Information unaudited Information ungeprüftGeneral information

As a financial institution with a long-term orientation, the LLB Group is committed to leaving an environment that is as intact as possible and stable social conditions for the coming generations. Sustainable business management is part of our performance mandate and corporate identity.

Liechtensteinische Landesbank Aktiengesellschaft (LLB) – founded in 1861 – is the longest-standing financial institution in the Principality of Liechtenstein. The Principality of Liechtenstein is our majority shareholder and pursuant to the “Gesetz über die Liechtensteinische Landesbank” (Law on the Liechtensteinische Landesbank – LLBG) holds at at least 51 per cent of the capital and voting shares. Our share has been listed on the SIX Swiss Exchange under the symbol LLBN (security number 35514757) since 1993. We have a banking presence in each of the market regions of Liechtenstein, Switzerland and Austria: Liechtensteinische Landesbank Aktiengesellschaft, LLB (Schweiz) AG and Liechtensteinische Landesbank (Österreich) AG. We also have two competence centres in the areas of Asset Management and fund services.

The Law on the Liechtensteinische Landesbank (LLBG) and the Öffentliche-Unternehmen-Steuerungs-Gesetz (Liechtenstein Law on the Control and Supervision of Public Enterprises – ÖUSG) form the essential foundations for the business activity of the LLB Group. Article 3 of the LLBG sets out the purpose of the bank and, as such, defines the core of our banking groupʼs business model. The aim of the Landesbank is therefore to operate in the sense of a universal bank, conducting banking transactions of all kinds at home and abroad. It is also stipulated by law that the business activities of the LLB Group are intended to promote the economic development of Liechtenstein, meet credit needs appropriately and enable customers to invest and manage their funds securely and profitably.

The “Beteiligungsstrategie der Regierung des Fürstentums Liechtenstein für die Beteiligung an der Liechtensteinischen Landesbank AG” (Participation Strategy of the Government of the Principality of Liechtenstein for the Participation in Liechtensteinische Landesbank AG) also stipulates that the LLB Group must conduct its business activities in accordance with ethical, social and environmental objectives. We fulfil this special obligation by offering a diverse portfolio of products and services, applying sustainable standards to our offerings, our infrastructure and procurement, and engaging broadly in society. As an employer, we are committed to a corporate culture that is characterised by partnership-based cooperation.

Bases for preparation

For many years, we have been providing transparency in the reporting on our sustainability efforts and the progress we have made in this regard. Up to the business year 2023, we prepared our sustainability report in accordance with the reporting standards of the Global Reporting Initiative (GRI). We are applying the requirements of the European Sustainability Reporting Standards (ESRS) for the first time with this Sustainability Statement. In accordance with the legislative provisions, the thematic focus is based on a double materiality assessment.

Reporting standard

We have prepared this Sustainability Statement in accordance with the following guidelines:

• Directive (EU) 2022/2464 as regards corporate sustainability reporting (hereafter referred to as the Corporate Sustainability Reporting Directive or CSRD);
• Delegated Regulation (EU) 2023/2772 as a supplement to Directive 2013/34/EU through standards for sustainability reporting (European Sustainability Reporting Standards = ESRS);
• Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088 (hereafter referred to as the Taxonomy Regulation) together with the supplementary implementing regulations.

The CSRD was incorporated into the Personen- und Gesellschaftsrecht (Liechtenstein Persons and Companies Act – PGR). Accordingly, the reporting also covers the content requirements of the PGR. We have not included any information in the Sustainability Statement based on other legislation or generally accepted standards for sustainability reporting.

We are also subject to the provisions of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (hereafter referred to as the Sustainable Finance Disclosure Regulation or SFDR) together with the supplementary implementing regulations. The reporting obligation under the SFDR is covered by our annual reporting on Principal Adverse Impacts (PAI) on sustainability.

Our own tool – the Regulatory Radar – ensures that we are always up to date with the latest legal developments and we document their implementation. External consultancy firms continually make the necessary adjustments to this tool based on current draft laws, regulatory requirements and definitive legal texts. The Group Regulatory Compliance organisational unit checks all entries, forwards them to the relevant departments for analysis and implementation and monitors their timely application within the LLB Group. Within the framework of sustainability regulation, we also work directly with external consultants to ensure that the relevant requirements are addressed and implemented.

Content of the report

The thematic scope of this Sustainability Statement is based on a materiality assessment conducted in accordance with the double-materiality principle. A detailed explanation of this process can be found in the Double materiality assessment section. As in the materiality assessment, the Sustainability Statement also takes into account the entire value chain of the LLB Group. The ESRS index in the appendices to the Sustainability Statement shows which disclosure obligations are covered by this report. The detailed quantitative disclosures on environmentally sustainable assets and environmentally sustainable assets in the area of nuclear energy and fossil gas in accordance with the Delegated Regulation (EU) 2021/2178 can also be found in the appendices.

Boundaries of the report

Our Sustainability Statement has been prepared on a consolidated basis. The scope of consolidation for the sustainability reporting is the same as for financial reporting (see chapter Scope of consolidation). Only reporting in accordance with the Taxonomy Regulation is carried out in accordance with the legal requirements on the basis of the regulatory scope of consolidation (see chapter EU Taxonomy).

When assessing the material impacts, risks and opportunities, we took into consideration the entire upstream and downstream value chain. As a result of our business model, we concentrate our strategies, measures, goals and key figures focus on our own business operations and the downstream value chain (see section Our value chain).

We have not withheld any information whatsoever on the grounds of intellectual property, know-how or innovation results. Furthermore, we have not made use of the exemptions provided for in Directive 2013/34/EU, which means that we have not withheld any information regarding upcoming developments or matters under negotiation.

Time horizons

As required by the ESRS, we use time horizons in the Sustainability Statement and in the upstream materiality assessment so that we can report in more precise detail on the impacts, risks and opportunities associated with the LLB Groupʼs business model:

• short-term time horizon – specified reporting period (01.01.2025 to 31.12.2025);
• medium-term time horizon – from the end of the short-term reporting period up to 5 years;
• long-term time horizon – more than 5 years.

These time horizons correspond to the horizons defined in the ESRS.

Assumptions and estimates

We prefer to use actual data in the sustainability reporting. If this is not available, data is estimated. Assumptions and estimates are particularly relevant in the calculation of greenhouse gas emissions (hereinafter referred to as GHG emissions). In the case of buildings that are not owned by the bank, we do not always have access to the data. In these cases, the data is estimated, for example on the basis of the number of employees and proxies (such as local electricity mix), by the myclimate foundation.

