EU Taxonomy Reporting

Since the EU Taxonomy Regulation came into force, Beiersdorf has been required to provide information on sales, capital expenditures (CapEx), and operating expenses (OpEx) associated with environmentally sustainable economic activities. The EU Taxonomy Regulation contains criteria for determining whether an economic activity qualifies as sustainable with respect to various environmental objectives. The overarching goal is to create a more sustainable financial sector and channel investments into green and sustainable projects, thereby contributing to the European Green Deal.

Taxonomy Impact Analysis Procedure¹

Beiersdorf uses a top-down approach to determine the Taxonomy eligibility of certain business activities with the help of the relevant specialist units. To this end, we have assembled an interdisciplinary team consisting of employees from the tesa and Consumer Sustainability departments, Group Accounting and Consolidation (Consumer), and Sustainability Controlling (tesa). The team continuously analyzes – in close cooperation with the specialist units – whether any Taxonomy-eligible economic activities are being performed.

Taxonomy-eligible activities relevant to Beiersdorf are identified based on the activity descriptions, the referenced NACE codes, and the supplementary publications of the EU Commission and the EU Platform on Sustainable Finance.

Identified Taxonomy-Eligible Economic Activities

Beiersdorf’s business model was comprehensively analyzed in connection with the implementation of the EU Taxonomy requirements. The core business activities of Beiersdorf are not covered by the activities listed in the latest version of the Delegated Acts. Only one activity in the tesa Business Segment, which relates to the manufacture of subcomponents for batteries (Activity 3.4), was identified as Taxonomy-eligible. However, this activity is of minor importance compared to Beiersdorf’s core business activities and only makes up a small proportion of the Group’s sales.

In terms of classifying investments and operating expenses, the EU Taxonomy Regulation distinguishes between the following three categories:

• Category A: investments or operating expenses related to assets or processes that are associated with Taxonomy-aligned economic activities.
• Category B: investments or operating expenses that are part of a (CapEx) plan to expand Taxonomy-aligned economic activities or to allow Taxonomy-eligible economic activities to become Taxonomy-aligned.
• Category C: investments or operating expenses related to the purchase of output from Taxonomy-aligned economic activities and individual measures enabling the target activities to become low-carbon or to lead to greenhouse gas reductions.

Due to Beiersdorf’s business model, no investments or operating expenses other than those related to economic activity 3.4 are allocated to category A. Similarly, as we are not drawing up any investment plans to convert our activities into Taxonomy-aligned economic activities, none of our investments or operating expenses are allocated to category B. Beiersdorf therefore only has to take into account investments and operating expenses relating to the purchase of output from Taxonomy-aligned economic activities and individual measures (category C).

The reported economic activities relate exclusively to the environmental objective of “climate change mitigation,” as they can make a positive contribution to the reduction of CO₂e emissions in the Group and are in line with Beiersdorf’s sustainability strategy. In this context, Taxonomy-eligible economic activities are assessed based on the technical screening criteria (“substantial contribution” and “do no significant harm”), i.e., in accordance with Annex 1 to the Commission Delegated Regulation (EU) 2021/2139. Economic activities contributing to the environmental objective “climate change adaptation” are included exclusively in reports for selected investment projects with a focus on factors in connection with climate change adaptation.

In the course of the data collection and reporting process, we make sure that each economic activity is clearly allocated to an EU taxonomy activity. We can thus rule out the possibility of economic activities being allocated twice.

The following economic activities were identified as Taxonomy-eligible:

Information and communication

• Activity 8.1 “Data processing, hosting and related activities” was identified as relevant for Beiersdorf, since the Consumer Business Segment operates a data center and provides these services to tesa. The acquisition of third-party computing power (cloud computing services) is also taken into account in this context.
• Activity 8.2 “Data-driven solutions for GHG emissions reductions” is no longer relevant with effect from the financial year 2024. Expenses in connection with emissions management software tools were reported here in the previous year.

