Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate-friendly buildings
• Attractive working conditions and a diverse workforce
• Ethical corporate governance and compliance
• Sustainable supply chain
• Customer and tenant satisfaction and health

Environmental Achievements

• More than doubled the remote reading capability of its digital infrastructure using Techem Smart System
• Avoided 8.7 million tons of CO2e per year through its products and services
• Reduced total energy consumption by 6.6% compared to 2019

Social Achievements

• Introduced an Employee Net Promoter Score (eNPS) to measure employee satisfaction
• Kept employee turnover below 5%
• Kept the LTIFR (Lost Time Injury Frequency Rate) below 5

Governance Achievements

• No cases of corruption in 2020
• 100% of employees in Germany received compliance training
• No data protection breaches (although there were nine cases reported)

Climate Goals & Targets

Environmental Challenges

• Too low a rate of building retrofits across the EU (1% annually)
• High energy demand in the building sector
• Potential for physical risks in the (extended) supply chain due to climate change
• Nine substantiated data protection complaints from customers

Mitigation Strategies

• Revised business model with a view to digitalization (heat data digitally read in over 80% of cases)
• Entered the smart metering business for electricity and gas
• Developed a sustainability program with ambitious targets
• Implemented measures to address data protection complaints
• Introduced an information security management system according to ISO 27001 (to be implemented successively until 2025)
• Planning to conduct an external audit to review data privacy compliance in 2023

Supply Chain Management

Supplier Audits: At least every three to four years for strategic suppliers

Responsible Procurement

• ESG criteria and Code of Conduct considered when selecting suppliers
• Suppliers required to confirm and observe the BME Code of Conduct or a comparable code

Climate-Related Risks & Opportunities

Physical Risks

• Infrastructure damage
• Scarcity and activity damage
• Transport damage due to extreme weather events

Transition Risks

• Government measures in response to climate change
• Changing customer needs

Opportunities

• Public incentives to reduce emissions
• Increased demand for climate-friendly energy supply solutions

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 50001 (Techem Solutions GmbH), BME (for sustainability management under the Code of Conduct)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3
• SDG 6
• SDG 7
• SDG 9
• SDG 11
• SDG 13

Techem's business model directly contributes to the achievement of these SDGs through energy efficiency, water management, sustainable infrastructure, and climate action.

Sustainable Products & Innovation

• Techem Smart System
• Smart Monitor
• Next-Generation Smoke Alarm

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• For the Climate and the Environment
• For the Individual and the Community
• For Ethical Business Conduct

Environmental Achievements

• Reduced CO2e emissions by 2.2% compared to the previous year.
• Achieved 82% radio readout rate for devices (aiming for 90% by 2025).
• Avoided approximately 8,500 tons of CO2e emissions annually with "Digital Heating Room".

Social Achievements

• Achieved an eNPS of +13.
• Increased the share of women in management positions to 27.7%.
• Organized Learning Days with over 6,400 hours of training.

Governance Achievements

• Received an ESG Risk Rating of 8.7 from Morningstar Sustainalytics.
• Implemented a Group-wide Diversity and Anti-Discrimination Policy.
• Linked executive compensation to sustainability targets (e.g., dismissal rate, women in management).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to physical risks (heat events, droughts, floods).
• Hesitant customer willingness to invest in low-emission, capital-intensive solutions (heat pumps).
• Shortage of skilled workers and employee retention.

Mitigation Strategies

• Developing alternative sourcing strategies and implementing specific sustainability audits.
• Offering low-investment solutions and focusing on customer needs.
• Creating an attractive working environment, expanding employee training, and implementing a diversity roadmap.

Supply Chain Management

Supplier Audits: Quality supplier audits every three to four years for strategic suppliers; occasional audits of Tier 2 suppliers.

Responsible Procurement

• Supplier Code of Conduct based on BME guidelines and UN Global Compact principles.
• Sustainability criteria integrated into supplier evaluation matrix.
• Multiple sourcing and long-term supplier relationships.

