Siemens Energy : Summary 2021

Sustainability at

Siemens Energy

Summary of the Sustainability Report 2021

siemens-energy.com/sustainability

How to fight climate change now?

Interview: Oliver Sachgau Photography: Götz Schleser

Climate change is a major threat to humanity. As Siemens Energy Chief Executive Officer and Chief Sustainability Officer Christian Bruch notes, the time has come to radically change and decarbonize our energy system.

Siemens Energy Summary of the Sustainability Report 2021

Page 2

In conversation at the Futurium, Berlin's "House of Futures", Bruch lays out a path forward for Siemens Energy and the world at large.

Christian Bruch, the world is far from where it needs to be to meet the Paris Climate Agreement goals. We are nearing a tipping point. Why is there still so much hesitancy to do what's needed to meet these goals?

The Futurium in Berlin is a meeting point for presenting and exchanging information about science, research, and innovation - the ideal location for a conversation with Christian Bruch about the future of sustainability in the energy sector.

I would not call it hesitancy. The transformation we need to go through is complex and massive. We can see that the elements we are driving today are not sufficient. The IPCC [Intergovernmental Panel on Climate Change] report has shown us that we have to move fast, and we have to move differently. We need to bring all stakeholders together to shift gears. The time to act is now.

The effects of climate change are distributed unevenly, affecting some areas of the world much more than others, especially developing countries and the global south. How do you address the disparity between where climate change is hitting people the hardest and where we have the most resources to tackle it?

We do need different solutions in different parts of the world. At the same time, as the Paris Agreement clearly states, the developed world has an obligation to support the developing world in tackling the challenges of energy supply while addressing sustainability. We, as the developed world, have not lived up to this commitment. We need to recognize that in the developing world in particular, the increase in energy demand will be massive. If the developing world fails to deal with this challenge, we will not be able to mitigate climate change, which will ultimately also be to the disadvantage of the developed world.

Your current portfolio consists of conventional and decarbonized tech- nologies. At the same time, you want to be the partner of choice for the energy transition. What will this mean for your portfolio?

There's no single silver bullet for the energy transition, whether it's solar or wind or hydrogen. We will need a variety of technologies - and for a transitional time, we will need conventional technologies. This is why I believe it's a strength to have what we call decarbonized portfolio elements and conventional technologies like gas turbines, because our customers have the same problem. Having said that, our portfolio is absolutely going to change going forward. That's not even a question. We focus our R&D investments of €1 billion every year on technologies that are relevant in a decarbonized energy world.

You've spoken in the past about the importance of bridging technolo- gies. Why would switching to gas help us decarbonize? Aren't you just taking half-measures?

First of all, if you can produce power from a renewable energy source, that's a better way to do it. Nobody is questioning that. But if you have a situation today where 70% of the CO2 emissions in power production are

caused by coal-fired power production, the most urgent task becomes how to stop and replace that. If gas helps us build a bridge by cutting the CO2 emissions by two-thirds compared to coal, then this is the right measure for reducing CO2 emissions in the short and medium term. Will it still be the right technology and approach ten or more years down the road? Probably not, but for me, it's important that we stop talking about long-term targets and start tackling some things immediately.

Siemens Energy has the goal of being powered by 100% renewable energy by 2023 as one lever of becoming climate neutral by 2030. How are you doing with these goals?

We're well on track here, and there's no doubt that we will achieve that target of being climate neutral in our own operations by 2030. Reaching this goal will obviously require reducing emissions, but we will also need to compensate emissions from 2030 onwards.

Is it more important to talk about how we as individuals use electricity, or about the way companies generate it?

That is a very important point because we underestimate the relevance of the individual. If we don't change the way we consume energy, we won't solve the problem. It will require all three elements - how we generate electricity, how we distribute and store it, and how we consume it

• and we all have a role as individuals to tackle that. We will have to change, all of us.

Oliver Sachgau is a Berlin-basedGerman-Canadian writer and journalist focusing on financial topics. His work has appeared in Bloomberg, the Wash- ington Post, Fortune, and the Independent.

