BMW Group

BMW AG is a stock corporation (Aktiengesellschaft) within the meaning of the German Stock Corporation Act. It has an executive Board of Management and a Supervisory Board that monitors how the Company is managed by the Board of Management.

Board of Management – Duties, diversity, expertise

The Board of Management has overall responsibility for the management of BMW AG. It defines the strategy and resource framework and takes actions to implement the strategy. The Board of Management decides on product and customer-related issues of particular importance and consequence to the BMW Group, as well as on automobile product strategy. The Board of Management incorporates various sustainability matters into the decisions taken at its meetings and addresses the material impacts, risks and opportunities associated with the Company's course of business.

As at 31 December 2024, 14% of the seven members of the Board of Management were female and 86% were male based on the composition principles and taking into account the ESRS reporting obligations.

The Board of Management must comprise at least one man and one woman. The Board of Management deals with the impacts, risks and opportunities arising from business development on a continuous basis.

Supervisory Board – Composition, diversity, expertise

BMW AG's Supervisory Board is composed of ten shareholder representatives (elected by the Annual General Meeting) and ten employee representatives (elected in accordance with the German Co-Determination Act). Female members made up 30% of the Supervisory Board at the end of 2024.

Skills Matrix Board of Management and Supervisory Board

Both the Board of Management and Supervisory Board have expertise across all material sustainability topics including:

• Climate change
• Pollution
• Water and marine resources
• Biodiversity and ecosystems
• Circular economy and resource use
• Own workforce
• Workers in the value chain
• Consumers and end-users
• Business conduct

Supervisory Board – Duties and committees

The Supervisory Board monitors the activities of the Board of Management and advises the Board of Management on important matters relating to the management and the strategic development of the Group. Sustainability issues and their associated material impacts, risks and opportunities are of key importance to the Supervisory Board.

The Supervisory Board has established committees including:

• Presiding Board - prepares meetings and addresses sustainability matters
• Audit Committee - reviews sustainability reporting and monitors ESG risks
• Personnel Committee - addresses Board of Management remuneration including sustainability targets
• Nomination Committee - prepares election proposals considering diversity objectives

The Board of Management incorporates various sustainability matters into the decisions taken at its meetings and addresses the material impacts, risks and opportunities associated with the Company's course of business. It also monitors the key sustainability-related indicators and targets as well as department-specific sustainability activities and developments.

The Board of Management regularly discusses:

• Reports related to the latest business developments
• The current market environment, financial and non-financial risks
• The Group risk strategy and the effectiveness of the risk management system
• The development of the workforce, diversity, and ongoing qualification and retraining measures
• Ongoing compliance activities and potential risks
• The implementation status of corporate due diligence requirements relating to respect for human rights and associated environmental standards

Progress Reports: The Sustainability and Mobility function submits progress reports on the BMW Group's overarching sustainability targets to the Board of Management at least three times a year. The targets and measures with regard to reducing CO2e emissions in all scopes, the circular economy, environmental and social standards and social sustainability are presented, and the strategic and operational implementation status is discussed.

Materiality Assessment: The results of the materiality assessment, including the material impacts, risks and opportunities, are presented to the Board of Management by the Group Reporting function for discussion.

Supervisory Board Reporting: At each of its meetings, the Board of Management presents the material impacts, risks and opportunities related to the latest business developments in its report on the current business situation to the Supervisory Board.

Annual ESG Reporting: Every September, the Supervisory Board receives a report from the Chairman of the Board of Management and the Board of Management member responsible for Finance on the extent to which key ESG targets have been achieved. These include targets for:

• Reducing carbon emissions
• The proportion of all-electric vehicles to total deliveries
• The fulfilment of sustainability requirements by suppliers
• The proportion of women in management positions
• The amount of spending on employee training and development

Board of Management Remuneration

The total remuneration provided to the members of the Board of Management consists of fixed and variable components. Variable remuneration accounts for 58-66% of the total target remuneration.

Performance Component Structure

The performance component of the bonus rewards the achievement of certain non-financial performance criteria defined by the Supervisory Board. These criteria are divided into:

• Individual targets for individual Board of Management members (departmental targets) - 10% of target amount
• Collective targets for the entire Board of Management (interdepartmental targets) - 90% of target amount

Sustainability Integration

The interdepartmental targets include sustainability-related performance criteria and other non-financial criteria:

• 50% weighting for sustainability-related targets
• 40% weighting for other non-financial targets

Long-term Component

The share-based remuneration as a variable long-term component depends on target achievement for financial indicators including return on capital employed (RoCE).

Target Setting and Review

The Board of Management's remuneration targets for each year are set in December of the previous year. A meeting is held in March to:

• Review the extent to which targets for the past financial year have been achieved
• Pass a resolution on the Board of Management's remuneration

The achievement of material ESG targets is discussed as part of the reporting on the annual and Group Financial Statements and is integrated into the remuneration system for the Board of Management.

The BMW Group has implemented comprehensive due diligence processes across its operations and value chain:

Human Rights Due Diligence

The due diligence processes for respecting human rights and related environmental standards apply to:

• Our own business
• Our suppliers
• Our other business partners

Supply Chain Due Diligence

Organizational Structure: In 2024, responsibility for developing procedures and implementing due diligence processes in the supply chain was firmly embedded in the purchasing strategy and strengthened by the establishment of a dedicated department.

Standards and Requirements: The ↗ BMW Group Supplier Code of Conduct stipulates that affected (local) communities, and indigenous peoples especially, must also be taken into account and protected across the supply chain.

Risk Assessment and Site Evaluation

Environmental Assessment: All sites that require an environmental assessment and approval under national law are subject to due diligence processes. This includes:

• All production sites
• Component production facilities
• Research and Innovation Centre (FIZ)
• Test tracks
• Distribution centres

New Site Assessment: New sites are assessed for impacts and risks using:

• Environmental due diligence
• Environmental impact analysis
• Climate risk assessments
• Baseline assessments of biodiversity (where required)

Materiality Assessment Integration

The Company's established environmental, social and governance due diligence processes form the starting point for identifying impacts on the environment and society along the BMW Group value chain as part of the materiality assessment.

Stakeholder Engagement

Maintaining an ongoing dialogue with civil society, affected communities and other relevant stakeholders in the supply chain is a key component in the approach to dealing with critical raw materials.

Grievance Mechanisms

Stakeholders can report compliance-related concerns through:

• The ↗ BMW Group Compliance Contact
• The ↗ BMW Group SpeakUP Line (available in all countries where BMW Group employees work via local, toll-free telephone numbers in more than 30 languages)

The BMW Group is involved in RBA Voices, a standardised, cross-industry grievance mechanism available for download from the Apple App Store and the Google Play Store.

