Leonardo

The risk governance model is in line with national and international standards and best practices and is compliant with the Corporate Governance Code for Listed Companies, the Organisational, Management and Control Model and the Group's Anti-Corruption Code. It has three levels, provides for clear-cut roles and responsibilities for the various departments and ensures a suitable exchange of information flows, to guarantee effectiveness.

The operating risk management, which involves the entire organisation, is based on the identification, assessment and monitoring of the enterprise and project risks and the related mitigation plans. It is supported by specific methodologies, instruments and metrics for the related analysis and management. The processes underlying Project Risk Management and Enterprise Risk Management (ERM), which are in turn integrated into the company business and support processes, are regularly improved, with the aim of innovating and spreading an effective risk-based organisational culture. Risk management processes support, in fact, the risk owners, along the entire corporate value chain, in identifying and managing risks and opportunities, including those linked to ESG factors. In particular, the ERM methodology fosters the identification and management of the cause-effect link between ESG factors and the potential impact on the Company (strategic, operational, financial, compliance and reputational) and supports the preparation of the Industrial Plan, which also includes the strategic vision and sustainability initiatives.

The Group has set out a model of responsible business conduct aimed at preventing, identifying and responding to the risk of corruption.

Thanks to its model, Leonardo SpA has reached the highest level of Transparency International's Defence Companies Index on Anti-Corruption and Corporate Transparency (DCI), in addition to having its ISO 37001 certification, the first international standard on anti-corruption management system, confirmed. Leonardo was the first company in the world's top ten in Aerospace, Defence and Security to obtain this certification. The model also provides for the responsible management of the supply chain, through the qualification, selection and management of suppliers, as well as the adoption of a risk analysis tool within the scope of due diligence audits within the process of engagement assignation to sales promoters, and other third parties.

The Group systematically carries out due diligence activities before and after the completion of partnerships and joint ventures. At this purpose, the active involvement of its top management in any related operation is aimed, among other things, at directing its strategies and identifying and managing any critical issue in a timely fashion.

The risk governance model is in line with national and international standards and best practices and is compliant with the Corporate Governance Code for Listed Companies, the Organisational, Management and Control Model and the Group's Anti-Corruption Code. It has three levels, provides for clear-cut roles and responsibilities for the various departments and ensures a suitable exchange of information flows, to guarantee effectiveness.

The operating risk management, which involves the entire organisation, is based on the identification, assessment and monitoring of the enterprise and project risks and the related mitigation plans. It is supported by specific methodologies, instruments and metrics for the related analysis and management.

Business Model

Strategic Vision: Leonardo's Industrial Plan 25-29

Leonardo operates in 150 countries in the world offering customised solutions and innovative, value-added after-sales support services in order to be a trusted partner for its customers. It competes in the most important international markets by leveraging technology and product leadership in its business areas (Helicopters, Aircraft, Aerostructures, Electronics, Cyber Security and Space).

Business Sectors

Leonardo is organised into six business Sectors. It also operates through subsidiaries, such as Leonardo DRS (Defence Electronics), joint ventures and investees.

Main Trends Impacting Business Model

Geopolitical tensions - The continuation of ongoing conflicts in Ukraine and the Middle East, and potential hotbeds in Africa and the Indo-Pacific region are destabilising global geopolitical balances, thus leading to increased focus on security and defence issues in the political debate and the stated willingness to further increase the defence budgets of major countries.

Innovation and Sustainability - The global scenario sees a transition from an exclusively Defence need to a broader concept of Global Security where digital technologies will be increasingly decisive for the management of complex scenarios, strategic and sensitive information, the management of climate and environmental emergencies, and the optimisation of available resources.

Reducing strategic dependencies - Reducing strategic dependencies is a crucial issue in ensuring a country's economic and technological security.

Integrated sustainability and sustainable finance - Sustainability is increasingly being used as a reference framework to assess how a company creates and sustains long-term value, managing the risks and opportunities in an ever-changing environment.

New skills and inclusion - The implementation and management of ecological and digital transition requires widespread development of new skills, scientific and digital above all, on which the competitiveness of businesses depends.

