GRENKE : Non-Financial Statement 2023

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NON-

FINANCIAL STATEMENT

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3. Non-Financial Statement 2023	information and updates during the year on our web-	Editorial note
3.1 GRENKE at a glance	site at www.grenke.com/en/.	The NFS is published annually as part of the group
			management report. The reporting date for the 2023
3.1.1 Report and regulatory framework		Included companies	NFS is December 31, 2023. Events of particular rele-
This report presents the mandatory non-financial	Unless otherwise indicated, the disclosures that follow	vance to the non-financial aspects in the reporting peri-
consolidated statement ("Non-Financial Statement"	relate to the GRENKE Group, i.e., the non-financial	od were taken into account until February 5, 2024. For
or "NFS") of the GRENKE Group for the period from	disclosures take into account the companies includ-	any questions regarding the report, please contact our
January 1 to December 31, 2023. The Non-Financial	ed in the IFRS-compliant scope of consolidation. The	Investor Relations department ([e-mail]).
Statement is a legal requirement pursuant to Sections	same applies to the disclosures on the EU Taxonomy
289b (1) and 289c HGB in conjunction with Section	(see in detail, Chapter 3.5 "Disclosures pursuant to Ar-	3.1.2 Our business model and value chain
315b HGB and the requirements of the EU Taxonomy	ticle 8 of the EU Taxonomy").	For details on the Consolidated Group, its business
(EU Regulation 2020/852) and associated delegated			activities and a description of our value chain, please
acts. In preparation for the mandatory implementation		Applied framework	refer to Chapter 1.1.1 "Business model and seg-
of the (EU Directive 2022/2464) Corporate Sustain-	In the 2022 financial year, the NFS was prepared for	ments" contained in the combined management re-
ability Reporting Directive (CSRD) for the compara-	the first time according to the "with reference" option	port. Details on the ownership structure of GRENKE
bility of corporate sustainability reporting starting with	of the Global Reporting Initiative Sustainability Report-	AG can be found in the explanations in the chapter
the 2024 financial year, we have further developed the	ing Standards (GRI SRS) - i.e. the general standards	entitled "Share and Investor Relations" as well as in
content of NFS. In our annual report, we use the NFS	GRI 1 to 3 as well as the thematic standards on eco-	Chapter 7 "Acquisition-related disclosures" in the
statement to report annually on how we deal with the	nomic topics (GRI 200 series), environmental topics	consolidated management report. Updates on the
impacts, opportunities and risks relating to the selec-	(GRI 300 series) and social topics (GRI 400 series). In	ownership structure and other capital-market-relevant
tion of non-financial topics relevant to GRENKE (see	this NFS report for the 2023 financial year, we have	information are published throughout the year on our
Chapter 3.2.1 "Stakeholder dialogue and materiality	added further data points from the topic standards.	website at www.grenke.com/investor-relations/gren-
analysis"). We provide information on the develop-	We publish the list of standards we cover from the	ke-share/shareholder-structure/.
ment status of our sustainability strategy (see chap-	GRI Content Index on our website atwww.grenke.
ters 3.2.2 "Sustainability strategy and goals" and 3.3.1	com/en/esg/.
"Sustainable corporate governance"), as well as on
our management approaches, key measures and the

progress made during the financial year (see Chapter 3.4 "Material sustainability topics"). We publish further

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3.2 Our sustainability strategy

3.2.1 Stakeholder dialogue and

materiality analysis

The materiality analysis completed in the 2022 fi-

nancial year forms the basis for the material topics

in our sustainability strategy as well as those con-

with stakeholders took place primarily in quarterly town hall meetings, as well as in the context of investor meetings and ESG roadshows, such as those related to our green bond issue.

In addition, we continued to add ESG topics to the annual employee survey. In producing this NFS, a focus was also placed on the internal collaboration with the more than 25 departments involved in preparing the non-financial reporting.

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tained in	this NFS. Building on our strategy control
process,	our materiality analysis process is con-
ducted at least once every five years and reviewed
and updated annually.

We base our materiality analysis on our continuous dialogue with our stakeholders. Since 1996, we have been collecting and analysing the expectations of stakeholder groups - mainly capital market participants and our employees, customers, and partners - and incorporating them into our strategic decisions. We use various target group-specific communication formats and channels to engage with our stakeholders.

