Introduction

Introduction

Our approach to sustainability

As a global provider of indoor climate and ventilation solutions, we recognise that our industry has a significant environmental footprint. We are committed to the United Nations (UN) Sustainable Development Goals (SDGs) and the United Nations Global Compact (UNGC), of which we are a signatory. Our sustainability strategy, based on a double materiality assessment, focuses on environmental responsibility, social issues, and governance. We work to reduce our environmental impact, promote fair labour conditions, and enhance transparency and accountability across our value chain.

Sustainability is central to our operations, as demonstrated by our policy commitments, including the Code of Conduct and the Supplier Code of Conduct. These policies align our activities and guide our suppliers in adhering to international standards, such as the UN Guiding Principles on Business and Human Rights (UNGPs) and International Labour Organization (ILO) conventions. We regularly review and update these policies. Our human rights due diligence framework, overseen by the CEO and the Sustainability Steering Committee, integrates human rights considerations into all operations.

Clear processes are in place to address negative impacts arising from our operations, including risk assessments and corrective actions. We are committed to investigating and resolving issues promptly, in line with our responsible business practices.

We provide several channels for our employees and stakeholders to seek advice or raise concerns. The Integrity Line (more details under Compliance and fair business practices) allows anonymous reporting of misconduct and policy violations. All concerns are handled confidentially, with safeguards in place to prevent retaliation.

We are an active member of various industry and sustainability associations. These memberships help us to follow global engineering best practices and to engage with other like-minded organisations. At Zehnder Group, we are committed to continuous improvement and high sustainability standards.

Our approach to reporting

From 2025 onwards, Zehnder Group’s Sustainability Report will be incorporated into the Integrated Annual Report. We will continue to increase transparency by outlining our sustainability strategy, progress, and challenges and responding to evolving stakeholder expectations and regulatory requirements.

The Sustainability Report covers the period from 1 January to 31 December 2025, encompassing all business segments and consolidated companies in line with the scope of consolidation in the Financial Report. We apply the principle of including acquisitions and excluding divestments in the reporting year on a full-year basis, unless stated otherwise. Where available, value chain information (upstream and downstream) is included through direct engagement; any remaining gaps are addressed using research and stakeholder input.

Social and governance key performance indicators (KPIs) reflect full-year actuals, while environmental KPIs are based on three quarters of actual data and an estimate for the fourth quarter, unless a deviation of more than 5% from the Group total for this KPI has been discovered between the actual and estimated figures. Selected KPIs have undergone limited assurance by PricewaterhouseCoopers AG and have been marked with a checkmark , as described in the Limited assurance report. Adjustments due to new or updated data are marked accordingly and figures that were unavailable or unpublished in the previous year or base year are marked “n/a”.

We report in accordance with the GRI (Global Reporting Initiative) Standards to the fullest extent permitted by law and our report on non-financial matters remains compliant with Art. 964a ff. of the Swiss Code of Obligations. The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) continue to be followed in our “Climate action” disclosures. Following the European Union (EU) omnibus proposal, the application of the Corporate Sustainability Reporting Directive (CSRD) has been deferred and the thresholds adjusted. We continue to collect data aligned with the European Reporting Standards (ESRS) to maintain readiness and will review CSRD applicability as the regulatory framework evolves. For the financial year 2025, we are voluntarily reporting on the EU taxonomy for the first time.

The report is structured as follows. The chapters Introduction, Governance, and Strategy describe Zehnder Group’s general approach to sustainability. The focus topics Environmental matters, Employee-related issues, Social issues, Combating corruption, and Respect for human rights are in line with the five non-financial reporting areas specified in the Swiss Code of Obligations. The focus topics contain issues identified based on the principles of double materiality. For each issue, we describe the associated impacts, risks, opportunities, and Zehnder Group’s management approach. We also describe the measures taken, their implementation and outlook, and report on relevant KPIs. The report also includes an EU taxonomy section. Finally, the report contains an index section comprising a GRI content index, an index in accordance with the Swiss Code of Obligations, a TCFD index, and a List of abbreviations.

Further details of our commitment to sustainability can be found on our Sustainability website.

Restatements of information

Zehnder Group’s greenhouse gas (GHG) emissions accounting policy is based on the Science Based Targets initiative’s (SBTi) Net-Zero Standard Criteria and Corporate Near-Term Criteria as well as the GHG Protocol. Under this policy, the base year inventory must be recalculated and restated if changes in company structure and activities, methodology changes, or data errors lead to a change of 5% or greater in Scope 1 and 2 combined base year emissions, or a change of 5% or greater in total Scope 3 base year emissions. If total combined Scope 1, 2, and 3 base year emissions change by 5% or more, all scopes must be recalculated, integrating all known changes in company structure and activities, methodology changes and data errors in all scopes.

During the reporting year, a data error was identified at one Group company representing more than 5% of Zehnder Group’s total Scope 1, Scope 2, and Scope 3 GHG emissions. This triggered a restatement of historical emissions data.

While the primary impact was related to Scope 3 emissions, minor adjustments were also made to Scope 1 figures to ensure methodological consistency and comparability across reporting years according to our GHG emissions accounting policy. These adjustments did not materially affect the previously reported Scope 1 emissions. No changes were necessary for Scope 2 emissions for previous years. As a result, the restated Scope 2 figures remain unchanged compared to previously reported values.

Any resulting recalculations or restatements are disclosed and explained in the footnotes of the relevant tables and figures, with the scope and magnitude of changes indicated.