Internal Control System Structure

The BMW Group has established comprehensive internal control systems for sustainability reporting integrated into its governance structure:

Board Level Controls

Board of Management Oversight: The Board of Management regularly discusses:

• The effectiveness of the risk management system and internal control system
• Material impacts, risks and opportunities arising from business development
• ESG risks as part of comprehensive risk reporting

Committee Structure

Audit Committee Responsibilities: The Audit Committee is responsible for:

• Monitoring the effectiveness of the internal control system
• Overseeing the internal audit system
• Monitoring the internal Compliance Management System
• Reviewing sustainability reporting and the financial reporting process
• Preparing internal and external audits for sustainability reporting

Risk Management Integration

Risk Reporting: The Committee receives detailed reports every six months on:

• Risk management and risk strategy
• Current risk situation
• Extent to which risk cover funds have been utilised
• ESG risks are included in these reports

Compliance Reporting: The Chief Compliance Officer reports to:

• The Audit Committee twice a year on compliance matters and Compliance Management System changes
• The Supervisory Board once a year

Sustainability-Specific Controls

Sustainability Function: The Sustainability and Mobility function:

• Ensures high-level management of sustainability topics as part of Group strategy
• Identifies areas where the Company potentially needs to take action
• Defines targets to be achieved
• Ensures sustainability issues are considered in all material Company decisions

Progress Monitoring: Progress reports on overarching sustainability targets are submitted to the Board of Management at least three times a year.

Data Quality and Verification

Skills Assessment: Both Board of Management and Supervisory Board members are surveyed annually on their sustainability expertise. The Legal, Patents and Group Compliance Management department verifies the plausibility of information provided.

External Validation: For materiality assessment mapping, the BMW Group arranged for its mappings to be validated by two external consulting firms.

Regulatory Compliance

ESRS Implementation: The Board of Management holds regular discussions on:

• Processes and actions for implementing new regulatory requirements
• Ensuring compliance with external reporting requirements in sustainability
• The extent to which CSRD/ESRS requirements have been implemented

BMW Group Strategy and Business Model

The aim of the BMW Group Strategy is to find the right balance between business, the environment and society. The key areas of focus within the strategy are:

• Electrification
• Digitalisation
• Sustainability or circularity

Sustainability encompasses the strategic organisation of the entire value chain. Sustainability considerations are therefore integrated in corporate structures and processes in a comprehensive and holistic manner.

Operating Segments

The BMW Group's business model comprises three segments:

Automotive Segment

• Development and manufacturing of premium automobiles
• Focus on all drivetrain technologies with strong emphasis on electromobility
• 17.4% of total deliveries in 2024 were all-electric vehicles

Motorcycles Segment

• Development and manufacturing of premium motorcycles
• Various drivetrain technologies including electric options

Financial Services Segment

• Credit financing and leasing of BMW Group vehicles
• Fleet business for commercial customers
• Key role in the sales system

Value Chain Structure

Upstream Value Chain

Comprises a multi-layered network of suppliers providing:

• Production materials
• Raw materials
• Components
• Capital goods
• Services for vehicle and parts production

Own Operations

• Global production network with plants being transformed for electromobility
• Research and Innovation Centre (FIZ)
• Vehicle testing facilities
• Component production

Downstream Value Chain

• Global sales network for vehicle distribution
• Customer care and maintenance services
• Vehicle recycling and dismantling (thousands of vehicles recycled annually)
• Use phase of vehicles by customers

Workforce

At 31 December 2024, the BMW Group employed 158,441 people worldwide.

Strategic Sustainability Goals

Climate Targets

• Net zero carbon emissions across entire value chain by 2050 at latest
• Aligned with 1.5°C pathway of Paris Agreement for Scope 1 and 2 emissions
• Well-Below-Two-Degree (WB2C) approach for Scope 3 emissions
• Reduce carbon emissions by at least 40 million tonnes by 2030 compared to 2019

Circular Economy

• Guided by principles: Re:think, Re:duce, Re:use, Re:cycle
• Increasing secondary raw material quota
• Closing material loops within automotive industry

Product Innovation

• NEUE KLASSE model generation launching 2025 with emphasis on efficiency and supply chain sustainability
• Hydrogen fuel cell variant planned for 2028
• Technology openness approach across all drivetrain types

Workforce Development

• Strategic goal of increasing proportion of women in management positions
• Continuous investment in employee expertise and training
• "Just Transition" approach combining transformation with modern, safe workplaces

The BMW Group attaches great importance to regular, frank and transparent dialogue with its stakeholders. The goal is to build trust, increase transparency and awareness, and facilitate the transfer of knowledge by providing information and opportunities for dialogue.

Stakeholder Policy and Groups

The Company revised its ↗ Stakeholder Engagement Policy in 2024, reviewing and redefining its key stakeholders. A distinction is made between:

• Affected stakeholders - directly or indirectly affected by business activities
• Users of sustainability statements - mainly consumers of general reporting (e.g., investors, business partners)

Key Stakeholder Groups

Internal Stakeholders

Employees (158,441 worldwide):

• Company-wide employee survey conducted every two years
• Participation through company ideas management system
• Works council representation and collective bargaining
• Due diligence processes for human rights apply to own workforce

Board of Management and Supervisory Board:

• Regular briefings on stakeholder feedback and views
• Direct dialogue with stakeholders such as investors and political decision makers
• Attendance at Annual General Meeting

External Stakeholder Groups

Investors and Financial Community:

• Regular conferences and analyst meetings
• Financial statement press conferences
• Incorporation of feedback into corporate and business strategies

Customers:

• Market research through global surveys to determine needs and expectations
• Customer satisfaction surveys and market research (e.g. Corporate Reputation Study)
• My BMW App for direct engagement
• Discussions with consumer bodies

Suppliers and Business Partners:

• Supplier theme days
• Various dialogue formats
• Integration into due diligence processes
• Partner academy programs

Affected Communities:

• Work directly with affected communities or local representatives
• Example: Local stakeholders closely involved in planning new battery assembly plant in Irlbach-Strasskirchen
• Designated contacts at BMW Group locations for stakeholder relations
• Ongoing dialogue regarding critical raw materials in supply chain

Scientific Community:

• International Sustainable Mobility Research Platform (ISMO) established 2024
• Partnership with four renowned universities: Cambridge (UK), Friedrich-Alexander-Universität Erlangen-Nürnberg (Germany), Harvard (USA), Tsinghua University (China)
• Board of Management involvement in discussing research results twice yearly from 2025

Civil Society and NGOs:

• Regular participation in public and political discussions
• Engagement during events like London Climate Week
• BMW Group award for social responsibility

Political Stakeholders:

• Participation in committees and working groups
• Memberships in initiatives and associations
• Regular briefings before major events (OECD conferences, AGM)

Industry and Multi-Stakeholder Initiatives

Active engagement in:

• Branchendialog Automobilindustrie
• Supply Chain Sustainability Working Group of German Association of Automotive Industry (VDA)
• Responsible Business Alliance (RBA)
• Drive Sustainability
• RBA Voices - standardised, cross-industry grievance mechanism

Communication Channels

Multiple channels available for stakeholder engagement:

• Main email addresses
• ↗ BMW Group Compliance Contact
• ↗ BMW Group SpeakUP Line (available in 30+ languages via toll-free numbers)
• Plant tours, BMW Welt, BMW museum
• Social media, company website, press releases
• Conferences, industry dialogues, studies

Integration into Decision Making

Strategy Development: External viewpoints and expectations help develop strategy and promote BMW Group's innovative strength.

