Basis of sustainability reporting

General basis for the preparation of the sustainability report

The Group sustainability statement (‘sustainability report’) was prepared in accordance with the requirements of Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 (Corporate Sustainability Reporting Directive, CSRD), of Article 8 of Regulation (EU) 2020/852, and of section 315c in conjunction with 289c to 289e of the German Commercial Code (HGB) regarding consolidated non-financial statements. The Group sustainability report covers the period from January 1 to December 31, 2024. In accordance with section 315c (3) HGB, the non-financial Group report was prepared as a framework based on the first sentence of the European Sustainability Reporting Standards (ESRS). KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, was commissioned to perform a voluntary limited assurance engagement on the non-financial report.

In addition to KION GROUP AG, all material subsidiaries were included that are controlled by KION GROUP AG and therefore contribute to the Group’s business activities (see also the basis of consolidation in the notes to the consolidated financial statements, note [4]; [ESRS 1.123]).

Alignment in accordance with CSR-RUG with voluntary application of ESRS

This Group sustainability report was prepared in accordance with the applicable legal requirements of CSR-RUG. The concept of double materiality analysis in accordance with ESRS means that the understanding of materiality according to GAS 20 is significantly expanded upon for the Group non-financial statement. Based on the KION Group’s material topics, the five matters outlined in CSR-RUG have already been covered as follows in accordance with ESRS and expanded for individual requirements of CSR-RUG.

The description of the business model can be found in the ‘Strategy, business model, and value chain of the KION Group’ chapter (Strategy, business model, and value chain of the KION Group). Notes on the amounts reported in the consolidated financial statements, the non-financial risks, and the identification of material matters can be found in the ‘Basis of sustainability reporting’ chapter and the ‘Impact, risk, and opportunity management’ chapter. Environmental matters according to CSR-RUG are comprehensively covered in the reporting with reference to ESRS E1 ‘Climate change’, ESRS E2 ‘Pollution’, ESRS E3 ‘Water and marine resources’, and ESRS E5 ‘Resource use and circular economy’.

‘Employee matters’ according to CSR-RUG are covered by the KION Group under ESRS S1 ‘Own workforce of the KION Group’.

The disclosure requirements according to CSR-RUG on ‘social matters’ were identified in the KION Group’s double materiality analysis as not subject to reporting requirements in accordance with ESRS. The policy on ‘social matters’ according to CSR-RUG is discussed in the ‘Strategy, business model, and value chain of the KION Group’ chapter. The findings of the double materiality analysis are taken into account in the targets, actions, and results of the ‘social matters’ policy reported in the respective topics and sub-topics of the ESRS disclosure requirements. The overarching involvement of stakeholders is disclosed in the ‘Description of the process to identify and assess material impacts, risks, and opportunities’ and ‘Interests and views of stakeholders’ chapters. The latter chapter has an additional focus on the customers as a stakeholder group and on the safety of KION Group products.

The disclosure requirements relating to ‘respect for human rights’ according to CSR-RUG are disclosed in reporting in line with ESRS S1 ‘Own workforce of the KION Group’ and ESRS S2 ‘Workers in the value chain’.

The disclosure requirements according to CSR-RUG on ‘anti-bribery and anti-corruption’ were identified in the KION Group’s double materiality analysis as not subject to reporting requirements in accordance with ESRS. The requirements with regard to ‘anti-corruption and anti-bribery’ policies according to CSR-RUG have been integrated into ESRS G1 ‘Business conduct’).

Definition of the basis of consolidation and information on the upstream and downstream value chain

The assessment of the upstream and downstream value chain included the unconsolidated subsidiaries and equity investments as well as the entities consolidated for financial reporting purposes. The findings of this assessment confirmed that the former are not material, based on the non-financial thresholds defined as material for the Group. This review of the value chain includes the required disclosures on greenhouse gas emissions (GHG emissions) according to ESRS E1 paragraph 44. The basis of consolidation for sustainability reporting is therefore in line with that for financial reporting.

For this disclosure requirement, no joint ventures, joint operations, or equity-accounted material equity investments were identified as part of the Group’s value chain (ESRS 1.67) over which it has operational control (ESRS 1.50 b).

As part of the double materiality analysis, the KION Group’s own operations and its upstream and downstream value chain were included in the evaluation of the impacts, risks, and opportunities (IROs). This sustainability report therefore also covers the upstream and downstream value chain on the basis of double materiality. Where individual policies, actions, metrics, and targets also relate to the value chain, or to specific parts of the value chain, they are highlighted accordingly in this sustainability report.

Amounts and metrics based on estimates and assumptions are explained, as is the methodology for deriving them. No information regarding the protection of confidentiality or of intellectual property has been omitted. Unless stated otherwise, the qualitative and quantitative disclosures in this sustainability report relate to the period of the KION Group’s financial year from January 1 to December 31, 2024.

Disclosures in relation to specific circumstances

The KION Group has voluntarily applied the European Sustainability Reporting Standards (ESRS), specified as the authoritative reporting standards by the CSRD, to prepare this sustainability report. In accordance with ESRS 1.110 and section 289b (1) and (3) and section 315b (1) and (3) of the German Commercial Code (HGB), this sustainability report has been integrated into the combined management report and follows the applicable requirements of the CSR Directive Implementation Act (CSR-RUG).

Voluntary ESRS implementation brings with it the following changes to sustainability reporting defined by section 315 in conjunction with sections 289c to 289e HGB:

• A double materiality analysis carried out in accordance with ESRS for the purpose of identifying material impacts, risks, and opportunities (IROs) in the KION Group’s own operations and in the upstream and downstream value chain,
• new or expanded disclosure requirements, metrics, and other key performance indicators in line with ESRS requirements, including descriptions of the material IROs and policies, actions, metrics, and targets.

Prior-year figures have not been disclosed, in accordance with the exemption provision in the first year that ESRS is applied.

Voluntary additional disclosures, including sources

The KION Group reports on requirements beyond the ESRS by providing voluntary disclosures as part of its Group sustainability report, which are labeled accordingly pursuant to ESRS 1.114 a).

Complementary information such as references and sources (for example, websites) that is not part of this Group sustainability report and the combined management report have been clearly labeled in the respective sections of text with double square brackets [[…]] where necessary.

General information in the context of material non-financial metrics

Some metrics in the sustainability report are subject to a high degree of estimation and measurement uncertainty. The reasons for this are explained in the respective chapters. The following metrics are subject to a very high degree of estimation and measurement uncertainty:

• GHG emissions in categories ‘3.1 Purchased goods and services’ and ‘3.11 Use of sold products’ (‘Metrics related to climate change’)
• Substances of very high concern (SVHC) (‘Metrics related to pollution’)
• Microplastics (‘Metrics related to pollution’)
• Resource inflows (‘Resource inflows and outflows’)

The disclosures, metrics, and other key performance indicators have undergone some changes year on year due to adjustments to the definition of metrics and scales as a result of ESRS being applied for the first time. In addition to a new level of detail, some of the Group’s internal metrics have been adjusted. This statement is therefore not fully comparable with the 2023 non-financial report.

No prior-year adjustments were made for possible material errors or changes to estimates for the metrics and other key performance indicators, in accordance with the exemption provision for the first-time application of ESRS.

In order to meet each specific requirement, forward-looking statements regarding sustainability matters made in this sustainability report are always viewed over an appropriate time horizon in line with the financial reporting of the KION Group. A short-term time horizon is a period of up to one year, a medium-term time horizon is a period of between one and five years, and a long-term time horizon is a period of more than five years.