Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability and conservation of resources
• Corporate Social Responsibility (CSR)
• Environmental protection

Environmental Achievements

• Reduced CO2 emissions of the Volkswagen Group’s new European passenger car fleet to 115 grams per kilometer (2014).
• Volkswagen Group aims to cut the average CO2 emissions of its new European passenger car fleet to 120 grams per kilometer by 2015.
• Volkswagen Group reduced CO2 emissions over the past five years by 25 grams of CO2 per kilometer to 126 grams of CO2 per kilometer.

Social Achievements

• Volkswagen Group’s headcount increased by 3.5% to 592,586 employees (2014).
• Focus on employee training, graduate development, advancement of women, family-friendly HR policies, preventive healthcare, and occupational safety.

Governance Achievements

• Volkswagen Group is committed to transparent and responsible corporate governance.
• Porsche SE has implemented an internal control and risk management system relevant for the financial reporting process.

Climate Goals & Targets

Environmental Challenges

• Litigation risks and legal disputes (various legal proceedings in the USA, Germany, and England).
• Tax matters (tax field audits for assessment periods 2006-2008 and 2009-2013).
• Risks relating to the business development (closely connected to risks relating to the significant investment in Volkswagen AG).

Mitigation Strategies

• Adequate provisions recognized for foreseeable litigation risks.
• Necessary measures implemented to execute the contribution transaction in accordance with tax rulings.
• Regular valuations of investments to detect impairment at an early stage.
• Premature refinancing of the revolving credit facility in 2014.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Employee interests
• Compliance
• Sustainability

Social Achievements

• Employee retention initiatives

Governance Achievements

• Updated rules of procedure and requirements profile for the supervisory board to align with new statutory requirements (FISG)

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic
• Global semiconductor shortage
• Supply chain disruptions
• Legal proceedings (diesel issue, investment increase in Volkswagen AG)

Mitigation Strategies

• Partnership with Bridgepoint Advisers for PTV development
• Adequate provisions for legal risks
• Digital communication channels for investor relations

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: German Corporate Governance Code (GCGC)

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

Environmental Metrics

ESG Focus Areas

• Environmental matters
• Employee-related matters
• Social matters
• Respect for human rights
• Anti-corruption and bribery matters

Social Achievements

• Implemented measures to protect employee health during the Covid-19 pandemic (testing, vaccination, remote work optimization, protective measures)
• Implemented a modern workplace concept in accordance with ergonomic and health and safety recommendations
• Created a corporate culture based on mutual appreciation and respect, including protecting employee rights
• Offered employee health initiatives (occupational healthcare measures, medical examinations, prevention programs, fitness programs)
• Introduced a company pension scheme with employer-funded contributions and the possibility of employee-funded components
• Increased employee flexibility by introducing a permanent mobile working arrangement
• Provided individual development opportunities (internal and external training, workshops, conferences, subsidized in-service training, coaching, language courses)

Governance Achievements

• Implemented a compliance management system to manage compliance risks
• Established a dedicated legal affairs and compliance board of management function
• Set up a compliance council to monitor compliance and prevent breaches
• Developed and implemented a code of conduct binding for all employees
• Provided compliance training and information measures for employees
• Established communication channels for reporting suspected breaches of law, anonymously if desired

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Sustainable Value Creation
• Sustainable Corporate Governance
• ESG (Environmental, Social, and Governance) aspects
• Employee-related matters
• Compliance
• Climate Change Mitigation

Environmental Achievements

• Virtual Annual General Meeting (significantly lower CO2 impact than in-person event)
• Net carbon neutral office space (TÜV-certified green electricity, photovoltaic systems, combined heat and power plants)

Social Achievements

• No work-related accidents, injuries, ill health, or fatalities
• Attractive working environment, training, and professional development programs
• Flexible working time models (phased retirement, part-time arrangements, mobile working)
• Diversity initiatives (40.4% female employees)

Governance Achievements

• Successful refinancing measures (€4.7 billion total volume)
• Record Schuldschein loan (€2.7 billion)
• Successful bond placements (€2.0 billion total)
• Updated and revised remuneration system (including new ESG KPIs)

Climate Goals & Targets

Environmental Challenges

• Difficult economic situation (war in Ukraine, supply chain issues, inflation)
• Legal disputes (diesel issue, increase of investment in Volkswagen AG)
• Risks from investments (potential impairment losses, decreased dividend inflow)
• Risks from financing and financial instruments (interest rate risks, counterparty risks)
• Parts supply shortages
• Disruptions in logistics chains

Mitigation Strategies

• Extensive refinancing measures (Schuldschein loan, bonds)
• Consistent focus on investment grade profile
• Long-term aim for low double-digit loan-to-value ratio
• Regular monitoring of key figures and analyst assessments
• Interest rate hedging instruments
• Diversification of liquidity investments
• Internal control and risk management systems

Supply Chain Management

Responsible Procurement

• Sustainability standards defined in codes of conduct for investments

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Employee matters
• Compliance

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Improved ESG rating performance; Designation of an ESG expert on the supervisory board; Variable remuneration of the board of management supplemented by individual ESG targets; Code of Conduct with clear ESG principles implemented as part of Porsche SE's compliance; ESG forms an important part of the investment selection and in our due diligence

Climate Goals & Targets

Environmental Challenges

• High concentration of investments in terms of number and industries; Net debt position limiting dividend paying capability; Market valuation reflects potential liabilities from legal issues

Mitigation Strategies

• Acquisition of shares in Porsche AG added another strong asset to its portfolio; Establishing partnerships to increase dealflow for promising growth companies; Significant progress regarding the reduction of debt position; Favorable developments in legal issues based on some recent judgements

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Prime status by ISS ESG; MSCI removed red flag at Volkswagen