Strategy

SBM-1 – Strategy, business model and value chain

Strategy

Energie AG’s overarching goal is to decarbonise the company’s entire cycle – from generation and distribution to recovery – in order to sustainably reduce CO₂ emissions. The first step will focus on the decarbonisation of Scope 1 and Scope 2 greenhouse gas emissions, subject to the key premise that the energy supply and waste management systems remain reliable. This is not only intended to advance the energy transition but also to mitigate the risk of a gradual increase in CO₂ pricing. A detailed transition plan for climate change mitigation in accordance with the ESRS requirements is being developed.

The process of transforming Energie AG into a sustainable energy system began in March 2023 with the Group-wide strategy and organisation project “LOOP”. In the 2023/2024 fiscal year, the focus was on further developing and implementing specific actions. Strategic decisions and investments during this period were intended to actively shape the energy transition (by reducing the share of non-renewable energy, increasing renewable electricity generation, expanding the charging infrastructure for e-mobility, switching to the biogenic fuel “Hydrotreated Vegetable Oil” (HVO)and further reducing CO₂ emissions) and digitalisation and to further strengthen Energie AG’s position in a volatile, rapidly changing market environment. In particular, the expansion of the company’s own renewable energy generation should contribute to reducing dependence on European energy markets and therefore secure a sufficient and consistent supply for customers in the long term. The target is to increase the share of renewable electricity generation by more than 1.0 TWh by 2035.

Important milestones in this development were the investment in the Slovenian project company AAE Gamit, družba za proizvodnjo električne energije, d.o.o. (AAE Gamit) which will develop wind power and photovoltaic (PV) projects in Slovenia, and the beginning of construction of the Ebensee pumped-storage power plant in October 2023, which, with its flexibility and storage capacities, will play a key role in increasing security of supply and compensating for fluctuations in demand and electricity generation from volatile renewable energy sources. In the second half of the 2023/2024 fiscal year, there was also another focus on the expansion of electricity generation from wind power in Upper Austria. To this end, a major expansion of wind power generation is planned in the Kobernaußerwald region by 2030.

In order to reduce its own CO₂ emissions while ensuring security of supply in the future, Energie AG is working to further diversify its own energy generation portfolio, for example by promoting and implementing new climate-friendly technologies, e.g. participating in research projects on the use of hydrogen – for which a dedicated “hydrogen team” was set up in the 2023/2024 fiscal year. In addition, preparations are being made for the transport and distribution of green gases through the existing gas grid.

The actions derived from the “LOOP” strategy and organisation project and already implemented in the 2023/2024 fiscal year will also have a material impact on the future-oriented developments in the sales divisions’ product portfolio. When launching new products, the focus was on decarbonisation, new e-mobility and PV offerings as well as further optimisations in the areas of digitalisation and customer experience. This decision was based on the fields of innovation defined as part of the “LOOP” strategy and organisation project in order to give direction and focus to all innovation activities within the Group. The goal of controlling and further developing innovation management within the Group has been assigned to the newly created Group Innovation holding unit. The Group Innovation holding unit drives and coordinates various innovation vehicles, supports the units’ innovation work and acts as a pioneer.

Energie AG is responding to the challenges posed by the increasing decentralisation of energy generation, which also entails increased investment in grid infrastructure, by pooling expertise with strategic partners in order to jointly develop innovative, ecologically and economically viable products and services for the market. One example of this is a partnership entered into in September 2024 with a clean tech company, which focuses not only on integrated solar storage power plants but also on intelligent, digital energy management systems that enable both private customers and companies to manage their energy flows more efficiently and sustainably. This should relieve the load on grid infrastructure and also ensure a stable energy supply.

Energie AG is forging ahead with the energy transition by expanding its range of sustainable products and services and transforming heat supply, as well as by optimising its own use of resources. In the 2023/2024 fiscal year, for example, the company began to combine renewable energy generation through solar power with e-charging stations by covering electric vehicle charging stations with PV panels at a company location for the first time in order to achieve a further reduction in CO₂ emissions.

Another focus of Energie AG’s corporate strategy is on sustainable property management, where the company strives to achieve a climate-active building standard. In addition, the process of decarbonising the company fleet is progressing through a gradual switch to electrically powered vehicles and focusing on expanding the public electric vehicle charging infrastructure and the corresponding services.

