Impact, risk, and opportunity management

The ESRS table below shows the topics, (entity-specific) sub-topics, and sub-sub-topics identified by the KION Group on the basis of the double materiality analysis that was performed:

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

The material impacts, risks, and opportunities (IROs) for the KION Group are based on the core results of the recent double materiality analysis (DMA) which was carried out in 2023 and finalized in 2024. The KION Group has considered and assessed environmental, social, and governance matters in accordance with the principle of double materiality, which includes the environmental and social impacts of the KION Group’s business activities (inside-out) as well as the financial risks to and opportunities for (outside-in) the KION Group’s business activities. The DMA is based on the differentiation between material and non-material IROs. The approach to identifying and assessing them is described below.

With regard to the KION Group’s business model, the DMA relates to the two operating segments Industrial Trucks & Services and Supply Chain Solutions, as described in the ‘Strategy, business model, and value chain of the KION Group’ chapter. The materiality analysis in 2022 already followed the principle of double materiality. A new DMA process was formulated and implemented in 2024 to ensure that it meets the methodological requirements of ESRS 1. The next revision of the DMA is scheduled for 2025.

The KION Group has defined the following value chain stages for the identification of IROs: upstream (which includes suppliers, raw materials, and other inputs to the company), own operations, and downstream (which covers distribution, sales, product use, and end-of-life handling as defined in the ‘Strategy, business model, and value chain of the KION Group’ chapter). The identified IROs were categorized and evaluated according to the respective stage.

To identify potential and actual IROs, the DMA covered all sustainability matters listed in ESRS 1 AR 16. In addition, a benchmark analysis, the results of the 2022 double materiality analysis, and the KION Group’s sustainability reports to date were taken into account. Furthermore, external sources such as an analysis of sector-specific trade literature and interviews with selected suppliers, customers, and investors of the KION Group were used to identify IROs.

Various relevant stakeholder groups were directly and indirectly involved in the initial IRO identification phase. Taking into account specific business relationships, the KION Group interviewed customers and suppliers from different Operating Units and regions as well as investors, due to their importance as external key stakeholder groups (see ‘Interests and views of stakeholders’). Within its own operations, the interests of the consolidated and unconsolidated subsidiaries of the KION Group were represented by the sustainability coordinators and working groups, and also by the sustainability leads of the Operating Units. Interviews were also conducted with investors, representing the financial and capital markets, and with customers, representing end users in the downstream value chain. With regard to the upstream value chain, suppliers were interviewed as representatives of ‘workers in the value chain’. In addition to the direct involvement of suppliers and customers, the interests of other relevant stakeholders such as employees, affected (local) communities, non-governmental organizations, and nature (considered a ‘silent stakeholder’) were indirectly included by involving relevant corporate functions and sustainability experts, and by including insights from scientific research.

These underlying internal and external inputs formed the basis for a preliminary list of IROs, into which the sustainability risks of the groupwide risk management system were additionally integrated. This preliminary list of IROs was verified and expanded by the Operating Unit (OU) sustainability leads and their respective working groups, as well as by specialists from the corporate functions (see ‘The role of the administrative, management, and supervisory bodies’). Their review ensured that relevant activities and business relationships, as well as the context in which they occur (i.e., geographies, sectors, etc.), were taken into consideration.

The KION Group has defined specific rating categories for the evaluation of IROs. The evaluation was performed on a gross basis in line with the groupwide risk management system.

Risks and opportunities in the short, medium, and long term were assessed with respect to their likelihood of occurrence and the potential magnitude of their financial impact. The categories and threshold values for financial materiality and the likelihood of occurrence were in line with the groupwide risk management system applicable in 2024 (‘risk report’; [ESRS 1.119 a)]). The severity of actual or potential impacts was assessed from the perspective of the affected stakeholders.

The negative impacts of the KION Group’s business activities on the environment and society were assessed in terms of the three components of severity (scale, scope, and irremediable character). With respect to potential negative human rights impacts, severity took precedence over likelihood. Positive impacts, in contrast, were assessed in terms of scale and scope only. Impacts were assessed qualitatively on the basis of the best available data sources, such as internal documentation or literature reviews and articles. Risks and opportunities were assessed on the basis of existing financial evaluations from previous risk assessments, where available, and other data sources, such as market trends or literature reviews and articles.

