BKW : Sustainability report

B K W G R O U P

Sustainability Report 2023

W e c r e a t e s p a c e s f o r li f e .

Our contribution

We make a major contribution to achieving a balance between prosperity and the environment by offering solutions for a future worth living.

Cover photo

Jan Stahl, BKW Energy, is the operations manager at Juvent wind farm in Bernese Jura. There, he is responsible for ensuring optimum operation, planning and monitoring of the wind turbines.

Table of Contents

5 Introduction

1. Our Commitment to a Future Worth Living
2. Strategy

1. Long-term Growth with Integrated Overall Solutions
2. Sustainability strategy based on the SUCCESS Framework

11 Structures

11 Governance and Organization

14 Risk Management

14 Management of Sustainability Risks and Opportunities

17 SUCCESS Framework

17 Society

1. Use of Resources

1. Climate Neutrality

1. Corporate Governance

1. Employees

1. Secure Products

1. Secure Data

69 Imprint

About this report

The consolidated companies of the sustainability reporting are the same as for the BKW annual reporting. Unless specified otherwise in an individual case, all information and figures relate to the entire BKW Group and the period of January 1, 2023 to December 31, 2023. Where relevant, the upstream and/or downstream value chain is addressed in the appropriate sections. This report is structured according to the seven SUCCESS Framework action areas of BKW's sustainability strategy (see page 7).

The Sustainability Report 2023 is in accordance with the requirements of the Swiss Code of Obli- gations. Furthermore, the BKW report conforms to the Swiss Ordinance on Climate Disclosures as well as the Corporate Sustainability Reporting Directive (CSRD) of the European Union.

As a participant in the UN Global Compact, BKW publishes its annual progress report on the initia- tive's website. BKW's contribution to achieving the Sustainable Development Goals (SDGs) is described in the appropriate sections of this Sustainability Report.

S U S TA I N A B I L I T Y R E P O R T 2 0 2 3

5

I N T R O D U C T I O N

Our Commitment to a Future

Worth Living

Ladies and Gentlemen,

For more than 125 years, BKW has offered trail- blazing solutions. What started as Elektrizitäts- werk Hagneck in 1898 has become an international group of companies with overall solutions in the fields of energy, buildings and infrastruc- ture. Not only have our business activities been expanded but also the requirements for sustainable corporate management.

BKW is increasingly integrating aspects of sustainability into all processes and strategic deci- sions. As of the end of 2023, Sustainability Management has been an integral part of the Corporate Development Group function which is a group function as well as Occupational Health & Safety, Legal Services and Group Compliance. Another important step to embed sustainability throughout the company is to integrate and assess our sustainability performance in our remuneration system as of 2024 onwards.

The path to a low-carbon economy and society is a still long one. As an energy and infrastructure company rooted in the region, we are predestined and determined to actively drive this change for- ward. In 2023, we made major investments again in the expansion of renewable electricity production and future-proof grid infrastructures. Renewable energies already account for more than 75 % of our installed production capacities. We want to continue to pursue this approach while at the same time reducing our greenhouse gas emissions in the Energy business to net zero by 2040. With the electrification of our more than 3,500 company vehicles by 2030 we are not only implementing another key point of our decarbonization strategy, but also increasingly providing our services with low CO2 emissions.

We want to continue on our chosen path in 2024: by investing in the future of energy and through our broad range of services for the promotion of energy efficiency. We create added value for our customers and make a major contribution to the

social transformation in the face of climate change. With our 12,000 employees, we are making today's and future living spaces worth living in.

Kind regards,

Robert Itschner
More information
CEO
	at:
	globalcompact.ch

"We see sustainability as

an integral part of corporate governance and are constantly driving change

to a sustainable economy and society."