In the case of financed GHG emissions, we apply the calculation method by the Partnership for Carbon Accounting Financials (PCAF). The PCAF Data Quality Score for selected GHG values provides information on the data quality and transparency in showing the extent to which data is estimated. Since not all company disclosures for the business year 2024 are available at the time of our reporting, in the future the GHG value will be specified using the reported values. Detailed information on the methods used in the calculation, on assumptions and estimates as well as the resulting imprecision in the measurement, can be found in the Greenhouse gas emissions section.

The estimates used in the calculation of the financed emissions of our mortgage portfolio are imprecise. The calculation is performed by the consulting firm Wüest Partner AG, which uses a multidimensional model for this purpose. Missing data is estimated on the basis of building characteristics (e.g. floor area, energy carriers) or supplemented with data available in the public domain. In order to minimise the risk associated with estimates, the precautionary principle is generally applied (for example, if there is no information on energy carriers, stochastic simulation methods or a “worst-of” variant are used). The calculations are checked for plausibility by our internal experts

Sustainability in the business model and strategy

The “Beteiligungsstrategie der Regierung des Fürstentums Liechtenstein für die Beteiligung an der Liechtensteinischen Landesbank AG” (Participation Strategy of the Government of the Principality of Liechtenstein for the Participation in Liechtensteinische Landesbank AG) creates an express link between economic objectives and sustainability targets. Accordingly, in defining and implementing its corporate strategy, the LLB Group must assume its ethical and social responsibility towards its employees, business partners, clients and Liechtenstein society and adopt ambitious climate targets. We take these requirements into account with our business model and strategy.

Our business model

The LLB Group is characterised by a focused, client-oriented business model and a diversified earnings structure. We are a bank that cultivates a consistent approach to values, with an impressive range of technologically innovative products. The LLB Group has a very sound capital base and symbolises stability and security. International awards also testify that investment expertise in asset management is one of our great strengths.

Our business model is based on two highly profitable market divisions:

• The Retail & Corporate Banking division covers the universal banking business in the home markets of Liechtenstein and Switzerland. It has the entire range of banking and financial services at its disposal. We have traditionally attached special importance to the savings and mortgage lending business. In addition to this, the division offers private financial planning, company pensions as well as target group-oriented investment advice and asset management for assets up to CHF 0.5 million. The division also serves regionally oriented private banking clients in German-speaking countries (Liechtenstein, Switzerland, Germany).
• The International Wealth Management division focuses on private banking clients as well as institutional and fund clients. In the area of private banking, the focus is on the markets of Austria and the rest of Western Europe as well as on the growth markets of Central and Eastern Europe and the Middle East. In these regions we offer investment counselling, asset management, asset structuring, financing as well as financial and retirement planning. In the fund business and institutional client areas, our clientèle includes fiduciaries, asset managers, fund promoters, insurance companies, pension funds and public institutions. The focus here is on the markets of Liechtenstein, Switzerland and Austria.

We offer a wide range of banking products and services that are specifically tailored to the needs of our clients. Our modern bank branches and digital services enable us to offer comprehensive financial planning, occupational pensions as well as target group-specific investment advice and asset management. This not only promotes the confidence of our clients in our services, but also helps them achieve their financial goals and secure their assets (see chapter Markets & clients).

In addition to a positive and safe working environment, our employees benefit from continuous further training and opportunities for personal development. The LLB Group attaches great importance to promoting a good corporate culture that emphasises integrity and taking the long-term view. Our aim with this approach is to maintain the motivation and satisfaction of our employees at a high level, which, in turn, has a positive effect on service quality and customer loyalty. We also pay attention to the well-being of our employees by offering flexible working models and various company health programmes.

Looking at the bigger picture of our partners and NGOs as well as the wider public, we are involved in numerous social and ecological projects. Through targeted sponsoring activities, we provide support for initiatives with the aim of making a contribution towards sustainable development and prosperity in the region. Owners and investors benefit from the LLB Groupʼs transparent communication and solid financial base, which is characterised by a sustainable dividend policy and strong equity base. This enables to ensure stable returns over the long term and strengthen confidence in our bank.

We do not accept clients domiciled in markets which have regulatory barriers. Further information on our market divisions can be found in the Segment reporting of the LLB Group.

Our value chain

For sustainability reporting, we make a distinction between the upstream and downstream value chain and our own business operations. We understand our upstream value chain to be all those third-party services that we need to enable us to offer our products and services. These include our suppliers, in particular IT hardware dealers and external IT service providers, as well as consultancy firms. Responsibility for the procurement of these services lies with the Group Sourcing and Procurement organisational unit. Other financial institutions (especially banks) and central banks are important as sources of refinancing.

Our own business operations include all internal resources and processes that directly or indirectly serve to create economic value. Our resources include our banking infrastructure (buildings, IT hardware, company cars) as well as our employees. The internal functions that make a significant contribution to the creation of economic value include the Retail & Corporate Banking and International Wealth Management market divisions as well as the Corporate Center. This brings together all organisational units that coordinate, support and monitor Group-wide business activities, processes and risks (for example product management, asset management, finance, credit and risk management). These are supplemented by departments such as Marketing or Human Resources. Further details can be found in the Corporate center chapter.

The downstream value chain includes our banking products and services for various client segments and stakeholder groups. These include, on the one hand, savings and mortgage products, investment advice, asset management, financial planning and occupational pensions for Retail & Corporate Banking clients and, on the other hand, investment advice, asset management, asset structuring, financing, financial and pension planning for private banking clients as well as institutional and fund clients. In accordance with our statutory supply mandate, our diverse range of products and services makes appropriate provision for public and private borrowing needs and enables domestic and foreign clients to invest and manage their funds securely and profitably.

There are significant impacts, risks and opportunities for us particularly in the downstream value chain and in our own business operations. This is the reason why our sustainability strategy focuses on these two areas. Our upstream value chain is less important since, as a bank, we have a low consumption of resources compared to other industries. For example, GHG emissions from purchased goods and services as well as upstream transport and distribution account for less than 0.1 per cent of the LLB Groupʼs total emissions (for details see chapter Climate change mitigation).

