Management of impacts, risks and opportunities

IRO-1 – Description of the process to identify and assess material impacts, risks and opportunities

In the 2023/24 fiscal year, Energie AG for the first time conducted a materiality assessment in accordance with the requirements of the CSRD and the ESRS requirements as part of the externally supported ‘ESG management/CSRD implementation’ project. In the 2024/25 fiscal year, the materiality assessment process was significantly further developed. For the first time, the assessment of impacts, risks and opportunities was carried out in a decentralised manner by the business and service units and subsequently consolidated by Group Risk Management.

In accordance with the principle of double materiality, the impacts, risks and opportunities of Energie AG in the areas of environmental, social and governance matters were identified and assessed to determine the material sustainability matters for reporting purposes.

Under the double materiality concept, a sustainability matter is considered from two perspectives: its positive or negative impacts on people and the environment (impact materiality), and its financial effects on the company, including associated risks and opportunities (financial materiality).

The materiality assessment was based on the ‘longlist’ set out in the current ESRS (ESRS 1 Appendix A), which provides a list of potentially material sustainability matters.

Negative and positive impacts on people and the environment may also give rise to financial consequences for Energie AG (e.g. reputational damage arising from negative impacts). These interrelationships were accordingly taken into account when determining risks and opportunities.

In the template standardised by Group Risk Management, positive and negative impacts were initially categorised as either potential or actual. When assessing the impact, the underlying cause, location and time horizon were recorded before a quantitative evaluation of scale and scope was conducted. For negative impacts, recoverability was also assessed, and for potential impacts the likelihood of occurrence was evaluated.

The materiality assessment and its results were addressed by both the Management Board and the Supervisory Board of Energie AG in the 2024/25 fiscal year. In addition, based on the stakeholder engagement concept developed in the 2023/24 fiscal year, the views of internal and external stakeholders were incorporated into the results of the materiality analysis during the reporting period. The materiality evaluation for the 2024/25 fiscal year took into account the stakeholder groups ‘S4 Consumers and end-users’ and ‘S1 Own workforce’. The first group was involved through a systematic assessment of existing customer concerns and grievances collected as part of Energie AG’s structured complaints management. Complaints management includes the processing and documentation of customer enquiries in the areas of electricity, gas, FTTH (Fibre to the Home) and heat. Further information on this can be found in S4-3, Processes to remediate negative impacts and channels for consumers and end users to raise concerns. The interests of the stakeholder group ‘S1 Own workforce’ were represented in the Group’s materiality analysis through the involvement of members of the Group’s workers' representative body (as representatives of the ‘Employees’ interest group). In a materiality assessment workshop, the impacts, risks and opportunities relating to ‘S1 Own workforce’ were structured, and the views of the Group representative were subsequently taken into account in the materiality assessment.

Further details on stakeholder involvement are provided in section SBM-2 Stakeholder interests and positions.

For the assessment of risks and opportunities, the time horizon was determined before a quantitative evaluation was performed based on the reusability of resources and/or the reliability of business relationships and/or the impact on future EBIT. The likelihood of impact was also assessed.

Sustainability risks were evaluated by the experts as part of the materiality assessment process using the individual assessment categories. This assessment resulted in a key indicator reflecting the degree of materiality for each topic.

A threshold value of 0.6 was established, derived from the quantitative scoring of criteria on a scale from 0 to 1. Where the assessment of either impact materiality or financial materiality met or exceeded this threshold, the sustainability matter was classified as material for Energie AG.

The initial results of the materiality assessment were reviewed and validated by the ESG Steering Committee and the Management Board, forming the basis for determining the Group’s material sustainability matters; these constitute the framework for sustainability reporting in accordance with the ESRS at Energie AG. The materiality assessment is based on the individual IROs. These are assessed by the decentralised business units and subsequently forwarded to Group Risk Management. In line with internal control system requirements, the evaluations submitted are checked for completeness and adherence to the standardised Group methodology.

Group Risk Management was involved throughout the entire materiality assessment process. Scales were established to assess the materiality of impacts and financial materiality, forming the basis for the assessments carried out by the business and service units. The impacts, risks and opportunities evaluated were analysed by Group Risk Management, and the financial risks and opportunities were aligned with the ongoing risk management process.