6 S U S TA I N A B I L I T Y R E P O R T 2 0 2 3

S T R A T E G Y

Long-term Growth with Integrated Overall Solutions

BKW commits to spaces for life using holistic solutions for energy, buildings and infrastructure. The company creates sustainable added value for its stakeholders as shown in this diagram:

Inputs

Business activities and markets

Outputs

- Financials: Investments in

- Production facilities for

renewable energy and in

electricity

modern electricity grids,

- Expansion of renewable

investments in services,

energy

investments in innova-

- Grid infrastructure (elec-

tions, patents

Go

tricity, telecom, transport,

o

r

d

G

- Environment: Raw materi-

l

u

e

o

water)

v

t

e

u

r

als and natural resources

c

ucti

n

- Innovations

e

on

a

t

rod

&

n

a

P

c

r

e

e

for energy production,

o

- Engineering services

ark ting

o

p

m

f

r

n

o

r a

products and services

C

d

r

d

h

(planning and construc-

we

r

D

n

e

p

a

e

n

a

w

t

n e

- Employees: Diversity

s

e

tion of technical facilities)

o

w e

i o

p

d

c

e

n

r

f a t

t

f

i

n rg

a b r

and experience, compe-

u

c

o

d

g

E

y

- Services for energy

l

n

n

c ea

l

i

r

t e z

tencies, technological

t

io

a

i

l

efficiency­

in buildings

i n e

s

i

t

s

e

n

s e d

o

a

t

r

expertise and capacity to

r

and mobility

n

g

C e

a

y

innovate, education and

p l

- Responsible business

o p

I

training, core values of

n

f

relationships

r

i

f

s

o y

m P

a

g

d

p

g

the company

i l a

t

n

n

n

- Storage technologies

l

s

i

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r

d

a

o

l

n e

u

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g

i

o

rmn

- Relationships: Customer

i

c

i

t

- Emissions, waste

a e n

t

n

n

s n

g

u

u

i

a

t

t

r

B

n

t

h

and supplier relationships,

e

n

e

n

e

c

- Land use and impact on

r a a

t

u t n

c i

d

la

m

dialogue with investors,

t

P

g

local populations

u n

le

o

p

in

r

o

I

l

im ld

e

f

associations and NGOs

ndustria

i

u

- Infrastructure and

eng

g&

b

ar

ineerin

re

systems: Energy genera-

chitectu

tion and distribution sys-

Strategy

tems, IT systems, decen-

tralized energy solutions

(such as heating networks,

PV installations, e-mobility

charging stations)

Outcomes

Solutions for a future worth living

-	Reliable supplies of power and heat	- Secure jobs and training	-	Financial profit, share value
-	Solutions that can be adapted to		opportunities	-	Efficient handling of resources
	climate change (such as green	-	Healthy and qualified employees,
	architecture, flood protection)		knowledge transfer in the network
		-	Taxes and regional value creation

S U S TA I N A B I L I T Y R E P O R T 2 0 2 3

7

Trailblazing company strategy

BKW is active in ten countries and pursues a growth strategy in the energy, buildings and infrastructure markets. Considering environmental and social issues as well as responsible corporate governance is an integral part of the strat- egy. By embedding the Sustainability Management into the Corporate Development group function (see also the Section Governance and Organization on page 11), BKW emphasizes the close connection between company strategy, business model and sustainability strategy (for further information on the company strategy see Annual Report page 6).

Sustainability strategy based on the

SUCCESS Framework

The diverse sustainability activities that BKW has pursued for many years were combined in the SUCCESS Framework in 2022. It provides strategic

orientation for BKW's sustainability management. The seven areas of activity cover all sustainability -related topics identified as material by BKW. By adopting medium- and long-term sustainability goals and implementing specific measures within the fields of action, BKW has made significant progress in its commitment to sustainability. For further information, see the following sections of this report.

