Consolidated Non-financial Statement

General Disclosures

In accordance with Sections §§ 315b und 315c HGB NORMA Group is obliged to prepare a consolidated non-financial statement for NORMA Group in the combined group management report. The following contents represent the consolidated non-financial statement for the fiscal year 2024 for NORMA Group. In this chapter, all information refers to the ESRS 2, unless otherwise specified.

The non-financial group statement relates to the period from January 1 to December 31, 2024.

In accordance with Section 289d HGB, the consolidated non-financial statement was prepared based in part on the first set of the European Sustainability Reporting Standards (ESRS) as a framework. 

The following information, which would be reportable according to the result of the double materiality assessment, was not included in the non-financial Group reporting:

S1-6 Characteristics of the company’s employees

S1-9 Diversity metrics

S1-10 Adequate wages

S1-16 Compensation metrics (pay gap and total compensation)

Preliminary remark

NORMA Group announced in an ad hoc announcement on November 28, 2024 that the Management Board has decided to initiate a process to sell the global business activities of the Water Management strategic business unit. This step was determined after an analysis and consideration of alternative options by the Management Board of NORMA Group SE regarding the further strategic direction of the Group. The aim of the strategic measure adopted is to focus business activities on the core business of fastening products. The spin-off of the Water Management division is intended to free up resources and capacities for further growth in the Industry Applications divisions and to strengthen the Mobility & New Energy division.

The Water Management division will remain as a third business unit for the time being. However, the aim is to sell all international activities of this business. The outcome and result of the sales process to be initiated are still open as at December 31, 2024 and are also influenced by external factors.

As this Annual Report reflects the business activities in 2024, almost all of the information presented in this report relates to the existing Group structure as at December 31, 2024. At individual, relevant points, the explanations may be set out in more detail in relation to a possible future structure.

Basis for Preperation

The basis for the preparation of non-financial reporting is the scope of consolidation of NORMA Group SE, i.e. all domestic and foreign companies, so that production sites as well as distribution, sales and competence centers and administrative buildings are included in the reporting. Where individual chapters deviate from this for certain facts and data, this is explicitly disclosed in the chapters.

BP-1 General basis for preparation of the consolidated non-financial statement

[BP-1-5a] The consolidated non-financial statement of NORMA Group SE (“NORMA Group”, “the company”) for the 2024 fiscal year is made for the entire scope of consolidation. [BP-1-5bi] [BP-1-5bii] The basis for the consolidated non-financial statement of NORMA Group is the scope of consolidation of the Consolidated Financial Statements (see the chapter NOTE 4 – SCOPE OF CONSOLIDATION). [BP-1-5c] The consolidated non-financial statement also covers the upstream and downstream value chain. As part of the materiality analysis, material impacts, risks and opportunities in the value chain were identified. The policies, measures and targets defined by NORMA Group cover various areas:

Employees of NORMA Group suppliers are considered in the upstream value chain. Customers, consumers and end users are considered in the downstream value chain. The own workforce includes both NORMA Group employees and employees of service providers who carry out activities on the company premises. In addition, affected communities and municipalities, especially those close to the production sites, are involved. By taking this approach, NORMA Group wants to ensure that sustainable principles are integrated and implemented and that all relevant stakeholders are analyzed. When disclosing metrics, NORMA Group refers to its own business activities for the 2024 fiscal year. [BP-1-5d] No information on intellectual property, know-how, or the results of innovations in orientation with European Sustainability Reporting Standards (ESRS) 1 Section 7.7 has been omitted from the consolidated non-financial statement. [BJ14] [BP-1-5e] The exemption from disclosure of pending developments or matters under negotiation in accordance with Articles 19a (3) and 29a (3) of Directive 2013/34/EU was not used.

BP-2 Disclosures in relation to specific circumstances

[BP-2-9a] [BP-2-9b]

Assessment of the value chain: [BP-2-10a, b, c] The descriptions of the disclosed data on NORMA Group’s upstream and downstream value chain can be found in the reporting on metrics in the topic-specific chapters. The parameters used to estimate the individual value chain data are also specified and described in detail in the reporting on metrics in the topic-specific chapters. [BP-2-10d] In addition, information on the estimation uncertainty and planned measures to improve accuracy in the future were also included there.

