Description of the Processes to Identify and Assess Material Impacts, Risks, and Opportunities

We have relied on materiality assessments as a strategic tool to orient our sustainability strategy and our reporting since 2011. In 2024, we revised our materiality assessment process extensively in line with new requirements under the ESRS, and performed a double materiality assessment pursuant to ESRS provisions.

Identification of Potential and Actual Impacts, Risks, and Opportunities

The first step of the assessment performed in 2024 involved defining potential and actual positive and negative impacts, as well as financial risks and opportunities (IROs). To do this, we identified business activities along our entire value chain at the level of the sub-topics specified in the ESRS, in which IROs could arise. This allocation of the value chain provided an overview of potential interdependencies between the environmental and social impacts and the associated risks and opportunities.

As a player in the cosmetics, adhesive, and FMCG (fast-moving consumer goods) industries, our focus is on resource use, packaging management, and supply chain conditions. We analyze complex interactions: for example, the use of palm oil or water directly influences ecological risks such as deforestation or water scarcity, as well as social aspects, such as fair working conditions throughout the supply chain. In addition to these risks, we examine opportunities, such as sustainable raw material alternatives or innovative packaging solutions. The aim is to ensure that our sustainability strategy is not developed in isolation, but as a dynamic response to complex interdependencies.

Data Basis and Scope of Analysis

Our data basis was drawn from internal sources such as topic-specific risk analyses, and external data sources that deal with industry-specific risks.

We considered both our own operations and the upstream and downstream value chain in identifying and assessing the impacts of our company on people and the environment. The focus was on our main business activities, product groups, business relationships, and key raw materials supply chains in which multiple negative and positive impacts, opportunities, and risks are likely. Individual sites and assets were not reviewed and affected communities were not consulted with a view to IROs in the areas of pollution, water, or resource use and circular economy. In some cases, individual impacts were assessed separately because of the different business models of the Consumer and tesa Business Segments.

Assessment of Impacts, Risks, and Opportunities

In the next step, these IROs were assessed and prioritized in several internal workshops involving representatives from all affected departments. In planning the workshops, we made sure that specialist representatives were in attendance, who were in regular dialogue with relevant external stakeholders and whose perspectives could therefore be directly included in the discussions. No external experts were involved.

The assessment of IROs was based on the methodology and thresholds set out in the implementation guidance of the “European Financial Reporting Advisory Group” (EFRAG). Negative impacts were assessed in terms of scale, scope, and irremediable character, and potential impacts in terms of likelihood. Positive impacts were not assessed in terms of irremediable character. Having assessed the positive and negative impacts, we classified these according to the scales and materiality thresholds determined by the EFRAG.

In our financial materiality assessment, the likelihood of occurrence and the potential scale of the financial effect were considered. We applied the scales and thresholds used in the Group-wide risk management system. This was a net risk assessment, in line with the Group-wide risk management system. Such methodological alignment is intended to ensure that the knowledge obtained from the materiality assessment can be integrated into the company’s general risk management and thus also in the associated management processes. Sustainability risks are generally regarded as equally as important as other risk types in the Group-wide risk management system. Sustainability risks categorized as strategic risks are given special consideration (see “Risks and Opportunities Report”).

Identification of Material Topics and Derivation of Reporting Disclosures

Where an IRO exceeded the materiality threshold, the associated topic was classed as material. Based on the IROs identified as material, Beiersdorf selected the disclosures to be reported and assigned material data points. Data points that are voluntarily reported or subject to phase-in options were eliminated. Where Beiersdorf identified individual data points or data elements in the remaining data points that were not considered material due to company-specific circumstances, these were not included in the reporting. An overview of all reported disclosure requirements can be found in “Annex A.”

Monitoring and Continuous Development

The final results were then validated by the relevant sustainability bodies from the two business segments: the Sustainability Council (Consumer Business Segment) and the Executive Committee (tesa Business Segment). The Executive Board and Supervisory Board (Audit Committee) of Beiersdorf AG were also informed and discussed the possible strategic implications of the results.

Monitoring identified IROs is a key part of our sustainability management. Developments and progress within the framework of our sustainability strategy are measured against clearly defined KPIs and targets, allowing any necessary adjustments to be made at an early stage. The results are presented to the relevant committees so that the identified risks and impacts can be strategically addressed.

We reviewed the results of the assessment in 2025 based on the findings from the first year of reporting in accordance with the ESRS (2024). We did not change the methodology. The review included changing the classification of the sub-topic “corruption and bribery” within “ESRS G1 – Business Conduct” from the previous year to not material, which is why we have not made any disclosure on the subject in this year’s report. The same applies to the sub-topics “social dialogue,” “freedom of association,” and “collective bargaining” within “S1 – Own Workforce.”

Regular reviews of the materiality assessment ensure that our actions remain relevant.