In the DMA, ‘high risks’ are understood in the same way as ‘material risks’. During the materiality validation process, the materiality threshold for positive and negative impacts was adjusted to ensure a sufficient coverage of relevant impacts. Consequently, the KION Group decided to define the threshold for the financial dimension and the impact dimension at over 50 percent of the highest theoretically possible IRO score per dimension. The IRO score was calculated by taking into account the financial magnitude and impact severity, multiplied in each case by the likelihood of occurrence of risks, opportunities, and potential impacts. This means that IROs are deemed to be material if the IRO assessment exceeds the threshold of 50 percent of the highest possible IRO value resulting from a combination of largest financial scope and/or severity and the highest probability of occurrence.

The methodology used for the financial scope and the assessment is based on the groupwide risk management system. Where possible, the sustainability-related risks were financially quantified or qualitatively assessed and assigned to one of the three assessment categories. The material risks identified through the DMA were integrated into the groupwide risk management system in 2024 and applied qualitatively. A standardized integration of these risks, including a detailed quantitative evaluation, is planned for the future. The process to identify and assess material opportunities and report on them was presented to the Executive Board of KION GROUP AG in the context of the DMA results. The involvement of the Executive Board of KION GROUP AG in the sustainability due diligence process is described in the ‘Information provided to and sustainability matters addressed by the undertaking’s administrative, management, and supervisory bodies’ chapter.

The preliminary results of the DMA were subject to two review rounds involving internal experts from the corporate functions and the DMA project team. The review included checking the completeness of information and explanations, as well as the plausibility of the evaluation, including cross-checks between IROs. Beyond the sub-topics required by ESRS, two additional entity-specific material sub-topics were identified: ‘Energy-efficient products’ (‘Climate change’) and ‘Management of relationships with suppliers, excluding payment practices’ (‘Business conduct’). The final results were discussed with the Sustainability Council and other relevant corporate functions in a dedicated meeting, presented to the workers’ representatives and approved by the Executive Board of the KION GROUP AG.

The KION Group is fully committed to continually reviewing and updating its assessments to ensure compliance with relevant regulations, and to mitigate any potential impacts as new information or changes in business activities arise.

The following section provides information on how the standards on the topics of environment and corporate governance were included.

Identifying and assessing material IROs in relation to ESRS E1 Climate change

The DMA procedure integrates climate considerations through data collection and analysis. The sustainability leads of the Operating Units and functions and the KION Group’s climate experts were also involved in the DMA process. The aim is to ensure that both the impacts on climate change and the climate-related effects on the Group’s value chain, including its own operations, are assessed.

The KION Group identifies relevant Scope 3 categories through a regular materiality analysis of GHG emissions. During this process, activities and plans are screened in order to identify actual and potential future GHG emission sources. The categories ‘3.1 Purchased goods and services’, ‘3.3 Fuel and energy-related emissions’, ‘3.4 Upstream transportation and distribution’, ‘3.6 Business travel’, ‘3.7 Employee commuting’, ‘3.11 Use of sold products’, and ‘3.12 End-of-life treatment of sold products’ of the Greenhouse Gas Protocol (GHG Protocol) standards have been deemed as material for the KION Group since 2021. The categories ‘3.2 Capital goods’, ‘3.5 Waste generated in operations’, and ‘3.15 Investments’ were added in 2023. Categories ‘3.8 Upstream leased assets’, ‘3.9 Downstream transportation’, ‘3.10 Processing of sold products’, ‘3.13 Downstream leased assets’, and ‘3.14 Franchises’ were not deemed as material. The regular reassessment of materiality within the Scope 3 categories and the inclusion in the DMA process emphasize the Group’s ambition to comprehensively manage and systematically reduce its GHG emissions. Furthermore, the Group’s total GHG emissions profile, previously performed analyses and risk assessments, results from climate-related workshops, as well as research and studies of relevance to the industry, were taken into account in order to identify actual and potential impacts on and by climate change.