[BP-2-11a] The sources of each estimate used and the uncertainties in the results are disclosed in the topic-specific chapters. This makes it transparent which factors contribute to the uncertainties in the quantitative key figures and monetary amounts. In addition, the assumptions and judgments made in assessing the sources of estimation and the uncertainty of the results are defined. [BP-2-11b] Information about the sources of measurement uncertainty for each applicable quantitative measure and monetary amount is also disclosed in the respective topic-specific chapter. The assumptions and assessments made when measuring each quantitative metrics and each monetary amount are also presented there.

[BP-2-13a][BP-2-13b][BP-2-13c] As this is the first year in which NORMA Group is preparing reporting in orientation with the European Sustainability Reporting Standards (ESRS) and introducing new metrics, this makes comparability with the previous sustainability reporting in accordance with Sections 315b and 315c in conjunction with Sections 289b to 289e HGB more difficult. Compliance with the requirements of the ESRS is in line with NORMA Group’s self-image of ensuring precise and future-oriented sustainability reporting. It offers an opportunity for further development and ensures future comparability.

[BP-2-14a] [BP-2-14b] [BP-2-14c]

Disclosures arising from other legislation or generally accepted sustainability reporting statements [BP-2-15] NORMA Group has included information from additional reporting standards in the consolidated non-financial statement. In detail, the following standard was used: Global Reporting Initiative.

Incorporation by reference [BP-2-16] NORMA Group has incorporated information by reference to supplement the requirements. For a number of topics, the following list of ESRS requirements and the specific data points mandated by a disclosure requirement is provided, incorporated by reference.

[MDR-T-77b] In addition to the assurance by the appointed auditor, the metrics reported in the 2024 fiscal year are not validated by any other external body responsible for quality assurance. If validation is carried out in individual cases, this will be reported at the appropriate point. In addition, NORMA Group uses all phase-in options in the first voluntary year of application of the CSRD, with the exception of the health and safety indicators according to ESRS S1-14.

Governance

GOV-1 The role of the administrative, management and supervisory bodies

[GOV-1-21a] The Management Board of NORMA Group consists of three members, while the Supervisory Board consists of six members. [GOV-1-21b] As NORMA Group is not subject to co-determination, there are no employee representatives on the Supervisory Board. [GOV-1-21c] The members of the Management Board have the necessary experience and expertise to manage the company independently. The Supervisory Board contributes in-depth knowledge of the relevant sectors, products and geographical regions of the company, which ensures that it performs its supervisory function competently and appropriately.

[GOV-1-21d] In the 2024 fiscal year, NORMA Group’s three-member Management Board consisted of one-third women and two-thirds men. At the end of the 2024 fiscal year, the Supervisory Board had a gender distribution of two-thirds female and one-third male. This reflects the gender diversity on our Management Board and Supervisory Board in a ratio of 1:1.

[GOV-1-21e] All members of the Supervisory Board are independent of the company and the Management Board within the meaning of the German Corporate Governance Code (GCGK). According to the GCGC, a Supervisory Board member is independent if there are no material and lasting personal or business relationships with the company, its Management Board or a controlling shareholder. [GOV-1-22a] The CFO is responsible for monitoring sustainability-related impacts, risks and opportunities on the Management Board and performs this task as part of the Sustainability Steering Committee.

[GOV-1-22b; GOV-1-22c(i) + (ii)] Due to the growing importance of corporate responsibility and ESG (environmental, social, governance), these topics are becoming increasingly important in the work of the Supervisory Board, Management Board, and employees. The Strategy Committee regularly deals with the impacts of climate change during the fiscal year, in particular, while the development of NORMA Group’s GHG emissions is specifically addressed in Supervisory Board and Management Board meetings.

Under the leadership of the Management Board member responsible for Corporate Responsibility and ESG, the Sustainability Steering Committee was established to deal with sustainability-related topics within NORMA Group. Oversight of the Steering Committee is the responsibility of the CFO as a member of the Management Board, and Vice President (VP) Investor Relations and Corporate Social Responsibility. Other members of the Steering Committee include Executive Vice President Group Finance & Tax, Executive Vice President Human Resources, Executive Vice President / General Counsel Legal / M&A, Vice President Integrity, Vice President Quality & EHS, and Executive Vice President Group Purchasing & Supply Chain Management. The Steering Committee meets every six weeks and manages and is responsible for sustainability topics in line with the targets and measures defined by the Management Board within topic-specific working groups. The Steering Committee also makes management decisions, sets targets, and defines future-oriented strategies. The members of the operational working groups meet regularly during the fiscal year to drive forward the issues within their specialist areas. The Corporate Responsibility team provides advice and support to the specialist departments and promotes the sustainability-related guidelines of the Management Board and the Steering Committee. The Corporate Responsibility Team reports regularly to the Steering Committee within the fiscal year on the current status of the project plan and provides decision-making support. In addition, the respective specialist departments monitor the impacts, risks, and opportunities.

