EMS CHEMIE : Sustainability report 2023

SUSTAINABILITY REPORT 2023

Contents

Editorial	2

Reporting on sustainability	4
Sustainability as part of long-term strategy	4
Economic sustainability	6
Social sustainability	9
Environmental sustainability	11

TCFD report	16

Key figures environment	19

Key figures employees	22

GRI Content Index (Global Reporting Initiative)	23

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EMS Group	Editorial
Sustainability Report 2023

Dear Customers, Partners, Shareholders, Employees and other interested parties

Since its foundation almost 90 years ago, the EMS Group has been committed to "sustainability" and has consistently followed the principle of making an active contribution to a more sustainable and better world in its corporate development and management - and this in three ways!

We ourselves - the EMS Group and our employees - want to act responsibly, resource-friendly and integrally in all aspects. In this way, we have been CO2-neutral since 2020! Our top priority is also to enable our customers to operate even more sustainably and responsibly, through use of highly innovative EMS products and services, allowing our customers to offer better and more environmental -friendly products themselves. Ultimately, we also want to be a role model and use our pioneering achievements as a sustainable industrial company to motivate other (partner) companies worldwide and support them in contributing to a sustainable, industrial global economy.

This pioneering success cannot be taken for granted and involves considerable effort. The key

to this lies in a culture of continuous innovation and a constant willingness to improve and change in all areas. Since its foundation in 1936, the EMS Group has completely reinvented itself four times. Sustainability was the basis for this foundation right from the start. Timber from the region and energy from the company's own, self-built hydroelectric power plants were used to produce ethanol, a sustainable biofuel used as a substitute for petrol, thus providing a major source of fuel for Switzerland during the war. It was a special concern of the company's founder to bring jobs and apprenticeships, first with the Holzverzucke­ rungs AG and later with Emser Werke, to the poor region dominated by mountain farming. Its own school, a self-founded university and initiation of cultural and social development brought industrialization and an upswing to the region. The substitute fuel made from wood, popularly known at the time as "EMSER water" - now "bio-fuel" - was produced CO2-neutrally using renewable raw materials and local hydropower. The by-products of wood saccharification were used at that time as animal feed. The reorientation towards highly

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durable synthetic fibers that followed in the 1950s was also based on sustainability: Polyamide fibers were characterized by a long life, were light- weight, comfortable to wear and greatly simplified processing.

In the 1980s, EMS increasingly focused on the development and production of high-performance polymers. These are highly resilient and at the same time particularly lightweight and durable. They are used in numerous applications in the industry, in automotive and the sanitary sector. With weight and cost-saving process chemicals, the EMS Group laid further cornerstones in terms of sustainability. Since then, as development partner, we have enabled the development of applications and components requiring significantly less fuel and energy for processing and in end use. With such innovative solutions we play a key role in helping our customers achieve their ambitious sustainability goals.

As an innovative, global industrial company, we have every right to be proud of this development!

In the period from 2001 to 2020, EMS already reduced energy consumption by 69 % through the implementation of hundreds of energy projects. In 2019, we launched our "Energy -30 %" project to save a further 30 % of energy by 2026. In 2023 the project made impressive progress: 18 energy- saving projects were successfully completed and another 182 energy-saving projects are planned for the years 2024 to 2026 with implementation already underway. Together with customers we have also developed new solutions using EMS high-performance polymers, for example for more effective heating, cooling and insulation systems in buildings or for the development of lighter, more efficient and more environmental-friendly cars. Car manufacturers are using space- and weight-saving components made from EMS polymers for intelligent thermal management solutions in electric vehicles or highly innovative EMS materials for car body protection, that allow car manufacturers to reduce process temperatures in curing ovens by 75 %.

Thanks to biomass and electricity from hydropow- er, the EMS Group has been CO2-neutral at all locations worldwide since 2020. We are now

working with our suppliers to significantly reduce their emissions (Scope 3) and have already set reduction targets for the indirect release of CO2 in our supply chain. By working closely with our suppliers, we were able to create a database on the supplier side and jointly define measures. As a result, the EMS Group has decided to reduce its Scope 3 CO2 emissions by 25 % before 2030 (compared to 2021). In January 2024, the EMS Group also joined the Science Based Targets initiative (SBTi), which requires and validates a detailed decarbonization program.

