The administrative, management and supervisory bodies of Vestas play a pivotal role in sustainability governance and the company's strategic direction. The Board of Directors includes sustainability oversight as part of its responsibilities, with the Audit Committee overseeing sustainability reporting and related risks. The Board regularly reviews sustainability performance and progress against targets through quarterly presentations from management.

The Board has established committees including the Audit Committee which has specific oversight responsibilities for sustainability matters. The Executive Management, led by CEO Henrik Andersen, has integrated sustainability into business strategy and operations.

The governance structure includes the Enterprise Leadership Team (top 80 leaders) and the Vestas Leadership Forum (top 250 leaders) which provide strategic alignment on sustainability initiatives across the organization. Regional Leadership Forums also support the cascading of sustainability priorities throughout the global operations.

Sustainability governance is embedded in the company's decision-making processes with quarterly assessment of sustainability-related goals broken down into key products, services and geographies presented to the Executive Management and the Board. The Board oversees the company's sustainability strategy which has a clear mandate of 'sustainability in everything we do'.

The Board of Directors and Executive Management regularly receive information on sustainability matters through various channels:

• Quarterly reporting: Assessment of sustainability-related goals, broken down into key products, services and geographies, is presented to the Executive Management and the Board on a quarterly basis • Annual reporting: Scope 3 emissions and community engagement metrics are reported annually to leadership • Strategic alignment events: The Vestas Leadership Forum (top 250 leaders) and Enterprise Leadership Team (top 80 leaders) focus on strategic alignment including sustainability matters • Committee oversight: The Audit Committee has specific oversight responsibilities for sustainability reporting and related risks

The sustainability matters addressed include:

• Climate change mitigation (E1)
• Circular economy and resource use (E5)
• Own workforce (S1)
• Affected communities (S3)
• Political engagement (G1)

The Board and management teams regularly evaluate progress against the company's sustainability strategy targets including carbon neutrality by 2030, zero-waste wind turbines by 2040, safety improvements, and increased diversity in leadership positions.

Vestas has implemented comprehensive due diligence processes across its operations and value chain:

Human Rights Due Diligence: Vestas updated its Human Rights Policy in 2024 to reflect evolving best practice and was ranked first in the Danish Institute for Human Rights' benchmark of large Danish companies. The company conducts Social Due Diligence on projects, achieving 83% coverage in 2024 compared to 59% in 2023.

Supply Chain Due Diligence: Vestas works closely with suppliers through various mechanisms including the annual Vestas Supplier Forum and enhanced engagement and integration with supply chain partners. The company maintains risk mitigation frameworks taking into account potential disruption of operations.

Value Chain Oversight: The company has established processes for engaging with value chain workers about impacts and maintains channels for workers to raise concerns. Vestas conducts due diligence across its complex supply chain involving both product and project manufacturing models.

Community Engagement: Vestas engages with impacted communities near projects to minimize and address potential grievances, with community grievance mechanisms in place. The company reported 2 community grievances in 2024 and supported 7,919 community beneficiaries.

Business Conduct: The company maintains policies and processes for prevention and detection of corruption and bribery, with 757 EthicsLine cases reported in 2024, of which 147 were substantiated.

Vestas has established comprehensive risk management and internal controls over sustainability reporting:

Governance Structure: The Audit Committee has specific oversight responsibilities for sustainability reporting and related risks. Sustainability risk management is integrated into the company's overall risk management framework.

Reporting Controls: This is Vestas' first integrated Annual Report addressing Corporate Sustainability Reporting Directive requirements. The sustainability statement has been prepared in compliance with ESRS and includes assurance procedures.

Risk Assessment: The company conducts double materiality assessments to identify and evaluate sustainability risks and opportunities. Material topics identified include Climate change, Water and marine resources, Biodiversity and ecosystems, Circular economy and resource use, Own workforce conditions, Workers in the value chain, Affected communities, and Business conduct.

Management Systems: Vestas has implemented management systems across key sustainability areas with regular monitoring and reporting. The company tracks performance against targets with quarterly reporting to Executive Management and the Board.

Assurance: Sustainability key figures for 2020-2023 were subject to limited assurance by previous auditors. The 2024 sustainability statement prepared in compliance with ESRS is subject to assurance procedures.

Data Quality: The company conducts regional validation and clean-up of contract data and has established accounting policies for sustainability metrics to ensure data integrity and reliability.

Business Model

Vision: To become the Global Leader in Sustainable Energy Solutions. By leading across our four business areas, Onshore, Offshore, Service, and Development, we aim to lead the energy transition forward.

Core Business Areas

Onshore: Vestas is the market leader with more than 40 years of experience in Onshore wind. Based on our own onshore wind turbine product design and development, we offer customers wind power solutions, and we take care of everything from siting, manufacturing, construction, and installation to final commissioning in cooperation with our partners.

Offshore: Vestas is becoming a leading player in Offshore wind with almost 30 years of experience. Based on our own offshore wind turbine product design and development, we offer customers wind power solutions, and we take care of all stages from siting through final commissioning.

Service: Vestas is the global market leader in Service within wind power with around 16,000 employees across 67 countries. Our people service 155 GW for our customers on long-term subscription-based contracts, making their assets operate more effectively.

Development: Development helps our customers grow their business, which in turn generates order intake for Vestas. More than 100 employees across 16 countries secure land rights and permits, design sites, ensure grid connection, and secure project offtake agreements to create quality projects for our partners' investments.

Key Inputs (SBM-1-42a)

Viewed through the lens of sustainability and the ESRS, our key inputs are:

• Raw materials
• Capital employed
• Energy
• Employee working hours

We gather these inputs through business relationships in the supply chain and in our own operations spanning from own workforce to contractors. Development and securing of the inputs is primarily through continuous improvement efforts, formal contractual agreements and risk mitigation frameworks taking into account any potential disruption of operations.