[GOV-1-22c(iii)] Currently, NORMA Group has only partially implemented specific controls and procedures to manage and monitor sustainability impacts, risks, and opportunities. To date, only risks have been considered in risk management. Further information on integration into risk management is described in the chapter 4 IRO-1 PROCESS IRO. The company is still in the early stages of this process. The first step was to identify the impacts, risks, and opportunities. In the coming fiscal years, the subsequent processes will be developed and implemented on an ongoing basis. In the future, the impacts, risks, and opportunities will be reviewed once a year and reassessed if necessary. In addition, a materiality analysis is carried out every three to five years or as required due to changes in the business model, for example, in order to take a holistic view of the impacts, risks, and opportunities and adjust them if necessary. Further information on the materiality analysis process can be found in the chapter IRO-1 PROCESS.

[GOV-1-22d] The responsible Management Board members monitor the implementation of the defined targets with regard to material impacts, risks, and opportunities of the operational working groups. NORMA Group’s specialist departments report regularly to the respective Management Board department during the fiscal year. For example, there is continuous reporting to the responsible COO of NORMA Group in the areas of environment, health and safety, and quality. The departments are responsible for documenting the progress of their work over the course of the fiscal year. The Corporate Responsibility team also regularly informs the Sustainability Steering Committee about the progress made in implementing the CSRD and the EU taxonomy during the fiscal year.

[GOV-1-23a] NORMA Group’s Management Board and Supervisory Board have the necessary expertise to monitor sustainability issues effectively. The Supervisory Board evaluates its work annually as part of a self-assessment, in which an external consultant may also be consulted. The presentation of the expertise required for sustainability issues is shown in the matrix GOV-1-21 SUSTAINABILITY EXPERTISE ON THE SUPERVISORY BOARD. The evaluation process includes a systematic analysis of existing skills and experience gained during the fiscal year. Possible gaps in knowledge can be closed through targeted training and the use of external experts. In March 2024, the Supervisory Board took part in specialized ESG training. [G1-GOV-1-5a] The Integrity department is also responsible for corporate governance and is assigned to the Chief Executive Officer’s area of responsibility. The Vice President Integrity reports directly to the Chief Executive Officer of NORMA Group. [G1-GOV-1-5b] The expertise of the Supervisory Board with regard to aspects of corporate governance is described in the matrix GOV-1-21 SUSTAINABILITY EXPERTISE ON THE SUPERVISORY BOARD. [GOV-1-23b] The sustainability expertise of the Management Board and Supervisory Board is also relevant for assessing the material impacts, risks, and opportunities within NORMA Group. Within the Sustainability Steering Committee, the CFO and chairpersons of the relevant specialist areas are assigned to various working groups according to their respective areas of expertise. For example, the Executive Vice President Human Resources is responsible for “Own Workforce” and all matters relating to human rights. This structured division is intended to ensure focused and competent handling of the respective subject areas.

GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies

[GOV-2-26a+b] The CFO is informed about the current status of the specialist areas at the six-weekly meetings of the Sustainability Steering Committee. At the same time, regular reports are submitted to the Supervisory Board by the responsible departments during the fiscal year. The material impacts, risks, opportunities, and the implementation of due diligence and the results and effectiveness of guidelines, measures, metrics, and defined targets are communicated. The Audit Committee is informed about ESG issues at least twice a year by the Vice President Corporate Social Responsibility.

[GOV-2-26a+b] Under the leadership of NORMA Group’s CFO, a Steering Committee meets every six weeks to discuss sustainability issues, among other things. The committee is informed by the Corporate Responsibility department about material sustainability-related impacts, risks, and opportunities as well as the implementation of due diligence and the results and effectiveness of concepts, measures, and defined targets. Based on this, the Steering Committee makes all necessary sustainability-related decisions. The Corporate Responsibility department also reports regularly to the Supervisory Board of NORMA Group on sustainability issues during the fiscal year. This also includes information on the material impacts, risks, and opportunities. The Audit Committee is informed about ESG issues at least twice a year by the Vice President Corporate Social Responsibility. The Management Board and Supervisory Board also consider the impacts, risks, and opportunities with regard to the company’s sustainable business strategy and when making decisions on material transactions. Compromises in connection with these impacts, risks and opportunities have not yet been taken into account in the 2024 fiscal year.

