ESRS E2 – Pollution

The KION Group manages the material topic of ‘Pollution’ in the context of the ‘Climate and energy’ action field.

Material impacts and risks and their interaction with strategy and business model in relation to pollution (E2 SBM-3)

The double materiality analysis identified negative impacts and a risk in relation to pollution as material.

Raw material extraction and processing (negative impact)

Raw materials such as steel, iron, and other metals are contained in parts and products purchased by the KION Group and used in its products. The extraction of these raw materials generally has a relevant environmental impact, primarily air pollution, which is caused by the release of pollutants during the extraction and processing of raw materials in the upstream value chain. Nitrogen oxides, carbon dioxide, and carbon monoxide are some of the pollutants known to result from this process.

As a manufacturer of material handling equipment that relies on these raw materials, the KION Group has identified air pollution caused by the production of these materials and resulting from its business relationships as a material impact in the upstream value chain.

Pollution from logistics (negative impact)

Road transportation is a major source of air pollution, with carbon dioxide, particulate matter, and nitrogen oxides being the most relevant pollutants. The largest source of air pollution for the KION Group is the transportation of goods from suppliers to its sites (upstream), as well as transportation between its sites in its own operations. The transportation of goods is predominantly carried out by third-party logistics providers. Pollution from the KION Group’s own vehicle fleet was also taken into account but was deemed not material due to the low mileage and transported weight. It is estimated that the bulk of transportation-related air pollution is attributable to third-party freight transportation providers. A smaller portion can be traced back to the Company’s fleet and the service vehicles that it uses.

Supply disruption due to potential ban of per- and polyfluoroalkyl substances (with some alternatives) (risk)

A potential ban on perfluoroalkyl and polyfluoroalkyl substances (PFAS) by the European Commission under REACH Annex XVII represents a material risk for the KION Group, as this decision could substantially affect several components in its products. A potential lack of alternatives – from a technical and financial perspective – to PFAS or to the purchased components that might be affected by a ban could disrupt supply due to bottlenecks and thus negatively impact on the Group’s productivity. There is also the risk of lost revenue and/or fines. The probability of this risk occurring depends on future decisions reached by the European Commission and on how soon technically and financially viable alternatives are available in the supply chain.

A complete ban and the limited current availability of alternatives for components with PFAS could lead to some of the KION Group’s products being excluded from its product portfolio. Higher maintenance costs and production downtime due to limited availability of parts are also possible. Depending on the nature and scope of future regulatory restrictions on PFAS, impacts could materialize that vary in character and severity.

Policies related to pollution (E2-1)

Principles of Supplier Conduct

The KION Group Supplier Code of Conduct, which was updated in 2025, outlines binding environmental, ethical, social, data protection, and IT security requirements for all suppliers worldwide. It was extensively revised in order to reflect enhanced regulatory requirements and sustainability standards.

The updated version addresses the requirements of the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) and the extensive human rights due diligence responsibilities thereunder. Furthermore, additional guidance on adhering to and monitoring environmental rules in the upstream value chain was added to the KION Group Code of Compliance. This includes compliance with statutory provisions, including EU REACH, EU POP, and US TSCA, when delivering products to the KION Group. The KION Group expects suppliers to actively identify and reduce the use of hazardous materials as part of their commitment to greater product and environmental responsibility. This guidance calls on the KION Group’s suppliers to proactively contribute to the conservation of natural resources for current and future generations through responsible environmental management.

Further details on the KION Group Principles of Supplier Conduct are available in the chapter ‘Policies related to workers in the value chain’.

KION Group Code of Compliance

The KION Group Code of Compliance (KGCC) sets out general principles for conduct that are binding for all employees and business partners of the KION Group. In the context of pollution, the KION Group strives to develop environmentally friendly products and business processes. The Group is also committed to protecting the environment and society by using eco-friendly manufacturing technologies. Furthermore, the KGCC demands compliance with regulations and the timely securing of required permits, and calls on all KION Group entities and employees to reduce pollution overall. The code also indirectly addresses the substitution and minimization of substances of concern by considering the latest technology standards, the best available and environmentally friendly methods, the use of safe products, and the reduction of pollution.