Double materiality analysis

The SUCCESS Framework is based on the materiality analysis performed in 2022. This materiality analysis was carried out in a comprehensive process with external support and took into account both the impact of business activities on people and the environment as well as the risks to BKW's business success (financial materiality). In this process, numerous experts performed a

S ociety

U se of Resources

C limate Neutrality

C orporate Governance

E mployees

S ecure Products

S ecure Data

8 S U S TA I N A B I L I T Y R E P O R T 2 0 2 3

qualitative evaluation of a total of 35 topics in several workshops. The following table provides a consolidated overview of the topics that were assessed as having medium to high materiality in terms of their risks and/or impacts, as well as their allocation to the seven areas of action. In 2023, BKW postponed some of these topics due to lack of resources. The following sections deal

with those topics that were pursued in the year of the report. The risks, opportunities and effects of the business activities as well as progress and challenges of the topics in the areas of action are detailed.

According to the specification of the European Sustainability Reporting Standards (ESRS), the

Topics involving medium to high risks and/or effects according to materiality analysis 2022

Society	- Human rights
	- Involvement of local communities/local presence
	- Responsible and sustainable investments
Use of Resources	- Reduction of waste and resource consumption, circular economy support
	- Biodiversity protection
Climate Neutrality	- Greenhouse gas reduction
	- Energy consumption/efficiency
	- Increase in renewable electricity generation and storage
Corporate	- Responsible business practices
Governance	- Transparent reporting
	- Organization of Corporate Governance
Employees	- Occupational health and safety
	- Employment/working conditions
	- Employee development
	- Diversity and inclusion
	- Cultural change sustainable action
Secure Products	- Safe and responsible operation of power plants and grids
	- Product safety and quality
Secure Data	- Information and cybersecurity
	- Data protection and use

S U S TA I N A B I L I T Y R E P O R T 2 0 2 3

9

materiality analysis must in future be carried out with the involvement of the relevant internal and external stakeholders. BKW will carry out the analysis again in 2024 in order to fine-tune the topics and, if necessary, define new ones, to focus on sustainability management and sustainability reporting. Relevant stakeholders will be involved in this process.

Stakeholder management

With its internal and external stakeholders, BKW builds respectful, appreciative relationships based on mutual trust. BKW fosters long-term partnerships. For all employees, the Code of Conduct and the values it contains form the basis for their daily actions (see also the Corporate Governance section on Page 41).

The opportunities for dialogue that have existed for many years, such as digital communication

channels, employee appraisals, brochures and
More information
magazines as well as events and themed road-
shows for employees, were also used in 2023. In	at:
2023, BKW has driven forward the integration of	bkw.ch/codeofconduct
the core values "entrepreneurial", "collaborative"
and "trailblazing" throughout the Group. In addi-
tion to the ways of communication mentioned
above, other methods such as e-learning, work-
shops and innovative online approaches have
been used. Furthermore, BKW carried out specific
further training for managers to sensitize them
to their function as role models and promote
partnership-based negotiation.
BKW also engages with external stakeholders in
different ways. Important stakeholders include
customers, suppliers, investors, shareholders,
associations, politics and authorities, non-gov-
ernmental organizations, municipalities and the
general public, as shown in the following table.

Interactions with external stakeholders

Customers	Customer surveys (B2C), customer discussions (B2B), various newsletters
	(half-yearly customer newsletter "Flash," corporate newsletter several times
	yearly), webinars on the subject of energy market development with B2B
	customers, website, social media
Suppliers	Regular supplier meetings
Investors,	General Meeting, informational events, financial position press conferences,
shareholders	investor conferences, in-person investor discussions
Associations	Memberships, board meetings, working group meetings,
	specialist papers, issue-focused information exchange

10 S U S TA I N A B I L I T Y R E P O R T 2 0 2 3

Politics and	Newsletter (quarterly), regular exchanges on specific subject areas, working
authorities	groups, statements on law and ordinance amendments, issue-focused infor-
	mation exchange
Non-governmental	Issue-focused information exchange, such as for project proposals
organizations
Local environment	Issue-focused information exchange and events, municipal mayoral events
(such as municipali-	(annual), Journée des Maires in Jura (annual)
ties)
General public,	Media work (press releases, media events, queries), social media, presentation
media	of the company at events, specialist papers, website