Our strategy

Our corporate strategy ACT-26 is based on the guidelines set out in the “Participation Strategy of the Government of the Principality of Liechtenstein for the Participation in Liechtensteinische Landesbank AG”. ACT-26 comprises three core elements:

• Growth: Over the next five-year strategy period, the LLB Group will once again strive to significantly increase its business volume through a combination of accelerated organic growth and targeted acquisitions. The basis for this expansion is the security and stability of the LLB Group combined with award-winning investment expertise and investment performance for private and institutional clients. In retail and corporate banking business, we also want to expand our position in Liechtenstein and Switzerland, as well as in private banking in Germany (see chapter Markets & clients).
• Efficiency: We attach great importance to providing the best personal advisory services to our clients. For this purpose, we employ a hybrid advisory model that combines automation and digital availability with classical advisory services. The existing client platform will be continually modernised and the range of services will be expanded for all client groups. We will adopt an agile approach to be able to react quickly to the changing needs of clients. At the same time, we will also be streamlining, standardising and automating our core processes to increase efficiency and make the bank more scalable (see chapter Digitalisation).
• Sustainability: Sustainability has always enjoyed a high priority at LLB. Therefore, we have set ourselves the goal of becoming completely climate-neutral ten years earlier than most of our competitors. On the way to achieving this we will significantly reduce the greenhouse gas emissions of our banking operations and those of our client portfolios. In addition, we want to expand our range of ecologically and socially responsible products.

The core element of sustainability also contains a clear commitment to social and governance issues. This includes the support of the LLB Zukunftsstiftung (LLB Future Foundation), the commitment to society and economic development in the region as well as the claim to be a family-friendly and excellent employer. We are also committed to a value-oriented approach to corporate management, transparent corporate governance, comprehensive sustainability reporting, and clear guidelines and processes to promote equal opportunities within the company.

Overview of the sustainability strategy

We have set ourselves ambitious, quantitative targets in all core areas of our corporate strategy. The aim is to achieve the objective in the core area of sustainability in intermediate steps: by 2026, we aim to achieve a reduction of at least 30 per cent in GHG emissions in products and own investments¹ whilst in banking operations we will strive for at least 20 per cent. By 2030, we want to reduce our Group-wide GHG emissions by 55 per cent in banking operations, in products and own investments (see chapter Climate change mitigation).

We currently see the lack of availability and quality of data from our counterparties as a key challenge for our sustainability strategy. We need this data to enable us to calculate key performance indicators and monitor our target attainment. To improve this situation, we launched an internal ESG database in the reporting year, which we intend to further develop in the coming years (see section Risk management in connection with the reporting).

Another challenge is the potential trade-off between the objectives of two core elements of our strategy: sustainability and growth. We see loans as a particular area for this conflict. CO₂-intensive investment properties support our growth ambitions but at the same time drive up our financed GHG emissions. The Sustainability Team highlighted the problem in the reporting year and, together with the responsible Sustainability Streams, submitted recommendations for action. These were approved by the Group Executive Board in autumn 2024; the specific measures will be developed by the Sustainability Streams in 2025. The Group Board of Directors was informed of the course of action taken.

In the reporting year, we signed the purchase agreement to acquire 100 per cent of the shares in the Zürcher Kantonalbank Österreich AG, which has offices in Salzburg and Vienna. The acquisition, which is in line with the strategy, took place on 9 January 2025 as part of a share deal with the previous sole owner Zürcher Kantonalbank (ZKB) (for details see chapter Company acquisitions).

Interactions between business model, strategy and sustainability

Sustainability aspects are an inherent part of the LLB Groupʼs business model and strategy. Our aim is to make an active contribution towards environmental protection as well as to promote social justice and responsible corporate governance. In line with the Group directive “Nachhaltigkeit” (Group directive on “Sustainability”), we pursue the following objectives:

• to create added value for our stakeholders (including society as a whole);
• to identify actual and potential as well as negative and positive impacts on the environment and society and to reduce negative impacts;
• to identify, measure, assess and effectively manage risks in connection with sustainability aspects arising from environmental, social and governance matters and to minimise any negative impacts on the LLB Group, its clients and its employees;
• to identify and exploit opportunities in conjunction with sustainability;
• to draw on the latest scientific findings in the above points.

The key adjustments we have made in recent years, or are currently making, to our business model and strategy, are described in brief below. We provide information on specific strategies, measures and targets in the chapters on our key sustainability aspects “Economic role and regional employer”, “Climate change mitigation”, “Diversity and equal opportunities” and “Corporate governance and integrity”.

In the reporting year, we conducted a double materiality assessment at the level of impacts, risks and opportunities (IROs) for the first time. The following explanations therefore refer entirely to sustainability aspects and not to specific IROs. In the future we intend to conduct a detailed analysis of the interaction between IROs, business model and strategy. There are currently no financial impacts arising from risks and opportunities relating to the above-mentioned sustainability aspects. We are currently unable to make a more reliable assessment of the long-term effects.

1In a bank, the term “own investments” refers to the management of the bankʼs own financial resources. The aim of treasury activities within the framework of the management of the banking book is to reconcile the financial risks arising from the bankʼs business activities, in particular the liquidity, interest rate and foreign currency risks, with the regulatory provisions and internal requirements, and to generate an appropriate level of earnings in the process.

Expansion of the responsible product range

Negative and positive impacts as well as risks and opportunities arise from decisions as to which companies or projects we invest in, directly or indirectly, or for which companies and projects we provide finance. For this reason, over recent years we have significantly expanded our range of ecologically and socially responsible products. Our aim is to minimise negative impacts on the environment and society and to foster positive effects as much as possible. By reducing these negative impacts, we are simultaneously reducing those risks associated with aspects of sustainability for our clients. We concentrate on products and services which we consider contain a sufficiently high level of potential for effective sustainability management. These are LLBʼs own funds, asset management mandates and loans.

We have implemented a responsible approach to investment in the area of asset management and with our LLB funds, which takes into account ethical, social and environmental aspects. As part of this approach, we have defined strict exclusion criteria for individual investments in companies that do not meet our ethical standards (breaches of international and national standards, manufacture of controversial products). Furthermore, we deliberately select companies that demonstrate a specific minimum ESG performance (ESG rating of at least “BBB” from the rating agency MSCI). Further details on our responsible approach to investment can be found in the chapter Climate change mitigation. In recent years, we have also expanded our range of funds to include two impact funds. These invest in companies that are on a credible path to decarbonisation (passive funds, following the EU Paris-Aligned benchmark), as well as in renewable energy projects, climate-friendly mobility, green buildings and energy efficiency projects (green bonds).

In the reporting year, we finalised our lending concept, which aims to reduce GHG emissions in our loan portfolio. At the same time, we have readjusted our “Umwelthypothek” (environmental mortgage): since 2024, corporate clients have also been able to benefit from more favourable terms if they take account of energy efficiency during construction or renovation. Together with the assets in own investments, loans, LLBʼs funds and asset management mandates are included in the calculation of our financed GHG emissions. By 2026 the aim is to have achieved a reduction in emissions of at least 30 per cent. Information on our progress in this area can be found in the chapter Climate change mitigation.