Key Outputs and Outcomes (SBM-1-42b)

Viewed through the lens of sustainability and the ESRS, the key outputs and outcomes of our business model are wind turbines installed. The value we create for our employees, investors, customers, and other stakeholders includes:

• Salaries
• EBIT margin before special items
• Total recordable injuries
• GHG emissions avoided

Global Operations

We operate globally with a track record of 189 GW capacity installed in 88+ countries. Our full suite of wind energy solutions ensures we can grow market presence in regions with significant wind potential, serving a wide array of customers across multiple regions, including Europe, North & South America, and Asia Pacific, while expanding our offshore wind capabilities to new markets.

Customer Base

Our main customers are utility companies, which seek to integrate renewable energy into their power grids. We also work with independent power producers that develop and operate wind farms relying on our technology to deliver consistent energy output.

Vestas engages with a diverse range of stakeholders and considers their interests and views in business strategy and operations:

Key Stakeholder Groups

Customers: Our main customers are utility companies seeking to integrate renewable energy into power grids and independent power producers. We maintain a customer-centric approach prioritizing value creation over volume. Priority customers have global account managers and leading access to our siting capabilities and Development projects. In 2024, we achieved a Customer Net Promoter Score of 59 for Onshore.

Employees: With approximately 35,000 employees globally, we prioritize their growth and development through comprehensive training, leadership development, and talent programmes. In 2024, we provided almost four million hours of training globally. Our 'learn and grow' score improved from 73 in 2023 to 76 in 2024 in our Employee Engagement Survey.

Suppliers: We work closely with strategic suppliers through enhanced engagement including the annual Vestas Supplier Forum. Key partnerships include Maersk, ZF and ArcelorMittal. We are shifting our industrial system from push to pull to optimize resource use and supply chain lead time.

Communities: We engage with impacted communities near our projects to minimize and address potential grievances. In 2024, we supported 7,919 community beneficiaries and received 2 community grievances. We conduct Social Due Diligence on 83% of projects in scope.

Investors and Shareholders: We aim to deliver stable profits returned through dividends and/or share buybacks. We issue sustainability-linked bonds and maintain regular communication about financial and sustainability performance.

Value Chain Workers: We have established processes for engaging with value chain workers about impacts and maintain channels for workers to raise concerns through our supply chain oversight.

Government and Regulators: We engage in political advocacy including our 'This is not a wind farm' campaign highlighting the need for redesigned wind farm auctions. We campaign for sustainable scale-up of renewable energy and alignment of public policy with climate commitments.

Stakeholder Engagement Methods

• Regular customer dialogues and partnership meetings
• Employee engagement surveys and leadership forums
• Annual supplier forums and strategic partnerships
• Community engagement programs and grievance mechanisms
• Investor relations and sustainability reporting
• Industry advocacy and policy engagement
• EthicsLine reporting system for raising concerns

Integration of Stakeholder Views

Stakeholder input influences our strategy development, particularly in:

• Sustainability target setting and validation
• Product development and technology priorities
• Supply chain management and partnerships
• Community impact mitigation
• Policy advocacy positions
• Safety and quality improvements

Material Impacts, Risks and Opportunities

Double Materiality Assessment Results

Vestas conducted a comprehensive double materiality assessment to identify material sustainability matters. The assessment identified the following material topics:

Environmental Topics:

• E1 Climate change: Material from both impact and financial materiality perspectives
• E3 Water and marine resources: Material
• E4 Biodiversity and ecosystems: Material
• E5 Circular economy and resource use: Material

Social Topics:

• S1 Own workforce: Material across multiple subtopics including health and safety, secure employment, and equal treatment
• S2 Workers in the value chain: Material
• S3 Affected communities: Material

Governance Topics:

• G1 Business conduct: Material

Key Material Impacts

Positive Impacts:

• Climate Impact: Expected GHG emissions to be avoided over the lifetime of capacity produced and shipped in 2024: 455 million tonnes CO2e
• Energy Transition: Delivered 13 GW of wind turbines in 2024, contributing to global renewable energy capacity
• Economic Development: Supporting local job creation and economic development in communities where we operate

Negative Impacts:

• GHG Emissions: Scope 1 & 2 emissions of 105k tonnes CO2e and Scope 3 emissions of 7.99 million tonnes CO2e in 2024
• Resource Use: Material efficiency rate of 1.0 tonnes of waste per MW produced and shipped
• Safety: 240 total recordable injuries with 2 fatal injuries in 2024

Material Risks

Climate-Related Physical Risks:

• Extreme weather events affecting operations and supply chains
• Sea level rise impacting coastal facilities and offshore installations

Climate-Related Transition Risks:

• Policy and regulatory changes affecting renewable energy incentives
• Technology risks from rapid innovation cycles
• Market risks from changing customer preferences

Supply Chain Risks:

• Disruption of operations due to geopolitical uncertainty
• Raw material price volatility and availability
• Quality issues affecting project execution

Social Risks:

• Workplace safety incidents
• Community opposition to projects
• Human rights risks in value chain

Material Opportunities

Market Opportunities:

• Growing demand for renewable energy driven by energy security concerns
• Expanding addressable market with wind energy expected to grow 7-9% annually for onshore and 20-25% for offshore towards 2030
• Data center and AI boom driving new power demand

Technology Opportunities:

• Development of larger, more efficient turbines
• Digitalization and efficiency improvements
• Circular economy innovations including blade recycling

Partnership Opportunities:

• Strategic partnerships across the value chain
• Customer co-development of sustainable solutions
• Government collaboration on energy policy

Integration with Strategy and Business Model

These material impacts, risks and opportunities are integrated into:

Corporate Strategy: The sustainability strategy with four pillars (Climate, Circularity, Social, Energy transition) addresses key material issues

Business Operations: Risk management and mitigation strategies are embedded across all four business areas (Onshore, Offshore, Service, Development)

Financial Planning: Expected financial effects from climate-related risks and opportunities are considered in strategic planning and capital allocation

Target Setting: Material issues inform sustainability target setting including carbon neutrality by 2030, zero-waste turbines by 2040, and safety improvements

The Board and Executive Management receive quarterly updates on progress against material sustainability issues, with annual reporting on scope 3 emissions and community engagement.