Siemens Energy Summary of the Sustainability Report 2021

Page 3

Company overview

At Siemens Energy, our mission is to empower our customers to meet the growing demand for energy while transitioning to a more sustainable world. With our innovative technologies and extensive energy experience we are committed to decarbonizing global energy systems and driving the energy transition.

Our broad portfolio of products, solutions and services covers almost the entire energy value chain, from conventional to renewable energy technolo- gies. These include gas and wind turbines, hybrid power plants operated with hydrogen, high voltage grid access solutions and high voltage transformers.

Behind Siemens Energy is a global team of more than 91,000 dedicated employees working across 90 countries. Our company is structured around two segments, Gas and Power (GP) and Siemens Gamesa Renewable Energy (SGRE), under which we operate the following Divisions:

Our company structure

Siemens Energy AG

Gas and Power

Siemens Gamesa Renewable Energy

Generation

Industrial Applications

Transmission

New Energy

Onshore

Offshore

Central Distributed

Key financial indicators

Orders

(in billions of €)	Revenue
~ 33	(in billions of €)
	~ 28.5
	Order backlog
	(in billions of €)
	~ 84

Gas and Power

• Generation: We provide products, solutions and services for conven- tional power generation with high efficiencies. We reduce carbon emis- sions from existing assets and develop technologies that will be critical in the future for the decarbonization of power generation applications.
• Industrial Applications: We support industrial customers in their con- ventional business and activities towards energy transition, by providing safe, reliable and highly efficient rotating, electrical, automation and digital products, solutions and services.
• Transmission: We partner with our customers to build and operate effi- cient grid infrastructures. We offer reliable products, solutions, and state-of-the-art services improved with digital functions to meet the growing demand for sustainable electrification.

• New Energy Business: We shape the green hydrogen economy. We are developing the technologies and applications urgently needed for decarbonization on an industrial scale and coupling economic sectors with renewable sources of power

Siemens Gamesa Renewable Energy

Wind energy: Through our majority stake in SGRE, we are one of the leading providers of wind power solutions across 90 countries. SGRE operates with a flexible business model and manages its business in two segments:

• Wind Turbines (comprising Onshore and Offshore), which covers the design, development, manufacturing and installation of wind turbines, and
• Service.

Siemens Energy Summary of the Sustainability Report 2021

Page 4

Strategic focus

At Siemens Energy, we believe innovative technologies are the key to combating climate change. As one of the world's leading energy technology companies, we are uniquely positioned to drive the energy transition. Our extensive experience in the energy market makes us the partner of choice for our customers on their journey to a more sustainable future.

To maintain our focus, we have established our company strategy along the three pillars of low- or zero-emission power generation, transport of energy and storage as well as reducing our greenhouse gas footprint and energy consumption in industrial processes.

Our strategic pillars

Our Sustainability Program

We		•  Decarbonized products,	•  Climate-neutral own	•  Decarbonized supply chain
Decarbonizing	services, and solutions	operations
for customers
	our business
energize
	•  Occupational health & safety	•  Human rights	•  Cultural transformation
society
Responsible	•  Conservation of resources	•  Compliance & integrity	•  Training & education
	•  Product stewardship	•  Inclusion & diversity	•  Societal engagement
	operations

We focus on building our company based on three strategic pillars:

Low- or zero-emission	Transport of energy	Reducing our greenhouse gas
power generation	and storage	footprint and energy consump-
		tion in industrial processes

Our Sustainability Program is integrated into our company strategy. The program is structured around topics that help us to contribute to the most relevant Sustainable Development Goals (SDGs) and be a sustainability leader in the industry.

The SDGs and their related targets are fostering a new understanding of how economic development can be reconciled with social and environmental challenges. To ensure our efforts have the biggest impact, we focus our activities on SDG 5, 7, 8, 9 and 13.

At the core of our Sustainability Program is the goal to decarbonize energy systems along the entire value chain. With our commitment to responsible operations, we are also leveraging Siemens Energy's societal impact.

Our first major  ESG ratings results show that we are on track to lead the energy transformation. You can find more information on our ambition and program in the  Sustainability Report 2021.

Siemens Energy Summary of the Sustainability Report 2021

Page 5