New environmental management systems in accordance with ISO 14001 have been intro- duced. Recognized certificates from ISCC (Interna- tional Sustainability & Carbon Certification) and EcoVadis (Gold) confirm our internal success.

Being sustainable, and enabling sustainability in our supply chains, remains a core element of our corporate strategy. We are therefore pleased to show in this report, measures taken and progress made in 2023 to promote sustainable and responsible action throughout the organization.

Magdalena Martullo	Dr. Joachim Streu
CEO and Vice-President	Chairman of the
of the Board of Directors	Sustainability Committee

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EMS Group	Reporting on sustainability
Sustainability Report 2023

As a globally active company, EMS is committed to sustainable development. EMS lives up to this corporate responsibility: with sustainable solutions for a wide range of applications with a focus on automotive engineering, the electrical and electronics industry, optics and numerous other industries, but also with numerous measures towards economic, social and environmental sustainability.

Sustainability as part of long-term strategy

EMS was founded in 1936 and was already committed to a sustainable, long-term corporate strategy in the early years: At the beginning, EMS produced ethanol by means of wood saccharifica- tion and was already at that time CO2-neutral with its own hydroelectricity. The company location was consciously chosen in the Grisons forests close to the raw material wood and near the River Rhine to produce hydroelectricity.

Today, polymer materials for demanding technical applications form the main business of EMS. The EMS business model is based on environmental compatibility and sustainability. These lightweight polymers are mainly used to replace heavy metal applications in automotive manufacturing, but also in a wide range of other industries. The weight reduction achieved with these materials makes a significant and sustainable contribution towards saving fuel and reducing emissions from vehicles and in the manufacture of consumer goods. EMS develops new applications with customers that sustainably save 64,800 tonnes of CO2 annually.

Economic sustainability forms the foundation of EMS' industrial corporate activities. Focus is on continuous, positive and long-term development.

EMS attaches great importance to environmentally- friendly and sustainable production. As early as 2006, EMS reduced CO2 emissions by more than 80 % by commissioning a biomass power plant at its largest production site in Domat/Ems, Switzer- land. Since 2020, the electricity supply at the Swiss and German production and sales sites has also been generated 100 % from CO2-neutral hydropow- er. With further measures involving hydroelectricity, all EMS production worldwide has been CO2-neutral since July 1, 2020.

EMS sets itself continual goals with regard to reduction of emissions, waste and wastewater and implements these in a targeted manner by means of ongoing operational improvements and with replacement and expansion investments.

The employees are the most important capital of EMS. They ensure innovative strength and competi- tiveness. Their safety, health, education and further training are given high priority and have an impact far beyond the bounds of the company.

EMS is aware of its social responsibility and supports a wide range of activities at its sites, in sport, cultural or educational areas.

Materiality analysis

Using a materiality analysis, EMS has determined where the activities of the EMS Group have the greatest economic, social and environmental impact and which issues are of importance to stakeholders. The finalized materiality analysis was reviewed and approved by Executive Management and the Board of Directors.

According to the principle of "double materiality", EMS considers topics to be important if they are of significance to EMS from an internal company perspective, or have a substantial economic, social or environmental impact. Important topics identified by EMS are as follows:

Economic sustainability

• Long-termprofitable growth: The long-term profitable growth of the EMS Group is based on continual innovation as well as new and further development.
• Business conduct: Ensure and promote that EMS business activities are conducted in accordance with regulations, standards and ethical principles.

Social sustainability

• Attractive employer: Creating responsible conditions of employment and employer-employee relations.
• Training and further education: Promoting personal development of employees with focus on training and further education far beyond the company environment.
• Health and safety in the workplace: Maintaining and promoting a safe and healthy work environ- ment for all employees involved in the provision of products and services.

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Environmental sustainability

• Greenhouse gas emissions and climate change: Reduction of impact on climate change including greenhouse gas emissions (in particular reduction of CO2) along the value chain.
• Energy consumption and efficiency: Reduction in energy consumption, increase energy efficiency and use of renewable energy sources for provi- sion of EMS' products and services.
• Resource-savingperformance: Sustainable reduction of environmental impacts resulting from provision of EMS' products and services through use of efficent technology and creation of an integrated circular process.