The responsible use of natural resources has always been part of Energie AG’s corporate strategy and is therefore another important component of the current transformation strategy. Comprehensive supporting ecological planning is carried out to minimise the impact on existing ecosystems caused by the implementation of expansion projects and to create replacement habitats for the organisms affected. Ongoing monitoring, such as biomonitoring at the waste incineration plant in Wels, ensures that environmental pollution caused by business operations is detected at an early stage and remains within legally prescribed limits. The next step planned for the company is a redesign of its biodiversity strategy with the aim of protecting and preserving the biological diversity of natural ecosystems as effectively as possible. The development of further actions for the implementation of a resource-conserving circular economy strategy will also be a focus in the next few years.

The process of transformation to a renewable energy future and development of new technologies this entails, also requires the creation of additional jobs in innovative and attractive sectors. This will enable the company to generate important additional expertise required for the strategic realignment within the company.

It is particularly important that Energie AG continues to position itself as an attractive and fair employer. Discrimination of any kind is not tolerated and employees are regularly given training on this. To further highlight the importance of this issue, an intensive programme was launched in the 2023/2024 fiscal year to increase diversity, equal opportunities and inclusion (DEI) in all areas. The newly created interdisciplinary “DiversiTeam” has set itself the target of actively promoting DEI and, with workforce involvement, implementing actions in the defined action areas and raising employee awareness accordingly. Another major objective of the multi-year DEI process is to maintain and continue to promote an open corporate culture based on transparency, mutual respect and appreciation, which creates scope for change – essential to the Group’s strategic realignment – by increasing employee satisfaction and therefore innovation and productivity. For this reason, from the outset, the “LOOP” strategy and organisation project was linked to a culture and change project to ensure that the company’s cultural alignment is in line with its strategic objectives. Employees have an active role in this cultural transformation, with a community of change agents acting as ambassadors across all areas of the Group and all employees being invited to introduce initiatives on future viability, cooperation/partnerships, customer experience, responsibility, sustainability and diversity to a new cultural compass platform.

Target group-focused employee development, promoting fair pay and a fairer gender distribution at management level as well as creating an inclusive working environment are further focus areas of the new strategic direction. Energie AG is also working to increase its attractiveness as an employer through regular training and development programmes as well as targeted preventive healthcare initiatives and efforts to improve work-life balance. These actions were recognised once again in the 2023/2024 fiscal year with prestigious government awards and the award of corresponding seals of approval, helping to increase loyalty and employee retention. Energie AG offers its employees a range of forms of support to prevent or, if necessary, alleviate mental stress in the workplace, including an “Mental Health at Work Service Line” and counselling – which can be anonymous on request – in the event of conflicts or work overload. Agreements on flexible working hours, working from home and taking sabbaticals ensure a high degree of working time flexibility. In addition, Energie AG offers its senior executives performance-related remuneration based on an MbO system. An essential cornerstone of the internal, sustainable problem-solving strategy is an anonymous “Whistleblowing system” that motivates employees at Energie AG to address grievances without fear of negative consequences (such as harassment, dismissal, etc.).

Energie AG takes its role as a buyer very seriously. Supplier suitability is assessed during the procurement process using relevant guidelines. A comprehensive supplier screening assessing environmental, human and labour rights including monitoring is currently being implemented and should in future increasingly contribute to minimising supplier risks in this regard as much as possible. Additionally, Energie AG has defined clear principles in its existing Code of Conduct for Contractors, which are based on the Organisation for Economic Co-operation and Development’s (OECD’s) Guidelines for Multinational Enterprises and are binding for all of the Group’s contractors and subcontractors. These directives are intended to ensure, among other things, that employees are treated fairly and with dignity in accordance with general human rights within the value chain. If necessary, Energie AG will exercise its contractually stipulated right of review to assess contractors’ compliance with the Code of Conduct.

Energie AG’s business activities are fundamentally focused on providing the highest possible level of security of supply and waste management and the best possible customer satisfaction. Therefore, one of the “LOOP” strategy and organisation project’s key targets is providing an outstanding customer experience that is highly focused on the needs and wants of customers, thereby helping to further strengthen the Group’s positive public reputation. With this in mind, in the 2023/2024 fiscal year, a cross-departmental project team developed a specific management agenda, which includes long-term changes to IT infrastructure. The aim is to implement extensive digitalisation to automate and simplify processes along the entire customer journey, especially in the business-to-consumer (B2C) sector, to such an extent that customers are guaranteed barrier-free access to all necessary information without overwhelming individuals with an excessive flood of information.