Dialogue on sustainability issues is becoming increasingly important due to growing government regulation in the ESG area since 2017 and rising sustainability reporting expectations, among others. By embedding sustainability in our corporate strategy, the relevant topics have become an integral part of our stakeholder dialogue. In 2023, our engagement

Stakeholder	Formats and channels
Management and employees	Management meetings, CEO letter, ESG Committee, quarterly town hall
// Supervisory Board	meetings, regular employee information (intranet), annual employee survey,
// Board of Directors and senior management	campaigns on occupational health and safety; social media (LinkedIn, Xing,
// Employees	Facebook), workshops and ESG projects
Business partners	On-site visits, workshops, welcome calls, customer and partner magazines,
// Lessees and customers	satisfaction surveys

• Resellers for the Leasing segment and partners for the three business segments Leasing, Factoring and Banking

Capital market	Annual reports, the Annual General Meeting, analyst and investor confer-
// Investors (debt and equity)	ences, road shows and capital market conferences, ESG Ratings (ISS ESG,
// Banks/financial analysts	S&P Global, Sustainalytics, MSCI, EthiFinance Ratings)
Supervisory authorities and regulators	Supervisory discussions, notifications and reporting, annual reports/other
// Regulatory authorities	reporting, dialogue with development banks such as Kreditanstalt für Wied-
// Regulators	eraufbau for development programmes and the German Federal Ministry of
// Auditing firms	Labor and Social Affairs regarding microcredits
// National/international legislators
(including standard setters)
Civil society	Associations Social media presence on LinkedIn, Xing, Facebook and
// Potential employees	kununu, corporate reporting (press releases/guest articles), exchange
// Media representatives	with media representatives, customer and partner magazine, exchange in
// Local stakeholders	non-profit projects
// Non-profit institutions

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We designed our materiality analysis to meet the double materiality requirement of Section 289c (3) of the German Commercial Code (HGB) and align with the GRI 3 standard. This approach also prepares us for the CSRD requirements, which will take effect starting with the 2024 financial year. This involves identifying those non-financial topics that are material from both the inside-out and outside-in perspectives. The inside-out perspective describes the impact of our company on society and the environment. The out-

Materiality analysis process

side-in perspective, on the other hand, describes the impact of non-financial topics on GRENKE Group's business performance, operating results and position (see the diagram "Materiality matrix"). The first step was to identify our most important internal and external stakeholder groups (see the chart "Relevant stakeholder groups"). We did this while paying particular attention to the potential influence of stakeholders on GRENKE and vice versa.

Relevant stakeholder groups

EXTERNAL

STAKEHOLDERS INTERNAL STAKEHOLDERS

• Banks/
  nancial analysts

//	Rating agencies	//	Supervisory Board
//	Investors
//	Board of Directors
	(debt and equity)
	//	Managers
//	Customers
//	Lessees	//	Employees

• Partner
• Research and science
• Standard setters
• Associations

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Identication

Survey

Validation and Prioritisation

01

02

03

04

05

Involve internal

Identify

Identify

and external

Create a

Validate

stakeholders

topics

stakeholders

materiality matrix

the results

Several sources were used to compile the potentially relevant non-financial topics. These included, ESG issues already identified by GRENKE along our business strategy, content from the GRI frameworks, ESG-related enquiries from rating agencies and industry comparisons on material ESG issues.

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The potentially relevant content was again validated for its relevance to our business model and consolidated into a list of 20 ESG topics covering the following areas:

• Environmental concerns
• Social issues
• Labour and human rights issues
• Business model and innovation
• Leadership and governance

In order to comply with the requirements of the German Commercial Code (HGB), the topics from the above-mentioned areas were allocated to the sustainability aspects specified in Section 289c of the HGB.

We surveyed our external and internal stakeholders as part of our materiality analysis in the 2022 financial year. An online survey was used to contact 708 external stakeholders and 266 internal stakeholders. A total of 147 internal stakeholders and 60 external stakeholders responded to the survey, representing a

response rate of 21.3 percent. Next to interviews with the Supervisory Board, individual expert interviews were also conducted with research and science representatives from the fields of bioeconomy, sustainable corporate management, sustainable product development and HR management/leadership. They gave further insight into the classification of non-financial topics and helped to validate the results of the stakeholder survey. All responses from the online survey and expert interviews were analysed and mapped in a materiality matrix (see the diagram "Materiality ma- trix").

In the 2023 financial year, we reviewed and validated our materiality analysis. In this context, GRENKE BANK AG conducted its own materiality analysis. The materiality of the material topics defined for GRENKE BANK by the Consolidated Group was confirmed by a survey of other bank-specific external and internal stakeholders.