Environmental Analysis: Stakeholder feedback incorporated into environmental and trend analyses, which feed into corporate and business department strategies.

Materiality Assessment: Most important external stakeholders included in materiality assessment through structured interview formats and virtual stakeholder forums with external moderators.

Board Level: Chairman of Supervisory Board maintains regular contact with stakeholders; Supervisory Board members interact with stakeholders through other activities and mandates.

Material Sustainability Topics Identified

The BMW Group's ESRS-based materiality assessment identified 85 material impacts, risks and opportunities across 31 sustainability sub-topics and sub-sub-topics. These are categorized across the entire value chain:

Environmental (E)

• E1 Climate Change: Climate change adaptation, Climate change mitigation, Energy
• E2 Pollution: Pollution of water, Pollution of soil, Microplastic
• E3 Water and Marine Resources: Water consumption, Water withdrawals
• E4 Biodiversity: Direct exploitation
• E5 Circular Economy: Resources inflows including resource use, Resource outflows related to products and services, Waste

Social (S)

• S1 Own Workforce: Health and safety, Gender equality and equal pay, Diversity, Training and skills development, Secure employment, Social dialogue
• S2 Workers in the Value Chain: Working time, Freedom of association including work councils, Health and safety, Training and skills development, Measures against violence and harassment, Child labour, Forced labour
• S4 Consumers and End-Users: Access to quality information, Privacy, Health and safety, Protection of children

Governance (G)

• G1 Business Conduct: Political engagement and lobbying activities, Corruption and bribery prevention and detection including training

Interaction with Strategy and Business Model

Climate Change Integration

The BMW Group directly and indirectly generates greenhouse gas emissions worldwide through:

• Upstream processes and raw material procurement
• Development and production activities
• Supply and use of products and services

Strategic Response:

• Offering electrified vehicles (BEV, PHEV, FCEV)
• Expanding use of CO2e-free energy including through PPAs
• Contributing to progressive decarbonisation
• Target: Reduce carbon emissions by at least 40 million tonnes by 2030 compared to 2019

Circular Economy Integration

Incorporating circular economy principles into business models and products is an important step towards:

• Reducing use of natural and limited resources
• Contributing to CO2 emissions reduction
• Preserving biodiversity
• Mitigating environmental and social impacts from primary material extraction

Strategic Elements:

• Re:think, Re:duce, Re:use, Re:cycle principles
• Increasing proportion of recycled materials in products
• Closing material cycles within automotive industry

Workforce Diversity

Diversity is an important element of the BMW Group's competitiveness:

• Strategic target: Increasing proportion of women in management positions
• Consistent support for employees to acquire new professional qualifications
• Investment in training and education at all locations

Material Impacts Assessment

Methodology: Double materiality approach considering:

• Inside-out perspective: BMW Group's impacts on environment and society
• Outside-in perspective: External sustainability factors influencing business model

Value Chain Coverage:

• Upstream: Multi-layered supplier network
• Own Operations: Production, R&D, testing facilities
• Downstream: Sales network, customer use phase, recycling

Resilience Analysis

Strengthening resilience is a key concern through:

• Early Recognition: Changes in environment identified early
• Scenario Planning: Alternative development scenarios considered
• Risk Management: Effective management of risks and opportunities
• Supply Chain Resilience: Expanding resilient global supply chains
• Digitalisation: Across entire supply chain for sustainable management

Environmental Analysis: Regularly updated analysis based on selected relevant topics including assessment of political and regulatory framework conditions.

Financial Effects

Current Impacts:

• Competition in electrified vehicle market intensified in reporting year
• Regulatory restrictions on certain energy sources (e.g., biogas) - financial effects avoided through hedging activities

Forward-Looking: No material risks or opportunities identified with significant probability of occurrence in 2025 that would result in material adjustment to carrying amounts of assets and liabilities.

Time Horizons

• Short-term: 2024 financial year
• Medium-term: 2025-2030 (2025-2035 for climate-related impacts)
• Long-term: After 2030 (after 2035 for climate-related impacts)

Most material impacts have already materialised, with ongoing management through established policies, targets, and measures across the value chain.

Materiality Assessment Process

The BMW Group conducted its first materiality assessment based on the European Corporate Sustainability Reporting Directive (CSRD) and ESRS, following the double materiality approach outlined in ESRS 1.

Four-Step Methodology

Step 1: Identification and Assessment

Topic Review: First step involves reviewing relevant sustainability topics identified from previous BMW Group materiality assessments, extended to meet ESRS requirements. New sustainability-related topics added in areas of:

• Strategy
• Board of Management remuneration
• Competition
• Environmental analysis

Impact Formulation: Negative or positive impacts on environment and society formulated for each sustainability topic along entire BMW Group value chain. Starting point is the Company's established environmental, social and governance due diligence processes, supplemented by new impacts not yet subject to detailed monitoring.

Assessment Methodology: Tool-supported assessment by internal experts using scale of 1 to 4. Material threshold: Impact, risk or opportunity exceeds 2.

Severity Assessment:

• Scope × Scale = Severity
• For negative impacts: remediation extent considered
• For potential impacts: probability of occurrence applied
• Risks/opportunities: financial scale × probability of occurrence

Value Chain Coverage: Both upstream (supply chain) and downstream value chain considered. Business conduct impacts focus on supplier relationship management.

Mitigating Actions: Effective mitigating actions already implemented during reporting period taken into account.

Step 2: Stakeholder Consultation

Affected stakeholders and sustainability statement users consulted:

• Investors
• Works Council of BMW AG (employee representatives)
• Customers
• Suppliers and business partners
• Network partners
• Civil society representatives, NGOs
• Political and scientific representatives

Method: Structured interview formats including virtual stakeholder forums with external moderators. Stakeholders placed in E, S, or G groups based on expertise.

Step 3: ESRS Mapping

Material sustainability topics assigned to individual ESRS disclosure requirements. BMW Group mapped topics independently and arranged validation by two external consulting firms due to absence of final European Commission mapping matrix.

Step 4: Validation and Finalization

Outcomes explained to relevant bodies, particularly Board of Management and Audit Committee of BMW AG. Results discussed with decision makers and adjusted if necessary.