The scope of the KGCC includes upstream and downstream operations as well as the Group’s own operations. The CEO and Chief Compliance Officer are responsible for overseeing compliance.

Stakeholder groups, including employees and business partners, are involved in the regular review of the KGCC through central functions, such as the HR department with regard to human rights and the Procurement department with regard to supplier requirements. To ensure that the KGCC is effectively communicated, the KION Group conducts regular training sessions for employees and all new workers. Business partners are informed about the policy in various ways, depending on the type of relationship.

The KGCC is available to the public on the KION Group’s website at www.kiongroup.com/en/About-us/Compliance.

Health, Safety, and Environment Statement of Intent

The Health, Safety, and Environment (HSE) Statement of Intent is a policy that outlines the principles governing HSE. The key content of the policy, which applies upstream, downstream, and to the Group’s own operations, covers compliance with legislation and standards, aspects that promote an HSE culture, mandatory training and stakeholder engagement, impact assessments, and reporting and responsibilities.

The HSE Statement of Intent also covers the mitigation of negative impacts linked to the pollution of air, water, and soil, including prevention and control. It states that the KION Group, represented by the Executive Board of KION GROUP AG, is responsible for systematically pursuing efforts to reduce emissions and discharges into the air, on land, and into water. Furthermore, all business partners covered by the scope of this policy must comply with all national HSE legislation, relevant codes of practice, and industry standards that apply to the Group’s activities. The Group must provide a safe environment for anyone affected by its operations. This is to be achieved by identifying hazards and eliminating them, or reducing them to an acceptable level, in accordance with or exceeding applicable standards. The HSE Statement of Intent also calls for the assessment of the environmental impact of historical, current, and future activities.

Further details on the HSE Statement of Intent are available in the chapter ‘Policies related to climate change mitigation and adaptation’.

Health, Safety, and Environment Standard

The KION Group HSE Standard defines minimum requirements for all KION Group locations and entities with regard to HSE matters, in addition to local regulations and the requirements of relevant ISO standards, such as ISO 14001 for environmental management. The HSE Standard applies to all KION employees, temporary workers, and guests across all locations, including factories, sites, sales and service organizations, and individuals at customer sites. The standard also applies to contractors, such as companies or individuals, who provide services or products to the KION Group and its local sites on behalf of an external company.

The CPSO function is responsible for implementing and overseeing the standard. The HSE Standard is reviewed regularly, and at least once a year, by the central HSE function and the stakeholder functions. The KION Group’s workers were represented in the review and approval process for refining the standard by the HSE heads of the Operating Units and the HSE network.

With regard to mitigating negative impacts linked to the pollution of air, water, and soil, including prevention and control, the HSE Standard states that effective environmental management is essential to the KION Group. All local subsidiaries are called upon to control and reduce waste, emissions, and the use of hazardous substances in accordance with applicable national legislation and the ISO 14001 or equivalent standards. This includes water, water discharges, land use, noise, biodiversity, and vibration. Furthermore, as part of the ISO 14001 certification process, all local subsidiaries are required to maintain an environmental impact and aspect register, which is supported by environmental audits and highlights the impacts on the environment. The HSE Standard also requires subsidiaries to complete an environmental risk assessment to minimize or eliminate any environmental risks. The assessment of environmental risks must cover all local subsidiaries and any customer sites where KION employees work. Emergency planning for sites is also included, with the fundamental aim of avoiding accidents and emergency situations. The KION Group’s HSE Standard is available to the workforce in nine languages.

Actions and resources related to pollution (E2-2)

Supplier compliance program

The KION Group has been systematically collecting data on material compliance matters from its suppliers since 2022. In 2024 and 2025, the compliance program focused on the KION ITS EMEA Operating Unit. Its purpose is to collect compliance data on substances of very high concern (SVHCs) in goods according to Article 33 of the EU REACH regulation, as well as information relating to the Restriction of Hazardous Substances Directive (EU RoHS), to chemicals covered by the Toxic Substance Control Act (US TSCA), to Article 9 of the EU’s Waste Framework Directive (WFD), and to conflict minerals according to the US Dodd-Frank Act.