In the second half of the 2023/2024 fiscal year, an internal pilot project was launched to determine which interdepartmental empowerment actions for customer service employees will contribute to further increasing customer satisfaction, for example by shortening processing times.

Energie AG is committed to ensuring that all customers have unrestricted, comprehensive access to its products and services and that supply and waste management are guaranteed at all times, especially in times of crisis. Regular, anonymised surveys and representative studies are used to evaluate the satisfaction of a broad range of target groups and to develop specific actions from the results. As part of the implementation of the “LOOP” strategy and organisation project, particularly relevant sustainability topics such as initiatives for diversity and inclusion are being developed intensively and will be a priority in future studies.

Energie AG actively and directly involves customers in its strategy and development processes in order to be able to meet customer needs in an even more targeted manner. For example, valuable feedback on offers and services is collected at the biannual customer forum so that products and services can be tailored more closely to the interests of the various target groups and any negative impacts can be responded to quickly and flexibly. In addition, the individual company segments regularly conduct customer satisfaction analyses and direct surveys of business partners.

Customers can use service helplines and online platforms to express their requests and concerns at any time and receive target Group-specific information that is presented as simply, clearly and understandably as possible through multiple channels, with continuous system availability ensured by appropriate IT control and automation, among other things. Every customer concern is documented and processed promptly by customer support teams. Customer satisfaction surveys are one of the ways in which complaints management is evaluated.

In the 2023/2024 fiscal year, Netz OÖ GmbH began redesigning its digital customer portal to make it even more intuitive, user-friendly and a central point of contact for all grid-related issues that are relevant to customers with maximum transparency and convenience. A major expansion of the online customer portal relating to the energy transition was completed in the 2023/2024 fiscal year. Customers can now access preliminary information for connecting PV systems at their specific location and register or deregister microgeneration systems directly online.

In addition to all activities aimed at improving the customer experience, Energie AG is currently implementing and continuously developing an information security management system with the target of establishing a binding framework for personal data protection and for identifying and managing information and communication technology (ICT) risks, particularly in view of the new challenges arising from increased digital interconnectivity. Additionally, there are regular Group-wide risk awareness campaigns and electronic training programmes are offered to raise employee awareness. Energie AG’s regular certifications demonstrate that the highest data protection and information security standards are already being implemented in all customer service processes.

The Group’s financial stability and robust creditworthiness are an essential prerequisite for systematically implementing the described transformation towards sustainability, while consistent sustainability management also plays a major role in securing future financial success. Energie AG’s financial goal is therefore to achieve attractive returns, to sustainably secure the value of the Energie AG Group and to continue to be a reliable and attractive business partner for owners and investors in the future. Financial stability and robust creditworthiness are supported by the balanced Group portfolio of liberalised and regulated business models. A further basis for success is the efficient management of risks and opportunities. It empowers the Group management to identify challenges – especially in the area of environmental and climate issues – at an early stage and to take effective action in good time.

As a provider of electricity, gas, heat and water as well as energy, waste management, information and communications services, the Company works to deliver the highest levels of quality and reliability in its products, processes and services. The Grid Segment comprises the construction and operation of the electricity and gas grid as the backbone of the electricity and gas supply in Upper Austria. The Energie AG Group also operates heating, fibre-optic (backbone) and e-charging networks.

Energie AG is headquartered in Linz, Upper Austria. Its market area includes Austria, the Czech Republic, and northern Italy. In the 2022/2023 fiscal year, a decision was taken to extend the regional focus on wind/PV to Germany, Italy, Slovenia and the Czech Republic in future.

At the start of 2024, the market area was extended to include Slovenia. On 30 January 2024, Erzeugung GmbH acquired an investment of 29.4% in the Slovenian project company AAE Gamit. Over the next five years, AAE Gamit will develop wind power and PV projects in Slovenia with a total peak output of over 180 MW.

Energie AG actively contributes to the achievement of the United Nations’ Sustainable Development Goals (SDGs) with its strategic positioning in combination with its individual projects and service offerings. The main emphasis is on meeting SDG 7: Affordable and clean energy, SDG 8: Decent work and economic growth, SDG 9: Industry, innovation and infrastructure, SDG 10: Reduced inequalities, SDG 12: Responsible consumption and production and SDG 13: Climate action.