IRO-2 - Disclosure requirements in ESRS covered by the company's sustainability statement

ESRS 2 – General Disclosures

Indicator	Disclosure requirement	Disclosure requirement	Page
BP-1	General basis for preparation of the sustainability statement	General basis for preparation of the sustainability statement
BP-2	Disclosures in relation to specific circumstances	Disclosures in relation to specific circumstances
GOV-1	The role of the administrative, management and supervisory bodies	The role of the administrative, management and supervisory bodies
GOV-2	Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies	Information provided to and sustainability matters addressed by the undertaking's administrative, management and supervisory bodies
GOV-3	Integration of sustainability-related performance in incentive schemes	Integration of sustainability-related performance in incentive schemes
GOV-4	Statement on due diligence	Statement on due diligence
GOV-5	Risk management and internal controls over sustainability reporting	Risk management and internal controls over sustainability reporting
SBM-1	Strategy, business model and value chain	Strategy, business model and value chain
SBM-2	Interests and views of stakeholders	Interests and views of stakeholders
SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	Material impacts, risks and opportunities and their interaction with strategy and business model
IRO-1	Description of the process to identify and assess material impacts, risks and opportunities	Description of the process to identify and assess material impacts, risks and opportunities
IRO-2	Disclosure requirements in ESRS covered by the undertaking’s sustainability statement	Disclosure requirements in ESRS covered by the undertaking’s sustainability statement

E1 – Climate change

Indicator	Disclosure requirement	Disclosure requirement	Page
ESRS 2 GOV-3	Integration of sustainability-related performance in incentive schemes	Integration of sustainability-related performance in incentive schemes
E1-1	Transition plan for climate change mitigation	Transition plan for climate change mitigation
ESRS 2 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	Material impacts, risks and opportunities and their interaction with strategy and business model
ESRS 2 IRO-1	Description of the process to identify and assess material climate-related impacts, risks and opportunities	Description of the process to identify and assess material climate-related impacts, risks and opportunities
E1-2	Concepts related to climate change mitigation and adaptation	Concepts related to climate change mitigation and adaptation
E1-3	Actions and resources related to the climate concepts	Actions and resources related to the climate concepts
E1-4	Targets related to climate change mitigation and adaptation	Targets related to climate change mitigation and adaptation
E1-5	Energy consumption and mix	Energy consumption and mix
E1-6	Gross Scope 1, 2 and 3 and Total GHG emissions	Gross Scope 1, 2 and 3 and Total GHG emissions
E1-9	Anticipated financial effects from material physical and transition risks and potential climate-related opportunities	Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

E4 – Biodiversity and ecosystems

Indicator	Disclosure requirement	Disclosure requirement	Page
E4-1	Transition plan and consideration of biodiversity and ecosystems in strategy and business model	Transition plan and consideration of biodiversity and ecosystems in strategy and business model
ESRS 2 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	Material impacts, risks and opportunities and their interaction with strategy and business model
ESRS 2 IRO-1	Description of the process to identify and assess material impacts, risks and opportunities in relation to biological diversity and ecosystems	Description of the process to identify and assess material impacts, risks and opportunities in relation to biological diversity and ecosystems
E4-2	Concepts related to biodiversity and ecosystems	Concepts related to biodiversity and ecosystems
E4-3	Actions and resources related to biodiversity and ecosystems	Actions and resources related to biodiversity and ecosystems
E4-4	Targets related to biodiversity and ecosystems	Targets related to biodiversity and ecosystems

E5 – Resource use and the circular economy

Indicator	Disclosure requirement	Disclosure requirement	Page
ESRS 2 IRO-1	Description of the process to identify and assess material impacts, risks and opportunities in relation to resource use and the circular economy	Description of the process to identify and assess material impacts, risks and opportunities in relation to resource use and the circular economy
E5-1	Concepts related to resource use and circular economy	Concepts related to resource use and circular economy
E5-2	Actions and resources related to resource use and circular economy	Actions and resources related to resource use and circular economy
E5-3	Targets related to resource use and circular economy	Targets related to resource use and circular economy
E5-4	Resource inflows	Resource inflows

S1 – Own workforce

Indicator	Disclosure requirement	Disclosure requirement	Page
ESRS 2 SBM-2	Interests and views of stakeholders	Interests and views of stakeholders
ESRS 2 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	Material impacts, risks and opportunities and their interaction with strategy and business model
S1-1	Concepts related to own workforce	Concepts related to own workforce
S1-2	Processes for engaging with own workforce and employee representatives about impacts	Processes for engaging with own workforce and employee representatives about impacts
S1-3	Processes to remediate negative impacts and channels for own workforce to raise concerns	Processes to remediate negative impacts and channels for own workforce to raise concerns
S1-4	Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions	Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions
S1-5	Targets related to managing material negative impacts, advancing positive impacts and managing material risks and opportunities	Targets related to managing material negative impacts, advancing positive impacts and managing material risks and opportunities
S1-6	Characteristics of the company's employees	Characteristics of the company's employees
S1-7	Characteristics of external employees	Characteristics of external employees
S1-8	Collective bargaining coverage and social dialogue	Collective bargaining coverage and social dialogue
S1-9	Diversity indicators	Diversity indicators
S1-11	Social protection	Social protection
S1-13	Key figures for training and skills development	Key figures for training and skills development
S1-14	Key figures for health and safety	Key figures for health and safety
S1-15	Key figures for work-life balance	Key figures for work-life balance
S1-17	Incidents, complaints and severe human rights impacts	Incidents, complaints and severe human rights impacts