Climate-Related Specific Processes

Physical Climate Risks

Scenario Analysis: Three IPCC climate scenarios used:

• Low-emissions: <+1.5°C (Paris Agreement, SSP1-1.9)
• Medium scenario: +2.5°C (intermediate, SSP2-4.5)
• High scenario: >+4°C (fossil-fueled development, SSP5-8.5)

Risk Assessment: Site-specific risk data from external insurance company for all relevant BMW Group and supplier sites. Average annual expected damage loss calculated using:

• Location-related hazard situation
• Exposure
• Site-related vulnerabilities

Transitory Climate Risks

Assessed for medium-term using climate-related risk drivers and qualitative expert assessments. Include:

• Regulatory risks
• Technology risks
• Capital and financial market risks
• Market risks

Integration: All short-term risks from own operations and value chain assessed for transitory climate risks. Material climate-relevant risks included in scenario analysis.

Water-Related Assessment

LEAP Approach Applied: Locate, Evaluate, Assess, Prepare methodology:

Phase 1 - Locate:

• Aqueduct tool used to identify geographic areas affected by water-related risks
• BMW Group sites and upstream/downstream activities considered
• Sites in areas subject to high water stress identified

Phase 2 - Evaluate: Materiality of impacts assessed using river basins as relevant level, combined with operational risk assessment. Water Framework Directive 2000/60/EG criteria considered.

Phase 3 - Assess:

• Transitory risks/opportunities: Legal, political, technological, market, reputational changes
• Physical risks: Water scarcity, water stress, water quality deterioration
• Opportunities: Resource efficiency, market diversification, financing opportunities

Environmental Pollution Assessment

Site-Specific Analysis: Sites with particular influence on business activities examined. Risk assessment performed for each influential site:

• Environmental impact assessments
• Case-by-case certification depending on risks
• High-risk sites subject to damage reduction measures

New Site Assessment:

• Environmental due diligence
• Environmental impact analysis
• Climate risk assessments
• Baseline biodiversity assessments (where required)

Results and Validation

Material Outcomes: 85 impacts, risks and opportunities identified as material, assigned to 31 sustainability sub-topics and sub-sub-topics.

Stakeholder Validation: Material topics identified by internal assessment confirmed by surveyed stakeholder groups. Information on adjusting topic relevance incorporated into validation.

Disclosure Mapping: 31 material sustainability sub-topics associated with over 500 individual disclosure requirements (data points) for 2024 financial year in accordance with respective ESRS.

Review Process

First-Time Application: 2024 marked first ESRS-based materiality assessment - no prior year comparison possible.

Future Reviews: Results review planned following 2024 BMW Group Report publication during 2025 financial year and ongoing in subsequent years.

Based on the materiality assessment, the BMW Group has identified the following material sustainability topics that are covered by ESRS disclosure requirements:

Environmental Standards (E)

E1 - Climate Change

Material Sub-topics:

• Climate change adaptation
• Climate change mitigation
• Energy

Associated Disclosure Requirements: The BMW Group reports on climate-related policies, targets, actions, energy consumption and mix, GHG emissions across all scopes, and anticipated financial effects from climate risks and opportunities.

E2 - Pollution

Material Sub-topics:

• Pollution of water
• Pollution of soil
• Microplastic

Associated Disclosure Requirements: Covered through policies, actions, targets and metrics related to pollution prevention and management.

E3 - Water and Marine Resources

Material Sub-topics:

• Water consumption
• Water withdrawals

Associated Disclosure Requirements: The BMW Group reports on water-related policies, actions, targets, and consumption metrics, particularly for sites in water-stressed areas.

E4 - Biodiversity and Ecosystems

Material Sub-topics:

• Direct exploitation

Associated Disclosure Requirements: Covered through biodiversity-related policies, actions and impact assessments.

E5 - Resource Use and Circular Economy

Material Sub-topics:

• Resources inflows, including resource use
• Resource outflows related to products and services
• Waste

Associated Disclosure Requirements: The BMW Group reports on circular economy policies, actions, targets, resource inflows and outflows following the Re:think, Re:duce, Re:use, Re:cycle principles.

Social Standards (S)

S1 - Own Workforce

Material Sub-topics:

• Health and safety
• Gender equality and equal pay for work of equal value
• Diversity
• Training and skills development
• Secure employment
• Social dialogue

Associated Disclosure Requirements: Comprehensive reporting on workforce policies, processes, targets, and metrics including diversity statistics, training investments, health and safety performance, and collective bargaining coverage.

S2 - Workers in the Value Chain

Material Sub-topics:

• Working time
• Freedom of association, including the existence of work councils
• Health and safety
• Training and skills development
• Measures against violence and harassment in the workplace
• Child labour
• Forced labour

Associated Disclosure Requirements: Covered through supply chain due diligence processes, supplier code of conduct requirements, and value chain worker protection measures.

S4 - Consumers and End-Users

Material Sub-topics:

• Access to (quality) information
• Privacy
• Health and safety
• Protection of children

Associated Disclosure Requirements: Addressed through consumer protection policies, product safety measures, and data privacy frameworks.

Governance Standards (G)

G1 - Business Conduct

Material Sub-topics:

• Political engagement and lobbying activities
• Corruption and bribery – Prevention and detection including training

Associated Disclosure Requirements: The BMW Group reports on business conduct policies, anti-corruption measures, compliance management systems, and political engagement activities.

General Disclosures (ESRS 2)

All material topics are supported by ESRS 2 general disclosures covering:

• Governance: Board roles, risk management, due diligence processes
• Strategy: Business model, stakeholder engagement, material impacts integration
• Impact Management: Identification and assessment processes

Disclosure Scope and Coverage

Total Disclosure Requirements: The 31 material sustainability sub-topics and sub-sub-topics are associated with over 500 individual disclosure requirements (data points) for the 2024 financial year.

Value Chain Integration: Disclosure requirements address impacts, risks and opportunities across:

• Upstream value chain (supplier network)
• Own operations (production, R&D, testing)
• Downstream value chain (sales, customer use, recycling)

Cross-Reference System: Detailed ↗ ESRS Index provides complete mapping of disclosure requirements and referenced data points throughout the sustainability statement.

Materiality Considerations

Bottom-up Approach: Materiality assessed at lowest topic level, meaning topics classified as non-material under ESRS may still hold significant importance for the BMW Group.

Mitigating Actions: Assessment factors in effective, Group-wide mitigating actions already implemented, which may affect materiality determinations compared to other companies.

Legal Compliance: Legally compliant behaviour remains a top priority for the BMW Group even in areas classified as non-material under ESRS.

This comprehensive coverage ensures that all material sustainability aspects of the BMW Group's operations and value chain are addressed through appropriate ESRS disclosure requirements.