Material Impacts, Risks and Opportunities

Risks for the Group

The Group is subject to a number of risks that may affect its objectives and results. Therefore, risk analysis and management processes are implemented systematically, including any related treatment action, with specific methodologies and practices that consider the probability of occurrence and related impacts in accordance with international regulations and standards.

Main Risk Categories and Actions:

Conflicts and geopolitical tensions - The evolution of the high tensions related to the conflicts between Israel and the Palestinians, and between Russia and Ukraine, could lead to scenario instability and new geopolitical complexities.

Government expenditure impacts - The major customers of the Group are governments or public institutions. The Group is influenced by economic and geopolitical factors at global and regional level, the rating or risk profile of countries, the expense policies of the public institutions.

Innovation and skills management - Incessant technological innovation and the growing complexity of the Group's businesses require constant alignment of skills, in order to provide high added-value products and services.

Climate change and environmental protection - The transition to a low-carbon and lower environmental impact economy may entail risks for the company, induced by greater severity of environmental and climate policies.

Cyber security risks - Companies are required to face the risks associated with cyber resilience of their products and services and their digital infrastructure, taking into account the continuous evolution of cyber threats.

Supply chain dependencies - The Group purchases, in very substantial proportions with respect to its sales, industrial products and services, materials and components, equipment and subsystems; it may therefore incur liability to its customers for operational, legal or financial risks attributable to third parties.

The operating risk management, which involves the entire organisation, is based on the identification, assessment and monitoring of the enterprise and project risks and the related mitigation plans. It is supported by specific methodologies, instruments and metrics for the related analysis and management. The processes underlying Project Risk Management and Enterprise Risk Management (ERM), which are in turn integrated into the company business and support processes, are regularly improved, with the aim of innovating and spreading an effective risk-based organisational culture.

Risk management processes support, in fact, the risk owners, along the entire corporate value chain, in identifying and managing risks and opportunities, including those linked to ESG factors. In particular, the ERM methodology fosters the identification and management of the cause-effect link between ESG factors and the potential impact on the Company (strategic, operational, financial, compliance and reputational) and supports the preparation of the Industrial Plan, which also includes the strategic vision and sustainability initiatives.

The examination of risks and consequent actions reported below is supplemented by the more detailed information provided in Note 37 of the Consolidated Financial Statements for the component of merely financial risks, and by the information provided in the specific section of the Consolidated Sustainability Statement for sustainability risks and opportunities linked to financial materiality.

The ESRS and SASB content indices in the section of the Annex attached to the "Report on Operations – Notes to the CSS" allow you to identify content requested by the respective standards and recommendations.

The Report on Operations includes the Consolidated Sustainability Statement (CSS) pursuant to Legislative Decree 125/2024, which transposes in Italy the European Directive CSRD (Corporate Sustainability Reporting Directive).

Leonardo's decision to adopt an integrated approach to its Report, has anticipated what is envisaged by the Corporate Sustainability Reporting Directive, which requires companies to publish sustainability disclosures in the Report on Operations starting from Reports issued in 2025.

Climate Change Targets

The decarbonisation process continued with the reduction of Scope 1 and 2 (market-based) CO2 emissions in line with the commitment to the Science-Based Targets Initiative. The further reduction of 4.4% was achieved, despite the increase in business volumes, mainly thanks to the progressive replacement of SF6 gas with a gas with a lower environmental impact, energy efficiency initiatives and the increase in the share of energy from renewable sources purchased by the network.

Energy Consumption and Mix

Energy efficiency initiatives achieved savings of 24 GWh of electricity withdrawals from the grid, mainly thanks to the progressive replacement of SF6 gas with a gas with a lower environmental impact, energy efficiency initiatives and the increase in the share of energy from renewable sources purchased by the network.

GHG Emissions

Performance: The further reduction of 4.4% in Scope 1 and 2 (market-based) CO2 emissions was achieved, despite the increase in business volumes, mainly thanks to the progressive replacement of SF6 gas with a gas with a lower environmental impact, energy efficiency initiatives and the increase in the share of energy from renewable sources purchased by the network.