The KION Group identified climate-related hazards over the short, medium, and long term and evaluated whether its assets and business activities may be exposed to these hazards through a multi-location analysis of physical risks. [[This was done with the help of four IPCC Representative Concentration Pathway (RCP) scenarios: RCP 2.6, RCP 4.5, RCP 6.0, and RCP 8.5.]]

Considering the variety of results and conclusions that can be drawn from current literature, the KION Group believes that using a wider range of scenarios ensured an appropriate coverage of its assumed risks and uncertainties. These scenarios therefore enabled KION Group to make informed decisions about sensible adaptation measures to mitigate identified risks. The Group’s location-specific geospatial coordinates were used as key inputs to the scenario analysis. Limitations arose mainly from the incomplete coverage of the scope for the sake of practicality with a focus on selected company locations, and from potential uncertainties regarding data validity.

The assessment utilized a combination of ERA5 reanalysis, Intergovernmental Panel on Climate Change (IPCC) climate model data, and external risk datasets for the current period (2011 to 2030), while the assessment for the future climate period (2031 to 2050) focused on the likelihood that future climate values will exceed the mean value of the current climate. The KION Group defined time horizons in line with the strategic planning horizons and capital allocation plans: short-term (up to 1 year), medium-term (1 to 5 years), and long-term (5 to 10 years).

The physical risks analysis assessed the likelihood and magnitude of climate-related adverse events and the vulnerability of the KION Group’s locations to these events. The analysis has not identified material risks in its own operations. While several instances of high risk were identified in the Group’s locations, a detailed review supported by local Health, Safety, and Environment (HSE) teams showed that vulnerability to those risks can be considered low due to indirect exposure and the remedial action already taken.

The results of the various Representative Concentration Pathway (RCP) scenarios, including the high-emission scenario, formed the basis for identifying and assessing short, medium, and long-term climate-related hazards in the Group’s own operations. Additionally, the Group’s DMA covered physical risks affecting the upstream value chain. The main focus was on disruption to the supply chain due to extreme weather events, which are listed as a material risk in the material sub-topic ‘Climate change adaptation’. Previous climate risk analyses did not identify any material downstream physical risks.

In 2023, the KION Group conducted a dedicated transition risks workshop to identify material risks in its own operations and along the value chain. The analysis applies scenarios consistent with limiting global warming to 1.5°C to identify risks pertaining to political, technological, market-related, and reputation-related factors. The net-zero by 2050 scenario was considered appropriate to model the expected development of market demand for low-carbon products and solutions, global supply chains for low-carbon materials, increasing costs of carbon, and the impact of existing and future regulation. This scenario takes into consideration the political, technological and market-related changes to be expected in a transition consistent with the Paris Agreement climate goals. These changes will shape the conditions in which the KION Group expects to be operating, for example in relation to customer demand, availability and pricing of sustainable materials, energy costs, availability of renewable electricity, carbon taxes and pricing, as well as bans on certain products and technologies. Political and market-related developments, both at national and regional level, provided key inputs for the scenario analysis. The main constraints identified relate to the uncertainty of policy implementation, market dynamics, and adoption rates of low-carbon technologies.

The KION Group identified transition events over the short, medium, and long term. Taking into consideration their likelihood, magnitude and duration (permanent or temporary), these events were set in relation to the Group’s assets and business activities to determine vulnerability and exposure, as well as the applicability of identified opportunities. Exposure was assessed by quantifying potential financial impacts across various risk categories, namely low, medium, and high impact.

During the course of the DMA process, the Group considered the transition risk workshop’s findings and also included opportunities in its own operations and along the value chain. The results of the scenario analysis mentioned above were used during the DMA process as the basis for identifying and assessing short, medium, and long-term climate-related transition risks. Long-term refers to more than five years, with transition risks in more than ten years’ time also taken into account.

Although the Group identified assets which contribute to significant GHG emissions and business activities which are not yet taxonomy-aligned, a decarbonization roadmap addressing all sources of GHG emissions was developed as part of the KION Group’s commitment to net zero and SBTi. The roadmap includes planned retirement of emission-intense assets and investment in low-carbon technologies. The roadmap thus demonstrates and supports the feasibility of a transition to a climate-neutral economy.