A structured strategy process is a prerequisite for consistent control over the Energie AG Group’s long-term business development. Strategies and actions that assure the sustainability of the Group’s profitability and financial performance and its push for the energy transition are derived from market development analyses, the evaluation of the business activities’ effects in an economic, ecological, and social context (monitoring processes, certifications etc.), the balancing of the Group’s strategic goals with the interests and expectations ascertained during the ongoing dialogue with stakeholders and the energy policy environment (new statutory requirements etc.).

In the 2023/2024 fiscal year, two strategy meetings were held at Group level as part of the annual strategy process. In April 2024, the strategic focus was on current market and business environment developments as well as the Group’s overall strategic objectives, and the priorities for further strategic work were defined. The primary focus was on continuing and implementing the decisions made in the 2022/2023 fiscal year as part of the “LOOP” strategy and organisation project. In addition, steps were taken to prepare for the Group’s ongoing digital transformation. At a subsequent Group strategy meeting in July 2024, discussion centred on strategic focus areas relating to innovation, decarbonisation and digitalisation. Strategy development and financial planning interact through a structured and standardised process.

Energie AG’s concepts and strategies on the issues of E1 Climate change, S1 Own workforce and S4 Consumers and end users can be read in the respective sections.

Business model and Group structure

Energie AG’s business model is centred on energy generation, the construction and operation of grids and the reliable supply of electricity, gas and heat to end users. Customers in Austria are also offered energy, information and communication services. The Group offers an integrated waste management and waste management solutions to its customers in Austria and northern Italy, while those in the Czech Republic are supplied with drinking water, heat and wastewater management services.

The goal of the Energie AG Group is to generate an ROCE (Return on Capital Employed) above the WACC through consistently value-oriented corporate management and control. Energie AG primarily relies on the ROCE and the operating result (EBIT) for its internal management and assessment of the Group’s earning power. For more information on the value management concept as an instrument for controlling economic success, see the Group Management Report, Value-based corporate management and capital costs.

As a competent, responsible and competitive Company, Energie AG offers its customers products and services that generate additional value, represent fair value and are regionally available. Since its foundation in 1892, this has helped to create a general spirit of partnership between the Energie AG Group and its customers, employees, suppliers and the general public.

Energie AG is organised in a Group structure. Management and Group functions are pooled in the holding company. The business and service areas are organised in the form of individual companies. In addition to the line and project organisation, the Group has an established crisis and emergency management system in Austria with regular drills and meetings convened as required.

The following diagram depicts the six business units and the three service units as of 30 September 2024.

Energie AG’s business activities are divided into five segments in accordance with IFRS reporting:

The Energy Segment is the Company’s core business and consists of electricity and heat generation, the trade with energy and energy-related products, electricity and gas sales, heat supply in Austria and sales of telecommunication services. The range of services also encompasses certain energy services, such as energy audits for large organisations, energy certificates and building modernisation plans, charge cards for electric mobility charging stations, special on-site power purchase agreement (PPA) models and system optimisation strategies.

The Grid Segment comprises the construction and operation of the electricity and gas grid as the backbone of electricity and gas supply to large parts of Upper Austria and parts of Lower Austria, Salzburg and Styria by Netz Oberösterreich GmbH (Netz OÖ GmbH), a fully owned subsidiary of Energie AG. Netz OÖ GmbH is responsible for securing the energy supply in Upper Austria.

The Waste Management Segment offers integrated waste management and individual waste management solutions in Austria and northern Italy. This includes the collection, acceptance, storage, sorting, management and incineration (including slag processing) of domestic and commercial waste, as well as recovery and reuse of recycling materials in this area.

The Czech Republic Segment offers comprehensive drinking water supply and wastewater management services in the Czech Republic. The business models include concession, operator and service contracts; specialised water, waste water and heating services; and construction and installations. Cities, local authorities, associations, industrial enterprises, housing companies and housing cooperatives are the contractual partners who form the Czech Republic Segment’s client base.

In addition to the management and control functions of the holding company, the Holding & Services Segment comprises the Telecommunications business area, commercial and technical services and some subsidiaries consolidated at equity that are not assigned to other segments. The commercial and technical service companies mainly provide services for the business units.

