Reducing risks through preventive measures In addition to having updated the declaration of principles and the way the complaints procedure is managed in the reporting year, we focused on preventive measures that are based on the results of the risk analysis. We continued to raise awareness among our employees in order to make our complaints mechanism known throughout the company. Furthermore, we integrated environmentally relevant legal provisions of the LkSG into our ISO 14001 environmental management system, and launched a training and communication campaign on the LkSG. We informed specialists and managers in all purchasing areas of the Festo Group about the applicable due diligence guidelines and the expected new regulations. At the same time, we continued the LkSG basic training from previous years. Requiring commitment from business partners As part of our due diligence processes, all suppliers must confirm in writing that they comply with our Code of Conduct for Business Partners. By signing the agreement, they also undertake to demand of their suppliers that they comply with these requirements. The Festo Code of Conduct for Business Partners is currently being supplemented with additional requirements (including the topics of deforestation, access to resources, and reducing emissions), which will apply to all existing and future suppliers. In addition, all new suppliers are evaluated and checked according to environmental and social standards as part of the supplier qualification process. If we identify risks of non-compliance at a supplier, they will not be qualified. We also analyze if there is a risk that our existing suppliers could deviate from our standards, classify them according to this risk, and regularly check the extent to which they comply with the requirements. Supplier evaluation based on environmental certifications All our suppliers also undergo specific assessment processes with regard to various environmental and climate protection targets. We distinguish, among other things, between suppliers with a higher and those with an average environmental impact. If their manufacturing processes are associated with a higher environmental impact, for example because of the industry-specific use of chemicals, we require certification according to ISO 14001 or validation according to the Eco-Management and Audit Scheme (EMAS). To evaluate distributors, we use an appropriate certification from the actual manufacturer. ISO 14001 or EMAS certification is optional for suppliers with an average environmental impact. Increasing transparency on conflict minerals Additionally, we expect our business partners to comply with all applicable regulations on conflict minerals. In order to be able to assess this, we investigate from which smelting plants the raw materials for our products come. In doing so, we rely on the methods of the Responsible Minerals Initiative. As part of the supplier self-assessment process, we also request information from our business partners about the use of possible conflict minerals. Moreover, we complete the Conflict Minerals Reporting Template (CMRT) of the Responsible Minerals Initiative to ensure transparency so that the proportion of certified smelters worldwide can be increased. Product purchasing: complying with legal requirements We inspect the products we purchase using an internal standard. The aim is to comply with the required substance bans and declaration obligations. The European Chemicals Regulation on the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) and the EU Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS), among others, are decisive for achieving this. You can find out more in the Compliance section on the Sustainability pages of our company website. New sourcing strategy with social and environmental requirements Festo is currently developing a global sourcing strategy that systematically integrates social and environmental criteria into the procurement process. The aim is to increase transparency in the supply chains and to set binding internal standards for evaluating and selecting suppliers. The new strategy includes: – Clear, measurable requirements for human rights and environmental standards in the procurement process. – Linking the results of evaluations (self-disclosure forms, audits, performance indicators) with decisions to give out awards. – Implementation using tool-supported processes and clearly defined milestones. External assessment of the sustainability performance of Festo In 2025, we once again participated in ESG ratings in order to continue to develop our sustainability management process. The external evaluations help us to identify potential for improvement, apply the resulting measures, and ensure transparent documentation along the entire value chain. We primarily use the EcoVadis and Integrity Next platforms for the external assessment of our sustainability performance. Furthermore, we take part in assessments and analyses on platforms such as the Responsible Business Alliance (RBA) and NQC Supplier Assurance so that we can meet both individual customer requirements and industry-specific specifications. 2. Social Festo SE & Co. KG Sustainability Report 2025 Festo SE & Co. KG Sustainability Report 2025 46 47
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