Targets:

• Scope 1 + Scope 2 CO2e emissions reduction target: -53% by 2030 (baseline 2020: 423 kton CO2e)
• Current progress: 240 kton CO2e (-43% vs baseline)
• Scope 3 downstream emissions per equivalent flight hour: -52% by 2030 (baseline 2020: 1.94 tCO2e/Fhe)
• Current progress: 1.25 tCO2e/Fhe (-36% vs baseline)

Climate-Related Financial Effects

Physical and Transition Risks

Climate change impacts - The impact of climate changes exposes the Company to an increased frequency of acute weather events, such as floods, storms and wind, as well as droughts and fires, which can endanger industrial sites and making it necessary to extend the ranges of product operating requirements.

Transition risks - The transition to a low-carbon and lower environmental impact economy may entail risks for the company, induced by greater severity of environmental and climate policies, disharmony in the regulations of different countries with related competitive asymmetries between companies, the progress of the relevant technology or the changing confidence of investors and lenders in the relevant business.

Risk Management Actions

The Group pursues an industrial strategy aimed at the environment protection and improving the efficiency of its production systems and processes on an ongoing basis. By participating as a partner of excellence in major European research and innovation programmes, it develops technological solutions with a lower environmental impact and functional to climate change adaptation.

The Group puts measures in place against any possible acute or chronic physical risks and has specific insurance cover against the possible consequences of disastrous climatic or natural events.

Financial Integration

ESG-linked financing: 64% of sources of financing linked to ESG parameters demonstrate the integration of sustainability performance into Leonardo's financial credibility and funding access.

Pollution Management

SF6 Gas Replacement

The decarbonisation process continued with the reduction of Scope 1 and 2 (market-based) CO2 emissions mainly thanks to the progressive replacement of SF6 gas with a gas with a lower environmental impact.

Hexavalent Chromium Phase-out

Preparatory activities were started for the phase-out of hexavalent chromium from 84 production lines in line with the requirements of the European REACH regulation.

Waste Management

Target: % reduction in the amount of waste produced: -15% by 2030 (baseline 2019: 38,499 tons). Current progress: 32,555 tons (-15% vs baseline) - target achieved.

Substances of concern and substances of very high concern

Leonardo, whose business is at the end of the supply chain, is committed to managing chemicals and mixtures deemed harmful to human health and ecosystems through material procurement and supplier qualification stages. The management of such substances is complex both because of the stringent performance, safety and certification requirements of its products and because some hazardous substances are not universally identified as such in materials entering production processes.

Leonardo has identified the hazardous substances used in industrial processes, started a rationalisation of the substances purchased, in compliance with the restrictions and exceptions provided for by the REACH Regulation, and provided for mitigation plans for each division, as well as specific objectives for the reduction, and, where technically possible, the elimination of hazardous substances from products while also taking advantage of eco-design initiatives that make it possible to identify alternatives with lower impact right from the design phase. Substitution projects involve operating expenses that are incurred from essentially in-house sources. In addition, in some cases Leonardo collaborates, when useful, with third-party business partners to identify, develop and test together alternative solutions, including within the framework of national and European research and funding programs, and involves suppliers in the management of hazardous substances and compliance with REACH regulations through contractual clauses and training courses on the subject.

In compliance with the REACH Regulation and the RoHS Directive, Leonardo targets the reduction of the use of hexavalent chromium in processes for hard coatings of parts with high thermomechanical strength and a need for corrosion protection in very challenging environments. The Group has also started an analysis of PFAS (Per- and Polyfluoroalkyl Substances) in the supply chain, which are present in paints or insulation and elastic materials for a gradual reduction of their use in its processes and products. During 2024, the "Phase out of CrVI" project planned an investment of €mil. 6.86 for the complete substitution of hexavalent chromium with alternative substances in all of the Group's approximately 80 industrial processes by 2034, and the elimination or replacement of CrIV was achieved for some processes as early as in 2024.