The compliance program was significantly expanded in previous years in view of the efforts made by governments around the world to regulate harmful substances such as PFAS. Besides KION ITS EMEA, the KION SCS Operating Unit’s suppliers that supply intermediate products in the North American market were additionally involved. In 2025, the number of suppliers included in the program was increased and the range of topics considered was expanded. Besides installing a further software module to record intermediate products and materials containing PFAS in its upstream value chain, the KION Group addressed other relevant topics. They include the requirements under the EU POPs Regulation regarding persistent organic pollutants, the issue of critical raw materials in the EU, metal procurement, and the handling of other conflict minerals (such as cobalt). As part of the PFAS initiative, suppliers from the Supply Chain Solutions segment were also involved in the relevant campaigns. The compliance program is to continue in the years ahead.

Through global supply chain compliance provider Assent, the KION Group asked upstream suppliers to provide specific chemical composition information for parts and components in the context of its compliance program.

The effectiveness of the program is monitored using the supplier response rate and Assent’s feedback report, which the procurement organization uses as a basis for following up with suppliers.

Reporting of substances of concern in KION Group products

Article 9 of the EU’s Waste Framework Directive (WFD) requires suppliers to provide information on SVHCs in articles or complex objects. This information is stored in the European Substances of Concern in Products (SCIP) database of the European Chemicals Agency (ECHA).

The KION Group submits SCIP notifications for the KION ITS EMEA Operating Unit based on the intermediate products that it purchases in the upstream value chain. Since 2024, the SCIP notifications have been automated using a direct interface to the ECHA’s EU system. They are monitored as part of the compliance process. Assent, an established external provider, creates and submits SCIP dossiers on behalf of selected subsidiaries for KION ITS EMEA. For the SCS segment, supplier surveys were carried out for the first time in 2025 in order to obtain information on intermediate products and components containing SVHCs using material numbers. In this way, the KION Group has been able to submit numerous simplified SCIP notifications, thereby increasing transparency. The information provided on substances of concern in articles gives the KION Group an informed basis for actions to substitute or reduce such substances. This indirectly contributes to a reduction in pollutants.

Development of actions to address upstream air pollution

Potential actions in relation to the new material topic of air pollution in the upstream value chain are currently being examined. As the KION Group does not directly control sources of air pollution in purchased materials, formulating a detailed roadmap is a complex task because all proposed actions have to be carried out in collaboration with suppliers. The first step is to obtain better data on materials associated with air pollution from key suppliers supplying such material to the KION Group’s subsidiaries.

Targets related to pollution (E2-3)

At the time of reporting, specific targets for pollution had not yet been set. Since SVHCs are a relatively new aspect, an initial in-depth analysis of relevant influencing factors and the definition of suitable metrics and scopes will be required. In addition, structured databases and the systematic collection of data will need to be established in order to create meaningful reference values and derive evidence-based targets from them. On the whole, quantitative targets can only be set to a limited extent at the moment due to a lack of options for substituting certain substances (e.g. lead alloys). In view of a potential future ban on PFAS, the KION Group aims to replace banned components where this is technologically and financially possible.

Metrics related to pollution

Metrics related to air pollution (E2-4)

With respect to air pollution, the KION Group identified material negative impacts in relation to its logistics infrastructure (upstream and own operations) (see ‘Material impacts, risks, and opportunities and their interaction with strategy and business model’). The air pollutants linked to the Group’s vehicle fleet were analyzed and an estimate was made for each substance. A comparison of the estimated amounts with the thresholds set by the European Pollutant Release and Transfer Register (E-PRTR) confirmed that no substance exceeded the defined threshold.

With regard to the material impacts of air pollution identified in activities linked to the extraction and processing of raw materials in the upstream value chain, the KION Group applies transitional provisions for value chain information.

Metrics related to substances of very high concern (E2-5)

The KION Group regularly records, assesses, and reports SVHCs contained in its products and product components to the ECHA’s SCIP database. This includes substances of very high concern linked to PFAS. Internal analyses conducted by the KION Group during the early stages of the public debate on a potential ban on PFAS showed that substances of very high concern are found in many purchased components and materials, and thus also in KION Group products. This includes electrical and electronic vehicle components, seals and hoses, lubricants, tires, and batteries. There are no alternatives available at present for individual components that are fully suitable from a technical or financial perspective. As it stands, a potential ban on PFAS would have a material financial impact, including on the KION Group.