The KION Group used scenarios and assumptions to assess the financial impact of climate-related risks and opportunities. In this financial report, the Group makes qualitative disclosures about risks and opportunities that were deemed material. For example, a stronger involvement in the electrification of intralogistics was identified as a strategic opportunity. This opportunity is consistent with a climate transition scenario in which an increasing carbon price strengthens market demand for electric products that emit significantly less GHGs during their use phase. The disclosed environmental risks are based on the same framework as that underlying the assessment of climate-related risks.

General disclosures on identifying and assessing material IROs in relation to ESRS E2 Pollution, ESRS E3 Water and marine resources, ESRS E4 Biodiversity and ecosystems, and ESRS E5 Resource use and circular economy

To identify and assess actual and potential IROs related to E2, E3, E4, and E5 in its own operations and in the value chain, the KION Group considered all business activities from its consolidated and unconsolidated entities. A list of company activities was compiled and centrally reviewed, and experts from the relevant corporate functions were involved in the identification of IROs and the assessment process. Given the nature of the KION Group’s business and of its operating segments, the activities in its own operations are not categorized as highly polluting and are not deemed to be particularly water-intensive. Additionally, the KION Group took the environmental standards applicable to all its entities and sites into consideration. All entities and sites are required to adhere to the Group’s HSE Standards and to certify their environmental management systems according to the ISO 14001 standard.

So far, no direct consultations with affected communities have been conducted as part of the DMA process, but they are under consideration as a possible future improvement.

Identifying and assessing material IROs in relation to ESRS E2 Pollution

The assessment identified material impacts and risks related to pollution associated with both business segments, particularly in the upstream value chain. These include impacts on air pollution due to the extraction and processing of raw materials and impacts and risks due to the presence of substances of very high concern (SVHC) found in purchased components. Impacts related to microplastics were deemed to be material, particularly in relation to tire abrasion, which is applicable to any transportation activity across the value chain, and also downstream in the Industrial Trucks & Services segment during the product use phase. For these reasons, the outcome of the DMA outlined material IROs that do not relate solely to a specific site or region.

Identifying and assessing material IROs in relation to ESRS E3 Water and marine resources

The KION Group conducts water stress risk assessments for its own operations resulting in a list of sites located in high water stress areas. [[The assessment of the current climate water stress (available blue water) was based on the World Resources Institute’s Aqueduct Water Risk Atlas (version 4.0), while the assessment for the future climate was based on the Aqueduct Water Stress Projections Data.]] The results were taken into account when determining the materiality of water withdrawal in its own operations for both the Industrial Trucks & Services segment and the Supply Chain Solutions segment. With regard to upstream activities, raw material extraction and processing were identified by the KION Group as posing high material risks related to water, particularly in respect of steel and electronics. In its business activities, the KION Group does not depend on marine resources or on commodities related to marine resources.

Identifying and assessing material IROs in relation to ESRS E4 Biodiversity and ecosystems

In 2023, the KION Group carried out an analysis of biodiversity risks for KION Group sites based on their geolocations. The analysis considered proximity to protected areas of biodiversity such as the Natura 2000 sites. Although none of the sites overlap with protected areas, the proximity of some locations is less than one kilometer. The evaluation concluded that the overall risk of negative impacts can be considered low, although further investigation is required at selected sites. There is currently no evidence of significant negative impacts from the KION Group’s activities on these areas with sensitive biodiversity that lead to the degradation of natural habitats or disturbances to species within protected sites. These results were taken into account when identifying and assessing IROs related to biodiversity and ecosystems. Furthermore, upstream and downstream activities were considered during the IRO identification process, with the involvement of external stakeholders (customers, suppliers) and experts from corporate functions.

At this stage, the KION Group has analyzed transition and physical risks in the context of climate change, which may include some aspects related to biodiversity.

The identification and assessment of specific dependencies, transition and physical risks, as well as of systematic risks related to biodiversity and ecosystems, were identified as areas for potential improvement and are being considered for future optimization of the DMA process using a step-by-step approach. Based on the DMA findings, the KION Group does not currently foresee a necessity for specific mitigation measures.