Collaboration with stakeholders on the use of hazardous substances

ASD - Leonardo participates and leads the working group of the European Aerospace and Defence Association (ASD) on REACH and chemical substances, supporting the actions towards the European Commission and Parliament and the dialogue with the European Defence Agency (EDA).

AIAD (Italian Industry Federation for Aerospace, Defence and Security) - Leonardo also chairs AIAD's REACH Working Group to coordinate dialogue with the Italian Ministry of Defence and political counterparts.

MoD UK – Leonardo participates in the UK Ministry of Defence's Sustainable Procurement Working Group to share best practices in managing industry policies, including REACH regulations and GHG protocols.

ADCR - Leonardo participates in the Aerospace and Defence Chromium ReAuthorisation Consortium (ADCR), contributing to specific reports, including a socio-economic analysis in which it involved over 70 key suppliers that could be impacted by the substitution plans, in order to mitigate the risk of discontinuity in the business particularly linked to the substitution of some chromates with alternative solutions.

RINA-Centro Sviluppo Materiali – Within the working group on Critical Raw Materials, Leonardo has activated collaboration with RINA-Centro Sviluppo Materiali, one of the research and development partners, concerning alternative coating creation techniques, preferring chemical processes with reduced environmental impact.

Quantitative disclosure

Leonardo is equipped with specific tools for collecting and reporting information related to substances of very high concern (SVHC) and substances of concern (SoC) to ensure compliance with current regulations. In Leonardo, the use of these tools, combined with the strong working synergy, therefore allow a proactive assessment and management of the impacts on both health and environmental matrices, as well as, through appropriate mitigation plans, a minimisation of risks related to the use of these substances. Likewise, the Group requires its suppliers to comply with current regulations related to the use of these substances, enhancing these best practices towards end customers as well.

Water Consumption

Target: % reduction in water withdrawals: -25% by 2030 (baseline 2019: 5,653 ML). Current progress: 4,492 ML (-21% vs baseline).

Performance: Work continued to improve efficiency in water consumption through circularity and optimisation and revamping of supply networks, achieving more than 130 Megaliters of water withdrawals reduction per year.

Circular Economy Actions

Circular Supply Chains

Leonardo promotes circular supply chains for strategic materials, which through recycling for internal or external use of secondary raw materials reduce material costs and improve production resilience.

Circular Carbon Fiber

With research and development projects that place us as the first in Italy, work continued on the implementation of the circular carbon fiber supply chain for aerostructures application.

Digital Factory Transformation

An example of the transformation of production systems is NEMESI, with the first smart factory applied to an entire production line completed in 2024 at the Aerostructures division plant in Pomigliano.

Critical Raw Materials Recovery

Critical raw materials, such as lithium, aluminium, titanium or semiconductors and rare earths, are indeed essential for technological and industrial development, and recovering these resources through recycling not only reduces dependence on third-party suppliers, but also contributes to environmental sustainability by reducing the ecological impact of mining.

Resource Use and Circular Economy Targets

Target achieved: The waste reduction target of -15% by 2030 has been achieved in 2024.

ESRS E5-4 Resource Inflows

Leonardo discloses the following resource inflows for the reporting period 2024:

Total Materials Used

In 2024, Leonardo consumed approximately 26.7 ktonne of raw materials (compared to 25.3 ktonne in 2023), including:

• approximately 10.4 kton of iron and steel alloys (8.9 kton in 2023)
• about 0.8 kton of paper and cardboard including packaging (0.8 kton in 2023)
• approx. 0.143 kton of aluminium, bauxite and alumina (purchased critical raw materials)
• approx. 0.015 kton of magnesium (critical raw materials purchased)
• approx. 6.9kt of semi-finished products (7.1kt in 2023)

Formal E5-4 Disclosure Table

Context

Within its manufacturing processes, Leonardo uses raw materials and semi-finished products. In particular, it processes significant quantities of critical raw materials such as aluminium and titanium and high-value circular materials such as carbon fiber composites, down to small quantities of rare earths and conflict minerals for digital transition. Another significant type is materials with a packaging function. In 2024, Leonardo purchased a total of 23.6 ktonnes of materials. Among them, none related to reused or recycled secondary components.