The Telecommunications unit, which is now part of Services und Digital Solutions GmbH, is responsible for providing preliminary telecommunications service products throughout Energie AG’s supply area and telecommunications and telematics services for the Group, and for setting up and operating the backbone network for the external market. The telecommunications unit provides not only bandwidth but also services in the layer 3 area (internet connectivity and telephone equipment) for Vertrieb GmbH.

As part of the “LOOP” strategy and organisation project, Energie AG Oberösterreich Business Services GmbH, Energie AG Oberösterreich Customer Services GmbH and Telekom GmbH were merged into Services und Digital Solutions GmbH on 21 March 2024 with retroactive effect from 30 September 2023 under universal succession.

Disclosures about changes under corporate law during the 2023/2024 fiscal year are provided in the Group Management Report, Business development in the Group, Changes under corporate law.

Value chain

Energie AG’s business model essentially covers four value chains: Energy (electricity, gas and heat), waste management, drinking water and wastewater and general utilities.

Energy (electricity, gas and heat)

The upstream value chain covers the use of natural resources such as water, sun, wind, gas, (biogenic) waste and biomass. Raw materials, equipment, operating resources and technical equipment, particularly for the construction, expansion and maintenance of power plants and grids, as well as services such as IT services and maintenance and construction services for projects such as the construction of the pumped-storage power plant in Ebensee, are purchased from external suppliers. Diversified and secure procurement is important to Energie AG.

The Energie AG Group’s own operations within the electricity value chain include the generation, storage, trading, transport, distribution and sale of electrical energy. The electricity is generated in the company’s own power plants and through procurement rights, with a focus on the use of renewable energy sources such as hydroelectric power, biomass, photovoltaics and wind power. Electricity is also generated in gas-fired power plants and through waste incineration. The Energie AG Group trades on wholesale exchanges and with over-the-counter (OTC) partners to meet the total electricity demand for its customers and to optimise the Group’s electricity portfolio. Electricity is transported through high-voltage lines and substations. Netz OÖ GmbH operates its own electricity grid, which supplies industrial, commercial and private customers in a large part of Upper Austria and parts of Lower Austria, Salzburg and Styria. Electricity is distributed over the medium and low-voltage grid and metered using electronic meters. Energie AG offers customers a range of electricity products that vary in price, origin and technology used. In doing so, it promotes the use of renewable energies and energy efficiency in order to reduce CO₂ emissions. Energie AG is also supporting the development of smart grids, which facilitate intelligent control of energy generation, consumption and storage and therefore contribute to making the energy system more flexible.

The gas value chain includes the procurement, storage, transport, distribution, use and sale of gas. Energie AG purchases gas on exchanges in Austria, Germany and the Netherlands as well as through bilateral contracts with European partners. No direct contracts are held with natural gas exploration companies or Russian companies. The proportional procurement of natural gas from explicitly non-Russian sources is another step towards diversification, though this relies on trading partners making “declarations of honour”, as no European origin system for natural gas has yet been established. Energie AG is contributing to reducing dependence on Russian gas by procuring natural gas supplies for private and commercial customers which do not originate from the Russian Federation in accordance with Article 9 of EU Regulation 2022/2576. Biogas is produced by third parties from biogenic waste and biomass from farms, municipalities or other suppliers. Energie AG manages gas storage capacities to ensure customer supply, to optimise the structure of the Group portfolio and to realise margins from the price differences between products with different delivery periods. Gas is distributed through a high-pressure and low-pressure grid and partly stored in underground storage facilities. Netz OÖ GmbH operates its own gas grid, which supplies industrial, commercial and private customers in parts of Upper Austria. Energie AG offers customers a range of gas products that vary in price, origin and technology used. In doing so, it encourages the phasing out of gas and oil heating systems in order to reduce CO₂ emissions. Energie AG is also supporting the development of power-to-gas systems, that convert surplus electricity from renewable sources into gas and therefore contribute to making the energy system more flexible.