Construction and real estate activities

• Combined packages of measures reported in connection with Activity 7.2 “Renovation of existing buildings” include content which is allocated to Activities 7.3, 7.5, and 7.6. The investment project (package of measures) must be in excess of 25% of the value of the building.
• Activities 7.3 “Installation, maintenance and repair of energy efficiency equipment,” 7.5 “Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings,” and 7.6 “Installation, maintenance and repair of renewable energy technologies” are part of our building management; they also include the installation, maintenance, and repair of heating, ventilation, and cooling systems, photovoltaic systems as well as measuring systems and energy-efficiency control units in our administrative buildings and production facilities.
• Activity 7.4 “Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)” was identified as relevant, as there are vehicle-charging stations on our premises that are operated by a third party.
• Activity 7.7 “Acquisition and ownership of buildings” covers investment activities in connection with the construction or expansion of our production and administrative buildings. The construction of these buildings are carried out by external construction companies. Capitalization of right-of-use assets from leases (IFRS 16) for rented office buildings is also reported under Activity 7.7.

Energy

• Activity 4.25 “Production of heat/cool using waste heat” was identified in this area, because Beiersdorf uses waste heat for internal heating processes. Activity 4.30 “High-efficiency co-generation of heat/cool and power from fossil gaseous fuels” is no longer relevant due to the sustainability strategy pursued by Beiersdorf from the financial year 2024. Other activities from this area, e.g., with respect to the production of renewable energy, have been recorded under “Construction and Real Estate” in accordance with the EU Taxonomy Regulation.

Transport

• Our transportation activities are generally outsourced to service providers, meaning we do not conduct any Taxonomy-eligible activities in this area. Our own fleet of company cars falls under Activity 6.5 “Transport by motorbikes, passenger cars and light commercial vehicles.”

Manufacturing industry/goods manufacturing

• The manufacture and sale of products from the Consumer Business Segment do not fall within the scope of the EU Taxonomy. With the manufacture of subcomponents for batteries (Activity 3.4, “Manufacture of batteries”), only a small proportion of the tesa Business Segment’s economic activity qualifies as Taxonomy-eligible. Its other activities do not generate Taxonomy-eligible sales. For example, tesa does not manufacture plastics in primary form, but sources them from suppliers.

The data basis for determining the key figures (sales, capital expenditure, and operating expenses) for Taxonomy-eligible and Taxonomy-aligned economic activities (numerator) and their corresponding reference figures (denominator) is generally derived from Beiersdorf’s financial controlling systems.

Taxonomy-Eligible Sales

The denominator for the purposes of the EU Taxonomy is determined in line with the definition of sales in the consolidated financial statements (see Notes to the consolidated financial statements, Income Statement, Note 01).

For the 2024 reporting year, sales relating to the manufacture of subcomponents for batteries are reported under Activity 3.4 “Manufacture of batteries.” The sales generated in this area are attributable entirely to the tesa Business Segment. These transactions amount to €17 million and therefore represent 0.2% of our Group sales of €9,850 million.

Taxonomy-Eligible Capital Expenditure (CapEx)

The reference figure (denominator) of our Taxonomy-eligible activities is determined in accordance with the requirements of the EU Taxonomy Regulation. For the 2024 reporting year, the reference figure is €509 million (denominator). In addition to the investments in intangible assets (Note 11 to the consolidated financial statements) and property, plant, and equipment (Note 12 to the consolidated financial statements) reported in the annual report, this figure also includes investments related to right-of-use assets from leases (Note 12 to the consolidated financial statements).

Capital expenditure for projects and long-term leases is allocated to the activities identified as Taxonomy-eligible with the help of Beiersdorf’s financial controlling systems and interviews with the responsible specialist units. For the 2024 reporting year, capital expenditure amounting to €111 million – a share of 21.9% – is attributable to Activity 7.7 “Acquisition and ownership of buildings.”

In total, our Taxonomy-eligible capital expenditure amounts to €156 million. This corresponds to a share of 30.7% of the total capital expenditure (denominator) of €509 million for the 2024 reporting year. The change compared to the previous year is primarily attributable to the conclusion of projects in connection with the modernization and expansion of our (production) sites and the associated capital expenditure in 2023 (Activity 7.7).