UN Global Compact and sustainable development goals

In July 2020, EMS joined the United Nations Global Compact as a signatory. EMS is committed to supporting the ten principles on human rights, labor standards, environmental protection and anti-corruption and making them part of its strategy, culture and daily work.

The commitment to support the Sustainable Development Goals (SDG), originates from EMS' commitment to sustainability and its participation in the United Nations Global Compact.

EMS contributes to the UN 2030 Agenda for Sustainable Development, focusing on eight of the seventeen overall goals. These 8 goals are:

• SDG 2 (Zero Hunger)  packaging applications to extend the shelf life of foodstuff and reduce food waste, baby bottles, reusable drinking bottles.
• SDG 4 (Quality Education and Lifelong Learning)  apprentice training, mobile apprenticeship (abroad), work experience offers, cooperation with universities, extra-occupational education, support through internal personnel development.
• SDG 5 (Gender Equality)  Equality laid down in the Code of Conduct, equal wage analyses.
• SDG 6 (Clean Water and Sanitation)  company- owned water treatment plant for local communi- ties.
• SDG 7 (Affordable and Clean Energy)  Process steam from a biomass power plant.
• SDG 8 (Decent Work and Economic Growth)  EMS is the most important industrial employer in the Canton Grisons, Switzerland, innovation, continual technological modernisation.

• SDG 9 (Industry, Innovation and Infrastructure)  circular economy, resource-friendly solutions.
• SDG 15 (Life on Land)  forestry management through use of process steam from wood.

Observation of due diligence

EMS has introduced processes to ensure compliance with Swiss legislation regarding conflict minerals. EMS is excempt from reporting obligations according to the Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected and Highrisk Areas.

EMS applies all aspects of the ILO Child Labor Conventions no. 138 and 182 and the ILO-IOE child labour guidance tool for business dated December 15, 2015 as well as the United Nations Guiding Principles on Business and Human Rights (UNGPs).

EMS communicates according to clause 21 UNGP on its approach to human rights as follows:

• As stated in its Code of Conduct, EMS supports and respects the protection of internationally proclaimed human rights and labor standards.
• EMS is committed to high standards of business ethics and integrity, including support and obser- vation of the internationally proclaimed human rights and labor standards as laid down in international human rights frameworks such as:
• 1. 1. Universal Declaration of Human Rights (UDHR)
  2. United Nations Guiding Principles on Business and Human Rights (UNGPs).
  3. ILO Core Labor Standards
  4. ILO Child Labor Conventions no. 138 and 182
  5. ILO-IOEChild labor guidance tool for businesses
  6. Ten Principles of the UN Global Compact (UNGC)
• EMS is committed to human rights and has manifested this by publishing a corresponding declaration of commitment. The declaration is in line with the "Protect, Respect, Remedy" concept set out by the UNGP.
• EMS has identified human rights issues in accord- ance with the UNGP and will regularly reassess human rights risks on the basis of feedback from internal and external stakeholders.
• Based on the identified human rights-related risks and impacts, EMS develops preventive measures

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EMS Group Sustainability Report 2023

that are integrated into the company's operating procedures (including purchasing processes), training programs, guidelines and management systems.

• EMS regularly monitors the effectiveness of the measures and their influence on the observance of human rights in its value chain and monitors the implementation of the human rights action plans. EMS did not identify any human rights violations in this reporting period.
• EMS has a reporting procedure for concerns and complaints. EMS attaches great importance to an open corporate culture in which employees are encouraged to express their opinions if they become aware of compliance risks. This also applies to issues relating to human rights.
• If negative impacts on human rights are discov- ered due to the company's business activities or due to links to its activities, EMS commits to take timely and transparent measures to remedy the situation in a fair and equitable manner in accordance with the UNGP.

Economic sustainability

Long-term success

In order to ensure desired economic sustainability, EMS works with medium and long-term plans. These are continually adapted to economic, political and technological developments.

With its innovative strength, EMS intends to create medium and long-term value for its stakeholders; with innovative products and services, interesting work- places and an attractive shareholder value.

Investments

In order to satisfy increasing customer demand in the future, EMS invests continually in capacity expansion. The investment program announced in 2021 with over 300 million CHF to increase capacity and energy efficiency at the main production site at Domat/Ems, Switzerland, is being implemented as planned.