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rainfall events affecting heating systems regionally.
• Supply chain disruptions due to heat events, droughts, floods, storms.

Transition Risks

• Impairment of business fields related to fossil fuel heat supply.
• Hesitant customer willingness to invest in low-emission technologies.

Opportunities

• Building business by providing innovative, low-emission heating technologies (heat pumps).
• Additional revenues from combining submetering and smart metering for electricity.
• Demand for products and services to reduce ecological footprint.
• Opening up new markets in e-mobility.

Reporting Standards

Frameworks Used: GRI Universal Standard 2021, TCFD

Certifications: ISO 50001

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 7
• SDG 3
• SDG 6
• SDG 9
• SDG 11
• SDG 13

Techem contributes to these SDGs through its energy efficiency solutions, health and safety services, water management practices, infrastructure development, neighborhood solutions, and climate awareness initiatives.

Sustainable Products & Innovation

• Heat pumps
• Smart metering systems
• Digital Heating Room
• adapterm system

Awards & Recognition

• HR Energy Award (Learning Days, 5x5 Innovation Impulse)

Environmental Metrics

ESG Focus Areas

• Climate & Environment
• Individual & Society
• Ethical Business Conduct

Environmental Achievements

• Reduced CO2e emissions by 20%
• Used 100% green electricity for Techem customers and German locations

Social Achievements

• Appointed 2.5% more women to management positions
• Achieved a Group-wide eNPS of +24 (an increase of eleven points compared to the previous year)

Governance Achievements

• Received an ESG risk rating of 8.7 from Morningstar Sustainalytics, indicating a “negligible risk” of material financial impacts from ESG factors
• Introduced a Group-wide Diversity and Anti-Discrimination Policy

Climate Goals & Targets

Environmental Challenges

• Uncertainty caused by the Building Energy Act and high prices for commercially available heat pump solutions
• Implementation of the Energy Efficiency Directive (EED) increased print output due to the requirement for monthly consumption billing
• High risk of human rights violations in the supply chain

Mitigation Strategies

• Decarbonization plan to reduce CO2e emissions by at least 90% across all scopes by 2045
• Revised reduction target for paper consumption due to EED requirements
• Introduced a comprehensive risk analysis, reviewed supply chain, adopted a Declaration on Human Rights for suppliers, and integrated sustainability criteria into supplier selection

Supply Chain Management

Supplier Audits: Quality supplier audits including environmental and social aspects for strategic suppliers (every 3-4 years)

Responsible Procurement

• Supplier Code of Conduct
• Declaration of Principles for Human Rights
• Sustainability criteria in supplier selection

Climate-Related Risks & Opportunities

Physical Risks

• Heavy rainfall events affecting heating systems
• Heat events, droughts, floods, and storms disrupting supply chain

Transition Risks

• Impairment of fields of business related to heat supply from fossil fuels
• Customer unwillingness to invest in low-emission, capital-intensive solutions

Opportunities

• Business growth through low-emission heating technologies
• Additional earnings from combining submetering and smart metering for electricity
• Demand- and customer-oriented services based on digital metering
• Development of new markets in electric mobility
• Increasing demand for products and services that reduce environmental footprint
• New fields of business in metering and billing due to increasing demand for cooling

Reporting Standards

Frameworks Used: GRI Universal Standard 2021, TCFD

Certifications: ISO 50001 (Energy Management), ISO 27001 (Information Security - critical systems in Germany)

Third-party Assurance: PricewaterhouseCoopers GmbH

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 6
• SDG 7
• SDG 9
• SDG 11
• SDG 12
• SDG 13

Techem contributes to these SDGs through its products and services, focusing on energy efficiency, water conservation, health and safety, gender equality, sustainable infrastructure, and climate action.

Sustainable Products & Innovation

• Heat pumps
• Smart metering systems
• Digital Boiler Room
• adapterm smart heating control system
• Multi-sensor devices (smoke alarms)

Awards & Recognition

• HR Energy Award (2022)