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Materiality matrix

signicance

ESG products

Risk management

Data protection

and services

Circular

High

Innovation and

economy

partnerships

Employer

Compliance

brand appeal

Financial

Reporting and transparency

inclusion

AND out)

Social engagement

Digitalisation and resource conservation

SOCIETYONIMPACTS (InsideENVIRONMENT-

signicanceLow

Corporate governance

Labour law

Customer security and satisfaction

and safety

Green economy objects

Access to

Diversity, inclusion and equal opportunity

Environmental impact of customers and partners

nancial markets

Human rights

Climate protection and adaptation to climate change

Low signicance

High signicance

IMPACTS ON BUSINESS SUCCESS (Outside-in)

Environmental issues

Employee issues

Social issues

Respect for human rights

Combating corruption

Sustainable corporate governance

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In the course of validating the results of the materiality	Customer safety and satisfaction	pliance and data protection were combined under this
analysis, the following definitions of the material topics	The focus of this topic is on our ability to create target-	topic due to their strong similarity in terms of content.
were supplemented and adopted to better integrate	ed customer experiences and ensure high customer
them into our operations and management:	satisfaction by offering SMEs attractive and equal ac-	These nine topics that are material for GRENKE are
		cess to financing. The two topics, client safety and	supplemented by the following minimum content in
ESG products and services	well-being and financial inclusion, have been com-	accordance with the German Commercial Code as
This topic describes our ability to offer sustainable	bined into this topic due to their similarities in terms	part of the Non-Financial Statement:
(leasing) financing and services and to enable SMEs to	of content.
invest in their sustainability. The two topics "ESG-re-			Climate change mitigation and climate change
lated products and services" and "Green economy		Innovation and partnerships	adaptation
objects" were combined due to their similar content.	This topic describes the development and mainte-	We see this topic as directly linked to the topics of
		nance of targeted partnerships as part of our commit-	ESG products and services, digitalisation and re-
	Circular economy	ment to promoting a sustainable society and taking an	source conservation, and risk management. The topic
This topic deals specifically with the reuse and recy-	innovative approach to solutions.	continues to be oriented towards the first and second
cling of leased assets after the end of the contract			environmental objectives of the same name in the EU
term to support a circular economy.		Risk management	Taxonomy. For this reason, the topic was classified as
		This topic addresses our ability to assess, manage	material in the course of the validation of the results.
Digitalisation and resource conservation	and minimise risks that could potentially affect the
This topic describes our ability to digitalise processes	Company's position and development.	Labour law issues and safety
and procedures, among others, to minimise the use			We consider these issues to be fundamental prereq-
of resources.		Reporting and transparency	uisites for meeting the expectations for employer at-
		The focus of this topic is on the transparent design of	tractiveness. In addition, employee matters constitute
	Employer attractiveness	corporate communications and financial and non-fi-	minimum content according to Section 289c HGB.
This topic measures our ability to attract qualified em-	nancial reporting.	Consequently, these are also the subject matter of the
ployees and retain them with adequate opportunities			Non-Financial Statement.
for promotion and personal development as well as	Compliance and data protection
target group-oriented offers.	This topic covers the protection of data by the
		­GRENKE Group and compliance with the relevant
		laws and regulatory requirements. The topics of com-

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• Respect for human rights

Respect for human rights is a fundamental prerequisite for the fulfilment of our strategically material top- ics. These are also specified as minimum content in Section 289c HGB and are therefore also included in the Non-Financial Statement.

As of the 2024 financial year, GRENKE will be subject to the reporting requirements of the CSRD and its definition of double materiality. In preparation for this we added a new material topic to our NFS for the 2023 financial year:

• Access to financial markets

This topic concerns GRENKE Group's access to financial markets in terms of raising and utilising capital and particularly the procurement of sustainable capi- tal, such as through the issue of (green) bonds.

The table below provides an overview of the allocation of topics according to classifications under Section

289 HGB:

Environmental concerns

• ESG products and services
• Circular economy
• Digitalisation and resource conservation
• Climate protection and adaptation to climate change

Employee issues

• Employer brand appeal
• Labour law issues and safety

Social issues

• Customer safety and satisfaction
• Innovation and partnerships

Respect for human rights // Human rights

Combatting corruption and bribery // Compliance and data protection

Sustainable corporate governance

• Risk management
• Reporting and transparency
• Access to financial markets

3.2.2 Sustainability strategy and targets

We see our non-financial commitment as a key success factor for our future viability and performance and strong long-term market position. Sustainability has been an integral part of our business activities since our foundation more than four decades ago. GRENKE's business model makes it easier for SMEs to utilise the latest resource-saving technologies by offering a variety of financing options. At the same time, our solutions ensure that leased objects continue to be utilised or optimally disposed of after the lease contract expires. Sustainability is already embedded in our corporate strategy. This is the basis for our sustainability strategy, which describes our sustainability vision "To be a pioneer for sustainable SMEs".