Identifying and assessing material IROs in relation to ESRS E5 Resource use and circular economy

To identify and assess actual and potential IROs with respect to resource inflow and waste, the KION Group gave special consideration to its HSE Standard that establishes requirements for material use and waste management. At this stage, a detailed screening of the Group’s assets has not yet been performed but is being considered as an area for potential future improvement.

The materiality analysis identified that material IROs related to circularity exist in both operating segments. Analysis confirmed that steel and iron constitute the majority of material resources used. The analysis revealed material risks and opportunities, including risks related to continuing with business activities as usual, such as potential loss of competitiveness, reputational damage, and raw material shortages. Material opportunities related to resource use and circular economy encompass new business models (services, used trucks, leasing and renting) and utilizing waste as a resource. Material risks of transitioning to a circular economy involve challenges with the current product portfolio, extended product development times, and significant investment requirements.

While material IROs were identified in the Group’s own operations and across the value chain, the procurement and production stages were identified as primary focus areas, particularly with regard to the use of recycled raw materials, the reduction of hazardous materials, and security of supply.

Identifying and assessing material IROs in relation to ESRS G1 Business conduct

With regard to business conduct, various business activities, sectors, locations, and types of transaction relevant to the KION Group were considered during the DMA process, thanks to the involvement of the corporate compliance experts and the sustainability leads from the Operating Units and corporate functions. Furthermore, insights from established compliance frameworks, including the annual compliance risk assessment and incident management processes, along with different regulatory requirements and market conditions, informed the identification of material IROs related to business conduct matters.

Interests and views of stakeholders

The social and environmental expectations of internal and external stakeholder groups with regard to the KION Group’s business activities are addressed as part of active stakeholder management and dialogue. The KION Group has used certain criteria to identify stakeholder groups that are of particular importance for groupwide sustainability management. Given the importance of these stakeholders and the significant role that they play for sustainable and long-term added value, the KION Group aims to consider their specific contributions and requirements in its sustainability performance. The Group’s key stakeholders include customers, KION employees, the financial and capital markets (investors, shareholders), suppliers, and workers’ representatives. The relevant legislation in the regions where the KION Group operates and, where appropriate, the work of non-governmental organizations (NGOs) and communities, including local communities, are also considered in this analysis.

As described in the double materiality analysis process, the KION Group has interviewed customers, employees, suppliers, and investors in order to identify and analyze material topics. For the qualitative survey in the double materiality analysis, customers and suppliers from the Operating Units and regions were selected in order to provide as full a picture as possible. The views of investors were taken as representative for financial and capital markets. Employee interests were incorporated through working groups in the Operating Units, through action field leads, and through central functions. The Sustainability Council led by the Chief People & Sustainability Officer (CPSO), the Executive Board of KION GROUP AG, the European Works Council, and the Group Works Council were informed of the views and interests of the relevant stakeholders in the course of discussions about the results of the double materiality analysis (see ‘Description of the process to identify and assess material impacts, risks, and opportunities’)

Customers

The KION Group continuously monitors the changing needs of key accounts and refines the sustainability strategy accordingly. In 2023, mounting customer expectations and carbon-neutral commitments encouraged the KION Group to formally commit to the SBTi’s net zero by 2050 target. The strategic target and the related actions are enshrined in the ‘Climate and energy’ action field. This means that these sustainability-related corporate governance actions also indirectly reflect customer interests. Due to its special importance to customers, the KION Group also participates in the annual sustainability assessment carried out by EcoVadis. As part of its efforts to enhance the sustainability strategy in 2024, the KION Group raised its target EcoVadis rating for the KION Group and its assessed subsidiaries from its current Gold rating to the top Platinum rating between now and 2027 (see ‘Strategy targets and target achievement in 2024’)

In addition to the abovementioned involvement of stakeholders, ‘social matters’* in the context of CSR-RUG also focuses on the strategic ‘Product and solution safety’ action field. With the involvement of key stakeholders, the due diligence processes for this non-financial matter were also carried out at the overarching level as part of the double materiality analysis and validated by the Executive Board of KION GROUP AG (see ‘Description of the process to identify and assess material impacts, risks, and opportunities’).

