoid pollution. This includes the gradual reduction of harmful materials and compounds, the minimization of pollution, and the restoration, regeneration, and transformation of ecosystems. In addition, the reporting to authorities could positively influence pollution management.

Development of actions to address microplastics

As pollution from microplastics is a new and specific material topic for the KION Group, further analysis is needed to gain a better understanding of influencing factors. Future developments, including a detailed roadmap, will be defined once adequate assessments have been completed and data collection processes have been optimized.

Development of actions to address upstream air pollution

Potential actions in relation to the new material topic of air pollution in the upstream value chain are currently being examined. As the KION Group does not directly control sources of air pollution in purchased materials, formulating a detailed roadmap is a complex task because all proposed actions have to be carried out in collaboration with suppliers. The first step is to obtain better data on materials associated with air pollution from key suppliers supplying such material to the KION Group’s subsidiaries.

Targets related to pollution

At the time of reporting, specific targets for environmental pollution were in preparation but have not yet been finalized. Since SVHCs and microplastics are relatively new aspects, further analysis of influencing factors, metric and scope definitions, and structured databases and data collection are required to establish a baseline and set targets. The necessary processes are already under way and will be continued in the coming years.

Metrics related to pollution

The following subchapters deal with the KION Group’s material metrics related to pollution.

Reporting on pollution has been expanded in line with the DMA results. The following includes disclosures on the newly identified material sub-topics of SVHCs and microplastics, and a revised scope of disclosure for air pollution.

Where available, measurements were used to develop pollution-related metrics. Estimates were only used where measurements were unavailable. The metrics for microplastics and SVHC metrics were not validated by an external body.

Metrics related to air pollution and microplastics

With respect to air pollution, the KION Group identified a material negative impact in relation to its logistics infrastructure (upstream and own operations) (see ‘Material impacts, risks, and opportunities and their interaction with strategy and business model’). The air pollutants linked to the Group’s vehicle fleet were analyzed and an estimate was made for each substance. A comparison of the estimated amounts against the thresholds defined by the European Pollutant Release and Transfer Register (E-PRTR) confirmed that no substance exceeded the threshold.

With regard to the material impacts of air pollution identified in upstream activities linked to the extraction and processing of raw materials, the KION Group applies transitional provisions for value chain information.

The KION Group also reported on microplastics for the first time in 2024 based on the negative material impact ‘Generation of microplastics during transportation’. The following method was used to calculate the volume of microplastics: the number of kilometers driven by the KION Group fleet multiplied by the amount of microplastics generated per kilometer. The calculation is based on the actual fuel consumption for the reporting year, which is used to estimate the distance driven by applying a conversion factor of liters per kilometer. For greater accuracy, publicly available studies were used to determine specific average conversion factors depending on the type of vehicle and fuel. Fuel consumption data is gathered for each consolidated subsidiary and listed as a table in a groupwide system encompassing the KION Group’s consolidated entities for financial reporting purposes. Electric vehicles were included by applying the average distance driven in the reporting year to the number of vehicles. The number and type of vehicles was determined across the Group based on a range of data sources at regional level and at the level of the Operating Units. The amount of microplastics was then estimated using average emission factors for the various vehicle types. Publicly available studies were consulted for the calculation of microplastics from vehicle tire wear.

In the reporting year, the amount of microplastics generated through tire abrasion during transportation was 59,753 kilograms.

The data is based on specific assumptions regarding fuel consumption. An assumption was made, for example, that diesel consumed by the subsidiaries was only used in vehicles and that other uses of the fuel were negligible. With regard to the consumption of compressed natural gas in vehicles, the same methodology was applied as for electric vehicles. Hybrid and internal combustion vehicles were included in the same pool to ensure that the fuel consumption of the hybrid vehicles was sufficiently reflected when estimating the distance traveled.

This metric is subject to a high degree of measurement uncertainty due to the reliance on average conversion factors, scientific research, and estimates regarding distance traveled and microplastics generated. The main limitations are therefore related to the use of conversion factors, averages, and the inevitable uncertainty of using scientific research in place of actual data. A range of sources and studies were consulted in order to minimize this uncertainty as much as possible.

Metrics related to substances of very high concern

With respect to the negative material impact ‘Substances of very high concern’, the KION Group discloses the amount of SVHCs that are embedded in its products, or in parts of its products, due to procured components in the Industrial Trucks & Services segment. The external service provider Assent supports the data collection process for SVHC-related information with regard to the parts purchased for the KION ITS EMEA Operating Unit (see ‘Actions and resources related to pollution’). This information is then combined with the quantities and weight of the purchased parts to calculate the amount of SVHCs for KION ITS EMEA. The amount calculated for KION ITS EMEA was used as a reference value and applied to the APAC and Americas regions, with revenue as a parameter.

The calculation methodology is based on the assumption that all components purchased in the reporting year were incorporated into products or were parts of products. Where suppliers stated the exact concentration of SVHCs, this figure was used. Otherwise, the concentration applied was equal to the minimum amount for which a supplier is legally required to report the substance (above 0.1 percent weight by weight). Given the lack of options for estimating with more reliable data, this methodology was deemed to provide the best possible estimate. The use of data from the EMEA region as a reference implies a similar base of materials in supplied parts, and thus a similar presence of SVHCs in the portfolio of the Industrial Trucks & Services segment, in the APAC and Americas regions too.

The main limitations result from the assumptions regarding the concentration of SVHCs, the partially incomplete data on the weight of purchased parts, and the lack of SVHC data for purchased parts in the two other regions. To address these limitations, calculation and logic rules were set that require the use of accurate data where feasible and the avoidance of underestimating and overestimating as much as possible. While SVHC data was available for individual components of the purchased parts, only the total weight was available for the purchased parts as a whole.

Consequently, the calculation of SVHCs had to be based on a best estimate derived from the total quantity of purchased parts. This involved taking the highest reported concentration for each SVHC contained in the various purchased parts as a best estimate and extrapolating it to the total weight of the product. The total quantity of SVHCs may be overestimated as a result of this generalized calculation. With respect to purchased parts for which weight information is not available, the KION Group opted to exclude them from the calculation as no reasonable estimate was possible. For these reasons, and due to the reliance on third-party (upstream) data and the use of estimates, the reported amount of SVHCs in, or as part of, products is subject to measurement uncertainty.

The KION Group evaluated a number of potential approaches to reporting with the aim of disclosing the respective metrics related to substances of very high concern for the Supply Chain Solutions segment. It was not possible to obtain specific information as the method for calculating the data was still in development in the year under review. The Group therefore considered using estimates based on reference models and publicly available information. However, these approaches were rejected as they were deemed to not fulfil the requirements of ESRS 1 Appendix B in terms of data quality and reliability.

The KION Group therefore relies on the applicable transitional provisions in the same way as it does for information from the value chain, as the relevant data from the upstream value chain is needed for the required metrics for the Supply Chain Solutions segment. The Group will continue to pursue an approach to obtaining SVHC data for the Supply Chain Solutions segment in the next reporting period. With this in mind, future plans include an expansion of upstream SVHC data collection via Assent or, alternatively, via a reference-model approach that includes a survey to collect specific data from the respective main suppliers.