Resource Outflows

Waste Management Performance

Target: % reduction in the amount of waste produced: -15% by 2030 (baseline 2019: 38,499 tons). Current progress: 32,555 tons (-15% vs baseline) - target achieved.

Circular Economy Initiatives

Work continued on the implementation of the circular carbon fiber supply chain for aerostructures application and initiatives aimed at encouraging the transition to a circular economic model.

Waste

Total waste produced:

The environmental indicators related to water withdrawals and waste generated showed an improvement (by 5.7% and 1.5%, respectively), thanks to water network efficiency projects and waste reduction management measures, despite the increase in business volumes and the entry of the Telespazio Group into the scope of consolidation.

Waste data (2023-2024):

Waste recovery:

57% of waste recovered (as reported in the business profile section).

Waste management target:

Leonardo has set a target of 15% reduction in the amount of waste produced by 2030 compared to 2019 baseline (38,499 tons in 2019 to 32,555 tons target in 2030, representing a 15% reduction already achieved as of 2024).

Management approach:

Leonardo promotes a policy of reducing impacts through the efficiency of production processes, the implementation of waste reduction plans and circular economy programs. The Group is committed to reducing the use of hazardous substances and preparations. Leonardo's commitment to implementing the ISO 14001-certified HSE Management System at all Group sites ensures both compliance with the limits and restrictions imposed by environmental regulations and monitoring of the process of reducing impacts.

The gradual replacement of harmful chemicals used in aviation with REACH-compliant alternatives is underway, thus ensuring greater sustainability and a lower environmental footprint.

Note: The report does not provide detailed breakdown by waste type (hazardous vs non-hazardous), waste diverted from disposal vs directed to disposal, or specific waste treatment methods (recycling, recovery, landfill, incineration).

Workforce Targets

Progress: We have continued to work to promote a work environment that values gender diversity, a commitment demonstrated by the increase in both female managers and the hiring of women with STEM degrees compared to 2023.

Workforce Characteristics

Geographic Distribution:

• Italy: 36,704 employees
• United Kingdom: 8,957 employees
• United States: 7,782 employees
• Poland: 3,300 employees
• Rest of the World: 3,725 employees

Growth: In 2024 the workforce increased by 6,902 employees compared to 2023, including as a result of the consolidation of Telespazio on a line-by-line basis from 1 January 2024 (3,261 employees as at the date of consolidation). Growth is mainly divided between Italy (about +2,000), the United Kingdom (about +700), the United States (about +460) and Poland (about +390), thanks also to the stabilisation of the employment contracts.

Diversity Metrics

Performance: We have continued to work to promote a work environment that values gender diversity, a commitment demonstrated by the increase in both female managers and the hiring of women with STEM degrees compared to 2023.

Targets:

• Women on total new hires: 32% by 2025 (current: 24.1%)
• Women on total new hires in STEM areas: 30% by 2025 (current: 23.2%)
• Women at managerial levels: 20% by 2025 (current: 17.7%)
• Women on total employees: 20% by 2025 (current: 20.3%) - target achieved

Training and Skills Development

Training delivered: 1.4 million hours of training delivered to employees

Training opportunities: 1,281 training opportunities including internship, apprenticeship, traineeship and school-to-work alternation programmes

New hires with STEM qualifications: 7,434 new hires, 42.5% hold a STEM degree, 50.5% under 30 and 24% women

Skills management: The Group monitors and manages competencies and professional skills by means of plans of action directed at attracting, retaining and motivating its human resources, managing talents, providing ongoing specialist training and reskilling/upskilling, insourcing core competencies and defining succession plans, with the gradual adoption of state-of-the-art tools of People Analytics and new Lifelong Learning development and training platforms for all personnel, particularly in the STEM (Science, Technology, Engineering & Mathematics) area.