[GOV-2-26c] In the 2024 fiscal year, the Steering Committee dealt with the material impacts, risks and opportunities. A detailed overview can be found in the chapter IRO-1 PROCESS IRO.

GOV-3 Integration of sustainability-related performance in incentive schemes

[GOV-3-29a-e] A detailed overview of the inclusion of sustainability-related benefits in the incentive system can be found in the REMUNERATION REPORT 2024.

GOV-4 Statement on due diligence

[GOV-4-33] The following overview explains how and where the application of the key aspects and steps of the due diligence process is reflected in the consolidated non-financial statement:

GOV-5 Risk management and internal controls over sustainability reporting

[GOV-5-36a] Risk management at NORMA Group is an integral part of corporate governance, both at Group management level and in the individual companies and functional areas. NORMA Group also has an internal control system for non-financial processes and Group-wide activities. Due to the heterogeneous process landscape and the high rate of change in the  requirements for non-financial information, the maturity level of the non-financial internal control system does not yet correspond to that of the (Group) financial internal control system. It aims to ensure the security and reliability of sustainability reporting and compliance with all legal requirements and internal guidelines. The Management Board of NORMA Group is responsible for maintaining an effective risk and opportunity management system. The Supervisory Board is responsible for monitoring the effectiveness of the Group’s risk management system.

The procedures and methods for preparing the sustainability report are partially integrated into NORMA Group’s risk management process and internal control system. The risks that exist in the context of sustainability reporting are identified by Corporate Responsibility, which is the responsible specialist department, and described within the risk management system. Corporate Responsibility has also developed internal controls and measures to minimize these risks. The identified risks and controls/measures are described in more detail below. The sustainability report is also audited with limited assurance by the external auditors. The non-financial metrics that are relevant to the remuneration of the Management Board are audited with reasonable assurance as part of the audit of the financial statements.

[GOV-5-36b] The approach of the internal control and risk management system with regard to the Group accounting process is explained in detail in the risk and opportunity report (see the chapter RISK AND OPPORTUNITY REPORT. The sustainability reporting process is based on the existing approach to risk assessment as part of the risk management system. Risks that arise in the context of sustainability reporting are recorded within the risk management system and follow the methodology of the entire risk management process.

[GOV-5-36c] The following main risks relating to sustainability reporting were identified as part of the financial risk assessment carried out:

• Reporting does not fully comply with regulatory requirements and standards (e.g. EU taxonomy, CSRD)

• Incompleteness and accuracy of the data

• Time of availability of the information

Internal controls and measures have been developed to minimize these risks:

As part of sustainability reporting, checklists developed by NORMA Group must be worked through to ensure complete and consistent sustainability reporting. In order to avoid errors, the process for preparing sustainability reporting texts is based on the separation of responsibilities and functions or competencies as well as plausibility checks as part of the reporting process. The individual sections of the report in relation to the text are prepared by the responsible departments and then consolidated, applying the principle of dual control.

[GOV-5-36d] The results of the risk assessment and internal controls throughout the sustainability reporting process are integrated into the relevant internal functions and procedures by the respective relevant departments. For example, Corporate Responsibility conducts a final review to ensure that all material data points required by the ESRS have been considered in both reporting and data collection.

[GOV-5-36e] The CFO is responsible for preparing the sustainability report. The CFO and the relevant specialist departments are regularly informed about the content and progress of the report every six weeks as part of the Steering Committee. If material risks arise or if the internal controls reveal potential risks, the Steering Committee is informed at an early stage. The Audit Committee and Supervisory Board also deal with the sustainability report for NORMA Group. The Supervisory Board is informed of the contents of the sustainability report by the Management Board and reviews it. The final report is submitted to the Audit Committee and the Supervisory Board of NORMA Group for review. If the Supervisory Board has no further adjustment requests or queries following its review, approval is granted.

Strategy

SBM-1 Strategy, business model and value chain

[Introduction SBM-1-39] NORMA Group considers itself one of the leading international market and technology leaders in advanced and standardized connection and fluid handling technology, as well as water management solutions. With its 25 production sites and numerous sales offices, the Group has a global network through which it supplies more than 10,000 customers in over 100 countries with over 40,000 high-quality products and solutions. [SBM-1-40ai][SBM-1-40aii][SBM-1-AR14] Detailed information on the product portfolio, key markets and customer groups can be found in the section SELECTIVE PRODUCT PORTFOLIO. [SBM-1-40aiii] In addition, a breakdown of the workforce by region can be found in the section WORKFORCE BY REGION. [SBM-1-40iii]

[SBM-1-40e][SBM-1-40f] NORMA Group pursues individual topic-specific sustainability targets. These are described in more detail in the following environmental, social and governance chapters. There are currently no sustainability targets in connection with NORMA Group’s products, services or customer groups.