The heat value chain includes the generation, storage, transport, distribution and sale of thermal energy. Energie AG generates and procures district heat and local heat from non-fossil sources such as biomass, geothermal energy, waste incineration and waste heat as well as from gas-fuelled combined heat and power plants and gas boilers. Erzeugung GmbH operates its own heat network, which guarantees the supply of industrial, commercial and private customers in Upper Austria. Local heat contracting plants focussing on Upper Austria and areas along the border with Salzburg, Styria and Lower Austria are operated by Vertrieb GmbH. In the Czech Republic, heat is also distributed through external pipe networks. Heat consumption is measured using heat meters. In Austria, Energie AG is promoting the use of renewable heat sources and thermal insulation in order to reduce CO₂ emissions. It is also supporting the development of combined heating and cooling plants that generate heat and cooling at the same time and contribute to increasing the flexibility of the energy system in Austria.

Energie AG constructs and operates pipe and grid infrastructure for electricity, gas and district heat, which enable energy to be transported to customers (private, commercial and industrial) via its subsidiaries.

Electricity, gas and heat are offered and provided to customers (private, commercial and industrial) through various sales channels. Austrian customers are assisted both in generating their own electricity with the help of photovoltaic plants and in feeding it into the public grid. Energie AG also supports the expansion of renewable heat generation using heat pump systems and district heating by providing monetary subsidies, tailored offers and far-reaching advice and information campaigns. Energy advisory services that help customers save energy complete the portfolio.

Waste Management

Energie AG is active in the waste management sector both as a waste collector and as a waste handler. The most significant sources of waste are from private households, businesses, industry and municipalities, which either leave their waste to Energie AG or maintain locations from which the waste is collected by Energie AG.

Energie AG uses a variety of processes to convert waste materials into energy and recycling materials. The most common waste management processes are sorting, recycling (e.g. refrigerators), chemical-physical treatment and waste incineration, including slag processing, which are carried out in the company’s own or external plants. Alongside this, the company also trades in raw materials and recycling materials such as paper, cardboard, metal, etc.

The company purchases operating resources and vehicles, such as waste management vehicles for collecting and transporting waste materials, as well as self-propelled work equipment for on-site handling. Energie AG requires services for the maintenance of plants, such as those of Welser Abfallwertung (WAV), as well as logistics services, in particular waste management vehicle and truck drivers for the transport of waste and products. Once the waste has been collected, it is treated, focusing on recovering energy and valuable resources.

Energie AG sells energy and recycling materials obtained from waste on a variety of markets and to customers. Sorted and processed waste is used in industry as secondary raw materials.

Energie AG generates heat and electricity from the waste, which is distributed to end consumers through the respective electricity grids and heating networks. Energie AG also supplies sorted and processed waste to industry as secondary raw materials, which can be used to manufacture new products. Examples include recycling paper and cardboard and recovering metals by processing the slag remaining after waste incineration. Energie AG stores waste materials that cannot be recycled in its own or public landfills.

Drinking water and waste water

Energie AG offers services for cities, local authorities and water boards for the supply of drinking water, wastewater management and sewage services. It also takes into account the environmental and social impact of its activities along the entire value chain, which is shown in the diagram. Energie AG is committed to the sustainable use of water as a resource and takes action to avoid water loss.

In the Czech Republic, Energie AG holds official licences to extract surface and groundwater for drinking water and to discharge treated wastewater. Water sources for drinking water treatment include surface water (watercourses, lakes, reservoirs or dams) and groundwater, whose quality and quantity are influenced by precipitation (including runoff from urban areas) and discharged treated wastewater. In addition, a variety of materials, technologies and resources are used to conduct business activities.

In Upper Austria, Energie AG holds water law licences for the extraction of groundwater and the operation of its own water supply facilities. The groundwater used meets the legal quality requirements, meaning that no treatment is required for the majority of the installations.

Energie AG operates and partly owns the water infrastructure and carries out regular maintenance and servicing of water supply, sewage, wastewater treatment and water treatment plants, as well as their renovation and expansion, to the extent that they are owned by the Energie AG Group.

Energie AG provides water management services such as sewer inspections, hydrant inspections, leak detection, water sampling and analyses and uses a range of advanced technologies to optimise operations, such as smart water meters in the Czech Republic.

Energie AG supplies end consumers (households, businesses and industrial companies) in the Czech Republic with drinking water and disposes of their waste water. In addition, rainwater is drained from cities and municipalities and for water boards and is used along the value chain in part as raw water for the treatment of drinking water. This means that end consumers are, indirectly, also suppliers to Energie AG.