Process for Identifying and Assessing Material Impacts, Risks and Opportunities

Double Materiality Assessment Process

Vestas conducts a comprehensive double materiality assessment to identify and assess material sustainability impacts, risks and opportunities. The process follows ESRS requirements and considers both impact materiality (actual and potential impacts on people and the environment) and financial materiality (financial effects on the company).

Assessment Methodology

The double materiality assessment process includes:

1. Stakeholder Engagement: Input from various stakeholder groups including employees, customers, suppliers, communities, investors, and regulators

2. Impact Identification: Systematic review of potential positive and negative impacts across the value chain

3. Risk and Opportunity Mapping: Assessment of climate-related and other sustainability risks and opportunities

4. Materiality Evaluation: Evaluation of significance from both impact and financial perspectives

5. Validation and Approval: Review and validation by management and Board oversight

Regular Review and Updates

The materiality assessment is regularly updated to reflect:

• Changes in business operations and strategy
• Evolving stakeholder expectations
• New regulatory requirements
• Emerging sustainability issues
• Market developments

Integration with Business Processes

The results of the materiality assessment are integrated into:

• Strategic planning and decision-making
• Risk management processes
• Sustainability target setting
• Reporting and disclosure
• Performance monitoring and management

Key Identified Material Topics

The process identified the following material topics:

• E1 Climate change
• E3 Water and marine resources
• E4 Biodiversity and ecosystems
• E5 Circular economy and resource use
• S1 Own workforce (multiple subtopics)
• S2 Workers in the value chain
• S3 Affected communities
• G1 Business conduct

Governance and Oversight

The materiality assessment process is overseen by:

• Executive Management with quarterly review of sustainability matters
• Board of Directors with oversight of sustainability strategy
• Audit Committee with specific responsibility for sustainability reporting
• Regional and functional leadership teams for implementation

Continuous Improvement

Vestas continuously refines its approach to identifying and assessing material impacts, risks and opportunities through:

• Regular stakeholder feedback
• Industry best practice benchmarking
• Regulatory guidance updates
• Internal capability development
• External assurance and verification

Disclosure Requirements Covered in Vestas' Sustainability Statement

Vestas' sustainability statement covers the following ESRS disclosure requirements based on the materiality assessment:

ESRS 2 General Disclosures

• GOV-1: Role of administrative, management and supervisory bodies
• GOV-2: Information provided to and sustainability matters addressed by bodies
• GOV-4: Statement on due diligence
• GOV-5: Risk management and internal controls over sustainability reporting
• SBM-1: Strategy, business model and value chain
• SBM-2: Interests and views of stakeholders
• SBM-3: Material impacts, risks and opportunities and their interaction with strategy
• IRO-1: Description of processes to identify and assess material impacts, risks and opportunities
• IRO-2: Disclosure requirements covered by the sustainability statement

Environmental Standards

E1 Climate Change:

• E1-2: Policies related to climate change mitigation and adaptation
• E1-3: Actions and resources in relation to climate change policies
• E1-4: Targets related to climate change mitigation and adaptation
• E1-5: Energy consumption and mix
• E1-6: Gross Scopes 1, 2, 3 and Total GHG emissions

E3 Water and Marine Resources:

• E3-1: Policies related to water and marine resources
• E3-4: Water consumption

E4 Biodiversity and Ecosystems:

• E4-2: Policies related to biodiversity and ecosystems

E5 Circular Economy and Resource Use:

• E5-1: Policies related to resource use and circular economy
• E5-2: Actions and resources related to resource use and circular economy
• E5-3: Targets related to resource use and circular economy
• E5-4: Resource inflows
• E5-5: Resource outflows

Social Standards

S1 Own Workforce:

• S1-1: Policies related to own workforce
• S1-4: Taking action on material impacts and effectiveness
• S1-6: Characteristics of employees
• S1-9: Diversity metrics
• S1-14: Health and safety metrics

S2 Workers in the Value Chain:

• S2-1: Policies related to value chain workers
• S2-2: Processes for engaging with value chain workers
• S2-3: Processes to remediate negative impacts
• S2-4: Taking action on material impacts

S3 Affected Communities:

• S3-1: Policies related to affected communities
• S3-2: Processes for engaging with affected communities
• S3-3: Processes to remediate negative impacts
• S3-4: Taking action on material impacts

Governance Standards

G1 Business Conduct:

• G1-1: Business conduct policies and corporate culture
• G1-2: Management of relationships with suppliers
• G1-3: Prevention and detection of corruption and bribery
• G1-4: Incidents of corruption or bribery
• G1-5: Political influence and lobbying activities

Entity-Specific Disclosures

• Transparent tax practices
• Cyber security risks

EU Taxonomy Reporting

Vestas also provides EU Taxonomy disclosures as required under the EU Taxonomy Regulation.

Basis for Omissions

Where specific disclosure requirements are not included, this is based on the materiality assessment results showing these topics are not material for Vestas' business model and impacts. The company applies the ESRS materiality criteria in determining which disclosures to include.

Assurance

Key sustainability metrics have been subject to limited assurance procedures, with the 2024 sustainability statement prepared in compliance with ESRS requirements.