[SBM-1-40g] NORMA Group’s vision “We join forces to provide superior solutions for a sustainable future” reflects the anchoring of sustainability in the company’s own strategy. This vision underlines the ambition to work together on innovative and sustainable solutions for a future-proof world. NORMA Group also pursues the mission “Driven by passionate collaboration and global excellence, we add value as the reliable partner for mission-critical solutions in industry applications, water management, mobility & new energy.” Several core elements of the mission reflect the fact that sustainability is an integral part of the strategic orientation: “Passionate collaboration” stands for building trusting relationships with colleagues, business partners and local communities. NORMA Group understands “global excellence” to mean the promotion of sustainability and resource efficiency. “Mission-critical solutions” focus on current global megatrends such as resource scarcity and climate change in the markets relevant to NORMA Group. With “add value,” the company supports sustainable transformation, and as a “reliable partner” it is committed to compliance and good corporate governance, which shows that sustainability is an integral part of its strategic orientation.

However, NORMA Group also faces future challenges, especially in the area of CO₂ reduction for its products and the introduction of a product carbon footprint. These challenges require measures to improve CO₂ emissions over the entire product life cycle. As a concrete measure, NORMA Group plans to develop a roadmap that defines specific mechanisms for action.

[SBM-1-42a] [SBM-1-42b]

At the core of NORMA Group’s business model is the ability to adapt quickly and flexibly to changing customer requirements as well as economic and social conditions. The targeted training and development of employees, and the utilization of their potential are the decisive keys to innovative strength and corporate success. A detailed description of the business model can be found in the chapter BUSINESS MODEL. There, the input factors such as raw materials, technology and human resources are described, the interaction of further processing is explained, and the resulting products and their benefits for customers, investors and other stakeholders are shown.

[SBM-1-42c] The central building blocks of NORMA Group’s value chain are human resources, i.e. employees of NORMA Group itself as well as employees of upstream or downstream companies. NORMA Group takes account of the most important value chains in its business activities: In the upstream value chain, employees of NORMA Group suppliers are considered for this purpose. Supplier groups from the areas of steel and metal components, granulates and plastics, among others, are particularly relevant. Further explanations can be found in the chapter PURCHASING AND SUPPLIER MANAGEMENT. Customers, consumers and end users are considered in the downstream value chain. Customer groups in the Mobility & New Energy and Industry Applications SBUs are particularly relevant. The own workforce includes both NORMA Group employees and employees of service providers who carry out activities on the company premises. In addition, affected communities and municipalities, especially those close to the production sites, are involved. By taking this approach, NORMA Group wants to ensure that sustainable principles are integrated and implemented along these parts of the value chain and that all relevant stakeholders are analyzed.

SBM-2 Interests and views of stakeholders

[Introduction SBM-2-43-44] NORMA Group sees itself as a transparent and open company and pursues a stakeholder-oriented approach. The company specifically seeks exchange with its internal and external stakeholders. These include experts and local stakeholders. In this way, NORMA Group aims to ensure continuous dialog with relevant stakeholders and promote a proactive improvement process as part of its commitment to sustainability. This is applied throughout the Group.

[SBM-2-45a] NORMA Group’s most important stakeholders include employees, customers, suppliers, shareholders and financial market players as well as experts from the media, academia and politics. NORMA Group also regularly engages in dialog with civil society groups such as NGOs during the fiscal year. NORMA Group is also in contact with associations, trade unions, analysts, communities near the site as well as people from science and politics. The company views it as part of its responsible corporate governance to ensure transparency regarding stakeholder interests and the impacts of its business activities on these groups, while appropriately incorporating these considerations into material decision-making processes. An open dialog with stakeholders and a clear understanding of their expectations are particularly important when shaping the company’s strategic direction and identifying material future topics for NORMA Group. To this end, the stakeholder perspective was considered in the materiality analysis in accordance with the ESRS. Selected internal experts for the respective ESG topics (e.g. QEHS specialist department for environment and health and occupational safety and quality) were consulted in order to identify and assess impacts, risks and opportunities relating to environmentally and socially relevant topics. [S1-SBM-2-12] As a central stakeholder group, the interests, viewpoints and rights of its own employees play a decisive role in shaping the company’s business model and strategic direction. NORMA Group’s corporate culture is intended to promote open communication and encourage employees to contribute to the further development of the business. This is a core component of the “Join Forces” corporate vision. Particular emphasis is placed on material aspects of corporate culture, working conditions and fundamental values such as diversity, inclusion and full respect for human rights, which are firmly embedded in the corporate philosophy and form the foundation for long-term success and sustainability. Continuous dialog with employees is important for success; it shapes both the business model and the strategic direction. A large number of local and global initiatives, such as the employee survey, ensure a continuous exchange of information.