We are aware of that other types of products and services can also have a significant impact on environment and society. Investment advice, pure execution transactions (“execution only”) and private label funds are worth particular mention here. In view of our limited influence in this context, we have not taken these services and products into account in our sustainability strategy and in the calculation of our financed GHG emissions. Whilst we have the decision-making authority for loans and LLBʼs own funds, we always take into account for example our clientsʼ individual sustainability preferences in investment advice. In the case of execution-only transactions and private label funds, the decision-making authority lies solely with our clients. The potential for effective sustainability management is correspondingly limited.

Banking operations

In recent years, we have made numerous adjustments to our own business operations to minimise the negative impact on the climate. For example, for many years in Liechtenstein we have had a mobility management system that creates incentives for green mobility. Employees receive financial support if they switch to public transport to get to work or forego their own car parking space. Within our regulations on expenses, we encourage the use of public transport for business trips. We also mainly rely on green electricity from renewable energy sources (e.g. wind, solar, hydropower) in our own buildings.

Attractive employer

As a services company, we are particularly dependent upon qualified and motivated employees. In order to remain attractive to job seekers in the future, we attach great importance to a modern working environment. Numerous measures are aimed at attracting qualified applicants for vacancies and the long-term retention of existing employees. These include the promotion of good health in the workplace, enhancing the quality of the workplace and providing more flexibility in terms of working hours and location. In order to gauge employee satisfaction and to identify any need for improvement, we conduct comprehensive employee surveys in the companies of the LLB Group and define ambitious follow-up measures.

Integration of sustainability into risk management

We continue to press ahead with the integration of ESG risks into the risk management process. These risks can have a negative impact on profitability as well as reputation and consequently on the enterprise value of the company or the value of loans, investments or deposits. They can also have a correspondingly adverse effect on the asset, financial as well as earnings position of the LLB Group. As part of an ongoing project, we ensure that ESG risks are systematically identified, assessed, managed and monitored in the future in order to strengthen the resilience of the LLB Group in the long term and at the same time to meet all the relevant regulatory requirements. Until this project has been completed we are unable to provide any reliable information on the long-term financial consequences of climate risks (including potential stranded assets²) on our portfolios.

Resilience of business model and strategy

In order to test the resilience of our business model against climate risks, in 2024 we conducted a climate scenario analysis for our investment portfolio (LLB funds, asset management mandates, Treasury) (For details see chapter Climate change mitigation). In the future we intend to extend the resilience analysis to other areas of the company and themes.

LLB Group employees

As of 31 December 2024 we had 1ʼ501 employees, of whom 932 were in Liechtenstein. This makes us one of the largest employers in Liechtenstein. Our employees primarily come from our defined target markets of Liechtenstein, Switzerland, Austria and Germany.

Employees by geographic region

Membership of industry initiatives

Membership in various industry initiatives forms a central component of our sustainability strategy. This enables us to put forward our ideas to the financial industry and get a valuable impetus for the continued development of our sustainability management. As of 31 December 2024, we are a member of the following initiatives:

2According to the “FMA Guidelines on Dealing with Sustainability Risks” from the Austrian Financial Market Authority, stranded assets are assets “whose earning power or market value decreases dramatically and unexpectedly, in extreme cases to the point of being rendered worthless. For example, a power plant that can no longer be operated due to changes in regulatory conditions such as energy efficiency criteria, or an oil or gas field, the development or use of which is no longer profitable or no longer permitted." (Document No. 01/2020, P. 15, Footnote 37).

• The United Nations Net-Zero Banking Alliance (NZBA): the aim of the Alliance is to drive forward and provide finance for the economic transformation in order to reach net zero by 2050 at the latest.
• Principles for Responsible Banking (PRB): the PRB is an initiative for responsible banking and provides a single framework for a sustainable banking industry. It was developed as part of an innovative partnership between banks around the world and the Finance Initiative of the United Nations Environment Programme.
• The Climate Pledge: the Climate Pledge is a voluntary commitment to implement the Paris Climate Agreement ten years earlier and consequently be CO₂ neutral by 2040.
• Principles for Responsible Investment (PRI): the aim of the United Nations Finance Initiative is the responsible management of securities.
• UN Global Compact: as a United Nations initiative, the UN Global Compact pursues the vision of an inclusive, sustainable global economy that benefits all people, communities and markets. To make this happen, it provides support for companies to pursue a responsible approach to doing business on the basis of ten universal principles, covering, amongst other things, human rights, labour standards, environmental protection and anti-corruption practices.

In addition, we have been a partner of the Swiss Climate Foundation since 2012. We consequently belong to a group of partner firms that pool their resources to provide uncomplicated and efficient support to small and medium-sized enterprises (SMEs) in Switzerland and Liechtenstein in the implementation of their courses of action.

Sustainability governance

In 2022 we established our own governance structure for sustainability. It facilitates the efficient implementation of the sustainability strategy and ensures that sustainability aspects are taken into account at all hierarchical levels.

Sustainability governance is regulated in the Group directive “Nachhaltigkeit” (Group directive on “Sustainability”). It also describes how we deal with certain sustainability risks, in particular greenwashing risks. We apply the provisions of the Sustainability directive to our own business operations as well as to our upstream and downstream value chains.

Overview of our sustainability and governance structure (as at 31.12.2024)

Role of the Group Board of Directors

The Group Board of Directors is made up of seven persons. On the basis of their education, professional background and experience, the members contribute various complementary skills and abilities. One area of focus is on the specialist knowledge of the financial services industry as well as knowledge of the Liechtenstein economy and corporate management. All Board of Directors members are non-executive members. In accordance with the “Richtlinie betreffend Informationen zur Corporate Governance” (Directive on Information relating to Corporate Governance), they are independent. With two women on the Board, the proportion of women was 29 per cent at the end of 2024. The employees of the LLB Group are not represented on the Board.

Sustainability-related responsibilities

The responsibilities of the Group Board of Directors of the LLB Group are set out in the Group directive “Nachhaltigkeit” (Group directive on “Sustainability”). Within the framework of the regular strategy periods, it adopts the strategic guidelines (sustainability strategy), approves strategically relevant decisions as well as the annual Sustainability Statement as part of the management report within the LLB Groupʼs annual report. The following subcommittees of the Group Board of Directors deal with various aspects of sustainability in accordance with the Group directive “Nachhaltigkeit” (Group directive on “Sustainability”):

• The Group Audit Committee deals with the supervision and control of the sustainability reporting, including the associated risks.
• The Strategy Committee advises on the adjustment to the current sustainability strategy.
• The Group Risk Committee informs the Group Board of Directors about sustainability risks.
• The Group Nomination & Compensation Committee ensures that sustainability is incorporated into the incentive systems.