Policies Related to Climate Change Mitigation and Adaptation

Vestas has established comprehensive policies and commitments related to climate change mitigation and adaptation:

Climate Strategy and Commitments

Carbon Neutrality Target: Vestas has committed to achieve carbon neutrality in our own operations by 2030 – without using carbon offsets. This requires that all our offices, factories, vehicles, vessels, and other operations are fully decarbonised through our own actions.

Science-Based Targets: Our climate targets are aligned with the Science Based Targets initiative (SBTi) and Paris Agreement goals:

• Reduce scope 1 & 2 GHG emissions 55% by 2025 and 100% by 2030 (baseline year 2019)
• Reduce scope 3 GHG emissions per MWh generated 45% by 2030 (baseline year 2019)

Sustainability Strategy Foundation: Climate action is one of four strategic sustainability pillars under our mandate of 'sustainability in everything we do', alongside Circularity, Social responsibility, and Energy transition leadership.

Policy Integration

Corporate Strategy Integration: Climate change mitigation is fully integrated into our corporate strategy, with the sustainability matters relating to climate change mitigation (E1) being one of the main material topics alongside Circular economy and resource use (E5), Own workforce (S1), Affected communities (S3), and Political engagement (G1).

Value Chain Approach: We are working to decarbonise the entire wind energy supply chain by working with strategic suppliers to lower the carbon intensity of energy generated by our turbines (Scope 3 emissions).

Target Revalidation

Vestas recognizes that current projections indicate we will not deliver on the 2025 target to reduce GHG emissions by 55 percent, primarily due to our expanded scope of operations including offshore activities that were not considered when original targets were set. We plan to seek revalidation of our targets in 2025, considering our new scope of operations and complying with the SBTi five-year revalidation requirement, while staying in alignment with the Paris Agreement.

Governance

Climate-related policies are overseen by the Board of Directors and Executive Management, with quarterly assessment of progress presented to leadership. The policies apply across all products, services, geographies, and customer categories as part of our foundational ESG management system.

Actions and Resources in Relation to Climate Change Policies

Decarbonisation Initiatives

Renewable Energy Transition:

• 100% renewable electricity for own activities maintained since previous years
• 33% renewable energy overall in 2024 (including heating and transport)
• Converting benefit vehicle fleet to EV/PHEV
• Testing sustainable aviation fuel for offshore vessels and helicopters

Low-Emission Materials:

• Introduced low-emission steel towers as a new product offering in 2024
• Partnership with ArcelorMittal to enable low-emission steel supply
• Baltic Power project in Poland will be first in the world to utilize low-emission steel for V236-15.0 MW™ turbines
• Expanding range of low-emission materials offerings for 2025 and beyond

Operational Efficiency:

• Decreased Scope 1 and 2 emissions by 44% outside Offshore operations
• Total Scope 1 & 2 emissions: 105k tonnes CO2e in 2024 vs 109k tonnes in 2023
• Improved material efficiency rate to 1.0 tonnes waste per MW in 2024 vs 1.2 in 2023

Supply Chain Decarbonisation

Scope 3 Emissions Reduction:

• Scope 3 GHG emissions intensity improved to 5.66 kg CO2e/MWh generated in 2024 from 6.30 in 2023
• Working with strategic suppliers to reduce carbon intensity of turbine manufacturing
• Enhanced engagement and integration with supply chain partners

Supplier Engagement:

• Annual Vestas Supplier Forum to build relationships and align on sustainability goals
• Formal contractual agreements include sustainability requirements
• Risk mitigation frameworks account for climate-related disruptions

Technology and Innovation

R&D Investment:

• EUR 531m invested in green R&D in 2024 (vs EUR 500m in 2023)
• Continued development of scalable, reliable and sustainable energy solutions
• Focus on larger, more efficient turbines to reduce lifecycle emissions intensity

Product Development:

• V236-15.0 MW™ offshore platform for improved efficiency
• Modular designs for reduced manufacturing emissions
• Circular design principles to enable end-of-life recycling

Climate Impact Metrics

Emissions Avoided:

• Expected GHG emissions avoided over lifetime of 2024 capacity: 455 million tonnes CO2e
• Total expected annual GHG avoided by installed fleet: 239 million tonnes CO2e
• 13 GW of wind turbines delivered in 2024 contributing to global decarbonisation

Resource Allocation

Financial Resources:

• Sustainability-linked bonds issued in 2022 and 2023 were significantly oversubscribed
• Capital allocation priorities include investments supporting long-term decarbonisation goals
• EUR 1.2bn total investments expected in 2025

Organizational Resources:

• Technology & Operations organization with 13,000+ people focused on sustainable industrialization
• Sustainability team with VP level leadership and cross-functional matrix structure
• Regional and functional teams implementing climate initiatives globally

Monitoring and Reporting

Progress Tracking:

• Quarterly assessment of climate-related goals presented to Executive Management and Board
• Annual sustainability key figures subject to assurance
• Regular stakeholder reporting through integrated annual report and sustainability disclosures

Continuous Improvement:

• Regular review and updating of climate action plans
• Benchmarking against industry best practices
• Integration of stakeholder feedback into climate strategy evolution

Targets Related to Climate Change Mitigation and Adaptation

GHG Emissions Reduction Targets

Scope 1 & 2 Emissions Targets:

• 2025 Target: Reduce scope 1 & 2 emissions by 55% from 2019 baseline
• 2030 Target: Achieve 100% reduction in scope 1 & 2 emissions (carbon neutrality without offsets)
• Current Status: 105k tonnes CO2e in 2024, showing improvement from 109k tonnes in 2023

Scope 3 Emissions Targets:

• 2030 Target: Reduce scope 3 GHG emissions per MWh generated by 45% from 2019 baseline
• Current Performance: 5.66 kg CO2e/MWh generated in 2024, improved from 6.30 in 2023

Energy and Resource Efficiency Targets

Renewable Energy Usage:

• Target: 100% renewable electricity for own activities (achieved and maintained)
• Performance: 33% renewable energy overall in 2024, with 214 GWh renewable energy consumed

Material Efficiency:

• 2025 Target: Improve material efficiency rate to 1.2 tonnes waste per MW produced and shipped
• 2030 Target: Improve material efficiency rate to 0.2 tonnes waste per MW produced and shipped
• 2024 Performance: 1.0 tonnes waste per MW, showing improvement from 1.2 in 2023

Target Revalidation and Challenges

2025 Target Status: Vestas acknowledges that current projections indicate we will not deliver on the 2025 target to reduce GHG emissions by 55%. This is primarily due to:

• Expanded scope of operations including offshore activities
• Original targets set before re-entering offshore wind market
• Increased overall business activities and manufacturing capacity

Planned Actions:

• Seek revalidation of targets in 2025 considering new scope of operations
• Comply with SBTi five-year revalidation requirement
• Maintain alignment with Paris Agreement goals
• Continue adaptation of strategy and transition plan

Positive Impact Targets

Climate Impact:

• Achievement: 455 million tonnes CO2e expected to be avoided over lifetime of capacity produced and shipped in 2024
• Fleet Impact: 239 million tonnes CO2e expected annual avoided emissions from total installed fleet
• Capacity Growth: 13 GW of wind turbines delivered in 2024

Integration with Business Strategy

Financial Targets Alignment: Climate targets are integrated with long-term financial ambitions including:

• At least 10% EBIT margin before special items
• 20% ROCE over the cycle
• Market leadership in revenue growth

Technology Targets:

• Continued R&D investment (EUR 531m in 2024) to advance sustainable energy solutions
• Development of larger, more efficient turbines
• Innovation in low-emission materials and manufacturing processes

Governance and Monitoring

Oversight: Climate targets are monitored through:

• Quarterly assessment by Executive Management and Board
• Annual sustainability reporting with external assurance
• Integration into strategic planning and capital allocation

Accountability: Progress against climate targets influences:

• Strategic decision-making
• Resource allocation
• Performance evaluation
• Stakeholder communications

Policies Related to Water and Marine Resources

Vestas recognizes water and marine resources as a material sustainability topic, particularly given our operations in coastal areas for offshore wind development and our global manufacturing footprint.

Water Management Policies

Resource Efficiency: Vestas is committed to responsible water management across our operations, with policies focused on:

• Efficient water use in manufacturing processes
• Water conservation measures in facilities
• Responsible withdrawal from freshwater sources
• Protection of local water resources

Operational Water Use: Our water consumption primarily relates to:

• Manufacturing processes for turbine components
• Facility cooling and heating systems
• Employee facilities and office operations
• Cleaning and maintenance activities

Marine Resource Considerations

Offshore Wind Development: As we expand our offshore wind capabilities, we consider marine resource impacts including:

• Marine ecosystem protection during construction and operation
• Sustainable installation practices
• Responsible decommissioning planning
• Collaboration with marine conservation stakeholders

Coastal Operations: Our offshore manufacturing and service facilities are designed with consideration for:

• Coastal water quality protection
• Marine habitat preservation
• Sustainable port and harbor usage
• Integration with local marine resource management

Integration with Sustainability Strategy

Circular Economy Connection: Water management connects to our circular economy goals through:

• Waste water treatment and reuse where possible
• Minimizing water-intensive processes
• Closed-loop manufacturing systems where feasible

Supply Chain Requirements: We engage with suppliers on responsible water management practices as part of our overall supply chain sustainability requirements.

Governance and Management

Oversight: Water and marine resource management is overseen as part of our comprehensive environmental management system, with regular monitoring and reporting of water consumption metrics.

Continuous Improvement: We continuously evaluate opportunities to improve water efficiency and reduce environmental impact on marine resources through operational improvements and technology upgrades.

Regulatory Compliance

Vestas maintains compliance with local water management regulations across all operational jurisdictions and works proactively with authorities on marine resource protection in offshore wind development projects.

Policies Related to Biodiversity and Ecosystems

Vestas recognizes biodiversity and ecosystems as a material sustainability topic, particularly considering the environmental impact of wind energy infrastructure on natural habitats and wildlife.

Biodiversity Protection Framework

Environmental Impact Assessment: Vestas implements comprehensive environmental impact assessments for wind energy projects, including:

• Pre-construction biodiversity surveys
• Wildlife migration pattern analysis
• Habitat impact evaluation
• Species protection measures
• Long-term monitoring protocols

Project Development Integration: Our Development business incorporates biodiversity considerations throughout the project lifecycle:

• Site selection criteria include biodiversity impact assessment
• Permitting processes address environmental protection requirements
• Grid connection planning considers ecosystem connectivity
• Community engagement includes environmental stakeholders

Marine Biodiversity Focus

Offshore Wind Considerations: As we expand offshore wind capabilities, we specifically address:

• Marine ecosystem protection during construction and operation
• Seabird and marine mammal impact mitigation
• Benthic habitat preservation
• Sustainable installation practices that minimize ecosystem disruption

Collaborative Approach: Working with marine conservation organizations, research institutions, and regulatory authorities to:

• Develop best practice guidelines for offshore installations
• Support marine biodiversity research
• Implement adaptive management strategies
• Share learnings across the industry

Supply Chain and Manufacturing

Sustainable Materials: Consideration of biodiversity impacts in material sourcing including:

• Responsible sourcing of raw materials
• Supply chain requirements for environmental protection
• Partnership with suppliers on sustainability practices
• Life cycle assessment including biodiversity considerations