The BMW Group has implemented comprehensive policies related to climate change mitigation and adaptation as part of its strategy to achieve net zero carbon emissions across the entire value chain by 2050 at the latest.

Climate Change Mitigation Policies

Strategic Framework

The BMW Group's ambitious sustainability targets are aligned with:

• 1.5°C pathway of the Paris Agreement for CO2e emissions (Scope 1 and Scope 2)
• Well-Below-Two-Degree (WB2C) approach for CO2e emissions from supply chain and use phase (Scope 3)

Target Setting

In 2030, the BMW Group intends to reduce its carbon emissions levels by at least 40 million tonnes compared to 2019. This new target replaces the previous goal of reducing carbon emissions per vehicle by 40% over the same period.

Holistic Approach

The Group's science-based approach involves:

• Permanent reduction of energy requirements (Scope 1 and 2 emissions of BMW Group locations)
• Greater use of renewable energy (Scope 1 and 2 emissions of BMW Group locations)
• Latest technology to improve efficiency (Scope 3 Use of Sold Products)
• Renewable electricity criterion when awarding supplier contracts (Scope 3 Purchased Goods and Services)
• Continuously increasing secondary raw material quota (Scope 3 Purchased Goods and Services)

Product and Technology Policies

Drivetrain Strategy

Technology Openness: The BMW Group offers state-of-the-art drive technology regardless of drivetrain type, recognizing that a high-quality mix of efficient drivetrain types makes an effective contribution to CO2e emissions reduction.

Electrification Timeline:

• 2024: All-electric vehicles accounted for 17.4% of total deliveries
• 2025: NEUE KLASSE model generation launch with strong emphasis on efficiency and sustainability
• 2028: Introduction of hydrogen fuel cell variant

Fuel Innovation

Advanced Fuel Compatibility:

• B-series petrol engines (since 2015): Approved for fuel containing up to 25% ethanol (E25), reducing CO2e emissions by 20-45% depending on fuel composition
• B-diesel engines (since 2015): Compatible with HVO100 fuel derived from waste materials with 90% fewer carbon emissions
• 2025 Pilot Project: All diesel models produced in Germany filled with non-fossil HVO100 as factory fill

Existing Fleet Impact: As of January 2025:

• 4.5 million diesel engines in BMW Group fleet
• Over 13 million B-series petrol engines
• Higher renewable fuel share enables significant CO2e emissions cuts

Adaptation Policies

Physical Risk Management

The BMW Group addresses climate adaptation through comprehensive physical risk assessment:

Scenario Planning: Uses three IPCC climate scenarios:

• Low-emissions scenario: <+1.5°C (SSP1-1.9)
• Medium scenario: +2.5°C (SSP2-4.5)
• High scenario: >+4°C (SSP5-8.5)

Risk Assessment: Site-specific analysis for all relevant BMW Group and supplier sites covering:

• Acute extreme weather events (heavy rain, hail, storms, floods)
• Longer-term changes in temperature and rainfall
• Average annual expected damage loss calculations

Resilient Infrastructure

Construction Planning: Updates on risks identified in climate scenarios are taken into account when planning new construction and conversion measures.

Supply Chain Resilience: Forward-looking risk management and digitalisation help strengthen supplier network resilience against climate impacts.

Implementation Framework

Governance Integration

Climate policies are integrated into corporate structures through:

• Regular Board of Management discussions on climate-related impacts, risks and opportunities
• Sustainability and Mobility function ensuring high-level management of climate topics
• Progress reports to Board of Management at least three times per year

Measurement and Monitoring

Climate impacts are assessed, recorded, measured and reported in accordance with:

• Greenhouse Gas Protocol requirements
• Regular internal review and adjustment of relevant emission categories
• Integration into long-term corporate planning with CO2e emissions simulation

Value Chain Integration

Policies extend across entire value chain:

• Upstream: Supplier requirements for renewable energy use
• Own Operations: Energy efficiency and renewable energy expansion
• Downstream: Product efficiency improvements and customer support for sustainable mobility

The BMW Group has implemented comprehensive actions and allocated significant resources to support its climate change policies across the entire value chain.

Energy and Production Actions

Renewable Energy Expansion

Power Purchase Agreements (PPAs): The BMW Group is expanding the use of cost-effective CO2e-free energy, including through PPAs, contributing to progressive decarbonisation.

Production Transformation: Entire plants in the production network are being transformed and geared towards electromobility while production continues, demonstrating the "Just Transition" approach that combines transformation with modern, safe, and reliable workplaces.

Efficiency Improvements

EfficientDynamics Technologies: The BMW Group has been reducing fuel consumption for many years using innovative EfficientDynamics technologies, which bring together:

• Highly efficient drivetrains
• Intelligent lightweight construction
• Optimised vehicle energy management systems

Historical Achievement: Between 1995 and 2020, the BMW Group halved the CO₂ emissions of its new car fleet in Europe through unwavering commitment to EfficientDynamics technologies.

Product Development Actions

Electrification Strategy

NEUE KLASSE Development: The new model generation launching in 2025 was developed with strong emphasis on:

• Efficiency throughout the supply chain
• Sustainability integration
• Strategic approach to close material cycles and move toward circularity

Drivetrain Diversification:

• 2024 Achievement: All-electric vehicles accounted for 17.4% of total deliveries, making BMW Group one of the world's most successful suppliers of all-electric vehicles
• 2028 Target: Introduction of second all-electric and locally emission-free variant powered by hydrogen fuel cells

Advanced Fuel Implementation

Immediate Action - 2025 Pilot Project: Since early 2025, all diesel models produced in Germany are filled with non-fossil HVO100 as their first factory fill prior to delivery to retail partners. This pilot project demonstrates that HVO100 is a fully viable and practical diesel substitute.

Fleet Readiness: The BMW Group's vehicle fleet includes:

• Around 4.5 million diesel engines compatible with HVO100
• Over 13 million B-series petrol engines approved for E25 fuel

Supply Chain Actions

Supplier Requirements

Renewable Energy Criteria: The BMW Group uses electricity from renewable sources as a criterion when awarding contracts to suppliers (Scope 3 Purchased Goods and Services).

Secondary Materials: Continuously increasing secondary raw material quota to reduce supply chain emissions (Scope 3 Purchased Goods and Services).

Due Diligence Enhancement: In 2024, responsibility for developing procedures and implementing due diligence processes in the supply chain was firmly embedded in purchasing strategy and strengthened by establishing a dedicated department.

Circular Economy Actions

Material Cycle Closure

4R Principles Implementation: Guided by Re:think, Re:duce, Re:use, Re:cycle principles, working closely with partners in the circular economy to:

• Close material loops within the automotive industry
• Integrate circularity into processes
• Reduce consumption of resources and drive development of closed material cycles

Recycling Operations: Thousands of vehicles are dismantled and recycled using efficient methods every year at the BMW Group's recycling and dismantling centre.