In line with this vision, our sustainability strategy sets out our ESG objectives and measures along the three dimensions of climate and environment, social con- tribution, responsibility and trust. We have defined a strategic ambition for each dimension. For our sustainability strategy, we derived the strategic focus topics from the analysis of our material topics (see Chapter 3.2.1 "Stakeholder dialogue and materiality analysis").

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We continue to base the design of our strategic ambitions on the United Nations Sustainable Development Goals (SDGs).

Our sustainability ambitions

Our sustainability strategy focuses on 9 of the 17	CLIMATE & ENVIRONMENT
goals of the 2030 Agenda (see diagram "Our sustain-
ability ambitions").

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Enabler for sustainable SMEs

Climate and Environment		Social Contribution		Responsibility and Trust

In consideration of the climate and the environment, we want to support the transformation to a green future with our range of sustainable financial services and make it easier for our customers to make environmentally conscious investment decisions. Our goal

We accelerate the transformation to a green future by providing sustainable financial services and facilitating green investment choices.

• ESG products and services
• Circular economy
• Digitalisation and resource conservation

We promote equal opportunities and innovative strength for our customers, partner companies and employees alike.

• Employer appeal
• Customer security and satisfaction
• Innovation and partnerships

We strengthen transparent communication and create a sustainable corporate structure and culture.

• Risk management
• Reporting and transparency
• Compliance and data protection

is to steadily increase the share of green economy objects in the new leasing business and finance the sustainable investment needs of our SME customers (SDG 12). This includes objects for the generation and storage of renewable energies (SDG 7). The development of local green economy expertise and partner networks enables effective risk management and the utilisation of growth opportunities (see Chapter 3.4.1.1 "ESG products and services").

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We also intend to continue advancing our own product range in line with ESG criteria and offer our SME customers a sustainable lease contract oriented towards a circular economy and resource conservation (see Chapter 3.4.1.1 "ESG products and services"). The digitalisation of our business processes plays a key role in reducing our environmental footprint (SDG 12 and 13). By 2025, we want to become climate-neutral in terms of Scope 1 and 2 emissions and, at the same time, steadily reduce our Scope 3 emissions. Our Digital Excellence digitalisation strategy is relevant to achieving these goals (see Chapter 3.4.1.3. "Dig- italisation and resource conservation" and Chapter 6.2.2.5 "Overall statement on future development").

To make the sustainability of our leasing portfolio measurable and transparent, or at a minimum objectively verifiable, we are continuing to develop our GRENKE Sustainability Index (GSI). The GSI will enable us to talk in concrete terms to our partners and SME customers about sustainability issues and raise the awareness of sustainable investment opportunities.

SOCIAL CONTRIBUTION

We see our social contribution in our promotion of equal opportunities and our innovative strength for our SME customers, business partners and employees alike. Our financing solutions are especially tailored to the investment needs of small and medium-sized companies. Thanks to the share of medical technology equipment in our lease portfolio, our solutions are also contributing to promoting health and well-being in society (SDG 3).

We want to strengthen and expand our reputation in the job market as an attractive employer to secure the Company's long-term success. An important indicator is the satisfaction of our own employees, which we measure annually and continually improve by taking effective measures. We consider equal opportunities and diversity (SDG 5) to be the cornerstones to achieving this. We consider gender diversity in the composition of the Board of Directors, Supervisory Board and our workforce. The selection and development of our talents - regardless of culture, nationality, ethnicity, gen- der, sexual orientation, physical abilities, faith, political beliefs, age and experience - are also particularly im-

portant to us and must be encouraged. Our offers to employees include models for appropriate remuneration schemes, flexible work schedules and the promotion of employee health, including ergonomic work- spaces and preventive healthcare.

We increase access to high-quality education (SDG 4) internally through the training and development of our employees (see Chapter 3.4.2.1.5 "Employee qualification and development"). Outside of the Company, we are involved in various partnerships and sponsorships to promote education and culture as well as research and development.

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