Land Use Management: At manufacturing and service facilities:

• Responsible land use planning
• Native vegetation preservation where possible
• Sustainable facility design and construction
• Local ecosystem integration

Policy Integration

Regulatory Compliance: Full compliance with biodiversity protection regulations across all operational jurisdictions

Best Practice Implementation: Adoption of international best practices for biodiversity protection in renewable energy development

Stakeholder Engagement: Active engagement with environmental organizations, local communities, and regulatory bodies on biodiversity protection

Continuous Improvement

Research and Innovation: Support for research into:

• Wildlife-friendly wind energy technologies
• Ecosystem impact mitigation measures
• Biodiversity monitoring technologies
• Habitat restoration techniques

Knowledge Sharing: Participation in industry initiatives to share knowledge and best practices for biodiversity protection in renewable energy development.

Governance

Environmental Management: Biodiversity protection is integrated into Vestas' environmental management system with regular review and improvement of policies and practices.

Community Engagement: Our community engagement processes specifically address environmental concerns and biodiversity protection measures with local stakeholders.

Policies Related to Resource Use and Circular Economy

Vestas has established comprehensive policies focused on circular economy principles and efficient resource utilization as part of our sustainability strategy pillar "Circularity - We want to produce zero-waste wind turbines by 2040."

Circular Economy Strategy

Zero-Waste Vision: Our ultimate goal is to produce zero-waste wind turbines by 2040, supported by our industry-leading Circularity Roadmap which outlines our pathway and interim targets.

Material Efficiency: We have set specific targets to improve material efficiency:

• 2025 Target: Improve material efficiency rate to 1.2 tonnes waste per MW produced and shipped
• 2030 Target: Improve material efficiency rate to 0.2 tonnes waste per MW produced and shipped (90% improvement)
• 2024 Performance: 1.0 tonnes waste per MW, showing improvement from 1.2 in 2023

Waste Management and Recycling Policies

Waste Hierarchy: Following the waste management hierarchy of reduce, reuse, recycle:

• Reduce: Minimizing waste generation through design optimization and manufacturing efficiency
• Reuse: Extending component life through refurbishment and repurposing
• Recycle: Maximizing recycling rates for materials and components

Recycling Performance:

• 68% of materials recycled in 2024 (maintained from 2023)
• 30k tonnes of waste collected for recycling in 2024
• Focus on increasing recyclability rates across product portfolio

Product Design and Innovation

Circular Design Principles: Integration of circular economy principles into product development:

• Design for disassembly and end-of-life recycling
• Material selection prioritizing recyclable and sustainable materials
• Modular design approaches for component reuse
• Life cycle assessment integration in design decisions

Blade Recycling Innovation: Advanced development of circular recycling methods for epoxy-infused blades while continuing traditional recycling routes for repowering projects

Component Life Extension

Refurbishment Programs:

• 34.5% refurbished component utilization in 2024 (vs 33.5% in 2023)
• 2030 Target: Increase refurbished component utilization to 55%
• Focus on extending useful life of components through repair and refurbishment

Repowering Services: Supporting customers in:

• Lifetime extensions of existing turbines
• Technology upgrades for improved efficiency
• Component replacement with refurbished alternatives
• End-of-life planning and material recovery

Supply Chain Integration

Supplier Requirements: Integration of circular economy principles into supply chain management:

• Supplier sustainability requirements
• Collaborative development of circular solutions
• Material traceability and lifecycle tracking
• Waste reduction initiatives across the value chain

Material Sourcing:

• Prioritizing recycled and sustainable materials where possible
• Working with suppliers on circular material flows
• Developing closed-loop material systems

Resource Efficiency Measures

Manufacturing Efficiency:

• Waste reduction in production processes
• Material optimization and yield improvement
• Energy efficiency in manufacturing operations
• Water conservation and reuse initiatives

Packaging and Transport:

• Sustainable packaging solutions
• Transport optimization to reduce material use
• Returnable and reusable packaging systems
• Logistics efficiency improvements

Governance and Implementation

Strategic Integration: Circular economy policies are integrated into:

• Corporate strategy and business planning
• Product development processes
• Supply chain management
• Customer engagement and solutions

Performance Monitoring: Regular tracking and reporting of:

• Material efficiency metrics
• Waste generation and recycling rates
• Component refurbishment utilization
• Circular economy target progress

Stakeholder Engagement

Customer Partnerships: Working with customers on:

• Circular economy solutions
• End-of-life planning for turbines
• Sustainable upgrade and repowering options
• Shared value creation through circularity

Industry Collaboration: Participation in industry initiatives to:

• Develop circular economy standards
• Share best practices
• Advance recycling technologies
• Create circular material markets

Actions and Resources Related to Resource Use and Circular Economy

Blade Recycling Innovation

Advanced Recycling Technology: In 2024, we advanced the development of a new circular recycling method for epoxy-infused blades, representing a significant breakthrough in addressing one of the wind industry's most challenging recycling problems.

Traditional Recycling Continuation: While developing new technologies, we continue to recycle blades through traditional recycling routes, particularly for repowering projects in the USA and other markets.

Research and Development: Significant investment in R&D for circular solutions as part of our EUR 531m green R&D investment in 2024.

Component Refurbishment Programs

Refurbishment Utilization: Achieved 34.5% refurbished component utilization in 2024, up from 33.5% in 2023, demonstrating progress toward our 2030 target of 55%.

Service Integration: Refurbishment programs are integrated into our Service business operations:

• Component repair and restoration
• Performance testing and certification
• Quality assurance processes
• Customer integration and acceptance

Life Extension Services: Supporting customers through:

• Lifetime extension programs for existing turbines
• Technology upgrade solutions
• Component replacement with refurbished alternatives
• Performance optimization services

Manufacturing Efficiency Improvements

Waste Reduction: Achieved material efficiency rate improvement to 1.0 tonnes waste per MW produced and shipped in 2024, down from 1.2 in 2023.