The KION Group strives to continually improve the safety features of its products in line with the ‘Product and solution safety’ action field, with a focus on providing user-oriented, safe, and ergonomic products and solutions. The strategic targets set for the ‘Product and solution safety’ action field were under review in 2024 (see ‘Strategy targets and target achievement in 2024’). In 2024, the KION Group pursued the following general ambitions.

Many of the safety features in the Industrial Trucks & Services segment are already part of the vehicles’ standard equipment level, which can be expanded at the customer’s request. The KION Group is continuously developing and improving the safety features of its products with the aim of making industrial trucks safer to use. A particular focus of product development in 2024 was on avoiding accidents that lead to personal injury. The KION Group introduced a range of digital assistance and warning systems to minimize this risk, and now offers, among other things, the new safety options Front and Reverse Assist Camera and Reverse Assist Radar. The AI-based camera technology identifies people and avoids collisions by issuing warning signals and reducing speed.

In the context of product safety, a particular focus in the Supply Chain Solutions segment was on avoiding risks from noise pollution at customer sites. New types of analysis, including 3D noise mapping, were integrated to reduce user exposure to increased noise levels and to improve safety at work. The visualization of noise pollution can reveal room for improvement in the systems installed at customer sites. In the Supply Chain Solutions segment, the Dematic Drone Inspection Services support the safety of service technicians during regular inspections of warehouse equipment, from high-bay storage to facility management for an entire building.

The results of the actions described in both segments are in line with the general ambitions of the strategic ‘Product and solution safety’ action field.

* Voluntary disclosure in accordance with ESRS 1.114 a).

Employees

The KION Group performed its annual KION Pulse global staff survey once again in 2024. The survey addresses topics such as internal communication and collaboration, while also providing a platform for employees to share their personal points of view. The aim is to gather ideas, information, and suggestions from all employees and draw on them to take the company forward and fuel the KION Group’s sustained – and sustainable – growth. The survey serves as a basis for actions to promote employee satisfaction, motivation, and commitment. In the ‘Talent’ action field of the KION Group sustainability strategy, target achievement for employee satisfaction is defined in terms of KION Pulse. The survey is also enshrined in the long-term incentive scheme for the Executive Board and executives of KION GROUP AG.

Financial and capital markets

As a listed company, KION GROUP AG – the strategic management holding company of the KION Group – maintains relationships with the financial and capital markets. It does so through regular and close contact with investors and through capital market conferences, for example, where sustainability criteria are also discussed. The KION Group also meets the capital market’s need for information by actively participating in the annual Corporate Sustainability Assessment (CSA) carried out by financial services company S&P Global Switzerland SA and is monitored as part of the ‘Sustainable governance’ action field of the sustainability strategy (see ‘Strategy targets and target achievement in 2024’).

The sustainability-related interests of the KION Group’s financial backers are also consistently addressed. For example, the Group issued a variable-rate promissory note in 2023 that is linked to the achievement of ESG targets over a term of up to seven years (ESG-linked revolving credit facility) (see notes to the consolidated financial statements, note [30]; [ESRS 1.123])

Suppliers

The KION Group formulates its sustainability requirements for suppliers in dedicated guidelines and regulations. It works closely with its suppliers and business partners to encourage and call on them to commit to responsible and low-carbon operations. Besides the Principles of Supplier Conduct, the General Terms and Conditions of Purchase of the KION Group also contain contractual clauses and requirements that not only promote sustainable sourcing, but also demand it of suppliers. [[Both documents can be found online at www.kiongroup.com/en/About-us/Suppliers.]]

The KION Group also undertakes initiatives and pilot projects focusing on lifecycle assessments and cradle-to-cradle certification (C2C) in collaboration with suppliers. This creates a high degree of transparency for sustainable supply chains for KION Group end products and also boosts suppliers’ sustainability efforts.