Health and Safety Metrics

Performance: 16.5% reduction in the injury rate compared to 2023

Risk management: Risks to the workers' health and safety are based on the principle of zero tolerance, in strict compliance with the relevant regulations, and are managed through targeted risk analyses, which take account of injury frequency and severity rates and related improvement objectives, specific action and training plans, within the framework of a precise system of proxies and powers for each relevant matter, aimed at ensuring that the action taken complies with the Group's guidelines.

Certification commitment: The Group also confirms its commitment to extend the coverage in terms of Health and Safety System, for example through the ISO 45001 certification.

Value Chain Worker Policies

Supplier management: The model provides for the responsible management of the supply chain, through the qualification, selection and management of suppliers, as well as the adoption of a risk analysis tool within the scope of due diligence audits.

Supply chain training: 198 key suppliers received training on sustainability issues in 2024, with a target of ≥ 500 by 2027.

ESG integration: 20% (in value) of major new tenders awarded include ESG criteria/requirements, with a target of >70% by 2028.

Supplier engagement: Leonardo has been pursuing its policy of strengthening and improving the supply chain for some years, leveraging a transparent and sustainable partnership relationship with the excellences in its Supply Chain, to give rise to a more innovative, integrated and resilient industrial eco-system.

Engagement with Value Chain Workers

Supplier development programs: In addition to the programmes already in place or completed (LEAP, ELITE Leonardo Lounge), the Company has defined a set of principles and rules for the assessment of key suppliers, specifically oriented towards the development and growth of the Supply Chain with a view to long-term sustainability (Leonardo Assessment and Development for Sustainability).

Training and collaboration: The cluster aims to engage suppliers to expand Leonardo's commitment to sustainability throughout the value chain. It encapsulates the collaboration, development and training initiatives of suppliers - mostly SMEs - on digital transformation, cyber security, and social and environmental responsibility.

Science-based targets engagement: In 2024, internal training activities were started to engage suppliers in defining their science-based decarbonisation goals, which is among Leonardo's SBTi-validated objectives.

Value Chain Worker Impact Management

Due diligence processes: The Group systematically carries out due diligence activities before and after the completion of partnerships and joint ventures. A due diligence is performed before dealing with a third party under an offset agreement, which is conducted according to the relevant international best practices.

Risk assessment: The Company has defined a set of principles and rules for the assessment of key suppliers, specifically oriented towards the development and growth of the Supply Chain with a view to long-term sustainability (Leonardo Assessment and Development for Sustainability).

Supply chain resilience: Third-party acquisitions of suppliers relevant to the Group could change the terms and conditions of contract renewals, with costs or timing being less convenient for the Company. Leonardo manages this through transparent and sustainable partnership relationships with excellences in its Supply Chain.

Value Chain Targets

Supply chain sustainability engagement: Internal training activities were started to engage suppliers in defining their science-based decarbonisation goals, which is among Leonardo's SBTi-validated objectives.

Community Impact Management

Local value creation: The creation of shared value for the communities in the vicinity of production sites has also been strengthened thanks to the activities organised with Plastic Free and the collaboration with the Banco Alimentare ETS Foundation, for the collection of surplus food from canteens.

Educational initiatives: Training and engagement activities were strengthened on sustainability and DE&I issues, as well as were activities aimed at promoting STEM subjects in support of the educational system and the local area. These include the Leonardo Constellation project, carried out in collaboration with Il Cielo Itinerante and 10 other associations that work on social change by sharing Leonardo knowledge and hosting children at the Italian sites.

Community solutions: Leonardo has identified the issue as a priority both for the business and in terms of the materiality of its impacts, risks, and opportunities. The benefit of the solutions offered by the Group in the area of protecting territories, infrastructure and citizens, as well as in the area of emergency management, is recognised, even by stakeholders, as the most relevant impact generated by Leonardo on society, consistent with purposes and strategy.

Consumer and End-User Impact Management

Global security solutions: Security has once again become a key issue on the agendas of many countries, and related investments increased, with the primary goal of protecting the building blocks of our society: people, institutions, natural resources, climate, territories, and infrastructure.