Services

Energie AG offers its customers (private, commercial and industrial) and Group companies a broad portfolio of services that contribute to its environmental, social and economic goals. In order to provide these services, Energie AG procures a range of services from its suppliers and partners, as well as raw materials, technology and operating resources, which it uses sustainably and efficiently.

Energie AG’s range of services includes the following areas: technical services, such as planning and engineering, construction and maintenance as well as troubleshooting of grid or network-related facilities in the field of electricity, gas, heat and data, as well as plants for electricity and heat generation and storage; waste management services, such as waste collection, waste treatment, waste incineration, wastewater treatment and recovery, and advice on the remediation of contaminated sites; energy services, such as energy certificates and energy audits, energy efficiency advice and subsidy processing, on-site power purchase agreements and instalment purchase models for photovoltaic and thermal plants; information and communication services, such as the development of ICT products, telecommunications services (such as internal telephony and telematics services), the construction and operation of the fibre-optic network as well as related Layer 3 services (internet connectivity, telephony) and the operation of fibre optic infrastructure; commercial services, such as accounting, auditing, purchasing, human resources, legal, compliance and risk management; customer services, incl. call centres, an online service portal, a customer magazine and customer loyalty programme; a dense network of public charging infrastructure for electric vehicles and associated services, some of which are digital (charging card, direct payment), as well as charging infrastructure solutions for private homes and businesses.

SBM-2 – Interests and views of stakeholders

Energie AG considers the involvement of its stakeholders to be extremely important to ensure that their interests and views are taken into account.

The following stakeholder groups were identified in the strategy development processes and as part of the “ESG management/CSRD implementation” project:

Particular attention is paid to the stakeholder groups affected: customers (consumers and end users) and employees (Management Board, senior executives, employees). For more information on current inclusion, see S4 Consumers and end users, S4-2 and S4-3 as well as S1 Own workforce, S1-2 and S1-3 and G1 Business conduct, G1-1.

The outcomes of customer involvement were taken into account in the “LOOP” strategy and organisation project in the 2023/2024 fiscal year. In particular, a separate part of the project focused on aligning even more closely with the needs of customers in terms of access to products and services as well as high-quality information. The goal of the strategic repositioning in this area is to significantly improve the customer experience through digitalisation and simplification, see also S4 Consumers and end users, Customer experience and digitalisation. The organisational consolidation provides the framework for making even greater use of the company’s strengths in telecommunications and IT in particular in order to optimise customer processes. The development and design of a needs-orientated customer platform should facilitate the continued expansion of digital customer services in the future. Fully digitalised solutions with a high degree of automation are intended to improve service quality and reduce waiting times. In addition, customer needs for an expansion of offers related to the energy transition were recognised and a strategic target was set to significantly expand offers in the areas of heat pumps, home storage, photovoltaics and e-mobility, particularly in the B2C sector, see also E1 Climate change, E1-3 and S4 Consumers and end users, S4-4.

Procedures for engaging with the company’s own workforce regarding the impacts, including through dialogue with employee representatives, are explained in S1 Own workforce, S1-2. Further, the available channels and opportunities for employees to raise concerns about negative impacts and procedures for remediation are described in S1 Own workforce, S1-3 and G1 Business conduct, G1-1.

Employees were also closely involved in carrying out the materiality assessment. The interests and views of employees from all areas of the Group were factored into the assessment of Energie AG’s material topics in several workshops. Details on the implementation of the materiality assessment can be found in section IRO-1 – Description of the process to identify and assess material impacts, risks and opportunities.

In the 2023/2024 fiscal year, a concept for the future involvement of stakeholder groups with regard to sustainability matters was developed as part of the “ESG management/CSRD implementation” project. The different stakeholder groups were analysed and subsequently evaluated according to influence and interest. There was a particular focus on vulnerable groups with a high level of concern or interest but little influence. This concept was developed by employees from a range of different areas of the Group, meaning that the interests and views of the workforce were once again widely reflected.

The analysis revealed that the following stakeholder groups were particularly important, and a concept was subsequently developed for them with suitable engagement formats and a timetable: employees, customers, neighbours, nature, value chain workers and the Supervisory Board.

In addition to making use of the wide range of existing communication channels, the company also plans to selectively establish new communication channels. This is particularly important where the stakeholder analysis concluded that greater consideration of the interests and views of stakeholders is necessary in the future. In particular, the value chain workers have not yet been included in the stakeholder communication to date and therefore the aim is to increase this communication in the coming years.