In the last five years, EMS has invested a total of CHF 335 million (excluding acquisitions).

A total of CHF 49 million (previous year: 94) was invested in 2023. Of this amount, EMS invested 77.7 % (76.4 %) in Switzerland, 5.8 % (9.7 %) in Europe (excl. Switzerland), 7.7 %

(8.0 %) in Asia and 8.8 % (5.9 %) in America. Investments were mainly made in the areas of capacity expansion, sustainability, efficiency improvement and renewal.

Thanks to newly developed processes, EMS has succeeded in introducing production lines which consume up to 50 % less energy.

Governance

The Board of Directors of EMS bears responsibility for sustainability and climate protection as well as climate-related risks and opportunities; the Board of Directors decides on strategy and targets. The environmental, social and ethical performance is overseen by a Sustainability Committee formed by the Board of Directors.

Climate-related initiatives and measures are planned in the business units and approved and defined by Executive Management as part of the planning process.

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Implementation takes place in line management. More information on how EMS manages sustainability risks, can be found in the TCFD report.

Stakeholders and risk management

EMS meets the needs of business partners, employees and the environment through responsible economic, social and environmental behavior. The demands of the various stakeholders are recorded within the framework of the integrated quality management system and objectives, measures and priorities are defined and implemented at the levels of quality, safety, environment and health. All these objectives and measures are planned in the business units and approved and defined by Executive Management within the framework of annual planning. Implementation takes place in line man- agement.

EMS has developed a comprehensive risk management system which is integrated into the planning and management process. The risk assessment by EMS management is discussed twice a year with the Audit Committee and the Board of Directors. A distinction is made between strategic, operational, legal and financial risks.

The objective of risk management is to:

• systematically identify special risks before they occur
• establish processes to monitor, reduce and, at best, prevent risks, and
• find a balance between risks and opportunities.

Ethics and compliance

Internal Audit and the Chief Compliance Officer (CCO) are responsible for monitoring compliance with applicable laws, policies and principles of global business ethics. The CCO reports directly to the CEO.

Employees are also required, and business partners are encouraged, to report potential violations to the CCO via a special (anonymous) compliance channel or to contact the head of the legal depart- ment. The Group Directive defines how employees must report such violations and regulates the conduct of the recipients. Sanctions are imposed in the event of proven misconduct.

Compliance training courses are held under the direction of the CCO at the individual Group companies. The following training courses were held:

• combating corruption and bribery;
• antitrust/competition law;
• export controls/sanctions;
• data protection (in particular the EU General Data Protection Regulation, GDPR);
• human rights.

The training program is continuously developed. Employees are required to undergo initial training when they start working for EMS with further training every two years. Employees are also provided with general and specific legal advice or individual training where necessary.

Combatting corruption

As a member of the United Nations Global Com- pact, EMS is committed to a clear and strict stand on anti-corruption. Corruption is categorically rejected. There are clear guidelines for prevention and employees are trained in this regard. According to audits by the internal audit department, there were no cases of corruption at EMS worldwide in 2023.

Competition

EMS is committed to fair competition with no price fixing, cartels or other competition-distorting activi- ties. EMS handles its operational and commercial knowledge with care. In particular, EMS consistently protects its technical and commercial knowledge from loss or access by unauthorized persons.

Audits and inspections

The internal audit department, the compliance department as well as the external auditing body support the Board of Directors or the Audit Committee in the exercise of its monitoring and control functions. Audits and inspections make a significant contribution towards this. They also present management at Group (Executive Management), business unit and local company levels with an assessment that is independent of line management. This is done to determine whether the activities concerned comply with external, statutory and EMS internal guidelines and requirements (compliance aspect) and whether the processes and controls designed are effective.

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EMS Group Sustainability Report 2023

Identified deficiencies and potential for improvement are presented in reports with measures and implementation dates. Implementation of the defined measures is assessed in follow-up audits.

Audits and inspections are carried out by various functions within the EMS Group.

The EMS internal audit department is independent of line organization and carries out group-wide audits of key processes. Focus is on the structure of internal control systems and the effectiveness of internal controls.