Resource Management Actions

Water Efficiency

Monitoring and Reduction: The BMW Group monitors fresh water and energy consumption levels consistently to minimise usage.

Treatment Systems: Expanding water treatment systems to:

• Minimise fresh water usage
• Maximise efficiency
• Alternative water sources utilisation (e.g., rainwater)

Waste and Resource Optimisation

Measures developed specifically for Company facilities include:

• Water consumption reduction
• Alternative water source usage
• Resource efficiency improvements

Research and Innovation Actions

Scientific Collaboration

International Sustainable Mobility Research Platform (ISMO): Established in 2024, this international research partnership includes:

• BMW Group
• University of Cambridge (UK)
• Friedrich-Alexander-Universität Erlangen-Nürnberg (Germany)
• Harvard University (USA)
• Tsinghua University (China)

Objective: Conduct research into sustainability and develop scientifically sound approaches to help develop strategy, with Board of Management involvement in discussing research results twice yearly from 2025.

Technology Development

Efficiency Innovation: The BMW Group's entry into electromobility began over 15 years ago with development of the all-electric BMW i3, with extensive experience continuing to shape manufacturing processes for all-electric models.

Organisational Actions

Governance Structure

Sustainability Function: The Sustainability and Mobility function:

• Ensures high-level management of sustainability topics as part of Group strategy
• Identifies areas needing action
• Defines targets to be achieved
• Prepares Board of Management resolutions

Reporting and Monitoring: Progress reports on overarching sustainability targets submitted to Board of Management at least three times per year, covering:

• CO2e emissions reduction targets across all scopes
• Circular economy progress
• Environmental and social standards
• Strategic and operational implementation status

Employee Development

Just Transition: The BMW Group combines transformation with modern workplaces, investing continuously in building workforce expertise through:

• Continuous training programmes
• Job security guarantees
• Skills development for future technologies

Recognition: Highly regarded employer ratings consistently rank the BMW Group as one of the world's most attractive employers.

Financial Resources

While specific financial allocations for climate actions are not detailed in the available text, the BMW Group demonstrates significant resource commitment through:

• Major production facility transformations
• Research and development investments
• Global supply chain transformation
• International research partnerships
• Continuous workforce development programmes

These actions represent a comprehensive, science-based approach to climate change mitigation and adaptation across the BMW Group's entire value chain, with measurable progress toward the 2030 target of reducing carbon emissions by at least 40 million tonnes compared to 2019.

The BMW Group has established comprehensive targets related to climate change mitigation and adaptation aligned with scientific climate pathways.

Overall Climate Targets

Long-term Net Zero Commitment

2050 Target: The BMW Group is committed to achieving net zero carbon emissions across its entire value chain by 2050 at the latest.

Science-Based Target Alignment

The BMW Group's ambitious sustainability targets are aligned with:

• 1.5°C pathway of the Paris Agreement for CO2e emissions (Scope 1 and Scope 2)
• Well-Below-Two-Degree (WB2C) approach for CO2e emissions from the supply chain and use phase (Scope 3)

Updated 2030 Target

Absolute Emissions Reduction: In 2030, the BMW Group intends to reduce its carbon emissions levels by at least 40 million tonnes compared to 2019.

Note: This new target replaces the previous goal of reducing carbon emissions per vehicle by 40% over the same period.

Scope-Specific Targets

Scope 1 and 2 Targets (Own Operations)

Energy Requirements: Permanent reduction of energy requirements at BMW Group locations

Renewable Energy: Greater use of renewable energy at BMW Group locations

Infrastructure: Use of cost-effective CO2e-free energy, including through Power Purchase Agreements (PPAs)

Scope 3 Targets (Value Chain)

Supply Chain (Upstream)

Supplier Energy Criteria: Use electricity from renewable sources as a criterion when awarding contracts to suppliers (Scope 3 Purchased Goods and Services)

Secondary Materials: Continuously increasing secondary raw material quota (Scope 3 Purchased Goods and Services)

Product Use Phase (Downstream)

Efficiency Improvements: Use latest technology to improve efficiency (Scope 3 Use of Sold Products)

Product and Technology Targets

Electrification Targets

2024 Achievement: All-electric vehicles accounted for 17.4% of total deliveries

2025 Milestone: Launch of NEUE KLASSE model generation with strong emphasis on efficiency and sustainability throughout the supply chain

2028 Target: Introduction of second all-electric and locally emission-free variant powered by hydrogen fuel cells

Fleet Emissions Targets

Historical Performance: Between 1995 and 2020, the BMW Group halved the CO₂ emissions of its new car fleet in Europe

EU Compliance: The BMW Group regularly surpasses EU carbon targets for its fleet

Advanced Fuel Targets

Immediate Implementation: 2025 pilot project filling all diesel models produced in Germany with non-fossil HVO100 as factory fill

Fuel Compatibility Enhancement:

• B-series petrol engines approved for up to 25% ethanol (E25), reducing CO2e emissions by 20-45%
• B-diesel engines compatible with HVO100 fuel with 90% fewer carbon emissions

Circular Economy Targets

Material Efficiency

4R Principles: Implementation of Re:think, Re:duce, Re:use, Re:cycle principles

Circularity Integration: Strategic approach to close material cycles and gradually move closer to circularity

Resource Reduction: Reduce consumption of resources and drive development of closed material cycles

Adaptation Targets

Risk Management

Scenario Coverage: Address climate risks across three IPCC scenarios:

• Low-emissions: <+1.5°C (SSP1-1.9)
• Medium: +2.5°C (SSP2-4.5)
• High: >+4°C (SSP5-8.5)

Infrastructure Resilience: Integration of climate risk assessments into new construction and conversion planning

Supply Chain Resilience: Strengthen supplier network resilience against climate impacts

Monitoring and Accountability

Target Integration

Climate targets are integrated into:

• Corporate Planning: Long-term corporate planning with CO2e emissions simulation
• Board Reporting: Progress reports to Board of Management at least three times per year
• Performance Management: Regular review against reduction targets with measures initiated as needed

Measurement Framework

Targets measured and reported according to:

• Greenhouse Gas Protocol requirements
• All relevant scopes and categories
• Regular internal review and adjustment processes
• Integration into Group Financial Statements assumptions

Workforce and Social Targets

Just Transition

Employee Development: Continuous investment in building workforce expertise for transformation

Workplace Quality: Modern workplaces that guarantee safety and reliability in productive environment

Training Commitment: Continuous training guarantees jobs during transformation

Strategic Implementation Timeline

2024: Foundation year with 17.4% BEV delivery share and pilot project initiation

2025: NEUE KLASSE launch and HVO100 pilot project full implementation

2028: Hydrogen fuel cell variant introduction

2030: Achievement of at least 40 million tonnes CO2 reduction compared to 2019

2050: Net zero carbon emissions across entire value chain

These targets represent a comprehensive, science-based approach to climate action that addresses both mitigation and adaptation across the BMW Group's entire value chain, with clear milestones and accountability mechanisms to track progress toward the ultimate goal of net zero emissions by 2050.