[S2-SBM-2-9][S2-SBM-2-AR4][S3-SBM-2-7] NORMA Group is also aware of the impact of its business activities on workers along the entire value chain and on affected communities. The workforce in the upstream processes is seen as a key stakeholder group that can be significantly influenced by the company’s activities. NORMA Group suppliers who sign the Supplier Code of Conduct, i.e. in particular the preferred suppliers, commit to respect and uphold human rights.

Additionally, the management team and investor relations representatives hold discussions with institutional investors, financial analysts and private shareholders throughout the year. The company’s goal is to maintain consistent, transparent and reliable communication with both private and institutional investors. The traditional communication formats include, on the one hand, legally required mandatory components such as Quarterly Statements, Half-year and Annual Reports, investor presentations and announcements. In doing so, the company regularly informs its shareholders during the fiscal year about the strategic and business development of the Group. At the same time, NORMA Group’s Investor Relations team is focusing on expanding the digital information offering, for example through the online Annual Report, and providing new, target group-oriented communication formats.

NORMA Group involved the various internal and external stakeholders in determining the material impacts, risks and opportunities as part of the materiality analysis. Further information can be found in the chapter IRO-1 PROCESS IRO [in the referenced text: SBM-2-45b]. [SBM-2-45c].

[SBM-2-45d] NORMA Group’s management and supervisory bodies are informed about the views and interests of stakeholders affected by our sustainability-related impacts through selected internal and external formats. As part of the “Sustainability Management @ NORMA Group” program, reports are submitted to the CFO and the line managers of the relevant departments every six weeks as part of the Steering Committee. In addition, a Corporate Responsibility Report has been published annually in the past.

Impact, Risk and Opportunity management

The double materiality assessment was carried out in accordance with the European Sustainability Reporting Standards (ESRS). The materiality analysis and the identified impacts, risks and opportunities also meet or exceed the requirements of Section 289c HGB, meaning that no further material impacts, risks and opportunities within the meaning of Section 289c HGB were identified in addition to the following material topics.

IRO-1 - Description of the processes to identify and assess material impacts, risks and opportunities

[Introduction IRO-1-51-52] In order to identify material impacts, risks and opportunities (IROs) of NORMA Group, a double materiality assessment was carried out in accordance with the European Sustainability Reporting Standards as part of the consolidated non-financial statement for the 2024 fiscal year. The process used to identify the impacts, risks and opportunities and assess their materiality is explained below. The consolidated results of the materiality analysis can be found in chapter SBM-3 IRO STRATEGY.

Materiality was assessed through a process aimed at identifying, assessing, prioritizing and monitoring both potential and actual impacts on society and the environment, as well as risks and opportunities that may in turn impact NORMA Group’s financial performance, cash flows, access to finance or cost of capital. Within the double materiality assessment process, the entire scope of consolidation of NORMA Group was taken into account (see BP-1 GENERAL INFORMATION). [G1-IRO-1-6] In particular, NORMA Group also considered the entire scope of consolidation when identifying material impacts, risks and opportunities in connection with corporate governance. The process of identifying material impacts, risks and opportunities in connection with corporate governance ran parallel to the process of the overall materiality analysis.

[IRO-1-53a][IRO-1-53bi-iv] [IRO-1-53ci-ii]