Taxonomy-Eligible Operating Expenses (OpEx)

The data basis for calculating the reference figure (denominator) for Taxonomy-eligible operating expenses for the 2024 reporting year is derived from Beiersdorf’s financial controlling systems. The reference figure is the sum of the following cost components:

• Research and development expenses
• Expenses in connection with short-term and low-value leases
• Maintenance and repair expenses

Where possible, operating expenses were allocated directly to the identified Taxonomy-eligible activities using data from our financial systems. In cases where it was not possible to directly allocate percentage shares, these shares were broken down and, if necessary, allocated using appropriate keys (e.g., capital expenditure for Taxonomy-eligible activities).

Taxonomy-eligible operating expenses amounted to €35 million. Compared with the investment expenditure reference figure of €524 million, this is equivalent to a share of 6.7%. The change compared to the previous year is primarily attributed to operating expenditures, which are reported for the first time in connection with activity 7.3, 7.7 and 8.1 for the financial year 2024.

Approach and Results of the Alignment Analysis

To assess whether the Taxonomy-eligible activities relevant to Beiersdorf are Taxonomy-aligned, we conducted a comprehensive analysis of the relevant technical screening criteria as set out in the annexes to the Delegated Acts on the EU Taxonomy. For a Taxonomy-eligible activity to be classified as Taxonomy-aligned, the following requirements must be satisfied cumulatively:

• Compliance with the technical screening criteria for a substantial contribution to the respective environmental objective
• Compliance with the technical screening criteria to avoid material adverse effects on other environmental objectives (do no significant harm, DNSH)
• Compliance with minimum safeguards

In principle, compliance with the technical screening criteria is checked and documented individually for each activity. DNSH compliance regarding Appendix A (“Climate change adaptation”) is verified centrally for the relevant Taxonomy-eligible activities with the help of climate risk and vulnerability analyses for each site.

Beiersdorf relies on processes, documents, and guidelines that are established within the Group to review and comply with the minimum protection requirements (see sections “ESRS S2 — Workers in the Value Chain” and “ESRS G1 — Business Conduct”). Beiersdorf actively promotes compliance with laws, codes of conduct, and human rights. Our annual risk management process includes an assessment of human rights violations by our employees and in our supply chain. Beiersdorf advocates for fair competition and actively prevents corruption through a number of compliance programs. Through appropriate monitoring measures, Beiersdorf ensures that the minimum protection requirements of the EU Taxonomy are met. Beiersdorf has a compliance management system for taxes similar to the Group-wide compliance management system.  Based on our analyses, we have identified a Taxonomy-aligned share for the following activities:

• Activity 6.5 “Transport by motorbikes, passenger cars and light commercial vehicles”
• Activity 7.4 “Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)”
• Activity 7.5 “Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings”
• Activity 7.6 “Installation, maintenance and repair of renewable energy technologies”
• Activity 7.7 “Acquisition and ownership of buildings”

The remaining activities identified as Taxonomy-eligible are not Taxonomy-aligned.

The tables below show the amount of Taxonomy-aligned CapEx and OpEx clustered by component:

To check our compliance with the technical screening criteria in connection with Activity 7.7 “Acquisition and ownership of buildings,” we primarily relied on the available energy performance certificates (EPCs) and the primary energy demand listed therein. In the event that no energy performance certificate was available, we used alternative external confirmations that provide appropriate evidence of compliance with the limits specified in the technical screening criteria (e.g., energy class A).

The majority of Beiersdorf’s Taxonomy-eligible activities involve products and services obtained from suppliers and service providers. Where possible, the relevant technical assessment criteria are primarily checked directly by Beiersdorf or by confirmation from our suppliers. In some cases, there were no third-party evidence and confirmations available for these economic activities to conclusively assess their potential Taxonomy-alignment. For other economic activities, the technical screening criteria could not be fully met, resulting in no Taxonomy-aligned disclosure for this portion. This particularly applies to portions of investment expenses for activities 6.5, 7.7 and 8.1.

The 2024 reporting year posed further considerable challenges for both Beiersdorf and its suppliers in terms of proving the Taxonomy-alignment of the identified Taxonomy-eligible activities.

Key Figures EU Taxonomy Reporting

¹ Given the ongoing, dynamic development of the formulations contained within the EU Taxonomy Regulation, also in consideration of the supplementary publications of the EU Commission and the EU Platform on Sustainable Finance, uncertainties persist regarding the interpretation of its wording and terms. As a result, we may make changes to our Taxonomy Impact Analysis in the future.