Current Financial Effects

Market Competition Impact

Competition in the electrified vehicle market intensified in the reporting year. The financial effects of this development are discussed in the Earnings Performance of the BMW Group section.

Regulatory Restrictions

Regulatory restrictions mean that certain energy sources, such as biogas, can no longer be used for emission reduction measures. However, hedging activities ensured that financial effects for the BMW Group were completely avoided.

Risk Assessment for 2025

No material risks or opportunities have been identified for which there is a significant probability of occurrence in 2025 that would result in a material adjustment to the carrying amounts of the assets and liabilities recognised in the corresponding financial statements.

Climate Risk and Opportunity Analysis

Physical Climate Risks

The BMW Group has implemented a wide range of measures to mitigate physical climate risks, so that no physical climate risks as defined by the sense of the ESRS are categorised as material. All material climate-related risks are transitory risks.

Risk Modelling: Physical climate risks may result in:

• Damage to assets (buildings, vehicles, parts)
• Downtime at BMW Group's own or supplier sites
• Production interruptions at individual sites in extreme scenarios

Scenario Analysis: Physical climate risks increase particularly in the long-term period for 2050 and beyond within the >+4°C scenario (SSP5-8.5), affecting both BMW Group production sites and supplier sites.

Transitory Climate Risks and Opportunities

Medium-term Risks (Until 2036)

Highest Materiality: Potential transitory risks are deemed the highest over the medium-term due to rapid, potentially unforeseeable developments in the Paris Agreement global warming scenario.

Policy Risk: It cannot be ruled out that more decisive measures will have to be taken globally in the next few years to achieve the <+1.5°C target. Regulatory requirements introduced at short notice may enter into force, which could impact:

• Products
• Production processes
• Supply chains
• Calculation and disclosure requirements
• Target contribution of measures taken

Market Risk: Competition and demand, especially for electric vehicles, may change in a 1.5°C scenario.

Strategic Alignment

Consistency: At present, the BMW Group's strategy is consistent with the transition to a carbon-neutral economy in accordance with ESRS E1 AR 12(d).

Planning Integration: The attainment of the Paris Agreement targets is part of the BMW Group's long-term corporate planning, meaning that the low-emission scenario is incorporated into the assumptions for the Group Financial Statements.

Climate Opportunities

Market Opportunities

The BMW Group recognises economic opportunities in the orientation towards the 1.5°C path, arising from:

Product Demand: Demand for low-emission products generated by the goal of slowing down climate change

Efficiency Gains:

• Efficiency and transport potential in carbon footprint reduction in upstream value chain
• Increasing range of BMW Group drivetrain variants
• Growing market share among environmentally conscious buyers

Competitive Advantage:

• One of the world's most successful suppliers of all-electric vehicles
• Regular surpassing of EU carbon targets for its fleet
• Strong rankings in prestigious sustainability rating schemes

Technology Opportunities

Innovation Leadership:

• Over 15 years of experience in electromobility development
• Extensive experience from BMW i3 development continues to shape manufacturing processes
• NEUE KLASSE development with strong sustainability emphasis

Fuel Technology:

• Advanced fuel compatibility (E25, HVO100) provides immediate emission reduction potential
• Technology openness approach enabling flexible response to market demands

Financial Planning Integration

Corporate Planning

Climate impacts are made integral to long-term corporate planning through:

• CO2e emissions simulation based on sales planning
• Focus on supply chain and use phase emissions
• Current assumptions checked against reduction targets
• Derivation of required measures and implementation initiation

Risk Management

Physical and transitory risks and opportunities are:

• Taken into account in internal management
• Incorporated in Group Financial Statements preparation
• Covered across wide range of scenarios over long-term planning period and beyond
• Address plausible risks and uncertainties

Target Achievement Monitoring

Financial effects are managed through:

• Regular progress reporting to Board of Management
• Target system monitoring
• Suitable actions discussed and approved when targets not met
• Integration into performance measurement and remuneration systems

The comprehensive risk and opportunity analysis demonstrates that while the BMW Group faces potential financial effects from climate-related transitory risks, particularly in regulatory and market developments, the company has positioned itself strategically to capitalise on the transition to a low-carbon economy while maintaining financial resilience through diversified risk management approaches.

The BMW Group has implemented comprehensive policies related to pollution prevention and management across its operations and value chain.

Environmental Management Framework

Holistic Environmental Management

The BMW Group takes a comprehensive approach to environmental protection through robust environmental management systems and corporate responsibility practices that have upheld high standards for over fifty years. The Company pioneered sustainable business practices by appointing the first environmental officer in the German automotive industry over fifty years ago.

Site-Specific Policy Implementation

Environmental Assessment Requirements: All sites that require environmental assessment and approval under national law are subject to comprehensive pollution management policies, including:

• All production sites
• Component production facilities
• Research and Innovation Centre (FIZ)
• Test tracks
• Distribution centres

Risk-Based Approach: Sites with high risk and high level of damage potential are subject to specific measures to reduce potential environmental damage.

Pollution Prevention Policies

New Site Assessment

For new sites, the BMW Group implements systematic pollution prevention through:

• Environmental due diligence assessments
• Environmental impact analysis
• Climate risk assessments
• Baseline assessments of biodiversity (where required)

Risk mitigation measures derived from these assessments are implemented as required.

Existing Site Management

Certification and Monitoring: Sites with particular influence on business activities are subject to:

• Environmental impact assessments
• Case-by-case certification depending on risks involved
• Continuous monitoring and improvement measures

Technology and Process Policies

EfficientDynamics Integration: Environmental protection is integrated into product development through EfficientDynamics technologies that bring together:

• Highly efficient drivetrains
• Intelligent lightweight construction
• Optimised vehicle energy management systems

Air Quality Policies

Emissions Reduction

Fleet Emissions: Between 1995 and 2020, the BMW Group halved the CO₂ emissions of its new car fleet in Europe through commitment to efficiency technologies.