Production Optimization:

• Streamlined manufacturing processes to minimize waste
• Improved material yield and utilization
• Enhanced quality control to reduce defects and rework
• Technology & Operations organization focusing on industrial efficiency

Recycling Performance:

• 68% materials recycling rate maintained in 2024
• 30k tonnes of waste collected for recycling
• 44k tonnes total waste from operations

Circular Product Development

Design Integration: Integration of circular economy principles into product development:

• V236-15.0 MW™ offshore platform designed with end-of-life considerations
• Modular design approaches for improved component reuse
• Material selection prioritizing recyclability
• Life cycle assessment integration

Turbine Recyclability:

• Hub and blade recyclability rate: 88% in 2024 (down from 90% in 2023 due to material mix changes)
• Total turbine recyclability rate: 97% reported for first time in 2024
• Continuous improvement in recyclable design features

Repowering Market Development

Market Leadership: Vestas is positioned as a leader in the growing repowering market, particularly in the USA where significant capacity installed 15-20 years ago is reaching end of design life.

Three Repowering Options:

1. Lifetime Extension: Continue safe operation beyond design life
2. Partial Repowering: Replace select components for improved performance
3. Full Repowering: Complete replacement with modern technology

Customer Support: Comprehensive repowering services including:

• Site assessment and feasibility studies
• Technology selection and optimization
• Project management and execution
• Material recovery and recycling coordination

Supply Chain Circular Initiatives

Supplier Engagement: Working with strategic suppliers on circular economy initiatives:

• Annual Vestas Supplier Forum includes sustainability and circularity discussions
• Contractual requirements for sustainable practices
• Collaborative development of circular solutions
• Material traceability and lifecycle management

Material Innovation:

• Low-emission steel towers introduced as new product offering
• Partnership with ArcelorMittal for sustainable steel supply
• Expansion of sustainable material options planned for 2025

Resource Allocation

Financial Investment:

• Circular economy initiatives integrated into EUR 531m green R&D investment
• Capital allocation for recycling technology development
• Investment in refurbishment capabilities and facilities

Organizational Resources:

• Dedicated teams working on circular economy solutions
• Cross-functional collaboration on circular design
• Integration with Technology & Operations organization
• Service business capabilities supporting circularity

Performance Monitoring

Metrics Tracking: Regular monitoring of:

• Material efficiency rates
• Waste generation and recycling performance
• Refurbished component utilization
• Product recyclability rates

Continuous Improvement:

• Regular assessment of circular economy initiatives
• Integration of learnings into business processes
• Stakeholder feedback integration
• Best practice sharing across operations

Customer and Market Engagement

Customer Solutions: Providing customers with circular economy options:

• Repowering and lifetime extension services
• Sustainable upgrade pathways
• End-of-life planning and material recovery
• Performance optimization through circular approaches

Market Development: Active participation in developing circular economy markets:

• Industry collaboration on standards and best practices
• Policy engagement on circular economy regulations
• Knowledge sharing and thought leadership
• Market education on circular economy benefits

Targets Related to Resource Use and Circular Economy

Material Efficiency Targets

2025 Target: Improve material efficiency rate to 1.2 tonnes of waste per MW produced and shipped

• Current Performance: 1.0 tonnes per MW in 2024
• Status: Target achieved ahead of schedule, showing 17% improvement from 2023 baseline of 1.2

2030 Target: Improve material efficiency rate to 0.2 tonnes of waste per MW produced and shipped

• Improvement Required: 90% improvement from current baseline
• Progress: On track with significant improvement already achieved

Long-term Circular Economy Vision

2040 Target: Produce zero-waste wind turbines

• Strategic Framework: Industry-leading Circularity Roadmap outlines pathway and interim targets
• Integration: Aligned with overall sustainability strategy pillar of "Circularity"

Component Refurbishment Targets

2030 Target: Increase refurbished component utilization to 55%

• 2024 Performance: 34.5% refurbished component utilization
• 2023 Baseline: 33.5%
• Progress: Positive year-over-year improvement toward target

Product Recyclability Targets

Turbine Recyclability: Maintain and improve high recyclability rates

• 2024 Performance: 97% total turbine recyclability rate
• Hub and Blade Performance: 88% recyclability rate in 2024
• Continuous Improvement: Ongoing design optimization for recyclability

Waste Management Targets

Recycling Rate: Maintain high materials recycling performance

• 2024 Performance: 68% of materials recycled
• Volume: 30k tonnes of waste collected for recycling out of 44k tonnes total
• Target: Continue improvement in recycling rates and waste reduction

Innovation and Development Targets

Blade Recycling Technology: Develop and commercialize circular recycling methods for epoxy-infused blades

• 2024 Progress: Advanced development of new circular recycling method
• Implementation: Continue traditional recycling while scaling new technologies

Circular Design Integration: Embed circular economy principles in all new product development

• Modular Design: Develop products for easier disassembly and component reuse
• Material Selection: Prioritize recyclable and sustainable materials
• Life Cycle Assessment: Integrate circular considerations in design decisions

Business Integration Targets

Repowering Market Leadership: Maintain leadership position in growing repowering market

• Service Integration: Leverage 155 GW under service for repowering opportunities
• Technology Solutions: Offer comprehensive repowering options (lifetime extension, partial, full)
• Market Development: Support market growth through education and best practices

Supply Chain Circularity: Integrate circular economy requirements across supply chain