To enable them to effectively perform their monitoring function, the members of the Board of Directors receive a written update every six months on the progress made in implementing the corporate strategy. This strategy briefing also includes measures to achieve the sustainability targets. In the course of its regular meetings, the Group Board of Directors deals with sustainability issues at least once a year; additional ad hoc meetings are held as required. It is kept informed about the development and status of the implementation of the sustainability strategy by the Group Executive Board, Group Corporate Communications & Sustainability or the relevant specialist departments. In the reporting year, the Group Board of Directors or the relevant subcommittees dealt with the following impacts, risks and opportunities:

• operational GHG emissions as part of the strategy update;
• financed GHG emissions for own investments and mortgages within the framework of the Risk Report;
• positive impacts on the climate through planned financing solutions;
• status quo of the implementation of our diversity strategy, including relevant indicators for impacts, risks and opportunities;
• risks associated with the sustainability reporting (in particular data availability and quality).

For the first time, in 2024, we conducted a double materiality assessment in line with the ESRS. We have accordingly not yet implemented specific controls and procedures for managing the impacts, risks and opportunities identified. The Group Board of Directors and the Group Audit Committee were informed about the results of the materiality assessment and the process behind it (for details see section Double materiality assessment).

In addition, the Group Board of Directors was informed in the reporting year about the possible conflict between the LLB Groupʼs economic growth targets and its sustainability ambitions (see section Our strategy). As required, the Group Executive Board reports on the follow-up measures still to be defined and their effectiveness.

Sustainability-related expertise

The members of our Board of Directors have expertise in the regulatory requirements in the field of sustainability:

• Georg Wohlwend: the Chairman of the Board of Directors initiated an internal LLB training course on the regulatory requirements for sustainability, which he attended on 22 November 2024. The focus was on scientific bases, political goals and measures, the strategic orientation of the LLB Group as well as the latest legal and regulatory developments and challenges. When selecting the topics, care was taken to cover all aspects relevant to banks in terms of potential impacts, risks and opportunities.
• Dr. Richard Senti: thanks to his work in the heating, air conditioning and ventilation industry, Vice President Dr. Senti has extensive experience in the areas of energy and energy efficiency. At the Board of Directors and Executive Board level of a Liechtenstein heating and ventilation manufacturer, he is also the driving force behind the preparation of the Sustainability Statement. On 22 November 2024, he completed the internal LLB training course on the regulatory requirements for sustainability.
• Dr. Nicole Brunhart: she was the Sustainability Lead at a global asset management company and a member of the Sustainability Steering Committee of a liquidation and management company. She also took part in various working groups of the Asset Management Association Switzerland (AMAS) and Swiss Sustainable Finance (SSF) – including on the topics of “Transparency and disclosure of sustainability-related collective assets” and “Swiss Climate Scores”. Dr. Nicole Brunhart attended the internal LLB training course on the regulatory requirements for sustainability on 22 November 2024.
• Leila Frick-Marxer: she completed the internal LLB training course on the regulatory requirements for sustainability on 22 November 2024.
• Thomas Russenberger: he also attended the internal LLB training course on the regulatory requirements for sustainability on 22 November 2024.
• Dr. Karl Sevelda: based on his role as CEO of a major Austrian bank, he is familiar with the potential impacts, risks and opportunities of a bank in relation to sustainability aspects. Dr. Karl Sevelda attended the internal LLB training course on the regulatory requirements for sustainability on 22 November 2024.
• Dr. Christian Wiesendanger: up to 2020, he was responsible for the global development and maintenance of all sustainability investments in the global wealth management business at a major Swiss bank. In 2022 and 2023, he was the driving force behind the preparation for the issuance of green bonds at a Swiss real estate company. Dr. Christian Wiesendanger attended the internal LLB training course on the regulatory requirements for sustainability on 22 November 2024.

Targeted training and information ensure that a knowledge of sustainability is continually developed within the Group Board of Directors. In addition, internal experts are available to the members of the Board of Directors to help with specific enquiries on sustainability issues. We are currently focused on a comprehensive build-up of knowledge and do not yet focus on specific impacts, risks and opportunities.

Role of the Group Executive Board

The Group Executive Board, comprising four men and one woman (see chapter Corporate governance), is responsible for the implementation of the sustainability strategy and informs the Group Board of Directors at least once a year on the corresponding progress. In addition, the core element of sustainability is dealt with in depth as part of the annual strategy meeting of the Group Board of Directors. In the reporting year, the Group Executive Board and the heads of the Sustainability Streams (see section Sustainability Streams) received in-depth training on the key aspects of the regulatory requirements for sustainability (e.g. Corporate Sustainability Reporting Directive, European Sustainability Reporting Standards, EU Taxonomy, Sustainable Finance Disclosure Regulation).

All members of the Group Executive Board, the CEOs of LLB Schweiz and LLB Österreich as well as the Head of Group Corporate Communications & Sustainability are represented on the Sustainability Council. This Council is the central body for our sustainability governance and defines the sustainability strategy as well as the associated goals. Its members are required to monitor the implementation of the sustainability strategy within the scope of their respective areas of responsibility. The Council meets at least three times a year; ad hoc meetings can be held as required. Resolutions must be subsequently adopted or rejected by the Group Executive Board.

At the meetings of the Sustainability Council, the Group Corporate Communications & Sustainability organisational unit or specialist departments provide information on the status quo of the implementation of the sustainability strategy. Decisions of strategic relevance are discussed, work assignment formulated and delegated directly to the Sustainability Streams. In the reporting year, the Sustainability Council dealt with the following impacts, risks and opportunities, among others:

• operational and financed GHG emissions, including mitigation measures (mobility concept, lending concept);
• risks associated with the sustainability reporting (in particular data availability and quality).

As with the Group Board of Directors, the Group Executive Board dealt with potential trade-offs between the LLB Groupʼs growth targets and its sustainability ambitions (see section Our strategy). The Group Executive Board is kept regularly informed by the responsible Sustainability Stream about the follow-up measures yet to be defined as well as their effectiveness.

The Group Corporate Communications & Sustainability organisational unit also regularly reports to the Group CEO on the progress and challenges in implementing the sustainability strategy as part of a jour fixe.

Group Corporate Communications & Sustainability

This organisational unit is responsible for the coordination and communication between the Sustainability Council and the Sustainability Streams. The Streams are responsible for the operational implementation of the sustainability strategy and regulatory requirements. Group Corporate Communications & Sustainability also regularly informs the Sustainability Council and the Group Board of Directors on the status of the implementation of the sustainability strategy.