S2 – Workers in the value chain

Indicator	Disclosure requirement	Disclosure requirement	Page
ESRS 2 SBM-2	Interests and views of stakeholders	Interests and views of stakeholders
ESRS 2 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	Material impacts, risks and opportunities and their interaction with strategy and business model
S2-1	Concepts related to value chain workers	Concepts related to value chain workers
S2-2	Processes for engaging with value chain workers about impacts	Processes for engaging with value chain workers about impacts
S2-3	Processes to remediate negative impacts and channels for value chain workers to raise concerns	Processes to remediate negative impacts and channels for value chain workers to raise concerns
S2-4	Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions	Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions

S4 – Consumers and end-users

Indicator	Disclosure requirement	Disclosure requirement	Page
ESRS 2 SBM-2	Interests and views of stakeholders	Interests and views of stakeholders
ESRS 2 SBM-3	Material impacts, risks and opportunities and their interaction with strategy and business model	Material impacts, risks and opportunities and their interaction with strategy and business model
S4-1	Concepts related to consumers and end-users	Concepts related to consumers and end-users
S4-2	Processes for engaging with consumers and end-users about impacts	Processes for engaging with consumers and end-users about impacts
S4-3	Processes to improve negative impacts and channels for consumers and end-users to raise concerns	Processes to improve negative impacts and channels for consumers and end-users to raise concerns
S4-4	Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions	Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions

G1 – Business conduct

Indicator	Disclosure requirement	Disclosure requirement	Page
ESRS 2 GOV-1	The role of the administrative, management and supervisory bodies	The role of the administrative, management and supervisory bodies
ESRS 2 IRO-1	Description of the process to identify and assess material impacts, risks and opportunities	Description of the process to identify and assess material impacts, risks and opportunities
G1-1	Business conduct concepts and corporate culture	Business conduct concepts and corporate culture
G1-3	Prevention and detection of corruption and bribery	Prevention and detection of corruption and bribery
G1-4	Incidents of corruption or bribery	Incidents of corruption or bribery

List of data points in the general and topic-related standards arising from other EU legislation (ESRS 2, Appendix B)