• Supplier Engagement: Work with strategic suppliers on circular initiatives
• Material Traceability: Develop systems for lifecycle material tracking
• Collaborative Innovation: Partner with suppliers on circular solutions

Performance Measurement

Quarterly Monitoring: Progress against circular economy targets included in quarterly sustainability assessments to Executive Management and Board

Annual Reporting: Comprehensive reporting on circular economy metrics and target progress

Stakeholder Communication: Regular updates to stakeholders on circular economy achievements and challenges

Target Integration

Strategic Alignment: Circular economy targets integrated with:

• Overall sustainability strategy
• Business area strategies (Onshore, Offshore, Service, Development)
• Financial performance targets
• Customer value proposition

Risk Management: Targets support risk mitigation related to:

• Resource availability and costs
• Regulatory requirements
• Customer sustainability expectations
• End-of-life product responsibilities

Success Metrics

Quantitative Measures:

• Material efficiency rate (tonnes waste per MW)
• Refurbished component utilization percentage
• Product recyclability rates
• Waste recycling percentages

Qualitative Measures:

• Customer satisfaction with circular solutions
• Industry recognition and benchmarking
• Innovation pipeline development
• Stakeholder engagement effectiveness

E5-4 Resource Inflows

Vestas uses ISO-compliant Life Cycle Assessments (LCAs) to evaluate the environmental performance of wind turbines from raw material extraction to end-of-life. The assessments cover the entire plant until grid connection, including the turbine, foundation, site cabling, and transformer station, using Sphera LCA for Experts software.

These detailed studies account for approximately 25,000 parts, typically covering over 99.5 percent of the turbine mass and 99.9 percent of the complete wind plant. Each component's material type, weight, and manufacturing processes are described. The LCA models form the basis for Vestas' global Resource inflow mass balance. Double counting is avoided as reused and recycled inflows are considered separately. The LCA reports account partially for packaging in the bills-of-materials of the product. Based on our estimated data, packaging accounts for below 1 percent of material flows in total, being relatively negligible.

Wind turbines are typically composed of 85-90 percent steel, iron, and metals, 10-15 percent composites and polymers, and the rest electronics, lubricants, and fluids. Recycled content is accounted for using industry datasets, such as Worldsteel or Eurofer.

Resource Inflows Metrics (2024)

The scope of Resource inflows includes materials in Vestas' wind turbines produced and shipped and components for service operations for the reporting period. The metric excludes property, plant and equipment, which are deemed negligible.

The data for resource inflows is sourced from Vestas LCAs and the corresponding bill-of-materials, supplier certification scheme information and global Service transaction data.

In 2024, Vestas used an estimated 430 thousand tonnes of secondary raw materials in its turbines. This figure is based on estimations from standard database data and is not Vestas supplier-specific.

Critical raw materials, including rare earth elements, are detailed in the 'Social information' section of the Sustainability statement under 'S2 Workers in the value chain'. These materials are also modelled in the LCA and managed by Global Procurement through cross-functional activities.

Resource outflows

Recyclability of products

Recyclability rate of hub and blade: 41% (2024)

• 2023: 42%
• 2022: 42%
• 2021: 90%
• 2020: 88%

Recyclability rate of total turbine: Not disclosed for 2024 (97% reported for 2020, then discontinued)

Product durability and lifetime

Expected lifetime of wind turbines: 25-30 years (standard design life)

The expected annual GHG avoided by the total aggregated installed fleet at the end of 2024: 186 million tonnes CO₂e. The turbines produced and shipped during 2024 are expected to avoid 455 million tonnes of GHG emissions over their lifetime.

Circular design initiatives

Vestas is developing circular blade solutions. In 2024, the company advanced development of a new circular recycling method for epoxy-infused blades in collaboration with Aarhus University, Danish Technological Institute and Olin. This solution allows for the separation and recovery of raw materials in epoxy-infused blades.

The blade circularity solution was developed to an industrially relevant scale in close collaboration with recycling partner Stena Recycling during 2024.

Material efficiency

Material efficiency rate: 2.5 tonnes of waste (excluding recycled) per MW produced and shipped (2024)

• 2023: 2.0
• 2022: 1.6
• 2021: 1.2
• 2020: 1.0

Vestas has a target to improve material efficiency rate to 0.2 tonnes of waste per MW produced and shipped by 2030.

Repowering and lifetime extensions

Vestas offers repowering solutions that extend the productive life of wind farms. The company has a dedicated focus on the growing repowering market, allowing customers to replace aging turbines with more efficient modern technology.

Waste

Total waste generation

Volume of waste from own operations: 89,000 tonnes (2024)

• 2023: 70,000 tonnes
• 2022: 47,000 tonnes
• 2021: 44,000 tonnes
• 2020: 44,000 tonnes

Waste collected for recycling: 46,000 tonnes (2024)

• 2023: 35,000 tonnes
• 2022: 26,000 tonnes
• 2021: 30,000 tonnes
• 2020: 30,000 tonnes

Waste management approach

Vestas focuses on reducing waste from own manufacturing and key suppliers, repairing and refurbishing components to extend their useful life, and ensuring that waste generated is managed responsibly.

The company's Circularity Roadmap guides efforts towards a fully circular value chain that avoids waste, reuses materials and creates a circular economy for turbine components and materials.

Circular economy targets

Vestas has set a target to produce zero-waste wind turbines by 2040. The company aims to improve its material efficiency rate to 0.2 tonnes of waste per MW produced and shipped by 2030 (from 2.5 in 2024).

The company also targets to increase the rate of refurbished component utilisation to 55% by 2030.

Non-recyclable materials impact

Non-recyclable materials in turbines have a negative impact on the environment (identified as a material impact in the double materiality assessment). Design with greater proportion of recyclable materials, such as the blade circularity solution, is identified as a financial opportunity.