The role of the Sustainability Officer is part of Group Corporate Communications & Sustainability. They possess specific knowledge of sustainability and, together with other employees from this organisational unit and other departments, make up the Sustainability Team. Their tasks include, amongst other things, a regular exchange of information with the Sustainability Officers of the Group companies.

Group Corporate Communications & Sustainability also coordinates the Green Teams. In these teams, employees can contribute their own ideas and take on project responsibility and so help to actively shape the sustainable future of the LLB Group. Our aim in this is to tap into the creativity of our employees in order to find innovative solutions that would otherwise not be found through a top-down only approach. The Sustainability Team selects the participants for the Green Teams and participates in their coordination.

Sustainability Streams

The leads of our eleven Sustainability Streams are responsible for implementing the regulatory requirements for sustainability and the defined objectives of the sustainability strategy in their business area. Strategies are defined for individual areas and these are explained in detail in the chapters on the key sustainability aspects.

The Stream leads must ensure participation by the Group companies and that there is a regular interchange of views and ideas on current topics. As part of their operational activities, they are also responsible for ensuring that the necessary budget and resources for the implementation of the regulatory requirements for sustainability and sustainability strategy are available in their respective business areas. To ensure that the Stream leads can effectively exercise their responsibility, in the reporting year they received training on the key aspects of the regulatory requirements for sustainability.

Group Regulatory Compliance acts as a sustainability control body on a Group-wide basis. This role includes a regular interchange with the Group companies and also checks on the status of their implementation of the regulations. As part of its compliance reporting, the business unit reports on audits which have been conducted as well as on the findings and any breaches. With the help of the Regulatory Radar, Group Regulatory Compliance monitors the regulatory requirements in terms of sustainability, the allocation to the departments responsible and the implementation of the sustainability measures.

Sustainability Streams of the LLB Group

The leads of the Sustainability Streams meet regularly under the leadership of the Sustainability Team to report on their current status and coordinate their activities. An individual exchange is also held between the Sustainability Team and each individual lead. The Stream leads keep the Sustainability Council and, via Group Corporate Communications & Sustainability or the Group Executive Board, also the Group Board of Directors up to date on all relevant topics.

Sustainability-related due diligence

Due diligence with regard to potential negative sustainability impacts is the responsibility of the eleven Sustainability Streams (see section Sustainability Streams). The methods used in this context differ according to the subject area. Details can be found in the chapters on the material sustainability aspects.

Core elements of due diligence

Dialogue with stakeholder groups

For us, sustainability as a corporate responsibility means meeting the expectations of the various internal and external stakeholder groups. We are in regular dialogue with the various stakeholders who influence our business activities and over whom we have influence – in person, via electronic media, at information events or at work meetings and conferences. We also involved our stakeholder groups in the materiality assessment process and took their concerns into account accordingly (see section Double materiality assessment). Their interests are also incorporated into the process of fulfilling our due diligence obligations.

In the reporting year there was no change in our sustainability strategy as a result of feedback from our stakeholders. We take the results of our consultation processes into account when defining measures – for example, through the initiatives we have taken as a result of the employee survey (see chapter Diversity and equal opportunities). The Group Executive Board is kept continually informed about the input from the stakeholder channels by the departments responsible. The Group Audit Committee is incorporated into the materiality assessment process and in this way learns more about the concerns of our stakeholder groups. The Group Board of Directors is then informed of the results and the materiality assessment process.

Clients

We use various channels – for example within the context of surveys – to record client needs and satisfaction levels. Complaints can be recorded via the regulatory complaints management system. Client advisers also have the option of documenting client satisfaction in the Avaloq core banking system.

Employees

Our employees also have various channels at their disposal through which they can express their concerns. These include regular employee surveys, the Representation of Employees of the LLB headquarters in Vaduz, the works council of LLB Österreich or our whistleblowing tool (see chapter Diversity and equal opportunities).

Partners and NGOs

We maintain dialogue with partners and non-governmental organisations (NGOs) through our membership of associations and clubs. These include, for example, the Liechtensteinische Bankenverband (Liechtenstein Banking Association – LBV) and the Liechtensteinische Industrie- und Handelskammer (Liechtenstein Chamber of Industry and Commerce – LIHK). As part of charitable campaigns, we often work in cooperation with local NGOs, such as the Liechtensteinischen Gesellschaft für Umweltschutz (Liechtenstein Society for Environmental Protection – LGU).

The public

We also maintain contact with the media and business journalists in our market regions, separate to ad hoc publicity and the annual report and analystsʼ press conference. We make every effort to answer their questions in a transparent and timely manner. As the organiser or sponsor of various events, we strengthen our relationship with the local population.

Owner and investors

The Principality of Liechtenstein is our majority shareholder. We maintain a regular dialogue with representatives of the Government and the Landtag (Parliament). We have an obligation to inform the Principality of Liechtenstein about the course of business. Against this backdrop, a meeting is held twice a year between the senior management of the LLB Group and the Liechtenstein Head of Government. The Chairman of the Group Board of Directors takes on board any suggestions made by the Government during the course of these discussions. Once a year, the Group Board of Directors and the Group Executive Board invite the entire Government to a roundtable discussion. Like all core elements of our ACT-26 corporate strategy, the subject of sustainability is also addressed at this discussion.

Sustainability-related remuneration policy

By law, the Group Board of Directors is responsible for the overall management of the bank. The Group Nomination & Compensation Committee provides support for the Board in, among other things, the design of remuneration policy and incentive systems. The remuneration structure of the LLB Group is designed in such a way that it does not offer any incentives for excessive risk-taking in the area of sustainability. Specific ESG elements currently do not form part of LLBʼs general remuneration policy.

The remuneration for the Group CEO is an exception to this rule. As described in the Compensation report, the Group CEOʼs salary comprises a fixed basic salary and a variable portion. In this context, the Group CEO has a total of five individual performance targets. One of these targets contains an ESG-related component. Among other things, the Group CEO is responsible for the successful implementation of the sustainability strategy, which also includes the target of achieving net-zero emissions by 2040 at the latest. We are not yet able to provide exact details in percentage terms for the climate-related pay incentives in the reporting year because the data on which the measurement of target achievement is based has up to now been considered too uncertain. The remuneration policy for the management bodies is approved by the Group Board of Directors.

Risk management in connection with the reporting

In accordance with the LLB Groupʼs directive “Nachhaltigkeit” (Group directive on “Sustainability”), the overall coordination of sustainability reporting lies with the Group Corporate Communications & General Secretary organisational unit. The entire reporting process, including specific responsibilities, is set out in the Reporting Manual for the Sustainability Statement. For most material topics (“Climate change mitigation”, “Diversity and equal opportunities”, “Corporate governance and integrity”), there are instructions listing the most important qualitative and quantitative data points as well as the associated determination process or the necessary calculation steps. All key figures are calculated at Group level; various departments are responsible for the consolidation. Details can be found in the chapters on the material sustainability aspects.