List of data points in the general and topic-related standards arising from other EU legislations (ESRS 2, Appendix B)
Disclosure requirement and related data	SFDR reference	Pillar 3 Reference	Benchmark regulation reference	EU Climate law reference
ESRS 2 GOV-1 21 d: Boards' gender diversity	x		x
ESRS 2 GOV-1 21-e: Percentage of management body members who are independent			x
ESRS 2 GOV-4 30: Statement on due diligence	x
ESRS 2 SBM-1 40-d-i: Involvement in activities related to fossil fuel activities	x	x	x
ESRS 2 SBM-1 40-d-ii: Involvement in activities related to chemical production	x		x
ESRS 2 SBM-1 40-d-iii: Involvement in activities related to controversial weapons	x		x
ESRS 2 SBM-1 40-d-iv: Involvement in activities related to the cultivation and production of tobacco			x
ESRS E1-1 14: Transition plan to reach climate neutrality by 2050				x
ESRS E1-1 16-g: Undertakings excluded from Paris-aligned benchmarks		x	x
ESRS E1-4 34: GHG emission reduction targets	x	x	x
ESRS E1-5 38: Energy consumption from fossil fuels by source (only high climate impact sectors)	x
ESRS E1-5 37: Energy consumption and mix	x
ESRS E1-5 40–43: Energy intensity associated with activities in high climate impact sectors	x
ESRS E1-6 44: Gross Scope 1, 2, 3 and Total GHG emissions	x	x	x
ESRS E1-6 53–55: Gross GHG emissions intensity	x	x	x
ESRS E1-7 56: Removal of greenhouse gases and CO₂ certificates				x
ESRS E1-9 66: Exposure of the benchmark portfolio to climate-related physical risks			x
ESRS E1-9 66-a: Disaggregation of monetary amounts by acute and chronic physical risk ESRS E1-9 66-c: Location of significant assets at material physical risk		x
ESRS E1-9 67-c: Breakdown of the carrying value of its real estate assets by energy-efficiency class		x
ESRS E1-9 69: Degree of exposure of the portfolio to climate-related opportunities			x
ESRS E2-4 28: Amount of each pollutant listed in Annex II of the E-PRTR (European Pollutant Release and Transfer Register) emitted into air, water and soil	x
ESRS E3-1 9: Water and marine resources	x
ESRS E3-1 13: Special approach	x
ESRS E3-1 14: Sustainable oceans and seas	x
ESRS E3-4 28-c: Total water recycled and reused	x
ESRS E3-4 29: Total water consumption in m³ per net sales from own activities	x
ESRS 2 SBM-3 - E4 16-a-i: Activities that have a negative impact in biodiversity sensitive areas	x
ESRS 2 SBM-3 - E4 16-b: Material negative impacts on land degradation, desertification or soil sealing	x
ESRS 2 SBM-3 - E4 16-c: Activities impacting threatened species	x
ESRS E4-2 24-b: Sustainable practices or approaches to land use and agriculture	x
ESRS E4-2 24-c: Sustainable ocean/sea practices or approaches	x
ESRS E4-2 24-d: Concepts for combating deforestation	x
ESRS E5-5 37-d: Non-recycled waste	x
ESRS E5-5 39: Hazardous and radioactive waste	x
ESRS 2 SBM-3 – S1-14-f: Risk of incidents of forced labour	x
ESRS 2 SBM-3 – S1-14-g: Risk of incidents of child labour	x
ESRS S1-1 20: Human rights policy commitments	x
ESRS S1-1 21: Due diligence policies on issues addressed by the fundamental International Labour Organization Conventions 1 to 8			x
ESRS S1-1 22: Processes and actions to combat human trafficking	x
ESRS S1-1 23: Workplace accident prevention policy or management system	x
ESRS S1-3 32-c: Grievance/complaints handling mechanisms	x
ESRS S1-14 88-b und -c: Number of fatalities and number and rate of work-related accidents	x		x
ESRS S1-14 88-e: Number of days lost to injuries, accidents, fatalities or illness	x
ESRS S1-16 97-a: Unadjusted gender pay gap	x		x
ESRS S1-16 97-b: Excessive CEO pay ratio	x
ESRS S1-17 103-a: Incidents of discrimination	x
ESRS S1-17 104-a: Non-respect of UNGPs on Business and Human Rights and OECD guidelines	x		x
ESRS 2 SBM-3 – S2 11-b: Significant risk of child labour or forced labour in the value chain	x
ESRS S2-1 17: Human rights policy commitments	x
ESRS S2-1 18: Concepts related to value chain workers	x
ESRS S2-1 19: Non-respect of UNGPs on Business and Human Rights and OECD guidelines	x		x
ESRS S2-1 19: Due diligence policies on issues addressed by the fundamental International Labour Organization Conventions 1 to 8			x
ESRS S2-4 36: Human rights issues and incidents connected to its upstream and downstream value chain	x
ESRS S3-1 16: Human rights policy commitments	x
ESRS S3-1 17: Failure to comply with the United Nations Guiding Principles on Business and Human Rights, the ILO principles or the OECD Guidelines	x		x
ESRS S3-4 36: Human rights issues and incidents	x
ESRS S4-1 16: Concepts related to consumers and end users	x
ESRS S4-1 17: Non-respect of UNGPs on Business and Human Rights and OECD guidelines	x		x
ESRS S4-4 35: Human rights issues and incidents	x
ESRS G1-1 10-b: United Nations Convention against Corruption	x
ESRS G1-1 10-d: Protection of whistleblowers	x
ESRS G1-4 24-a: Fines for violation of anti-corruption and anti-bribery laws	x		x
ESRS G1-4 24-b: Standards of anti-corruption and anti-bribery	x

As a result of the materiality assessment, the following matters were identified as not material: E2 Pollution, E3 Water and marine resources and S3 Affected communities.

The lists of threshold values specified by EU legislation were used to determine points of contact and to assess the topics under E2 Pollution. Energie AG does not report on E2 Pollution, as none of the values from the prescribed list exceed the relevant threshold. A detailed analysis of these thresholds was carried out as part of the ‘ESG Management/CSRD Implementation’ project.

Energie AG does not publish a report on the entire area of E3 Water and marine resources, as no points of contact were identified in some cases (all topics relating to marine resources) and the topics of water consumption and extraction as well as water discharge were classified as non-material based on the assessment of impacts, opportunities and risks. Water consumption by end users served by Energie AG has been addressed under S4 Consumers and end-users.

Energie AG is not required to report on the S3 Affected communities standard in its entirety, as all subtopics were assessed as non-material based on the evaluation of impacts, risks and opportunities. Some of the subtopics are reflected in other ‘longlist’ items, such as E4 Biodiversity and ecosystems and S4 Consumers and end-users.