Multi-domain solutions: Leonardo has identified the issue as a priority both for the business and in terms of the materiality of its impacts, risks, and opportunities. The benefit of the solutions offered by the Group in the area of protecting territories, infrastructure and citizens, as well as in the area of emergency management, is recognised, even by stakeholders, as the most relevant impact generated by Leonardo on society.

Solutions portfolio: Solutions for security and progress in 150 countries - The solutions offered and developed by Leonardo include the most innovative global monitoring solutions, which, by integrating real-time data and information from multiple sources and multiple domains, and analysing it with AI algorithms, strengthen the ability to prevent, respond to, and manage any possible crises in increasingly complex scenarios.

Customer services: These include the gradual virtualisation of customer services that Leonardo has carried out in the aircraft field, through remote collaboration and online training that have reduced time and environmental impacts and increased the effectiveness and timeliness of customer support.

Business Conduct and Corporate Culture

Anti-corruption certification: Leonardo achieved the target set for 2024 by obtaining the renewal of ISO 37001:2016 certification in July. Annual renewal/maintenance of the ISO 37001:2016 "Anti-Bribery Management System" certification with maintenance targets for 2025 and 2026.

Leadership recognition: Thanks to its model, Leonardo SpA has reached the highest level of Transparency International's Defence Companies Index on Anti-Corruption and Corporate Transparency (DCI), in addition to having its ISO 37001 certification, the first international standard on anti-corruption management system, confirmed. Leonardo was the first company in the world's top ten in Aerospace, Defence and Security to obtain this certification.

Risk management model: The Group has set out a model of responsible business conduct aimed at preventing, identifying and responding to the risk of corruption. The risk governance model is in line with national and international standards and best practices and is compliant with the Corporate Governance Code for Listed Companies, the Organisational, Management and Control Model and the Group's Anti-Corruption Code.

Training and compliance: Among the key initiatives in 2024, Leonardo continued its efforts to train and raise awareness of trade compliance risks among its employees, involving more than 9,000 employees in more than 15,000 training hours.

Supplier Relationship Management

Supplier portfolio: More than 11,000 suppliers with 83% of purchases related to domestic markets

Supply chain strategy: Leonardo has been pursuing its policy of strengthening and improving the supply chain for some years, leveraging a transparent and sustainable partnership relationship with the excellences in its Supply Chain, to give rise to a more innovative, integrated and resilient industrial eco-system.

Supplier development: In addition to the programmes already in place or completed (LEAP, ELITE Leonardo Lounge), the Company has defined a set of principles and rules for the assessment of key suppliers, specifically oriented towards the development and growth of the Supply Chain with a view to long-term sustainability (Leonardo Assessment and Development for Sustainability).

Due diligence: The model provides for the responsible management of the supply chain, through the qualification, selection and management of suppliers, as well as the adoption of a risk analysis tool within the scope of due diligence audits within the process of engagement assignation to sales promoters, and other third parties.

ESG integration: 20% (in value) of major new tenders awarded include ESG criteria/requirements with a target of >70% by 2028.

Anti-Corruption and Bribery Prevention

ISO 37001 certification: Leonardo achieved the target set for 2024 by obtaining the renewal of ISO 37001:2016 certification in July. Target for annual renewal/maintenance through 2026.

Industry leadership: Leonardo was the first company in the world's top ten in Aerospace, Defence and Security to obtain this certification. Thanks to its model, Leonardo SpA has reached the highest level of Transparency International's Defence Companies Index on Anti-Corruption and Corporate Transparency (DCI).

Management system: The Group adopts and updates its organisational, control, procedural and training system to ensure fraud risk monitoring and compliance with any and all anti-corruption laws applicable in the domestic and foreign markets in which it operates.

Risk assessment: The model provides for the responsible management of the supply chain, through the qualification, selection and management of suppliers, as well as the adoption of a risk analysis tool within the scope of due diligence audits within the process of engagement assignation to sales promoters, and other third parties.

Training programs: Among the key initiatives in 2024, Leonardo continued its efforts to train and raise awareness of trade compliance risks among its employees, involving more than 9,000 employees in more than 15,000 training hours.