To determine the material report content, NORMA Group has drawn up a list of sustainability aspects based on the sub-topics from the ESRS and supplemented these with company-specific aspects and topics from other regulations such as the Global Reporting Initiative (GRI). Based on this, a total of 46 sub-topics were defined, which were categorized according to overarching sustainability aspects and then divided into the three fields of action “Environment,” “Social” and “Governance.” The list serves as a basis for identifying the positive and negative as well as actual and potential impacts arising from NORMA Group’s business activities and relationships along the value chain. In addition, material risks and opportunities were identified. As part of the process to identify and assess IROs, all business areas and activities of NORMA Group were considered. The material topics were assigned to the relevant stages of the value chain. Due to the homogeneous business model and comparable risk profile, there was no disaggregation by business unit or geographical region, for example. [IRO-1-53g] NORMA Group used internal and external stakeholders to identify and evaluate IROs. This was to ensure that the defined value  chain stages and relevant sources were considered. [E2-IRO-1-11a][E3-IRO-1-8a][E5-IRO-1-11a] As part of the materiality analysis, NORMA Group did not systematically analyze its sites and business activities with regard to local issues of environmental pollution, water resources, resource use and circular economy, nor did it carry out an assessment of assets and activities. Instead, these analyses were carried out at Group level. The Water Framework Directive was not taken into account here. [E4-IRO-1-17] Furthermore, the materiality analysis revealed that no material impacts, risks or opportunities were identified in relation to biodiversity and ecosystems.

[SBM-2-45b] [IRO-1-53biii]

To ensure that the views and interests of stakeholders are taken into account in the process of conducting the double materiality assessment, 14 relevant stakeholder groups consisting of internal and external stakeholders were identified in preparation for the materiality analysis. Internal stakeholders include experts from the areas of Corporate Responsibility, Quality, Environment and Health & Safety (QEHS) and Integrity, who were able to provide key perspectives and input on the identified environmental, social and governance areas on behalf of their departments.

External stakeholders include customers, suppliers, shareholders and financial market players, non-profit organizations, local communities, trade unions, national human rights institutions, environmental organizations, lawyers and external consultants.

As part of the analysis, NORMA Group actively involved both internal and external stakeholder groups in the assessment process of the identified impacts, risks and opportunities. Internal stakeholders in particular played a central role in the assessment of these factors. This evaluation was carried out through structured integration in a two-stage process:

• Qualitative interviews: In the first phase, qualitative interviews were conducted to identify the relevant impacts, risks and opportunities in the environmental, social and governance areas. These interviews served to gain an in-depth understanding of the respective topics and their implications. The qualitative interviews were conducted with the internal stakeholder groups.

• Written query for quantitative evaluation: In the second phase, a written survey was conducted in which internal and external stakeholders quantitatively assessed the previously identified impacts, risks and opportunities. This assessment was based on an impact scale and a financial scale developed using the ESRS. This enabled a uniform classification and weighting of the identified factors.

Internal stakeholders were interviewed based on their expertise or randomly, either on all identified environmental topics or on all identified social and governance topics.

NORMA Group also involved external stakeholders in the evaluation process by means of subject-specific questionnaires. The potential impact of the individual topics was assessed. In relation to the internal stakeholders, only a few external stakeholders participated on a voluntary basis. In order to achieve meaningful and practically relevant results, external stakeholders were not consulted to identify impacts, risks and opportunities.

[IRO-1-53bi-iv] [IRO-1-53ci-ii]

To assess and prioritize the identified IROs, they were classified into positive or negative, actual and potential impacts, as well as risks and opportunities. Dependencies and interrelationships between impacts, risks and opportunities were not explicitly considered in the materiality analysis. Various time horizons were considered for the assessment: a short-term observation period of less than one year, a medium-term observation period of up to five years and a long-term period of more than five years. The short and medium-term periods were considered together when evaluating and prioritizing the IROs. The time horizon used is consistent with the time horizons defined in ESRS 1 section 6.4.

To assess the materiality of each identified (potential and actual) negative impact, the factors of scale, scope and irremediable character of the impact were used, which together determine the severity of the impact. All three factors were rated on a four-point scale, with 4 being the most significant (1 = ”very low negative impact” to 4 = ”very high negative impact”). In addition to the severity, potential impacts were assessed on the basis of their likelihood, also using the four-point scale. In the case of potential negative impacts on human rights, the severity of the impact takes precedence over the likelihood. The materiality of potential social impacts was therefore assessed solely on the basis of severity. The assessment of the materiality of each identified (potential and actual) positive impact was carried out in parallel. However, only the factors of scale and scope and, where applicable, likelihood were considered here.

When assessing the materiality of financial effects, the likelihood and magnitude of the financial effects of the identified risks and opportunities were evaluated. Analogous to the assessment of impacts, scales of 1 to 4 were used (1 = ”very unlikely” to 4 = ”very likely”).

The average values for each question were calculated in order to analyze all responses and identify the material topics. The assessment of the respective specialist department was weighted twice in order to recognize their expertise in the respective area. The material topics were identified on the basis of these average values and using the ESRS methodology. An assessment of an impact or financial effect of a topic that meets the materiality threshold is a material impact, a material risk or a material opportunity. The materiality threshold was a value of 2.50.