The company’s management bodies were informed of the concept for the future involvement of stakeholder groups with regard to sustainability matters. In addition, the supervisory bodies were informed of the strategic repositioning in the area of customer experience as part of the “LOOP” strategy and organisation project and the results of the materiality assessment conducted with the broad involvement of the Group’s employees.

Respect for human rights

Energie AG is committed to unreserved respect for human rights in all areas of the company, and in its wider sphere of influence. In its responsible corporate activities, Energie AG is guided by internationally recognised principles and practices such as the Guidelines for Multinational Enterprises of the OECD, the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization (ILO) and the UN Guiding Principles on Business and Human Rights.

The well-being of all persons within its supply area is an important goal for Energie AG Group. The Group focuses its actions on providing a safe and reliable supply that enables well-being, trade and commerce, and a high quality of life.

SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model

This section summarises the material positive and negative impacts as well as risks and opportunities of the Energie AG Group’s material sustainability matters as identified in the materiality assessment. The interdependence of the material impacts, risks and opportunities with the strategy and business model are described in section SBM-1 – Strategy, business model and value chain.

Given the high importance of sustainability topics to business activity, more and more aspects of ESG are being incorporated into risk management. This task is performed by the Group-wide risk management, which actively monitors and records potential risks and opportunities.

In the past, the material effects of Energie AG’s activities on the issues resulting from the Austrian Sustainability and Diversity Improvement Act (NaDiVeG) were evaluated based on international standards in an interactive process together with the relevant business units. The opportunities and risks identified in this way were subjected to a qualitative assessment using a group-wide uniform assessment method. Opportunities and risks were presented as net risks and action was taken to reduce these risks. Opportunities and risks are events outside of the “ordinary” business activities that entail potential positive or negative consequences. For details on the Group-wide risk management and a description of Energie AG’s opportunities and risks, please see the Group Management Report and the Notes to the Consolidated Financial Statements, Management of risks and opportunities.

The focus in the 2023/2024 fiscal year was on further developing the ESG risk management system in accordance with ESRS requirements. The materiality assessment process following the principle of double materiality in accordance with the new ESRS requirements is described in detail in section IRO-1 – Description of the process to identify and assess material impacts, risks and opportunities.

A risk analysis was carried out for selected suppliers (including the Czech Republic Segment) in the 2023/2024 fiscal year. The aim of this analysis was to identify risks associated with countries, sectors and the financial volume of the respective suppliers and to be able to take any required action. None of the suppliers reviewed were identified as high risk. As a result, no actions to address human rights-related risks were developed. Preparations are being made to expand the supplier risk analysis by implementing a software solution.

The assessed country-specific risk was determined using the following standards: “Children’s Rights in the Workplace Index” (a collaboration between Unicef and the Global Child Forum), “Global Slavery Index” (Walk Free), “Work-Related Injuries” (nsc), “ITUC Global Rights Index” (International Trade Union Confederation), “Multidimensional Poverty Index” (collaboration between the United Nations Development Programme and the Oxford Poverty and Human Development Initiative), “Poverty Headcount Ratio” (The World Bank), “Environmental Performance Index” (Yale Center for Environmental Law & Policy), “International Property Rights Index” (Property Rights Alliance), “Global Peace Index” (Institute for Economics & Peace) and other human rights indices such as the “Corruption Perception Index” (Transparency International). Individual limits for determining risk were set for each indicator.

The industry risk was determined as follows: Industry study by the German Federal Ministry of Labour and Social Affairs, CSR Risk Check, Corporate Human Rights Benchmarks and analysis of environmental risks.

Energie AG’s very good creditworthiness, most recently once more awarded an A rating by S&P Global Rating in March 2024, is an important prerequisite for funding sustainable future investment projects to achieve its strategic ambitions at market conditions that are economically attractive to investors. As of the reporting date, the Energie AG Group had substantial financial reserves in the form of cash and cash equivalents and short-term investments. In addition, as of 30 September 2024, the company had access to significant credit lines with Austrian and international banks that had not been used as at the reporting date.

Due to reporting in line with ESRS for the first time in the 2023/2024 fiscal year, there are no changes to the material impacts, risks and opportunities compared to the previous reporting period.