There are various risks associated with the sustainability reporting. These risks are assessed and prioritised on an ongoing basis by the experts of the Group Corporate Communications & Sustainability organisational unit and project teams (CSRD, EU Taxonomy). These are experience-based, qualitative expert assessments. In the reporting year, the Sustainability Council, the Group Board of Directors and individual members of the Group Executive Board were informed of the key risks and mitigating measures adopted.

Key challenges

We have identified the availability and quality of counterparty data as a key challenge. To enable key performance indicators to be calculated, in particular financed GHG emissions and the Green Asset Ratio, we rely on third-party providers to collect and process this data. As at the time of the report, the full information is not yet available. We have also identified incorrect and contradictory data as part of follow-up and plausibility checks. These circumstances may impair the quality of the calculated performance indicators and represent both a legal and a reputational risk for the LLB Group. We currently assess these risks as financially immaterial.

For this reason, we made additional efforts in the reporting year to improve data availability and quality. Of central importance in this respect is the LLBʼs internal ESG database, which we implemented in 2024 and which we intend to develop further over the coming years. In the first step, it covers the GHG data for own investments, LLBʼs own funds and asset management. Among other things, our system detects statistical outliers (see chapter Climate change mitigation). We also carry out manual spot checks and maintain regular communication with external data providers. A guide to the calculation of GHG emissions and a Taxonomy guide ensure that there is a uniform understanding and uniform calculation of performance indicators throughout the Group.

In order to calculate our operational GHG footprint, we rely almost exclusively on actual data. There is a residual risk due to a lack of data for individual company buildings. We use estimates to assist us in this. However, we consider the overall risk as low and have therefore not implemented any mitigating measures.

By involving two external consultancy firms and the companyʼs expertise in sustainability reporting, we ensure that we meet all the essential requirements for the Sustainability Statement. The LLB Group has also developed and implemented a set of rules to minimise the risks of greenwashing. The Sustainability Statement is also subject to these requirements. The Group Executive Board and the Group Board of Directors are kept informed about relevant developments.

Comprehensive approvals process

The quality of the sustainability reporting is ensured by a comprehensive approvals process. This Sustainability Statement was implemented as part of a Group-wide project under the responsibility of the Group CFO. Numerous members of the senior management are represented on the responsible Steering Committee, including the Head Group Finance, the Head Group Corporate Communications & Sustainability and the Head Group Regulatory Compliance. The Chairpersons of the Steering Committee are informed about the progress of the project every two weeks. In the future, we plan to anchor the multi-stage approvals process in various departments and to document it accordingly in the Reporting Manual for the Sustainability Statement.

In accordance with our Group directive “Nachhaltigkeit” (Group directive on “Sustainability”), the Group Audit Committee is responsible for supervising and monitoring the reporting on sustainability. This is the reason why it has addressed the subject of sustainability reporting on multiple occasions. The report findings are presented by the Group Audit Committee to the Group Board of Directors which in turn approves the Sustainability Statement as part of the management report within the LLB Groupʼs annual report. There are no plans for regular reporting to the Group Executive Board and the Group Board of Directors on the above-mentioned material risks of the reporting on sustainability. Both bodies are kept informed of relevant developments.

Double materiality assessment

The key tool for determining our most significant impacts, risks and opportunities is the materiality assessment, which we conducted for the first time in 2022 in accordance with the principle of double materiality; in doing so, we adhered to the requirements of the Non-Financial Reporting Directive (NFRD). The first materiality assessment in line with the new European Sustainability Reporting Standards (ESRS) was carried out between October 2023 and August 2024.

We plan to conduct a comprehensive materiality assessment during a strategy period and in the intervening years to review whether there are any grounds for adjusting the scope of the material impacts, risks and opportunities due to changes in the external environment or in our own business model.

In the future, the results of the materiality assessment will be taken into account in the management of material sustainability aspects. The ESRS define sustainability aspects in relation to the environment, social responsibility and governance that are potentially of importance for a companyʼs strategy and management (e.g. climate change, environmental pollution, own workforce). The sense and purpose of the materiality assessment is to identify those aspects of sustainability that are to be classified as material in terms of their impacts, risks and opportunities:

• Materiality of the impacts: a sustainability aspect is deemed material in terms of impact if it is accompanied by significant actual or potential positive or negative impacts of a company on people or the environment. Short-, medium- or long-term time frames have to be taken into account in this context.
• Financial materiality: a sustainability aspect is deemed material from a financial point of view if it is associated with significant risks and opportunities for the company. This is then the case if risks and opportunities have a material impact on the companyʼs development, financial position, financial performance, cash flows, access to finance or cost of capital within short-, medium- or long-term time frames, or if such effects are to be anticipated.

The extent to which the identified impacts, risks and opportunities are to be included in the management of sustainability aspects in the future will be examined on an individual basis and take various factors into account.

Themed areas taken into consideration in the assessment

The starting point for our first materiality assessment in accordance with ESRS requirements was the long list of potentially material sustainability aspects that we identified for our last materiality assessment in 2022. We have added further aspects to this list, adopted from legal requirements (e. g. ESRS), reporting standards (GRI, SASB), internal documents, media screenings and market observations.

With the help of a quantitative approach, we assessed whether the topic is material or not. The potential materiality was also guided by our value chain. We then bundled the sustainability aspects into a shortlist. For each shortlisted theme, we have defined negative and positive impacts, risks and opportunities (IROs). Where available, we have collated the results of our processes (such as employee surveys or annual PAI screening) for preserving due diligence in relation to sustainability and assigned these to individual IROs. These included, for example, operational GHG emissions, personnel key figures or PAI indicators.

We have assigned the defined IROs to the specific position in our value chain (upstream, own business operation, downstream). We have also drawn a distinction between direct and indirect business relationships:

• We maintain direct business relationships with our suppliers and external service providers (upstream value chain) as well as with our clients (downstream value chain); direct investments can also be assigned to this category (downstream value chain). We exert a direct influence here.
• Indirect business relationships involve companies in which we invest for our clients, for example in the context of asset management or investment advice (downstream value chain). We can only exert an indirect influence here, for example in the event of a divestment due to changes in our clientsʼ sustainability preferences.

We took both types of business relationships into account in the materiality assessment. In the reporting year, we were unable to conduct a materiality assessment for transactions with external asset managers due to the lack of data.