Legislation

The KION Group constantly monitors new legal provisions and amendments, establishing the necessary processes to meet statutory requirements, such as the EU taxonomy and the CSRD. As part of standardization initiatives and the work of interest groups, the KION Group gets involved in dialogue with political decision-makers, especially in relation to digital, environmental, and safety-related product requirements. Besides the KION Group being a member of the Blue Competence initiative of the Mechanical Engineering Industry Association (VDMA), its subsidiaries get involved in the work of trade associations and are also members of international institutions. Furthermore, the KION Group is a member of the German Federal Foundry Association (BDG) and the European Materials Handling Federation (FEM). In line with its Code of Compliance, the Group does not have any political relationships other than its membership of associations. [[The KION Group Code of Compliance (KGCC) can be found online at www.kiongroup.com/en/About-us/Compliance/.]] Over and above its involvement in trade associations, the KION Group is not represented in non-governmental organizations but press releases from these organizations are still followed and considered in its sustainability analysis where appropriate.

Communities and local communities (‘social matters’)*

Through its dialogue with communities, including local ones, at the municipal, regional, and overarching level, the KION Group pursues a global strategy of ongoing corporate citizenship with specific areas of focus with regard to fundraising and sponsorships: funding community facilities, providing humanitarian assistance in emergencies, promoting education and research, and supporting environmental projects. One of the purposes of the groupwide fundraising and sponsorship guideline is to provide transparency internally with regard to the KION Group’s corporate citizenship.

In 2024, the KION Group encouraged its employees to take part in a relief campaign for the victims of the floods in the Spanish province of Valencia. In addition to donations in kind, the campaign raised a total of €257,000 in December 2024 for the Red Cross in Spain.

* Voluntary disclosure in accordance with ESRS 1.114 a).

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

The material risks and opportunities identified by the KION Group were qualitatively assessed in terms of their interaction with its strategy and business model. The assessment factored in scenario analyses and probabilities of occurrence, mainly with regard to climate risks, but also to possible bans on relevant substances. Based on this resilience analysis, the KION Group believes that its strategy and business model are currently resilient in relation to the identified sustainability risks. The actions already initiated and the future mitigation and adaptation actions have been taken into account in the strategy and align with the Company’s business model. Adjustments to the business model or to the product portfolio, or more extensive investment in newer technology, may be required in the future if the risk assessment changes or in order to boost the Group’s resilience, for example in relation to climate change.

Overall, no financial transactions were identified with regard to the material risks and opportunities that had a significant impact on the KION Group’s financial position, financial performance, and cash flow. Up to December 31, 2024, a total of €22.4 million was set aside as a provision for future disposal and recycling obligations, primarily connected to the recycling of lithium-ion batteries installed in industrial trucks. (see notes to the consolidated financial statements, note [33], [ESRS 1.123])

The current potential financial effects of the individual sustainability matters in this sustainability report were individually assessed on the basis of a double materiality analysis in relation to their probability of occurrence and their materiality for the KION Group. They were subsequently classified in qualitative terms as low, medium, or high (see ‘Description of the process to identify and assess material impacts, risks, and opportunities’). Risks and opportunities with a current high financial effect combined with a medium or high probability of occurrence/risks and opportunities with a medium financial effect combined with a high probability of occurrence were identified as material for the KION Group.

Identified risks and opportunities with a current high financial effect and the associated cash flow related to:

• Loss of competitiveness (risk)
• Supply disruption due to a potential ban of PFAS (with no alternatives) (risk)
• Cost increases due to suppliers’ efforts to decarbonize and due to the monitoring of data in order to avoid greenwashing (risk)
• New business opportunities from the circular economy (opportunity)
• Achieve compliance with the law while making strategic plans (opportunity)

Risks and opportunities with a current medium financial effect and the associated cash flow related to:

• Extreme weather events in the supply chain (risk)
• Water scarcity in own operations (risk)
• Water scarcity in the supply chain (risk)
• Raw material shortages (risk)
• Organizational structures supporting circularity (risk)
• Reputational damage (risk)
• Low-carbon products (opportunity)
• Alignment of products with sustainability efforts of customers (opportunity)
• Waste as a resource (opportunity)
• Competitive advantage in the market (opportunity)

A detailed explanation of the risks and opportunities can be found in the ‘Climate change’, ‘Pollution’, ‘Water and marine resources’, ‘Resource use and circular economy’, ‘Own workforce of the KION Group’, ‘Workers in the value chain’, and ‘Business conduct’ chapters in this sustainability report.