Advanced Fuel Support: Pollution reduction through support for cleaner fuels:

• B-series petrol engines approved for up to 25% ethanol (E25), reducing emissions by 20-45%
• B-diesel engines compatible with HVO100 fuel with 90% fewer carbon emissions
• 2025 pilot project: All diesel models produced in Germany filled with non-fossil HVO100

Technology Innovation

Electrification Strategy: Accelerating transition to zero local emission vehicles:

• 17.4% of 2024 deliveries were all-electric vehicles
• NEUE KLASSE development emphasizing efficiency and sustainability
• Planned hydrogen fuel cell variant for 2028

Water and Soil Protection Policies

Water Management

Material Topics Identified: The BMW Group's materiality assessment identified as material:

• Pollution of water
• Pollution of soil
• Microplastic pollution

Water Treatment Systems: The BMW Group is expanding water treatment systems to:

• Minimise fresh water usage
• Maximise efficiency
• Prevent water pollution through proper treatment of discharge

Soil Protection

Site Assessment: Environmental impact assessments include soil protection measures for all relevant facilities, with particular attention to:

• Manufacturing sites requiring permits under national environmental laws
• Sites with potential soil contamination risks
• Preventive measures for new construction projects

Supply Chain Pollution Prevention

Supplier Requirements

Due Diligence Enhancement: In 2024, responsibility for environmental due diligence in the supply chain was firmly embedded in purchasing strategy and strengthened through establishment of a dedicated department.

Supplier Code Compliance: The ↗ BMW Group Supplier Code of Conduct includes environmental protection requirements that suppliers must meet, including pollution prevention measures.

Raw Materials Management

Responsible Sourcing: The BMW Group's raw materials strategy includes pollution prevention considerations as part of responsible resource management integral to holistic corporate strategy.

Regulatory Compliance

Legal Framework Adherence

Pollution prevention policies ensure compliance with:

• Federal Immission Control Act (BIMSchG) in Germany
• Country-specific environmental assessment requirements
• Water Framework Directive 2000/60/EG and its guidelines
• National environmental permitting requirements

Environmental Statement

Comprehensive Assessment: The BMW Group Environmental Statement includes:

• Qualitative assessment of environmental impact of manufacturing technologies at various sites
• Assessment of other emissions topics where available
• List of material environmental effects for all technologies
• Indirect environmental effects (e.g., employee commuting)

Circular Economy and Waste Prevention

4R Principles

Pollution prevention through circular economy implementation following Re:think, Re:duce, Re:use, Re:cycle principles:

• Reducing consumption of virgin materials
• Minimising waste generation
• Closing material loops to prevent environmental releases
• Working with partners to integrate circularity into processes

Recycling Operations

Waste Management: Thousands of vehicles are dismantled and recycled using efficient methods annually at the BMW Group's recycling and dismantling centre, preventing pollution from improper disposal.

Monitoring and Continuous Improvement

Performance Tracking

Pollution prevention policies are monitored through:

• Regular environmental performance assessments
• Integration into sustainability reporting
• Board of Management oversight of environmental impacts, risks and opportunities
• Annual review and updating of environmental management systems

Innovation and Technology

Continuous Development: The BMW Group continuously invests in:

• Cleaner production technologies
• Advanced emission control systems
• Alternative materials and processes that reduce environmental impact
• Research partnerships for environmental innovation

These comprehensive pollution-related policies demonstrate the BMW Group's long-standing commitment to environmental protection across all aspects of its operations, from individual site management to global supply chain oversight, ensuring systematic prevention and management of pollution impacts throughout the value chain.

Substances of concern and substances of very high concern

The BMW Group has established processes to monitor and ensure legal compliance with prohibitions and limits relating to the use of chemical substances at the vehicle level. With regard to hazardous substances that fulfil the criteria of any of the classes or categories specified in Article 57 of the REACH Regulation (EC) 1907/2006 in accordance with the CLP Regulation (EC) 1272/2008 and which constitute at least 0.1% of the mass of the final product, the BMW Group has initialised a process to assess the extent to which these substances can be replaced with suitable alternatives.

Firstly, the points of the supply chain at which these substances are used were identified and assessed in a further step against the background of the state of the art and taking business, regulatory and technical concerns into account. If the use of these hazardous substances cannot be avoided, the BMW Group uses them under controlled conditions in accordance with hazardous material regulations.

Exclusion of problematic substances

All substances used by the BMW Group are in compliance with national and European laws. In addition, compliance with statutory prohibitions and limits on the use of chemical substances is monitored. Substitutes are sought for hazardous substances that are categorised as being of very high concern in accordance with Articles 57 and 59 of the REACH Regulation, provided they are used with a proportion exceeding 0.1% by mass in a mixture in the production processes, while taking factors such as economic and technical requirements into account. If such substances cannot be avoided, they are used under controlled conditions and in strict compliance with hazardous substance regulations.

To the extent possible, the BMW Group excludes the use of problematic substances right from the vehicle design stage and sets out corresponding stipulations for its suppliers. Guidance is provided in the form of the Global Automotive Declarable Substance List (GADSL).

Furthermore, the Company is committed to reducing exposure to emissions inside the vehicle to a minimum. All BMW, MINI and Rolls-Royce brand Automobiles are equipped as standard with interior air filters for pollutants and particles. Since 2020, the BMW Group has been using interior air filters equipped with nanofibre technology that not only trap fine dust, but also certain microbial particles and allergens.

Given that vulnerable people react particularly sensitively, the statutory requirements for potentially hazardous substances include children in particular. Therefore, complying with threshold values also regularly comprises the protection of children's health.

No quantitative data on total amounts of substances of concern or substances of very high concern in tonnes has been disclosed.

Resource Inflows (ESRS E5-4)

Overall Resource Inflows

The BMW Group reports the following resource inflows for the 2024 reporting year:

Total resource inflows: 14,804,645 tonnes

The main materials used by the BMW Group in its production processes are steel, aluminium and thermoplastics.

Secondary Materials

Reused and recycled secondary components, products and materials account for 37.0% (5,476,984 t) of total resource inflows.

Biological Materials

The BMW Group notes that "biological materials play a minor role in terms of overall quantity" relative to the total volume of materials used. Therefore, 0.0% of the total resource inflows are sustainably sourced biological materials.

Scope and Context

Automobiles are the main products of the BMW Group for this report. In the future, motorcycles will also be included in the reporting process. In terms of the total volume of materials used, motorcycles represent a negligibly small share.

Water, auxiliaries and operating materials are also relevant process materials alongside the main manufacturing materials (steel, aluminium, thermoplastics).

Electrified vehicles use raw materials like lithium, nickel and cobalt in their batteries, which are included in the total resource inflows figure.

Resource Efficiency and Circular Economy Strategy

The BMW Group's objective is to reduce its dependency on primary raw materials through its "Secondary First" approach. The company aims to increase the proportion of recycled materials used, particularly for key materials such as steel, aluminium, battery materials, and thermoplastics.

For the NEUE KLASSE (launching 2025), requirements for the proportionate use of secondary materials for battery cell materials such as cobalt, lithium and nickel will be imposed as soon as contracts are awarded. The NEUE KLASSE will also contain a higher proportion of secondary materials in other material groups such as steel and aluminium.

Starting in 2023 with the BMW 5 Series, the BMW Group has disclosed the share of secondary materials in its new vehicles as part of life cycle assessments (Vehicle footprint).