Selection and representation of the stakeholder groups

The key stakeholder groups were involved in the determination of the material impacts; we have based our selection on past annual reports. We also conducted an industry comparison and took into account the corresponding ESRS requirements in order to identify potential further stakeholder groups. An analysis of the potential stakeholders and their relationship with the LLB Group was conducted in conjunction with an external firm of consultants. As a result, we prioritised five groups and classified four groups as less significant.

We have directly incorporated the “Owners and investors” and “Partners and NGOs” stakeholder groups into the materiality assessment process. As the main shareholder, the views of the Principality of Liechtenstein were polled in a focus interview. Representatives of partners and NGOs were selected on the basis of their knowledge of the societal or ecological context in which the LLB Group operates and were also invited to focus interviews.

The “Clients”, “Employees” and “General public” stakeholder groups were indirectly represented within the context of internal stakeholder workshops: the employees by the Liechtenstein Representation of Employees, the Austrian works council and an employee of LLB Schweiz; clients through employees in contact with clients (in particular, sales); the general public through employees of the Group Corporate Communications & Sustainability Department. By involving the employees, we ensured that both the interests of the workforce and human rights issues were taken into account within the LLB Group.

In addition, managers who were able to provide a qualified assessment of the relevant impacts, risks and opportunities on the basis of their expertise and years of experience were also included in the stakeholder workshops.

Materiality of the impacts

The assessment of the material impacts was carried out in a two-stage process. First of all, internal LLB experts used a four-point scale to analyse the severity of the potential and actual impacts. These experts were selected for their particular experience and expertise in the field of sustainability and ESG, respectively.

In line with the regulatory requirements, the severity of the impacts was determined by the extent (potential characteristics: low, moderate, high and very high) and the scope (potential characteristics: limited, concentrated, wide-ranging, global). In the case of negative effects, our experts also assessed the irreversibility of the effects (potential characteristics: easy to remedy, remedy with effort, difficult to remedy, non-recoverable). The probability of the impact occurring was also assessed on a four-point scale (probability of occurrence less than 25 %, 25 to 49 %, 50 to 75 % and more than 75 %).

The qualitative and quantitative indicators determined beforehand enabled a distinction to be drawn between potential and actual impacts. For example, our experts took into account the “Financed GHG emissions” indicator to enable an assessment to be made of the actual negative effects on the sustainability aspect of “climate change mitigation”. If the indicators used did not point to an actual effect, an assessment was made to determine whether there was a potential impact. We have also analysed potential negative impacts on human rights based on the aforementioned indicators (employee survey, PAI reporting). As far as the negative impact on human rights in the value chain is concerned, we have only taken into consideration its severity. Short-, medium- and long-term trends were taken into account in the assessment.

In the next step, a qualitative assessment was carried out as part of the focus interviews. The external stakeholders assessed only the materiality of the impacts and prioritised the most significant impacts of the LLB Group. Their assessment was then mirrored against the assessment of the LLBʼs internal group of experts.

The employees, clients and general public stakeholder groups were represented in stakeholder workshops by selected employees. These persons rated the possible and potential effects on a qualitative basis, according to severity and probability of occurrence. The expert assessment that had already been conducted was presented and discussed. The results were then consolidated and processed for final validation.

Financial materiality

Our in-house teams of experts assessed risks and opportunities relating to sustainability aspects from the perspective of the probability and scope of the financial impact. Using a four-stage grid, they estimated a potential loss or gain in relation to predefined thresholds, as well as a probability of occurrence of less than 25 per cent, 25 to 49 per cent, 50 to 75 per cent and more than 75 per cent. For the assessment and measurement of climate risks, the LLB Group took into account not only qualitative analyses but also quantitative key figures.

Within the framework of the stakeholder workshops, the expert assessment of the material risks and opportunities was subject to critical examination, analysis and discussion. Both the experts and stakeholders discussed medium- and long-term trends with regard to financial materiality. The results were in turn consolidated and processed for final validation.

Responsibility for identifying, evaluating, managing and monitoring sustainability risks lies with Group Financial Risk Controlling. This organisational unit was involved in the materiality assessment process both at the expert and internal stakeholder levels. However, our processes for determining financial materiality within the meaning of the ESRS and our general risk management process are not yet fully integrated. As part of an ongoing project, we are ensuring that ESG risks are systematically identified, assessed, managed and monitored in the future.

The correlations between impacts and risks have been taken into full consideration, with a particular focus on the dependence upon natural and social resources. During the phase of drawing up the initial IRO list, we took care to assume that any potential negative effects could pose possible financial risks for the LLB Group. We further expanded these correlations within the framework of our expert workshops.

Evaluation, validation and approval

When evaluating the results of the various stages of the analyses, sustainability aspects were assessed as being material if either their impacts or their risks or opportunities exceeded the established threshold (70^th percentile; average of 2.8 on a rating scale of 1 to 4). The 70^th percentile was considered useful as a separation point in order to achieve a targeted focus on the material sustainability aspects. The Steering Committee for the Regulatory Sustainability Programme has set the threshold at 2.8. This ensures that the material sustainability aspects are above the 70^th percentile and are therefore accorded the necessary weighting.

The result of the whole process was then subject to critical examination and validated by a project committee. Inputs were processed in the materiality assessment. The results were then submitted for approval to the Sustainability Council, in which the entire Group Executive Board is represented, and made available to the Group Audit Committee and the Group Board of Directors for information and discussion.

Results of the double materiality assessment

In the course of the double materiality assessment, our internal and external stakeholders rated a number of impacts, risks and opportunities as being material and then bundled these into the following four sustainability aspects: “Economic role and regional employer”, “Climate change mitigation”, “Diversity and equal opportunities” and “Corporate governance and integrity”. Our Sustainability Statement is structured on a themed basis according to these four sustainability aspects. A description of the impacts, risks and opportunities identified can be found in the tables below.

List of material impacts, risks and opportunities

Economic role and regional employer

Climate change mitigation

Diversity and equal opportunities

Corporate governance and integrity

Working in cooperation with an external firm of consultants, the experts of the Group Corporate Communications & Sustainability organisational unit have identified key data points. We mapped the sustainability aspects in accordance with the ESRS during the process of compiling the list of potentially material impacts, risks and opportunities for the materiality assessment. The basis for this mapping included, among other things, the list of relevant sustainability aspects contained in ESRS 1, Application Requirement 16. If a sustainability aspect was classified as material, we initially also assessed all associated data points as material. As part of the development of the Sustainability Statement, we reassessed each individual data point and subsequently made individual exclusions, in particular on the basis of the list of step-by-step disclosure requirements set out as standard in ESRS 1, Annex C.