[E1-IRO-1-20a] [E1-IRO-1-20bi-bii] [E1-IRO-1-20ci-cii], [E1-IRO-1-AR11a-d],[E1-IRO-1-AR9a-b]

[E1-IRO-1-AR12a-d], [E1-IRO-1-AR13a-d], [E1-IRO-1-AR15], [E1-IRO-1-21]

In accordance with the requirements of the conformity criteria within the EU taxonomy, a climate risk and vulnerability analysis was carried out in relation to the economic activities CCM 3.18 and CCM 5.1. The assessment of physical climate risks was carried out on the assumption that most of the economic activities of NORMA have an expected lifespan of more than ten years.

To enable an economic approach, the Corporate Responsibility department carried out an analysis of the largest percentage taxonomy-eligible revenue shares from the 2023 fiscal year and selected three Water Management companies and two companies with the highest revenue shares from eMobility products.

To determine the climate risks, coordinates of the selected locations were used to determine possible climate risks at the location. Potential climate risks were evaluated using a climate excellence tool. The evaluation was carried out in accordance with the precautionary principle. For example, the IPCC high emissions scenario SSP5-8.5 was used to determine the climate-related risks that pose a threat to the economic activities of NORMA. The climate model projections used in the latest IPPC assessment report (AR6) for the (SSP5-8.5) scenario were used to determine which hazards will have a material impact on NORMA’s individual sites and operations.

The potential climate risks were then validated in interviews with the site managers and other experts and existing mitigation measures, such as drainage systems for flood risks, were queried and documented.

Due to the existing and suitable remedial measures at the selected locations in the USA, China, India, Poland and Malaysia, no new measures were defined and no adaptation plan was developed, as no need for this was identified.

Beyond the climate risk and vulnerability analysis described above, no further analyses were carried out in connection with climate risks in the 2024 fiscal year. The climate scenarios used are not taken into account in the financial statements. The existing processes are to be expanded over the next few years.

[IRO-1-53e in conjunction with IRO-1-53ciii] The identified impacts, opportunities and risks are currently not integrated into the general risk management process and the assessment of NORMA Group’s overall risk profile. The company is still in the initial phase of this implementation process. In the following fiscal years, NORMA Group will consider integrating the impacts, opportunities and risks into the existing risk management system. The identified sustainability-related risks are not prioritized in comparison to other risks. [IRO-1-53f]

[IRO-1-53d] The impacts, risks and opportunities classified as material were reviewed and subsequently validated by top management and the CFO via the Steering Committee. The Steering Committee and the working groups of the sustainability management program were involved in the validation process. The result and the list of all IROs can be found in the section SBM-3 MATERIAL IROs. The review and confirmation of the results by the Steering Committee is part of NORMA Group’s internal control process.

[IRO-1-53b] [IRO-1-53h] The results of the double materiality assessment and the assessment of the key IROs are revalidated annually and the double materiality assessment process is repeated if necessary, for example in the event of changes to the business model. In the future, interfaces to other relevant processes such as the risk management process or other due diligence processes of the various specialist departments will be integrated into the process. The up-to-dateness of the material IROs is reviewed during the current reporting year, with internal experts and the respective specialist departments evaluating the IROs. If necessary, the results and affected IROs are adjusted accordingly and approved by the Steering Committee and therefore also the CFO. NORMA Group has changed the materiality assessment process compared to the previous reporting period 2023. In the previous reporting year 2023, the requirements of the German Commercial Code (HGB) and the GRI Standards were used as the methodological basis for the single materiality (assessment). Due to the requirements of the HGB and the ESRS, NORMA Group has carried out a double materiality assessment in accordance with the ESRS for the current 2024 fiscal year.

SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model

[SBM-3-48g] In 2024 fiscal year, the first voluntary year of application of the CSRD, NORMA Group conducted the double materiality assessment according to ESRS to identify material impacts, risks and opportunities. The implementation of the materiality analysis is discussed in the chapter IRO-1 PROCESS IRO, which describes the process for identifying and assessing the material impacts, risks and opportunities. NORMA Group is aware of the material impacts, risks and opportunities that its business activities may have on the environment, people and the economy. [SBM-3-48ciii] It is currently evident that the material impacts, risks and opportunities are of significant importance for NORMA Group’s sustainable business development in both the short and medium term. The material impacts, risks and opportunities identified as part of the materiality analysis are summarized in the following table:

[SBM-3-48a]