In addition, internal specialists from line organization carry out inspections regarding product quality, the environment, occupational safety, health, cleanliness and orderliness at business unit level and at the individual companies. The main results of such inspections are included in the systematic reporting process to Executive Management.

As a supplier, EMS itself is regularly audited by customers, in particular from the automotive and industrial sectors. These audits ensure compliance with international labor norms and standards in the areas of quality, environment, safety and health.

Management systems

The quality management systems of the business units EMS-GRIVORY and EMS-GRILTECH as well as EFTEC, are certified according to IATF 16949:2016 and ISO 9001:2015.

Until 2023, the business units EMS-GRIVORY and EMS-GRILTECH maintained an internal environmental management system in accordance with the guidelines of the Responsible Care Initiative/ISO 14001. Since 2024, the European EMS-GRIVORY locations have been certified according to ISO 14001 and other locations will follow.

The following EFTEC sites have a certified environmental management system according to ISO 14001:

EFTEC AG (CH), EFTEC North America LLC (USA), EFTEC Brasil Ltda (BR), EFTEC Systems S.A. (ES), EFTEC (Czech Republic) a.s. (CZ), EFTEC NV (BE), EFTEC Ltd (UK), EFTEC (Elabuga) OOO (RU), EFTEC (Nizhnyi Novgorod) OOO (RU), EFTEC (Romania) S.R.L. (RO).

EMS-GRIVORY has been certified according to ISCC Plus since 2023 in China, and since 2024 in Europe. EMS-CHEMIE AG locations have a sustainability rating from EcoVadis.

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Conduct in tax matters

Principle

EMS pursues a long-term sustainable tax strategy, taking into account the applicable national and international tax legislation.

Fiscal concept

The Group's tax strategy is designed to comply with the law of all countries in which EMS operates as well as with international treaties and guidelines in all tax matters. EMS does not engage in aggressive tax planning or use complex structures to minimize its tax liability. EMS does not rely on formal tax saving schemes lacking economic substance. EMS does not use hybrid instruments and/or structures, either for the purpose of tax avoidance, double deduction or tax exemption. Where necessary, EMS consults external consultants for its tax risk management.

EMS supports open and transparent cooperation with the respective tax authorities. In the event of tax audits, EMS is cooperative and promptly provides requested information.

Risk management

The tax aspects of business activities and transactions at EMS are proactively addressed, continuously monitored and controlled. EMS acts in accordance with standard market principles and adheres to the relevant national and international regulations when setting prices for Group transactions. EMS companies maintain up-to-date transfer pricing documentation.

Country-by-country reporting

Since the fiscal year 2018, EMS has submitted a Country-by-Country Report (CbCR) annually to the Swiss Federal Tax Administration (FTA). This OECD/ G20 standard contains relevant information on profit and taxes paid in countries where EMS operates. The FTA shares this report with the tax authorities of other countries in which EMS is taxable. This shows that EMS duly complies with its tax obligations in each country.

Responsibility in the supply chain

Working closely with suppliers, EMS aims to help prevent both human rights violations and environmental infringements in the supply chain. Evaluation processes are completed before entering into a business relationship with a supplier. EMS also conducts risk-oriented supplier audits. These audits are implemented by the EMS purchasing organization in collaboration with internal specialists (quality or technical experts). This contributes towards a continuous improvement process and promotes cooperation with suppliers. Suppliers audited by EMS demonstrably comply with the high standards set by EMS for environmentally and socially responsible production.

Social sustainability

EMS understands social sustainability to mean responsibility as an employer and a comprehensive commitment to the community.

Sustainable personnel policy

Attractive employer

EMS is committed to a sustainable personnel policy and to diversity in the workforce and structures. EMS values and promotes its employees and offers them attractive employment conditions. Motivated and committed employees make a decisive contribution to the result as they are prepared to go the extra mile in their performance to meet customers needs.

The management tools, which have been successfully implemented for many years, train and commit all employees to the same principles and an accordingly uniform work and management culture, thus supporting EMS in achieving its strategic goals.

Equal opportunities and equal pay

There are equal opportunities for women and men at EMS. At the end of 2023, the overall women's quota was 19.1 % (previous year 18.5 %), with

19.9 % (previous year 21.7 %) in management.

In 2020, an equal pay analysis was carried out in accordance with the provisions of the Gender

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